Agricultural Marketing Service
Animal and Plant Health Inspection Service
Economic Analysis Bureau
International Trade Administration
National Oceanic and Atmospheric Administration
Engineers Corps
Federal Energy Regulatory Commission
National Nuclear Security Administration
Centers for Disease Control and Prevention
Centers for Medicare & Medicaid Services
Food and Drug Administration
Health Resources and Services Administration
National Institutes of Health
Federal Emergency Management Agency
Bureau of Safety and Environmental Enforcement
Ocean Energy Management Bureau
Antitrust Division
Employment and Training Administration
Workers Compensation Programs Office
Copyright Royalty Board
Institute of Museum and Library Services
Federal Railroad Administration
Maritime Administration
National Highway Traffic Safety Administration
Comptroller of the Currency
Foreign Assets Control Office
Internal Revenue Service
Consult the Reader Aids section at the end of this issue for phone numbers, online resources, finding aids, and notice of recently enacted public laws.
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Gulf Coast Ecosystem Restoration Council.
Final rule.
The Gulf Coast Ecosystem Restoration Council (Council) publishes this rule to amend the Council's regulation on the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, to align with the Office of Management and Budget's (OMB) recent amendments to its regulations on Grants and Agreements.
This rule is effective February 8, 2021.
Kristin Smith at 504-444-3558 or
On December 19, 2014, OMB issued an interim final rule that implemented for all Federal award-making agencies the final guidance on Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). In that interim final rule, Federal awarding agencies, including the Council, joined together to implement the Uniform Guidance in their respective chapters of title 2 of the CFR, and, where approved by the Office of OMB, implemented any exceptions to the Uniform Guidance by including the relevant language in their regulations. The intent of this effort was to simultaneously reduce administrative burden and the risk of waste, fraud, and abuse while delivering better performance. Implementation of the Uniform Guidance became effective on December 26, 2014 (79 FR 75867, December 19, 2014) and must be reviewed every five years in accordance with 2 CFR 200.109.
OMB has revised sections of OMB Guidance for Grants and Agreements, effective November 12, 2020, except for the amendments to §§ 200.216 and 200.340, which were effective on August 13, 2020. (85 FR 49506, August 13, 2020). The Council publishes this final rule to adopt those revisions, without exception.
This rule contains no collections of information subject to the requirements of the Paperwork Reduction Act (44 U.S.C. 3506). Notwithstanding any other provision of law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with, a collection of information subject to the Paperwork Reduction Act unless that collection displays a currently valid OMB Control Number.
Because notice and opportunity for comment are not required pursuant to 5 U.S.C. 553 or any other law, the analytical requirements of the Regulatory Flexibility Act (5 U.S.C. 601
Accounting, Administrative practice and procedure, Grant programs, Grants administration.
For the reasons set forth above, Part 5900 of Title 2, Chapter LIX of the Code of Federal Regulations is amended to read as follows:
5 U.S.C. 301; 33 U.S.C. 1321(t)(2); 2 CFR part 200.
Under the above authority, the Gulf Coast Ecosystem Restoration Council (Council) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200, as revised in part effective August 13, 2020 and in part effective November 12, 2020. This gives regulatory effect to the revised OMB guidance and supplements the guidance as needed for the Council.
Office of Energy Efficiency and Renewable Energy, Department of Energy.
Final rule; correction.
On December 16, 2020, the U.S. Department of Energy (DOE) published a final rule amending the definition of showerhead. This correction republishes an amendment from the final rule that could not be incorporated into the Code of Federal Regulations (CFR) due to an inaccurate amendatory instruction. Neither the errors nor the corrections in this document affect the substance of the rulemaking or any of the conclusions reached in support of this final rule.
Ms. Amelia Whiting, U.S. Department of Energy, Office of the General Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC 20585. Telephone: (202) 586-2588. Email:
DOE published a final rule in the
In FR Doc. 2020-27280, appearing on page 81341, in the
On page 81359, in the third column, amendatory instruction 3.c., “Redesignating paragraphs (q) through (u) and paragraphs (r) through (v); and” is corrected to read “Redesignating paragraphs (q) through (u) as paragraphs (r) through (v); and”.
This document of the Department of Energy was signed on December 22, 2020, by Daniel R Simmons, Assistant Secretary for Energy Efficiency and Renewable Energy, pursuant to delegated authority from the Secretary of Energy. That document with the original signature and date is maintained by DOE. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DOE
Office of the Comptroller of the Currency, Treasury (OCC).
Final rule; correction.
On December 11, 2020, the Office of the Comptroller of the Currency (OCC) published in the
This correction is effective January 11, 2021.
Heidi M. Thomas, Special Counsel, Chief Counsel's Office, (202) 649-5490, Office of the Comptroller of the Currency, 400 7th Street SW, Washington, DC 20219.
On December 11, 2020, the OCC published in the
The OCC is issuing this correcting amendment without prior notice and the opportunity for public comment ordinarily prescribed by the Administrative Procedure Act (APA).
The OCC also is issuing this correcting amendment without the delayed effective date ordinarily prescribed by the APA. The APA 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.
Pursuant to section 302(a) of the Riegle Community Development and Regulatory Improvement Act (RCDRIA),
Section 302(b) of RCDRIA requires that regulations issued by a Federal banking agency
For purposes of the Congressional Review Act, the Office of Management and Budget (OMB) makes a determination as to whether a final rule constitutes a “major rule.”
The Congressional Review Act defines a “major rule” as any rule that the Administrator of the Office of Information and Regulatory Affairs of the OMB finds has resulted in or is likely to result in: (1) An annual effect on the economy of $100,000,000 or more; (2) a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; or (3) a significant adverse effect on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets.
As required by the Congressional Review Act, the OCC will submit the correcting amendment and other appropriate reports to Congress and the Government Accountability Office for review.
The Regulatory Flexibility Act (RFA)
As a general matter, the Unfunded Mandates Act of 1995 (UMRA)
The Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521) (PRA) states that no agency may conduct or sponsor, nor is the respondent required to respond to, an information collection unless it displays a currently valid OMB control number. This correcting amendment does not contain any information collection requirements therefore no submissions will be made by the agencies to OMB in connection with this rulemaking.
In the final rule document OCC-2020-25595 published in the
1. On page 80434, in the first column, the discussion under “E. Effective Date” is corrected by adding the following at the end of the section to read as follows:
Section 302(b) of the RCDRIA, 12 U.S.C. 4802(b), requires that regulations issued by a Federal banking agency imposing additional reporting, disclosure, or other requirements on insured depository institutions take effect on the first day of a calendar quarter that begins on or after the date of publication of the final rule, unless, among other things, the agency determines for good cause that the regulations should become effective before such time. Applying RCDRIA's quarterly effective date requirement in conjunction with the APA's 30 day delayed effective date requirement would result in an April 1, 2021, effective date. However, much of the final rule increases flexibility for filing procedures, eliminates redundant or unnecessary reporting requirements consistent with safety and soundness, and updates policies and procedures that increase clarity and reduce ambiguity for banks seeking compliance with 12 CFR part 5 requirements. In order for OCC-regulated institutions to take advantage of these burden-reducing amendments as soon as possible, the OCC finds that the benefits of an earlier effective date of the final rule outweighs the burden of a delayed April 1, 2021, effective date. Therefore, the OCC has determined that it has good cause to make the final rule effective before April 1, 2021.
In rule document 2020-28563 beginning on page 810 in the issue of Wednesday, January 6, 2021, make the following correction:
On page 810, in the
Pension Benefit Guaranty Corporation.
Final rule.
The Pension Benefit Guaranty Corporation is amending its regulations on Allocating Unfunded Vested Benefits to Withdrawing Employers and Notice, Collection, and Redetermination of Withdrawal Liability. The amendments implement statutory provisions affecting the determination of a withdrawing employer's liability under a multiemployer plan and annual withdrawal liability payment amount when the plan has had benefit reductions, benefit suspensions, surcharges, or contribution increases that must be disregarded. The amendments also provide simplified withdrawal liability calculation methods.
Hilary Duke (
This rulemaking is needed to implement statutory changes affecting the determination of an employer's withdrawal liability and annual withdrawal liability payment amount when the employer withdraws from a multiemployer plan. The final regulation provides simplified methods for determining withdrawal liability and annual payment amounts, which a multiemployer plan sponsor can adopt to satisfy the statutory requirements and to reduce administrative burden. In this final rule, PBGC adopts its proposed changes implementing statutory changes and providing simplified methods, with some modifications in response to public comments.
PBGC's legal authority for this action is based on section 4002(b)(3) of the Employee Retirement Income Security Act of 1974 (ERISA), which authorizes PBGC to issue regulations to carry out the purposes of title IV of ERISA; section 305(g)
This final regulation amends PBGC's regulations on Allocating Unfunded Vested Benefits to Withdrawing Employers (29 CFR part 4211) and Notice, Collection, and Redetermination of Withdrawal Liability (29 CFR part 4219). The changes implement statutory changes affecting the determination of an employer's withdrawal liability and annual withdrawal liability payment amount and provide simplified methods for a plan sponsor to—
• Disregard reductions and suspensions of nonforfeitable benefits in determining the plan's unfunded vested benefits for purposes of calculating withdrawal liability.
• Disregard certain contribution increases if the plan is using the presumptive, modified presumptive, or rolling-5 method for purposes of determining the allocation of unfunded vested benefits to an employer.
• Disregard certain contribution increases for purposes of determining an employer's annual withdrawal liability payment.
The Pension Benefit Guaranty Corporation (PBGC) administers two insurance programs for private-sector defined benefit pension plans under title IV of the Employee Retirement
Under sections 4201 through 4225 of ERISA, when a contributing employer withdraws from an underfunded multiemployer plan, the plan sponsor assesses withdrawal liability against the employer. Withdrawal liability represents a withdrawing employer's proportionate share of the plan's unfunded benefit obligations. To assess withdrawal liability, the plan sponsor must determine the withdrawing employer's: (1) Allocable share of the plan's unfunded vested benefits (the value of nonforfeitable benefits that exceeds the value of plan assets) as provided under section 4211, and (2) annual withdrawal liability payment as provided under section 4219.
There are four statutory allocation methods for determining a withdrawing employer's allocable share of the plan's unfunded vested benefits under section 4211 of ERISA: The presumptive method, the modified presumptive method, the rolling-5 method, and the direct attribution method. Under the first three methods, the basic formula for an employer's withdrawal liability is one or more pools of unfunded vested benefits times the withdrawing employer's allocation fraction—
The withdrawing employer's allocation fraction is generally equal to the withdrawing employer's required contributions over all employers' contributions over the 5 years preceding the relevant period or periods. Under the fourth method, the direct attribution method, an employer's withdrawal liability is based on the benefits and assets attributed directly to the employer's participants' service, and a portion of the unfunded benefit obligations not attributable to any present employer.
PBGC's regulation on Allocating Unfunded Vested Benefits to Withdrawing Employers (29 CFR part 4211) provides modifications to the allocation methods that plan sponsors may adopt. Part 4211 also provides a process that plan sponsors may use to request approval of other methods.
A withdrawn employer makes annual withdrawal liability payments at a set rate over the number of years necessary to amortize its withdrawal liability, generally limited to a period of 20 years. If any of an employer's withdrawal liability remains unpaid under the payment schedule after 20 years, the unpaid amount may be allocated to other employers in addition to their basic withdrawal liability.
Annual withdrawal liability payments are designed to approximate the employer's annual contributions before its withdrawal. The basic formula for the annual withdrawal liability payment under section 4219(c) of ERISA is a contribution rate multiplied by a contribution base. Specifically, the annual withdrawal liability payment is determined as follows—
As the basic formulas show, withdrawal liability and an employer's annual withdrawal liability payment depend, among other things, on the value of unfunded vested benefits and the amount of contributions.
In response to financial difficulties faced by some multiemployer plans, Congress made statutory changes in 2006 and 2014 that affect benefits and contributions under these plans. The four types of changes provided for are shown in the following table:
While each of the changes has its own requirements, they generally are all required to be “disregarded” by the plan sponsor in determining an employer's withdrawal liability. The statutory “disregard” rules require in effect that all computations in determining and assessing withdrawal liability be made using values that do not reflect the lowering of benefits or raising of contributions required to be disregarded.
The Pension Protection Act of 2006, Public Law 109-280 (PPA 2006), amended ERISA's withdrawal liability rules to require a plan sponsor to disregard the adjustable benefits reductions in section 305(e)(8) of ERISA and the elimination of accelerated forms of distribution in section 305(f) of ERISA (which, for purposes of this preamble are referred to as adjustable benefit reductions) in determining a plan's unfunded vested benefits. PPA 2006 also requires a plan sponsor to disregard the contribution surcharges in section 305(e)(7) of ERISA in determining the allocation of unfunded vested benefits.
PBGC issued a final rule in December 2008 (73 FR 79628) implementing these PPA 2006 “disregard” rules by modifying the definition of “nonforfeitable benefit” for purposes of PBGC's regulations on Allocating Unfunded Vested Benefits to Withdrawing Employers (29 CFR part 4211) and on Notice, Collection, and Redetermination of Withdrawal Liability (29 CFR part 4219). PBGC provided simplified methods to determine withdrawal liability for plan sponsors required to disregard adjustable benefit reductions in Technical Update 10-3 (July 15, 2010). The 2008 final rule also excluded the employer surcharge from the numerator and denominator of the allocation fractions used under section 4211 of ERISA. The preamble included an example of the application of the exclusion of surcharge amounts from contributions in the allocation fraction.
The Multiemployer Pension Reform Act of 2014, Public Law 113-235 (MPRA), made further amendments to the withdrawal liability rules and consolidated them with the PPA 2006 changes. The additional MPRA amendments require a plan sponsor to disregard benefit suspensions in determining the plan's unfunded vested benefits for a period of 10 years after the effective date of a benefit suspension. MPRA also requires a plan sponsor to disregard certain contribution increases in determining the allocation of unfunded vested benefits. A plan sponsor must also disregard surcharges and those contribution increases in determining an employer's annual withdrawal liability payment under section 4219 of ERISA. The MPRA amendments apply to benefit suspensions and contribution increases that go into effect during plan years beginning after December 31, 2014, and to surcharges for which the obligation accrues on or after December 31, 2014.
Congress also authorized PBGC to create simplified methods for applying the “disregard” rules.
On February 6, 2019 (at 84 FR 2075), PBGC published a proposed rule to explain the PPA 2006 and MPRA “disregard” requirements and PBGC's simplified methods. Each simplified method provided applies to one or more specific aspects of the process of determining and assessing withdrawal liability.
PBGC provided a 60-day comment period and received eight comment letters from: Actuarial consulting firms; associations representing multiemployer plans, pension practitioners, and contributing employers; and a practitioner. To address the comments, PBGC is making modifications and clarifications, adding examples, and providing additional simplified methods. The public comments, PBGC's responses, and the provisions of this final rule are discussed below.
This final rule, like the proposed, implements the PPA 2006 and MPRA requirements to disregard adjustable benefit reductions, benefit suspensions, surcharges, and contribution increases. All of the commenters commented on the provision in the proposed rule implementing the exception to the disregard rules for a contribution increase that provides an increase in benefits. The provision, comments, and changes to the proposed rule in response to the comments are discussed in more detail in section IV.A. of the preamble. Except for those changes, the final rule is substantially the same as the proposed rule.
The final rule, like the proposed rule, provides: (1) Simplified methods for disregarding adjustable benefit reductions and benefit suspensions; and (2) simplified methods for disregarding certain contribution increases in determining the allocation of unfunded vested benefits to an employer and the annual withdrawal liability payment amount. A plan sponsor may, but is not required to, adopt any one or more of the simplified methods to use in the calculation of determining and assessing withdrawal liability but must follow the statutory withdrawal liability rules for all other aspects. In response to comments, PBGC made clarifications and improvements to the simplified methods, which are discussed below in sections III and IV of the preamble.
Because some of the commenters found the examples illustrating calculations using the simplified methods helpful, PBGC is adding some of the examples to the operative text and to an appendix to part 4211. The final rule also eliminates some language that merely repeats statutory provisions and makes other editorial changes.
One commenter asked PBGC to clarify that the simplified methods are “safe harbor” methods, but that alternate simplified methods could be appropriate. The commenter requested that PBGC consider providing plan sponsors with the opportunity to seek approval for an alternative simplified method. Under the final rule, PBGC clarifies that, similar to a safe harbor, a plan sponsor that adopts one of the simplified methods satisfies the requirements of the applicable statutory provision and regulations. Consistent with the proposed rule, a plan sponsor may choose to use an alternative approach that satisfies the requirements of the applicable statutory provisions and regulations rather than any of the simplified methods. While PBGC does not approve alternative simplified methods on a plan-by-plan basis, PBGC welcomes informal consultations with trustees and their advisors on whether an alternative approach could satisfy the requirements of the applicable statutory provisions and regulations. In addition, PBGC invited comments in the proposed rule on other simplified methods that a plan might use to satisfy certain requirements in section 305(g) of ERISA and incorporated changes in the final rule in response to comments received. PBGC encourages trustees and their advisors to inform PBGC of additional simplified methods to consider for a future rulemaking.
Under the proposed rule, the changes relating to simplified methods would be applicable to employer withdrawals that occur on or after the effective date of the final rule. It further proposed that the changes relating to MPRA benefit suspensions and contribution increases for determining an employer's withdrawal liability would apply to plan years beginning after December 31, 2014, and to surcharges the obligation for which occur on or after December 31, 2014. The proposed rule did not provide an effective date.
Three commenters asked for clarification of the effective date and were concerned that the rule would require retroactive application. Two commenters were concerned that plans could be required to implement changes at some time other than the beginning or end of a specified plan year. The commenters made specific recommendations for an applicability date. One commenter recommended that the date be based on withdrawals in plan years beginning on or after the effective date of the final rule. A second commenter recommended that the regulation apply for withdrawals beginning in the plan year that next follows the plan year in which the rule becomes effective with a transition period in the event the next plan year begins within 6 months following the issuance of the final regulation. A third commenter recommended a transition period of at least 1 plan year to give plans time to evaluate and consider the methodologies included in the regulation for contribution increases that provide an increase in benefits. PBGC did not adopt this suggested transition period because the final rule does not include the proposed rule's provision implementing the exception under section 305(g)(3) of ERISA for additional contributions used to provide an increase in benefits. The provision is discussed in section IV.A. of the preamble.
In response to the comments about the rule's effective date, PBGC is clarifying that the changes made by the final rule apply to plans prospectively. Accordingly, the final rule is effective February 8, 2021 and applies to employer withdrawals from multiemployer plans that occur in plan years beginning on or after the effective date. Just as before the final rule, plan sponsors may apply their own reasonable interpretations of the statutory provisions to calculate an employer's withdrawal liability. Plan sponsors may, but are not required to, adopt the simplified methods provided in the final rule. In addition, as suggested by one commenter, PBGC added effective dates in parts 4211 and 4219 for the new sections providing simplified methods.
Under the basic methodology explained in section I above, a plan sponsor must calculate the value of unfunded vested benefits (the value of nonforfeitable benefits that exceeds the value of plan assets)
The final regulation, like the proposed, adds a new § 4211.6 to PBGC's unfunded vested benefits allocation regulation to implement the requirements that plan sponsors must disregard adjustable benefit reductions and benefit suspensions in allocating unfunded vested benefits. Section 4211.6 replaces the approach previously taken by PBGC to implement the PPA 2006 “disregard” rules by modifying the definition of “nonforfeitable benefit.” The added MPRA “disregard” rules made that prior approach difficult to sustain. The final regulation, like the proposed, eliminates the special definition of “nonforfeitable benefit” in PBGC's unfunded vested benefits allocation regulation and notice, collection, and redetermination of withdrawal liability regulation.
MPRA limited the requirement for a plan sponsor to disregard a benefit suspension in determining an employer's withdrawal liability to 10 years. Under the final regulation, like the proposed, the requirement to disregard a benefit suspension applies only for withdrawals that occur within the 10 plan years after the end of the plan year that includes the effective date of the benefit suspension. To calculate withdrawal liability during the 10-year period, a plan sponsor disregards the benefit suspension by including the value of the suspended benefits in determining the amount of unfunded vested benefits allocable to an employer. For example, if a plan has a benefit suspension with an effective date within the plan's 2018 plan year, the plan sponsor would include the value of the suspended benefits in determining the amount of unfunded vested benefits allocable to an employer for any withdrawal occurring in plan years 2019 through 2028. The plan sponsor would not include the value of the suspended benefits in determining the amount of unfunded vested benefits allocable to an employer for a withdrawal occurring after the 2028 plan year.
In cases where a benefit suspension ends and full benefit payments resume during the 10-year period following a suspension, the value of the suspended
Under section 305(g)(5) of ERISA, PBGC is required to provide simplified methods for a plan sponsor to determine withdrawal liability when the plan has adjustable benefit reductions or benefit suspensions that are required to be disregarded. The final regulation, like the proposed, provides a simplified framework for disregarding adjustable benefit reductions and benefit suspensions in § 4211.16 of PBGC's unfunded vested benefits allocation regulation. A plan sponsor may adopt the simplified framework in § 4211.16 to satisfy the requirements of section 305(g)(1) of ERISA and § 4211.6 of PBGC's unfunded vested benefits allocation regulation, or may choose to use an alternative approach to satisfy the requirements of the statutory provisions and regulation.
Under the simplified framework, if a plan has adjustable benefit reductions or benefit suspensions, the plan sponsor first calculates an employer's withdrawal liability using the plan's withdrawal liability method reflecting any adjustable benefit reduction and benefit suspension (§ 4211.16(b)(1)). The plan sponsor adds the employer's proportional share of the value of any adjustable benefit reduction and any benefit suspension (§ 4211.16(b)(2)). In summary, withdrawal liability for a withdrawing employer is based on the sum of the following—
(1) The amount that would be the employer's allocable amount of unfunded vested benefits determined in accordance with section 4211 of ERISA under the method in use by the plan (based on the value of the plan's nonforfeitable benefits reflecting any adjustable benefit reduction and any benefit suspension),
(2) The employer's proportional share of the value of any adjustable benefit reduction and the employer's proportional share of the value of any suspended benefits.
Consistent with the proposed rule, under the final rule, this amount is required to be calculated before application of the adjustments required by section 4201(b)(1) of ERISA, including the de minimis reduction and the 20-year cap on payments under section 4219(c)(1)(B) of ERISA.
Two commenters asked for clarification on how the rule for the application of adjustments required by section 4201(b)(1) of ERISA interacts with guidance provided under Technical Update 10-3 (July 15, 2010) for plan sponsors required to disregard adjustable benefit reductions. The commenters stated that plans may have interpreted Technical Update 10-3 to adjust for the de minimis reduction before adding the proportional share of the adjustable benefit reduction. One commenter stated that any clarification of the method provided in Technical Update 10-3 should be provided only on a prospective basis and that the final rule should provide a safe harbor for plans that may have interpreted Technical Update 10-3 differently.
PBGC agrees that Technical Update 10-3 did not specifically address how adjustments for the de minimis reduction and the 20-year cap on payments should be applied. PBGC is aware that some plans that adopted the simplified method under Technical Update 10-3 make separate calculations of an employer's liability under section 4211 of ERISA, subject to the adjustments required under section 4201, and an employer's liability for adjustable benefit reductions.
In reviewing the issue in the context of benefit suspensions, PBGC concluded that the “allocable amount of unfunded vested benefits” under section 4201(b)(1) of ERISA, which is calculated before adjustments are made, should include the employer's proportional share of the value of benefit suspensions required to be disregarded. For purposes of providing a simplified framework for adjustable benefit reductions and benefit suspensions, PBGC provided in the proposed rule that the adjustments required by section 4201(b)(1) of ERISA are made after adding the amount that would be the employer's allocable amount of unfunded vested benefits determined in accordance with section 4211 of ERISA and the employer's proportional share of the value of each of the benefit reductions and benefit suspensions required to be disregarded. Section 4211.16(b) of the final rule is unchanged from the proposed rule with respect to the application of the adjustments in section 4201(b)(1) of ERISA. In consideration of the comments received, PBGC is clarifying that the simplified framework in the final rule applies prospectively only and is applicable for withdrawals that occur in plan years beginning after the effective date of the final rule.
One commenter suggested that if the employer's allocable amount determined under § 4211.16(a) results in a negative value, a plan sponsor should be able to use the negative value to offset the employer's allocable share of the value of the adjustable benefit reductions and benefit suspensions under § 4211.16(b). The preamble to the proposed rule stated that under the simplified framework, the amount of unfunded vested benefits allocable to an employer under section 4211 of ERISA may not be less than zero. PBGC acknowledges that in some cases where precise actuarial calculations are being made (
The same commenter stated that construction-industry plans that have no unfunded vested benefits under section 4211 of ERISA should be permitted to elect a fresh start for that plan year, even if the plan continues to have liability for adjusted benefit reductions and benefit suspensions. PBGC agrees with the comment and that a plan sponsor's decision to implement a fresh start does not affect the value of adjustable benefit reductions and benefit suspensions in calculating withdrawal liability. In the final rule, PBGC is clarifying in new § 4211.12(d)(3) that in the case of a plan that primarily covers employees in the building and construction industry, the plan year designated by a plan amendment to implement a fresh start must be a plan year for which the plan has no unfunded vested benefits determined in accordance with section 4211 of ERISA without regard to § 4211.6.
The commenter also suggested that to the extent adjustable benefit reductions are restored, plan sponsors should be able to treat the liability for the adjustable benefit reductions as if it had been reduced or eliminated. PBGC agrees that, in this circumstance, a plan sponsor can offset the present value of restored adjustable benefits against the unamortized balance of the adjustable benefit reduction under § 4211.16(b)(2). The present value of the restored adjustable benefits would be included in the calculation of the allocable amount of unfunded vested benefits determined under § 4211.16(b)(1).
The simplified framework provides simplified methods for calculating the employer's proportional share of the value of any adjustable benefit reduction and the employer's proportional share of the value of any suspended benefits. If a plan has adjustable benefit reductions, the plan sponsor may adopt the simplified method discussed below to determine the value of the adjustable benefit reductions. If a plan has a benefit suspension, the plan sponsor may adopt either the static value method or adjusted value method to determine the value of the suspended benefits (also discussed below). The contributions for the allocation fractions for each of the simplified methods are determined in accordance with the rules for disregarding contribution increases under § 4211.4 of PBGC's unfunded vested benefits allocation regulation (and permissible modifications and simplifications under §§ 4211.12-4211.15 of PBGC's unfunded vested benefits allocation regulation).
Under the simplified framework, a plan sponsor must include liabilities for benefits that have been reduced or suspended in the value of vested benefits. But the simplified framework does not require a plan sponsor to calculate what plan assets would have been if benefit payments had been higher. One commenter asked for the final regulation to clarify that, regardless of whether plan sponsors adopt simplified methods for disregarding adjustable benefit reductions or benefit suspensions, plans are not required to track what plan assets would have been absent those reductions or suspensions. PBGC believes that generally accepted actuarial principles and practices accommodate the adoption of assumptions about quantities (like the amount of such an asset reduction) that may not have a material effect on the results of the computation. Thus, the issue raised by the commenter is one for resolution by the plan actuary.
Except as discussed in the preamble, the final regulation, like the proposed, incorporates the guidance provided in PBGC Technical Update 10-3 for disregarding the value of adjustable benefit reductions. Technical Update 10-3 explains the simplified method for determining an employer's proportional share of the value of adjustable benefit reductions. The method applies for any employer withdrawal that occurs in any plan year following the plan year in which an adjustable benefit reduction takes effect and before the value of the adjustable benefit reduction is fully amortized. The method is summarized in the chart in section III.B.3. below.
An employer's proportional share of the value of adjustable benefit reductions is determined as of the end of the plan year before withdrawal as follows—
The value of the adjustable benefit reductions is determined using the same assumptions used to determine unfunded vested benefits for purposes of section 4211 of ERISA. The unamortized balance as of a plan year is the value as of the end of the year in which the reductions took effect (base year), reduced as if that amount were being fully amortized in level annual installments over 15 years, at the plan's valuation interest rate, beginning with the first plan year after the base year.
The withdrawing employer's allocation fraction is the amount of the employer's required contributions over a 5-year period divided by the amount of all employers' contributions over the same 5-year period.
The 5-year period for computing the allocation fraction is the most recent 5 plan years ending before the employer's withdrawal. For purposes of determining the allocation fraction, the denominator is increased by any employer contributions owed with respect to earlier periods that were collected in the 5 plan years and decreased by any amount contributed by an employer that withdrew from the plan during those plan years, or, alternatively, adjusted as permitted under § 4211.12.
For calculating the value of adjustable benefit reductions, Technical Update 10-3 provides an adjustment if the plan uses the rolling-5 method. The value is reduced by outstanding claims for withdrawal liability that can reasonably be expected to be collected from employers that withdrew as of the end of the plan year before the employer's withdrawal. PBGC is not including this adjustment in this final rule. The requirement to reduce the unfunded vested benefits by the present value of future withdrawal liability payments for previously withdrawn employers is part of the rolling-5 calculation, and PBGC believes that excluding this adjustment avoids some ambiguity that might have led to additional unnecessary calculations and recordkeeping.
One commenter asked for the final regulation to provide an additional option for allocating the value of adjustable benefit reductions for plans using the presumptive method based on the 5 consecutive plan years ending before the plan year in which the adjustable benefit reduction takes effect. The commenter stated that the option would produce an allocation that is more consistent with the amount that would be allocated to an employer if the plan did not use a simplified allocation method. PBGC considered the comment and has determined that the option could be useful for plans using any withdrawal liability method under section 4211 of ERISA. Accordingly, PBGC has added this option to the simplified framework in § 4211.16(d).
Under the added option, the 5-year period for computing the allocation fraction is the most recent 5 plan years ending before the plan year in which the adjustable benefit reduction takes effect. For purposes of determining the allocation fraction, the denominator is increased by any employer contributions owed with respect to earlier periods that were collected in the 5 plan years and decreased by any amount contributed by an employer that withdrew from the plan during those plan years, or, alternatively, adjusted as permitted under § 4211.12.
For the additional option, the regulation requires an additional
PBGC's simplified framework provides two simplified methods that a plan sponsor may choose between to calculate a withdrawing employer's proportional share of the value of a benefit suspension—the static value method and the adjusted value method. Both methods apply for any employer withdrawal that occurs within the 10 plan years after the end of the plan year that includes the effective date of the benefit suspension (10-year period). A chart including a comparison of the two methods is in section III.B.3. below.
Under either method, an employer's proportional share of the value of a benefit suspension is determined as follows—
Under the static value method, the present value of the suspended benefits as of a single calculation date is used for all withdrawals in the 10-year period. At the plan sponsor's option, the present value could be determined as of: (1) The effective date of the benefit suspension (as similar calculations are required as of that date to obtain approval of the benefit suspension); or (2) the last day of the plan year coincident with or following the date of the benefit suspension (as calculations are required as of that date for other withdrawal liability purposes). The present value is determined using the amount of the benefit suspension as authorized by the Department of the Treasury under the plan's application for benefit suspension.
Under the adjusted value method, the present value of the suspended benefits for a withdrawal in the first year of the 10-year period is the same as under the static value method. For withdrawals in years 2-10 of the 10-year period, the value of the suspended benefits is determined as of the “revaluation date,” the last day of the plan year before the employer's withdrawal. The value of the suspended benefits is equal to the present value of the benefits not expected to be paid in the year of withdrawal or thereafter due to the benefit suspension. For example, assume that a calendar year multiemployer plan receives final authorization by the Secretary of the Treasury for a benefit suspension, effective January 1, 2018, and a contributing employer withdraws during the 2022 plan year. The revaluation date is December 31, 2021. The value of the suspended benefits is the present value of the benefits not expected to be paid after December 31, 2021, due to the benefit suspension.
For both methods, the withdrawing employer's allocation fraction is the amount of the employer's required contributions over a 5-year period divided by the amount of all employers' contributions over the same 5-year period.
For the static value method, the 5-year period is determined based on the most recent 5 plan years ending before the plan year in which the benefit suspension takes effect. For the adjusted value method, the 5-year period is determined based on the most recent 5 plan years ending before the employer's withdrawal (which is the same 5-year period as is used for the simplified method for adjustable benefit reductions).
For both the static value method and the adjusted value method, the denominator of the allocation fraction is increased by any employer contributions owed with respect to earlier periods that were collected in the applicable 5-year period for the allocation fraction and decreased by any amount contributed by an employer that withdrew from the plan during those same 5 plan years, or, alternatively, adjusted as permitted under § 4211.12 (the same adjustments are made using the simplified method for adjustable benefit reductions).
For the static value method, the regulation requires an additional adjustment in the denominator of the allocation fraction for a plan using a method other than the presumptive method or similar method. The denominator after the first year of the 5-year period is decreased by the contributions of any employers that withdrew and were unable to satisfy their withdrawal liability claims in any year before the employer's withdrawal. This adjustment is intended to approximate how a withdrawn employer's withdrawal liability is calculated under the rolling-5 and modified presumptive methods by fully allocating the present value of the suspended benefits to solvent employers. The adjustment is not necessary under the presumptive method, as that method has a specific adjustment for previously allocated withdrawal liabilities that are deemed uncollectible.
An example illustrating the simplified framework using the static value method for disregarding a benefit suspension is provided in § 4211.16(e) of PBGC's unfunded vested benefits allocation regulation.
If a benefit suspension is a temporary suspension of the plan's payment obligations as authorized by the Department of the Treasury, the present value of the suspended benefits includes the value of the suspended benefits only through the ending period of the benefit suspension.
For example, assume that a calendar-year plan has an approved benefit suspension effective December 31, 2018, for a 15-year period ending December 31, 2033. Effective January 1, 2034, benefits are to be restored (prospectively only) to levels not less than those accrued as of December 30, 2018, plus benefits accrued after December 31, 2018. Employer A withdraws in a complete withdrawal during the 2022 plan year. The plan sponsor first determines Employer A's allocable amount of unfunded vested benefits under section 4211 of ERISA. That
PBGC invited public comment on whether the examples in the proposed rule are helpful and whether there are additional types of examples that would help plan sponsors with these calculations. Two commenters stated that the provided examples are helpful and suggested that PBGC provide examples involving partial withdrawals. One commenter asked for clarification with examples of the simplified method for adjustable benefit reductions as applied to partial withdrawals. Section 4206 of ERISA and 29 CFR part 4206 provide rules for determining the amount of an employer's liability for a partial withdrawal and, in the case of a subsequent withdrawal, for determining the amount of the reduction of the employer's liability for the prior partial withdrawal. PBGC appreciates the comments requesting examples involving partial withdrawals and provides the following example using the simplified method in § 4211.16.
(1) The employer's allocable amount of unfunded vested benefits determined under section 4211 of ERISA is $1,000,000.
(2) The employer's proportional share of the value of the adjustable benefit reduction is $100,000 (after 8 years of amortization of the original amount).
(3) The employer's proportional share of the value of the benefit suspension is $250,000 (the employer's partial withdrawal occurs 3 years after the effective date of the benefit suspension).
To calculate the employer's withdrawal liability amount, under § 4211.16(b), the amounts in (1) through (3) above are added together for a sum of $1,350,000. Based on the sum, a de minimis reduction would not apply. The sum is then adjusted in accordance with the rules for adjustment of partial withdrawal under section 4206 of ERISA. Thus, in this example, the employer's proportional share of the value of the adjustable benefit reduction and proportional share of the value of the benefit suspension are disregarded in determining the withdrawn employer's partial withdrawal liability assessment amount.
The following chart provides a summary of the simplified methods discussed above:
Changes in contributions can affect the calculation of an employer's withdrawal liability and annual withdrawal liability payment amount. For example, such changes can increase or decrease the allocation fraction (discussed above in section I) that is used to calculate an employer's withdrawal liability. They can also increase or decrease an employer's highest contribution rate used to calculate the employer's annual withdrawal liability payment amount (also discussed above in section I).
Required surcharges and certain contribution increases would typically result in an increase in an employer's withdrawal liability even though unfunded vested benefits are being reduced by the increased contributions. Sections 305(g)(2) and (3) of ERISA mitigate the effect on withdrawal liability by providing that these surcharges and contribution increases that are required or made to enable the plan to meet the requirements of the funding improvement plan or rehabilitation plan are disregarded in determining contribution amounts used for the allocation of unfunded vested benefits and the annual payment amount. These sections do not apply for purposes of determining the unfunded vested benefits attributable to an employer by a plan using the direct attribution method under section 4211(c)(4) of ERISA or a comparable method.
Except as described below the final regulation, like the proposed, amends § 4211.4 of PBGC's unfunded vested benefits allocation regulation and § 4219.3 of PBGC's notice, collection, and redetermination of withdrawal liability regulation to incorporate the requirements to disregard these surcharges and contribution increases. The final regulation also provides simplified methods for disregarding certain contribution increases in the allocation fraction in § 4211.14 of PBGC's unfunded vested benefits allocation regulation (discussed below in section IV.B.). The final rule incorporates the disregard rules and simplified methods for contribution increases in the allocation methods for merged multiemployer plans provided in subpart D of part 4211. PBGC is not providing a simplified method for disregarding surcharges in the final rule because we believe that plans have been able to apply the statutory requirements without the need for a simplified method.
The provision regarding contribution increases applies to increases in the contribution rate or other required contribution increases that go into effect during plan years beginning after December 31, 2014.
Sections 4211.4(b)(2)(ii) and 4219.3(a)(2)(ii) of the proposed rule reflected an interpretation of the exception under section 305(g)(3) of ERISA for additional contributions used to provide an increase in benefits. Those sections provided, “The contribution increase provides an increase in benefits, including an increase in future benefit accruals, permitted by sections 305(d)(1)(B) or 305(f)(1)(B) of ERISA or sections 432(d)(1)(B) or section 432(f)(1)(B) of the Code, and an increase in benefit accruals as an integral part of the benefit formula.” The proposed rule required the portion of such contribution increase that is attributable to an increase in benefit accruals to be determined actuarially and for those contribution increases to be included in the calculation of a withdrawn employer's withdrawal liability and annual withdrawal liability payment amount.
Three commenters disagreed with the interpretation provided in the proposed rule. They said that the only narrow exception to include contribution increases that are used to provide an increase in benefits in the calculation of
The final rule modifies proposed § 4211.4(b)(2)(ii) and § 4219.3(a)(2)(ii) to provide the exception to the disregard rules for a contribution increase that provides an increase in benefits by simply referring to section 305(g)(3) of ERISA. Specifically, § 4211.4(b)(2)(ii) and § 4219.3(a)(2)(ii) in the final rule describe the exception as applying to contribution increases “used to provide an increase in benefits, including an increase in future benefit accruals, permitted by section (d)(1)(B) or (f)(1)(B) of ERISA.” A plan sponsor is required to include such contribution increases in the calculation of a withdrawn employer's withdrawal liability and annual withdrawal liability payment amount. The final rule does not provide further interpretation. Commenters raised interpretive issues about sections 305(g)(3), 305(d)(1)(B), and 305(f)(1)(B) of ERISA that are under the jurisdiction of the Department of the Treasury as well as plan benefit design issues that require further study. PBGC is continuing to examine these issues with the Department of the Treasury and, if appropriate, will issue additional guidance.
The allocation fraction that is used in the presumptive, modified presumptive, and rolling-5 methods to determine an employer's proportional share of unfunded vested benefits is discussed above in section I. The final regulation adds a new § 4211.14 to the unfunded vested benefits allocation regulation to provide a choice of one simplified method for the numerator and two simplified methods for the denominator of the allocation fraction. A plan sponsor may adopt the simplified methods in § 4211.14 to satisfy the requirements of section 305(g)(3) of ERISA and § 4211.4(b)(2) to disregard contribution increases in determining the allocation of unfunded vested benefits, or may choose an alternative approach that satisfies the requirements of the statutory provisions and regulations. A plan amended to use one or more of the simplified methods in this section must also apply the rules to disregard surcharges under new § 4211.4.
One commenter asked that the final regulation allow plans using the direct attribution method to use the simplified methods for contribution increases if use of such methods is otherwise reasonable. The disregard rules for contribution increases under section 305(g)(3)(A) of ERISA do not apply for purposes of determining the unfunded vested benefits attributable to an employer by a plan using the direct attribution method under section 4211(c)(4) of ERISA or a comparable method. PBGC's authority to provide simplified methods under section 305(g)(5) of ERISA is limited to methods for applying the disregard rules in determining withdrawal liability and payment amounts. PBGC therefore did not incorporate the commenter's requested change in the final rule.
Under the simplified method for determining the numerator of the allocation fraction, a plan sponsor bases the calculation on an employer's contribution rate as of the last day of each plan year (rather than applying a separate calculation for contribution increases that occur in the middle of a plan year). The plan sponsor starts with the employer's contribution rate as of the “employer freeze date.” The employer freeze date is the date that is the later of the last day of the first plan year that ends on or after December 31, 2014 (December 31, 2014 for a calendar year plan) and the last day of the plan year the employer first contributes to the plan. If, after the employer freeze date, the plan has a contribution rate increase that provides an increase in benefits so that the contribution increase is included, that rate increase is added to the contribution rate for each target year for which the rate increase is effective. Under the method, the product of the employer freeze date contribution rate (increased in accordance with the prior sentence, if applicable) and the withdrawn employer's contribution base units in each plan year (“target year”) are used for the numerator and the comparable amount determined for each employer is included in the denominator (described in B.2 below), unless the plan sponsor uses the proxy group method for determining the denominator (described in B.3 below). If there is more than one contribution rate or basis for calculating contribution base units, the calculations can be performed separately for each contribution rate or contribution base sub-group and then summed. An example illustrating the simplified method for disregarding certain contributions in determining the numerator using the employer's plan year 2014 contribution rate is provided in the appendix to part 4211.
Under the first simplified method for determining the denominator of the allocation fraction, a plan sponsor applies the same principles as for the simplified method above for determining the numerator of the allocation fraction. The plan sponsor holds steady each employer's contribution rate as of the employer freeze date, except for contribution increases that provide benefit increases as described above. For each employer, the plan sponsor multiplies this rate by each employer's contribution base units in each target year.
Plans frequently offer multiple contribution schedules under a funding improvement plan or rehabilitation plan, which may have varying contribution rate increases. Under these and other circumstances, it could be administratively burdensome for plans to determine the exact amount of an employer's contributions—excluding contributions required to be disregarded
A commenter noted that different schedules and rate increases may apply to different categories of employees of a single employer—for example, because different collective bargaining agreements apply to different categories of the employer's employees. In response, the final regulation permits a single employer whose employees have highly dissimilar contribution histories to be treated as two or more employers with more uniform contribution histories in applying the proxy group method.
Under the proxy group method, employers are grouped in rate history groups, based on similarity of contribution histories (or same percentage increases in contributions from year to year). (Notwithstanding the diversity of contribution histories, rate history groups may be limited to 10.) Representative employers, representing at least 10 percent of active plan participants, are drawn from rate history groups to form the proxy group. “Adjusted contributions”—excluding contribution rate increases that must be disregarded for withdrawal liability purposes—are determined for employers in the proxy group; then for rate history groups, based on the adjusted contributions of employers in each rate history group; and finally for the plan, based on the adjusted contributions of rate history groups represented in the proxy group. The plan's adjusted contributions form the denominator of the withdrawal liability allocation fraction.
As with other simplified methods, only contribution rates in effect at year end need be considered.
The process of forming rate history groups may be illustrated by the following examples.
Example 1. Employers in Plan A had twelve different contribution rates at the start of the rehabilitation period, as shown in the following table:
The rehabilitation plan requires increases of $0.50 per hour per year for employers in Row 1, $0.75 per hour per year for those in Row 2, and $1.00 per hour per year for those in Row 3. All collective bargaining agreements are amended by the beginning of 2015, and the increases are effective as of the beginning of 2015. The following table shows the percentage rates of increase in contribution rates at year-end 2015 compared with year-end 2014:
Since the increase rates for employers in Column 1 are the same, the plan can put those employers in one rate group. Similarly, employers in Column 2 have relatively uniform rates and can be grouped together, and likewise for those in Columns 3 and those in Column 4. Alternatively, employers in Columns 3 and 4 of Row 1 could be grouped together with those in Column 4 of Row 2; and employers in Columns 3 and 4 of Row 3 could be grouped together with those in Column 3 of Row 2.
Example 2. Plan B has many employers and many contribution rate schedules. Contributions change between 2010 and 2021 as follows:
Under the default schedule, there are one-time increases of 50 percent in 2010 for employers in Category A (defaults occurring in 2010); 55 percent in 2011 for employers in Category B (defaults occurring in 2011); and 60 percent in 2012 for employers in Category C (defaults occurring in 2012). For employers in Category D through Y, which have negotiated new collective bargaining agreements, increases are as shown in the following table:
The annual percentage increases for employers in Category D through Y are cumulative. Thus, if an employer's contribution rate for the second quarter of 2010 in Category F was $100.00, its contributions for 2010, 2011, and 2012 would be $104.00, $108.16, and $112.49 (based on rates in effect at year-end).
Appropriate rate history groups for 2015 through 2021 could be as follows:
These groupings take advantage of the provision that no more than ten rate history groups need be provided for.
In response to a comment requesting more flexibility in the determination of proxy groups, the final regulation omits the requirement that the proxy group employers be named in the plan. However, the regulation requires that there be consistency from year to year in the composition of both the proxy group and rate history groups, with certain exceptions. The intent is to keep these groups generally unchanged but to permit changes in their make-up to accommodate changes in circumstances such as contribution histories and employer withdrawals.
Employers contributing under the same rate schedule would typically be in the same rate history group, and a change in the rate schedule would typically not change the composition of the rate history group, because the rate histories of all employers in the group would be similarly affected. For example, suppose all the employers under a rate schedule are in the same rate history group, and the rate schedule changes. This would typically not change the composition of the rate history group, because the rate histories of all employers in the group would be similarly affected.
In the same vein, employers with disparate rate histories would typically be in different rate history groups, and the fact that they became covered by the same rate schedule would not typically place them in the same rate history group because their rate histories would remain different. For example, suppose two employers with disparate rate histories are in different rate history groups and become covered by the same rate schedule. This would not typically place them in the same rate history group because their rate histories would remain different.
On the other hand, if two employers in a rate history group moved to a different rate schedule, their rate histories would no longer match those of the other employers in the group. Depending on circumstances, this change might result in the formation of a new rate history group that (if it represented more than 5 percent of active participants) would require representation in the proxy group.
For proxy group employers, adjusted contributions for the plan year are determined by multiplying each employer's contribution base units for the plan year by what would have been the employer's contribution rate excluding contribution rate increases that are required to be disregarded in determining withdrawal liability.
Determining adjusted contributions for rate history groups is a two-step process. First, an adjustment factor is determined for the plan year for each rate history group represented in the proxy group of employers. This adjustment factor equals the sum of the adjusted contributions for the plan year for all employers in the rate history group that are in the proxy group, divided by the sum of those employers' actual total contributions for the plan year. Second, the adjustment factor for the year for each rate history group is multiplied by the contributions for the year of all employers in the rate history group (both proxy group members and non-members) to determine the adjusted contributions for the rate history group for the year.
Finally, the same steps are performed to determine adjusted contributions at the plan level. The sum of the adjusted contributions for all the rate history groups represented in the proxy group is divided by the sum of the actual contributions for the employers in those rate history groups, and the resulting adjustment factor for the plan is multiplied by the plan's total contributions for the plan year, including contributions by employers in small rate history groups not represented in the proxy group. The result—the adjusted contributions for the whole plan—is the amount of contributions for the plan year that may be used to determine the denominator for the allocation fraction under the proxy group method.
This process weights contributors by the size of their contributions. Heavy contributors' rates have a greater impact on the adjusted contributions than light contributors' rates.
A commenter asked that relief be provided for cases where information needed to determine adjusted contributions is unavailable. In response, PBGC has added a provision addressing situations where total contributions for a rate history group or a plan are unavailable to calculate adjusted contributions. In such situations, total contributions may be estimated by multiplying each contribution rate times the relevant projected contribution base units and adding all the results.
An example illustrating the simplified method for disregarding certain contributions in determining the denominator of the allocation fraction using the proxy group method is provided in the appendix to part 4211.
As noted above in section IV.A., changes in contributions can affect the calculation of an employer's withdrawal
The final regulation, like the proposed, amends § 4211.4 of PBGC's unfunded vested benefits allocation regulation and § 4219.3 of PBGC's notice, collection, and redetermination of withdrawal liability regulation to incorporate the requirements for contribution increases when a plan is no longer in endangered or critical status. The final regulation also provides simplified methods required by section 305(g)(5) of ERISA that a plan sponsor could adopt to satisfy the requirements of section 305(g)(4).
The rule to begin including contribution increases for purposes of determining withdrawal liability is based, in part, on when a plan's collective bargaining agreements expire. Because plans may operate under numerous collective bargaining agreements with varying expiration dates, it could be burdensome for a plan sponsor to calculate the amount contributed by employers over the 5-year periods used for the denominators of the plan's allocation method. The plan sponsor would have to make a year-by-year determination of whether contribution increases should be included or disregarded in the denominators relative to collective bargaining agreements expiring in each applicable year. The final regulation adds a new § 4211.15 to PBGC's unfunded vested benefits allocation regulation to provide two alternative simplified methods that a plan sponsor could adopt for determining the denominators in the allocation fractions when the plan is no longer in endangered or critical status.
Under the first simplified method, a plan sponsor could adopt a rule that contribution increases previously disregarded are included in the allocation fraction as of the expiration date of the first collective bargaining agreement requiring contributions that expires after the plan's emergence from endangered or critical status. If the plan sponsor adopts this rule, then for any withdrawals after the applicable expiration date, the plan sponsor would include the total amount contributed by employers for plan years included in the denominator of the allocation fraction determined in accordance with section 4211 of ERISA under the method in use by the plan. This would relieve plan sponsors of the burden of a year-by-year determination of whether contribution increases should be included or disregarded in the denominator under the plan's allocation method relative to collective bargaining agreements expiring in that year. An example illustrating this simplified method is provided in § 4211.15(c) of PBGC's unfunded vested benefits allocation regulation.
Under the second simplified method, a plan sponsor could adopt a rule that contribution increases previously disregarded are included in calculating withdrawal liability for any employer withdrawal that occurs after the first full plan year after a plan is no longer in endangered or critical status, or if later, the plan year including the expiration date of the first collective bargaining agreement requiring plan contributions that expires after the plan's emergence from endangered or critical status.
The final regulation also provides that, for purposes of these simplified methods, an “evergreen contract” that continues until the collective bargaining parties elect to terminate the agreement has a termination date that is the earlier of—
(1) The termination of the agreement by decision of the parties.
(2) The beginning of the third plan year following the plan year in which the plan is no longer in endangered or critical status.
PBGC invited public comment on other simplified methods that a plan operating under numerous collective bargaining agreements with varying expiration dates might use to satisfy the requirement in section 305(g)(4) of ERISA that, as of the expiration date of the first collective bargaining agreement requiring plan contributions that expires after a plan is no longer in endangered or critical status, the allocation fraction must include contribution increases that were previously disregarded. Two commenters supported PBGC's proposed simplified method as a reasonable way to satisfy the requirements of section 305(g)(4) of ERISA.
The rule for determining the highest contribution rate requires a plan sponsor of a plan that is no longer in endangered or critical status to continue to disregard increases in the contribution rate that applied for plan years during which the plan was in endangered or critical status. Because an employer's highest contribution rate is determined over the 10 plan years ending with the year of withdrawal, applying the rule would require a year-by-year determination of whether contribution increases should be included or disregarded. The final regulation adds a new § 4219.3 to PBGC's notice, collection, and redetermination of withdrawal liability regulation to provide a simplified method that a plan sponsor could adopt for determining the highest contribution rate.
The simplified method provides that, for a plan that is no longer in endangered or critical status, the highest contribution rate for purposes of section 4219(c) of ERISA is the greater of—
(1) The employer's contribution rate in effect, for a calendar year plan, as of December 31, 2014, and for other plans, the last day of the plan year that ends on or after December 31, 2014, plus any contribution increases occurring after that date and before the employer's withdrawal that must be included in
(2) The highest contribution rate for any plan year after the plan year that includes the expiration date of the first collective bargaining agreement of the withdrawing employer requiring plan contributions that expires after the plan is no longer in endangered or critical status, or, if earlier, the date as of which the withdrawing employer renegotiated a contribution rate effective after a plan is no longer in endangered or critical status.
An example illustrating this simplified method is provided in § 4219.3 of PBGC's notice, collection, and redetermination of withdrawal liability regulation. PBGC received two comments about the simplified method provided in § 4219.3. One commenter asked for clarification about the contribution rate that should be included in determining the highest contribution rate if an employer withdraws after its collective bargaining agreement expires, but before a new collective bargaining agreement is adopted. Another commenter stated that under the simplified method, if the plan year ends soon after the expiration date of the collective bargaining agreement, a higher contribution rate could be imposed on an employer than the plan's later negotiated contribution rate. PBGC agrees that this could occur under the simplified method if the bargaining parties do not reach agreement by the plan year after the plan year that includes the expiration date of the first collective bargaining agreement of the withdrawing employer requiring plan contributions that expires after the plan is no longer in endangered or critical status.
A commenter suggested that a grace period could be provided after the expiration date of the collective bargaining agreement, such as 180 days, during which the higher rate would not apply if it had not been agreed to in collective bargaining. While in many cases collective bargaining agreements are not renegotiated until after the expiration date of the collective bargaining agreement, PBGC believes that the collective bargaining parties will generally have time to resolve the scenario described by the commenter before a plan emerges from endangered or critical status. In addition, PBGC's simplified method already extends the disregard period beyond the highest contribution rate “for plan years during which the plan was in endangered or critical status” to include the period through the end of the plan year after the plan year that includes the expiration date of the first collective bargaining agreement that expires after the plan is no longer in endangered or critical status. Therefore, PBGC did not adopt the commenter's suggestion to change the simplified method in the final rule.
The Office of Management and Budget (OMB) has determined that this rulemaking is not a “significant regulatory action” under Executive Order 12866 and Executive Order 13771. The rule provides simplified methods, as required by section 305(g)(5) of ERISA, to determine withdrawal liability and payment amounts, which multiemployer plan sponsors may choose, but are not required, to adopt. Accordingly, this final rule is exempt from Executive Order 13771 and OMB has not reviewed the rule under Executive Order 12866.
Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, and public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes retrospective review of regulations, harmonizing rules, and promoting flexibility.
Although this is not a significant regulatory action under Executive Order 12866, PBGC has examined the economic implications of this final rule and has concluded that the amendments providing simplified methods for plan sponsors to comply with the statutory requirements will reduce costs for multiemployer plans by approximately $1,476,000. Based on 2016 data, there are about 450 plans that are in endangered or critical status.
PBGC invited public comment on the expected savings on actuarial calculations and other costs using the simplified methods. A commenter noted that expected savings on actuarial calculations and plan administration
The Regulatory Flexibility Act imposes certain requirements with respect to rules that are subject to the notice and comment requirements of section 553(b) of the Administrative Procedure Act and that are likely to have a significant economic impact on a substantial number of small entities. Unless an agency determines that a rule is not likely to have a significant economic impact on a substantial number of small entities, section 604 of the Regulatory Flexibility Act requires that the agency present a final regulatory flexibility analysis at the time of the publication of the final regulation describing the impact of the rule on small entities and steps taken to minimize the impact. Small entities include small businesses, organizations, and governmental jurisdictions.
For purposes of the Regulatory Flexibility Act requirements with respect to this final rule, PBGC considers a small entity to be a plan with fewer than 100 participants. This is substantially the same criterion PBGC uses in other regulations
Thus, PBGC believes that assessing the impact of the proposed regulation on small plans is an appropriate substitute for evaluating the effect on small entities. The definition of small entity considered appropriate for this purpose differs, however, from a definition of small business based on size standards promulgated by the Small Business Administration (13 CFR 121.201) pursuant to the Small Business Act. PBGC therefore requested comments on the appropriateness of the size standard used in evaluating the impact on small entities of the proposed amendments. PBGC did not receive any such comments.
On the basis of its definition of small entity, PBGC certifies under section 605(b) of the Regulatory Flexibility Act (5 U.S.C. 601
Business and industry, Employee benefit plans, Pension insurance.
Employee benefit plans, Pension insurance, Reporting and recordkeeping requirements.
Employee benefit plans, Pension insurance.
Employee benefit plans, Pension insurance.
Employee benefit plans, Pension insurance, Pensions, Reporting and recordkeeping requirements.
Employee benefit plans, Pension insurance, Reporting and recordkeeping requirements.
For the reasons given above, PBGC amends 29 CFR parts 4001, 4204, 4206, 4207, 4211 and 4219 as follows:
29 U.S.C. 1301, 1302(b)(3).
29 U.S.C. 1302(b)(3), 1384(c).
29 U.S.C. 1302(b)(3) and 1386(b).
29 U.S.C. 1302(b)(3), 1387.
29 U.S.C. 1302(b)(3); 1391(c)(1), (c)(2)(D), (c)(5)(A), (c)(5)(B), (c)(5)(D), and (f).
(a) * * * Section 4211(c)(5) of ERISA also permits certain modifications to the statutory allocation methods that PBGC may prescribe in a regulation. Subpart B of this part contains the permissible modifications to the statutory methods that plan sponsors may adopt without PBGC approval. * * *
The revision reads as follows:
(a)
(b)
(a)
(1) The numerator of the allocation fraction, with respect to a withdrawing employer, is based on the “sum of the contributions required to be made” or the “total amount required to be contributed” by the employer for the specified period.
(2) The denominator of the allocation fraction is based on contributions that certain employers have made to the plan for a specified period.
(b)
(1)
(2)
(i) The increases in contribution requirements are due to increased levels of work, employment, or periods for which compensation is provided.
(ii) The additional contributions are used to provide an increase in benefits, including an increase in future benefit accruals, permitted by section 305(d)(1)(B) or (f)(1)(B) of ERISA and section 432(d)(1)(B) or (f)(1)(B) of the Code.
(iii) The withdrawal occurs on or after the expiration date of the employer's collective bargaining agreement in effect in the plan year the plan is no longer in endangered or critical status, or, if earlier, the date as of which the employer renegotiates a contribution rate effective after the plan year the plan is no longer in endangered or critical status.
(c)
(a)
(1)
(2)
(3)
(b)
(a)
(b)
(a)
(b)
(1) A plan sponsor may amend a plan to provide that “the sum of all contributions made” or “total amount contributed” for a plan year means the amount of contributions that the plan actually received during the plan year, without regard to whether the contributions are treated as made for that plan year under section 304(b)(3)(A) of ERISA and section 431(b)(3)(A) of the Code.
(2) A plan sponsor may amend a plan to provide that “the sum of all contributions made” or “total amount contributed” for a plan year means the amount of contributions actually received during the plan year, increased by the amount of contributions received during a specified period of time after the close of the plan year not to exceed the period described in section 304(c)(8) of ERISA and section 431(c)(8) of the Code and regulations thereunder.
(3) A plan sponsor may amend a plan to provide that “the sum of all contributions made” or “total amount contributed” for a plan year means the amount of contributions actually received during the plan year, increased by the amount of contributions accrued during the plan year and received during a specified period of time after the close of the plan year not to exceed the period described in section 304(c)(8) of ERISA and section 431(c)(8) of the Code and regulations thereunder.
(c)
(1) The plan sponsor of a plan using the presumptive, modified presumptive or rolling-5 method may amend the plan to provide that only the contributions of significant withdrawn employers are excluded from the denominators of the fractions used in those methods.
(2) For purposes of this paragraph (c), “significant withdrawn employer” means—
(i) An employer to which the plan has sent a notice of withdrawal liability under section 4219 of ERISA; or
(ii) A withdrawn employer that in any plan year used to determine the denominator of a fraction contributed at least $250,000 or, if less, 1 percent of all contributions made by employers for that year.
(3) If a group of employers withdraw in a concerted withdrawal, the plan sponsor must treat the group as a single employer in determining whether the members are significant withdrawn employers under paragraph (c)(2) of this section. A “concerted withdrawal” means a cessation of contributions to the plan during a single plan year—
(i) By an employer association;
(ii) By all or substantially all of the employers covered by a single collective bargaining agreement; or
(iii) By all or substantially all of the employers covered by agreements with a single labor organization.
(d)
(i) A designated plan year ending after September 26, 1980, will substitute for the plan year ending before September 26, 1980, in applying section 4211(b)(1)(B), section 4211(b)(2)(B)(ii)(I), section 4211(b)(2)(D), section 4211(b)(3), and section 4211(b)(3)(B) of ERISA; and
(ii) Plan years ending after the end of the designated plan year in paragraph (d)(1)(i) of this section will substitute for plan years ending after September 25, 1980, in applying section 4211(b)(1)(A), section 4211(b)(2)(A), and section 4211(b)(2)(B)(ii)(II) of ERISA.
(2) A plan amendment made pursuant to paragraph (d)(1) of this section must provide that the plan's unfunded vested benefits for plan years ending after the designated plan year are reduced by the value of all outstanding claims for withdrawal liability that can reasonably be expected to be collected from employers that had withdrawn from the plan as of the end of the designated plan year.
(3) In the case of a plan that primarily covers employees in the building and construction industry, the plan year designated by a plan amendment pursuant to paragraph (d)(1) of this section must be a plan year for which the plan has no unfunded vested benefits determined in accordance with section 4211 of ERISA without regard to § 4211.6.
(e)
(i) A designated plan year ending after September 26, 1980, will substitute for the plan year ending before September 26, 1980, in applying section 4211(c)(2)(B)(i) and section 4211(c)(2)(B)(ii)(I) and (II) of ERISA; and
(ii) Plan years ending after the end of the designated plan year will substitute for plan years ending after September 25, 1980, in applying section 4211(c)(2)(B)(ii)(II) and section 4211(c)(2)(C)(i)(II) of ERISA.
(2) A plan amendment made pursuant to paragraph (e)(1) of this section must provide that the plan's unfunded vested benefits for plan years ending after the designated plan year are reduced by the value of all outstanding claims for withdrawal liability that can reasonably be expected to be collected from employers that had withdrawn from the plan as of the end of the designated plan year.
(a)
(b)
(1) The employer's contribution rate in effect on the employer freeze date, plus any contribution increase in § 4211.4(b)(2)(ii) that is effective after the employer freeze date but not later than the last day of the target year; times
(2) The employer's contribution base units for the target year.
(c)
(d)
(2) For purposes of this paragraph (d) —
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(3) A rate history group of a plan for a plan year is a group of included employers satisfying all of the following requirements:
(i) Each included employer of the plan is in one and only one rate history group.
(ii) The employers in the rate history group have substantially the same contribution history (or the same percentage increases in contributions from year to year), but there need not be more than ten rate history groups.
(iii) There is consistency in the composition of rate history groups from year to year.
(4) The proxy group of a plan for a plan year is a group of included employers satisfying all of the following requirements:
(i) On at least 1 day of the plan year, the employers in the proxy group represent at least 10 percent of active plan participants.
(ii) There is at least one employer in the proxy group from each rate history group of the plan for the plan year that represents, on at least 1 day of the plan year, at least 5 percent of active plan participants.
(iii) There is consistency in the composition of the proxy group from year to year.
(5) The adjusted contributions of an employer under a plan for a plan year are —
(i) The employer's contribution base units for the plan year; multiplied by
(ii) The employer's contribution rate per contribution base unit at the end of the plan year, reduced by the sum of the employer's contribution rate increases since the plan freeze date that are required to be disregarded in determining withdrawal liability.
(6) The adjusted contributions of a rate history group that is represented in the proxy group of a plan for a plan year are the total contributions for the plan year attributable to employers in the rate history group, multiplied by the adjustment factor for the rate history group. The adjustment factor for the rate history group is the quotient, for all employers in the rate history group that are also in the proxy group, of —
(i) Total adjusted contributions for the plan year; divided by
(ii) Total contributions for the plan year.
(7) The adjusted contributions of a plan for a plan year are the plan's total contributions for the plan year by all employers, multiplied by the adjustment factor for the plan. For this purpose, “the plan's total contributions for the plan year” means the total unadjusted plan contributions for the plan year that would otherwise be included in the denominator of the allocation fraction in the absence of section 305(g)(1) of ERISA, including any employer contributions owed with respect to earlier periods that were collected in that plan year, and excluding any amounts contributed in that plan year by an employer that withdrew from the plan during that plan year. The adjustment factor for the plan is the quotient, for all rate history groups that are represented in the proxy group, of —
(i) Total adjusted contributions for the plan year; divided by
(ii) Total contributions for the plan year.
(8) Under this method, in determining the denominator of a plan's unfunded vested benefits allocation fraction, the contributions taken into account with respect to any plan year (beginning with the base year) are the plan's adjusted contributions for the plan year.
(9) Notwithstanding the foregoing provisions of this paragraph (d), if total contributions for a year for a rate history group or for a plan are not timely and reasonably available for calculating adjusted contributions for that year,
(e)
(2)
(a)
(b)
(1) The expiration date of the first collective bargaining agreement requiring plan contributions that expires after the plan is no longer in endangered or critical status, or
(2) The date that is the later of—
(i) The end of the first plan year following the plan year in which the plan is no longer in endangered or critical status; or
(ii) The end of the plan year that includes the expiration date of the first collective bargaining agreement requiring plan contributions that expires after the plan is no longer in endangered or critical status.
(3) For purposes of paragraph (b)(2) of this section, the expiration date of a collective bargaining agreement that by its terms remains in force until terminated by the parties thereto is considered to be the earlier of—
(i) The termination date agreed to by the parties thereto; or
(ii) The first day of the third plan year following the plan year in which the plan is no longer in endangered or critical status.
(c)
(1)
(2)
(d)
(2)
(a)
(b)
(1) The amount that would be the employer's allocable amount of unfunded vested benefits determined in accordance with section 4211 of ERISA under the method in use by the plan without regard to § 4211.6 (but taking into account § 4211.4); and
(2) The employer's proportional share of the value of each of the benefit reductions and benefit suspensions required to be disregarded under § 4211.6 determined in accordance with this section.
(c)
(1)
(2)
(i) The numerator is the sum of all contributions required to be made by the withdrawing employer for the 5 consecutive plan years ending before the plan year in which the benefit suspension takes effect; and
(ii) The denominator is the total of all employers' contributions for the 5 consecutive plan years ending before the plan year in which the suspension takes effect, increased by any employer contributions owed with respect to earlier periods which were collected in those plan years, and decreased by any amount contributed by an employer that withdrew from the plan during those plan years. If a plan uses an allocation method other than the presumptive method in section 4211(b) of ERISA or similar method, the denominator after the first year is decreased by the contributions of any employers that withdrew from the plan and were unable to satisfy their withdrawal liability claims in any year before the employer's withdrawal.
(iii) In determining the numerator and the denominator in paragraph (c)(2) of this section, the rules under § 4211.4 (and permissible modifications under § 4211.12 and simplified methods under §§ 4211.14 and 4211.15) apply.
(3)
(i) The numerator is the sum of all contributions required to be made by the withdrawing employer for the 5 consecutive plan years ending before the employer's withdrawal; and
(ii) The denominator is the total of all employers' contributions for the 5 consecutive plan years ending before the employer's withdrawal, increased by any employer contributions owed with respect to earlier periods which were collected in those plan years, and decreased by any amount contributed by an employer that withdrew from the plan during those plan years.
(iii) In determining the numerator and the denominator in this paragraph (c)(3), the rules under § 4211.4 (and permissible modifications under § 4211.12 and simplified methods under §§ 4211.14 and 4211.15) apply.
(iv) If a benefit suspension in § 4211.6(a)(3) is a temporary suspension of the plan's payment obligations as authorized by the Department of the Treasury, the present value of the suspended benefits in this paragraph (c)(3) includes only the value of the suspended benefits through the ending period of the benefit suspension.
(d)
(1)
(i) The unamortized balance, as of the end of the plan year before the withdrawal, of;
(ii) The value of the benefit reduction as of the end of the plan year in which the reduction took effect; and
(iii) Determined using the same assumptions as for unfunded vested benefits and amortization in level annual installments over a period of 15 years.
(2)
(i) The numerator is the sum of all contributions required to be made by the withdrawing employer for the 5 consecutive plan years ending before the employer's withdrawal; and
(ii) The denominator is the total of all employers' contributions for the 5 consecutive plan years ending before the employer's withdrawal, increased by any employer contributions owed with respect to earlier periods which were collected in those plan years, and decreased by any amount contributed by an employer that withdrew from the plan during those plan years.
(iii) The 5 consecutive plan years ending before the plan year in which the adjustable benefit reduction takes effect may be used in determining the numerator and the denominator in this paragraph (d). If such 5-year period is used, in determining the denominator, if a plan uses an allocation method other than the presumptive method in section 4211(b) of ERISA or similar method, the denominator after the first year is decreased by the contributions of any employers that withdrew from the plan and were unable to satisfy their withdrawal liability claims in any year before the employer's withdrawal.
(iv) In determining the numerator and the denominator in this paragraph (d), the rules under § 4211.4 (and permissible modifications under § 4211.12 and simplified methods under §§ 4211.14 and 4211.15) apply.
(e)
(1)
(2)
(3)
(f)
(2)
(c) * * *
(2) * * *
(iii) In determining the numerator and the denominator in this paragraph (c), the rules under § 4211.4 (and permissible simplified methods under §§ 4211.14 and 4211.15) apply.
(c) * * *
(2) * * *
(iii) In determining the numerator and the denominator in this paragraph (c), the rules under § 4211.4 (and permissible simplified methods under §§ 4211.14 and 4211.15) apply.
(a) * * * In determining the numerators and the denominators in paragraph (d) of this section, the rules under § 4211.4 (and permissible simplified methods under §§ 4211.14 and 4211.15) apply.
The examples in this appendix illustrate simplified methods for disregarding certain contribution increases in the allocation fraction provided in § 4211.14 of this part.
Example 1. Determining the Numerator of the Allocation Fraction Using the Employer's Plan Year 2014 Contribution Rate (§ 4211.14(b)).
Assume Plan X is a calendar year multiemployer plan in critical status which did not have a benefit increase after plan year 2014. In accordance with section 305(g)(3)(B) of ERISA, the annual 5 percent contribution rate increases applicable to Employer A and other employers in Plan X after the 2014 plan year were deemed to be required to enable the plan to meet the requirement of its rehabilitation plan and must be disregarded. Employer A, a contributing employer, withdraws from Plan X in 2021. Using the rolling-5 method, Plan X has unfunded vested benefits of $200 million as of the end of the 2020 plan year. To determine Employer A's allocable share of these unfunded vested benefits, Employer A's hourly required contribution rate and contribution base units for the 2014 plan year and each of the 5 plan years between 2016 and 2020 are identified as shown in the following table:
The plan sponsor makes a determination pursuant to section 305(g)(3) of ERISA that the annual 5 percent contribution rate increases applicable to Employer A and other employers in Plan X after the 2014 plan year were required to enable the plan to meet the requirement of its rehabilitation plan and should be disregarded; benefits were not increased after plan year 2014.
Applying the simplified method, contribution rate increases that went into effect during plan years beginning after December 31, 2014 would be disregarded: The $5.51 contribution rate in effect at the end of plan year 2014 would be held steady in computing Employer A's required contributions for the plan years included in the numerator of the allocation fraction. Based on 4.3 million contribution base units, this results in total required contributions of $23.7 million over 5 years. Absent section 305(g)(3) of ERISA, the sum of the contributions required to be made by Employer A would have been determined by multiplying Employer A's contribution rate in effect for each plan year by the contribution base units in that plan year, producing total required contributions of $28.96 million over 5 years.
Example 2. Determining the Denominator of the Allocation Fraction Using the Proxy Group Method (§ 4211.14(d)).
Assume a plan covers ten employers. For 2017, three small employers were in rate history group X, representing less than 5 percent of active plan participants; employers A and B and two other employers were in rate history group Y; and employer C and two other employers were in rate history group Z. For 2018, there were changes in contribution rates for some of B's employees, and as a result, employer B is being treated as two employers, B1 and B2. B1 remained in rate history group Y because, while B1 has a significantly lower contribution rate than A, the contributions of both are subject to the same percentage increase each year. B2 was added to rate history group X. X continues to represent less than 5 percent of active plan participants, and the plan continues to ignore it in forming the proxy group. The plan forms a 2018 proxy group of three employers—A and B1 from rate history group Y and C from rate history group Z—that together represent more than 10 percent of active plan participants.
Contributions for 2018 are $1,000,000: $20,000 for rate history group X, $740,000 for rate history group Y, and $240,000 for rate history group Z, with A and B1 accounting for $150,000 and C accounting for $45,000 of the total contribution amounts.
Contribution rates for 2018 for A, B1, and C (excluding rate increases required to be disregarded for withdrawal liability purposes) and contribution base units for the three employers are: For A, 87 cents and 100,000 CBUs; for B1, 43 cents and 50,000 CBUs; and for C, 70 cents and 60,000 CBUs, as shown in rows (1) and (2) of the table below. Thus, the three employers' adjusted contributions are $87,000, $21,500, and $42,000 respectively, as shown in row (3).
Moving from the employer level to the rate history group level, the adjusted contributions for employers in the proxy group that are in the same rate history group are added together (row (4)). Those totals are then divided by total actual contributions for the proxy group employers in each rate history group (row (6)) to derive an adjustment factor for each rate history group (row (7)) that is applied to the actual contributions of all employers in the rate history group (row (8)) to get the adjusted contributions for each rate history group represented in the proxy group (row (9)).
Moving from the rate history group level to the plan level, the same process is repeated. Adjusted employer contributions for the rate history group are summed (row (10)) and divided by the total contributions for all rate history groups represented in the proxy group (row (11)) to get an adjustment factor for the plan (row (12)). Contributions for rate history group X are excluded from row (11) because no employer in rate history group X is in the proxy group. The adjustment factor for the plan is then applied to total plan contributions (row (13)) to get adjusted plan contributions (row (14)). Contributions for rate history group X are included in row (13) because—although X was ignored in determining the adjustment factor for the plan — the adjustment factor applies to all plan contributions (other than those by employers excluded from the plan's allocation fraction denominator). The plan will use the adjusted plan contributions in row (14) as the total contributions for 2018 in determining the denominator of any allocation fraction that includes contributions for 2018.
29 U.S.C. 1302(b)(3) and 1399(c)(6).
The additions read as follows:
(a) * * * Section 4219(c) of ERISA requires a withdrawn employer to make annual withdrawal liability payments at a set rate over the number of years necessary to amortize its withdrawal liability, generally limited to a period of 20 years. This subpart provides rules for disregarding certain contribution increases in determining the highest contribution rate under section 4219(c) of ERISA.
(a)
(1)
(2)
(i) The increases in contribution requirements are due to increased levels of work, employment, or periods for which compensation is provided.
(ii) The additional contributions are used to provide an increase in benefits, including an increase in future benefit accruals, permitted by section 305(d)(1)(B) or (f)(1)(B) of ERISA and section 432(d)(1)(B) or (f)(1)(B) of the Code.
(b)
(1) The employer's contribution rate as of the date that is the later of the last day of the first plan year that ends on or after December 31, 2014 and the last day of the plan year the employer first contributes to the plan (the “employer freeze date”) plus any contribution increases after the employer freeze date, and before the employer's withdrawal date that are determined in accordance with the rules under § 4219.3(a)(2)(ii); or
(2) The highest contribution rate for any plan year after the plan year that includes the expiration date of the first collective bargaining agreement of the withdrawing employer requiring plan contributions that expires after the plan is no longer in endangered or critical status, or, if earlier, the date as of which the withdrawing employer renegotiated a contribution rate effective after the plan year the plan is no longer in endangered or critical status.
(c)
(1)
(2)
(d)
(2)
Issued in Washington, DC.
U.S. Army Corps of Engineers, Department of Defense.
Final rule.
This final rule removes the U.S. Army Corps of Engineers' part titled Design Criteria for Dam and Lake Projects. This part is out-of-date and otherwise covers internal agency operations that have no public compliance component or adverse public impact. Therefore, this part can be removed from the Code of Federal Regulations (CFR).
This rule is effective on January 8, 2021.
Department of the Army, U.S. Army Corps of Engineers, ATTN: CECW-EC (Mr. Robert Bank), 441 G Street NW, Washington, DC 20314-1000.
Mr. Robert Bank at (202) 761-5532 or by email at
This final rule removes from the 33 CFR part 220, Design Criteria for Dam and Lake Projects providing policy, design, and report requirements for low level discharge facilities for drawdown of lakes to be impounded by Corps Civil Works projects. The rule was initially published in the
The solicitation of public comment for this removal is unnecessary because the rule is out-of-date, duplicative of existing internal agency guidance, and otherwise covers internal agency operations that have no public compliance component or adverse public impact. For current public accessibility purposes, updated internal agency policy on this topic may be found in Engineer Manual 1110-2-1602, “Hydraulic Design of Reservoir Outlet Works” (available at
This rule removal is being conducted to reduce confusion for the public as well as for the Corps regarding the current policy which governs the Corps' design criteria for Corps dam and lake projects. Because the regulation does not place a burden on the public, its removal does not provide a reduction in public burden or costs.
This rule is not significant under Executive Order (E.O.) 12866, “Regulatory Planning and Review.” Therefore, the requirements of E.O. 13771, “Reducing Regulation and Controlling Regulatory Costs,” do not apply. This removal supports a recommendation of the DoD Regulatory Reform Task Force.
Dams, Flood control.
Council on Environmental Quality.
Final rule.
Pursuant to Executive Order (E.O.) 13891, “Promoting the Rule of Law Through Improved Agency Guidance Documents,” this final rule establishes the process that the Council on Environmental Quality (CEQ) will follow for issuing guidance documents. E.O. 13891 requires Federal agencies to finalize regulations or amend existing regulations to establish processes and procedures for issuing guidance documents.
This rule is effective January 8, 2021.
Amy B. Coyle, Deputy General Counsel, Council on Environmental Quality, 730 Jackson Place NW, Washington, DC 20503, (202) 395-5750,
On October 9, 2019, President Trump issued E.O. 13891,
In this final rule, CEQ adds a new part 1519 to the Code of Federal Regulations to set out its procedures for the development and issuance of guidance documents consistent with the direction and reflecting the policies described in E.O. 13891 and OMB M-20-02.
Section 1519.1, “Purpose,” states that the purpose of part 1519 is to implement E.O. 13891, and explains CEQ's process for developing and issuing guidance.
Section 1519.2, “Guidance document procedures,” defines “guidance documents” in paragraph (a) and describes documents that do not meet that definition in paragraph (b), consistent with section 2(b)
Paragraph (c) of § 1519.2 lists the minimum requirements for any document meeting the definition of a guidance document consistent with Q22 of OMB M-20-02, including a title, unique identification number, date, indication of whether it revises or replaces prior guidance, summaries, and legal citations. Additionally, consistent with section 4(i) of E.O. 13891, paragraph (c)(6) includes a requirement that each guidance document clearly state that it does not bind the public, except as authorized by law or as incorporated into a contract.
Paragraph (c)(11) of § 1519.2 specifies that any guidance document must be posted on CEQ's website. E.O. 13891 also directed Federal agencies to make guidance documents publicly available in an indexed, searchable database online. As described in the
Finally, paragraph (d) of § 1519.2 requires the CEQ Office of the General Counsel to review and clear all guidance documents before CEQ issues them.
Consistent with section 4(ii) of E.O. 13891, § 1519.3, “Procedures for the public to request withdrawal or modification of a guidance document,” addresses the process for members of the public to petition CEQ to withdraw or modify a particular guidance document, including designation of the Office of the General Counsel as the office within CEQ to which the public should direct such petitions. CEQ intends to provide additional instructions on its guidance website, including appropriate contact information and format of the petitions.
Finally, § 1519.4, “Significant guidance documents,” addresses specific requirements for a subset of “guidance documents” that are “significant guidance documents” as defined by section 2(c) of E.O. 13891. Paragraph (a) sets forth that definition. OMB's Office of Information and Regulatory Affairs (OIRA) makes the final determination of whether a guidance document is significant. If OIRA makes such a determination for a particular guidance document, this section will also apply. Consistent with section 4(iii) of E.O. 13891, paragraph (b) sets forth procedural requirements, including public notice and comment for at least 30 days, unless an exception applies; public response to major concerns raised in comments; approval on a non-delegable basis by the Chairman, or an official acting as Chairman; review by OIRA under Executive Order 12866; and compliance with the applicable requirements for regulations or rules.
Under the Administrative Procedure Act, an agency may waive notice and comment procedures if an action is an interpretative rule, a general statement of policy, or a rule of agency organization, procedure, or practice.
E.O. 12866 provides that OIRA will review all significant rules. E.O. 13563 reaffirms the principles of E.O. 12866, calling for improvements in the Federal government's regulatory system to promote predictability, to reduce uncertainty, and to use the best, most innovative, and least burdensome tools for achieving regulatory objectives. OMB determined that this final rule does not meet the requirements for a significant regulatory action under E.O. 12866, as supplemented by E.O. 13563, and therefore it was not subject to review.
The Regulatory Flexibility Act, as amended (RFA), 5 U.S.C. 601
A statement containing the information required by the Unfunded Mandates Reform Act, 2 U.S.C. 1531
This rule is not an E.O. 13771 regulatory action because this rule is not significant under E.O. 12866.
Under the criteria in section 1 of E.O. 13132, this rule will not have sufficient Federalism implications to warrant the preparation of a Federalism summary impact statement because it will not substantially and directly affect the relationship between the Federal and State governments.
The purpose of this rulemaking is to formalize the CEQ's administrative procedures for issuing guidance documents, as required by E.O. 13891. CEQ has determined that the final rule is a non-major Federal action under the National Environmental Policy Act, 42 U.S.C. 4321
This rule does not contain any new collections of information that require approval by OMB under the Paperwork Reduction Act, 44 U.S.C. 3501
Administrative practice and procedure, Guidance.
42 U.S.C. 4321-4347; 42 U.S.C. 4371-4375; and E.O. 13891, 84 FR 55235.
(a) This part implements Executive Order 13891, “Promoting the Rule of Law Through Improved Agency Guidance Documents,” and reflects the policies described in that order. The provisions in this part address the Council on Environmental Quality's procedures for the development and issuance of agency guidance documents. This part explains what constitutes guidance documents, and sets forth the minimum requirements for guidance documents, the procedures to request withdrawal or modification of guidance documents, and the additional requirements and procedures for significant guidance documents.
(b) This part is intended to improve the internal management of the Council on Environmental Quality. It is not intended to and does not create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its agencies or other entities, its officers or employees, or any other person.
(c) If Executive Order 13891 or any provision thereof is rescinded or superseded, this part remains in effect.
(a)
(b)
(1) Agency statements of specific, rather than general, applicability.
(2) Agency statements that do not set forth a policy on a statutory, regulatory, or technical issue or an interpretation of a statute or regulation.
(3) Legislative rules promulgated under 5 U.S.C. 553 (or similar statutory provisions), or exempt from rulemaking requirements under 5 U.S.C. 553(a).
(4) Rules of agency organization, procedure, or practice that are not anticipated to have substantial future effect on the behavior of regulated parties or the public.
(5) Decisions of agency adjudication.
(6) Documents or agency statements that are directed solely to the Council on Environmental Quality or other agencies (or personnel of such agencies) that are not anticipated to have substantial future effect on the behavior of regulated parties or the public.
(7) Legal briefs and other court filings.
(8) Legal advice or opinions from the Council on Environmental Quality's Office of the General Counsel.
(9) Categories of guidance documents made exempt from Executive Order 13891 by the Administrator of the Office of Management and Budget's Office of Information and Regulatory Affairs through memoranda issued pursuant to section 4(b) of Executive Order 13891.
(c)
(1) Provide the title of the guidance document;
(2) Provide a unique document identification number;
(3) Identify the Council on Environmental Quality and any office, as appropriate, issuing the guidance document;
(4) Include the date of issuance;
(5) Include the term “guidance”;
(6) Include a disclaimer clarifying that it does not have the force and effect of law; is not meant to bind the public in any way; and is intended only to provide clarity to the public regarding
(7) If it is a revision to or a replacement of a previously issued guidance document, identify the guidance document that it revises or replaces;
(8) Include a short summary of the subject matter covered in the guidance document at the top of the document;
(9) Identify the activities to which and the persons to whom the guidance document applies;
(10) Include the citation to the statutory provision or regulation to which the guidance document applies or which it interprets; and
(11) Be posted on the Council on Environmental Quality's website.
(d)
(a) Any member of the public may petition the Council on Environmental Quality to withdraw or modify a guidance document.
(b) The petitioner must submit the request for the withdrawal or modification of a guidance document in writing to the Office of the General Counsel. The petition must contain a statement of the reasons for the petition and any supporting documents to support the petitioner's request.
(c) Upon receipt of a petition for withdrawal or modification of a guidance document, the Office of the General Counsel will consult with the relevant offices and coordinate the response to the petition.
(d) The Council on Environmental Quality should respond to a petition in writing, including electronically, within 90 days of receipt of a petition. The response should state whether the petition is granted, granted in part and denied in part, denied, or provisionally denied for lack of adequate information. If the petition is provisionally denied for lack of adequate information, the response should indicate what additional information is necessary to adjudicate the petition. The Office of the General Counsel should respond to the petition in writing no later than 90 days after receipt of the necessary additional information. The response should state whether the petition is granted, granted in part and denied in part, or denied.
(e) The Council on Environmental Quality may consider in a coordinated manner or provide a coordinated response to similar petitions for withdrawal or modification.
(f) The Council on Environmental Quality need not respond to petitions under this part for withdrawal or modification of documents that do not meet the definition of a guidance document.
(a)
(1) Lead to an annual effect on the economy of $100 million or more, or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or Tribal governments or communities;
(2) Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency;
(3) Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or
(4) Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles of Executive Order 12866.
(b)
(1) Submit the guidance document for review by the Office of Information and Regulatory Affairs under Executive Order 12866;
(2) Publish the draft significant guidance document in the
(i) This provision will not apply if the Council on Environmental Quality for good cause finds that notice and public comment is impracticable, unnecessary, or contrary to the public interest.
(ii) If such a finding is made, the Council on Environmental Quality must incorporate such a finding and a brief statement of its reasoning into the significant guidance document.
(3) Obtain approval on a non-delegable basis from the Chairman or an official who is serving in an acting capacity as the Chairman.
(4) Provide a public response to major concerns raised in comments on the draft significant guidance document.
(5) Announce the availability of the final significant guidance document.
(6) Comply with the applicable requirements for regulations or rules, including significant regulatory actions, set forth in Executive Orders 12866, “Regulatory Planning and Review,” 13563, “Improving Regulation and Regulatory Review,” 13609, “Promoting International Regulatory Cooperation,” 13771, “Reducing Regulation and Controlling Regulatory Costs,” and 13777, “Enforcing the Regulatory Reform Agenda.”
(c)
Federal Permitting Improvement Steering Council.
Final rule.
The Federal Permitting Improvement Steering Council (Permitting Council) has voted to add mining as a sector with infrastructure projects eligible for coverage under Title 41 of the Fixing America's Surface Transportation Act (FAST-41). A new part will be included in the Code of Federal Regulations that adds mining to the list of statutory FAST-41 sectors. The addition of mining as a FAST-41 sector will allow qualified mining infrastructure projects to become FAST-41 covered projects. FAST-41 coverage will help Federal agencies coordinate their environmental and project review efforts to improve the timeliness, efficiency, predictability, and transparency of the decision-making processes associated with covered
This rule becomes effective on January 8, 2021.
John G. Cossa, General Counsel, Federal Permitting Improvement Steering Council, 1800 G St. NW, Suite 2400, Washington, DC 20006,
Persons who use a telecommunications device for the deaf may call the Federal Information Relay Service (FIRS) at 1-800-877-8339 to contact this individual during normal business hours or to leave a message at other times. FIRS is available 24 hours a day, 7 days a week. You will receive a reply to a message during normal business hours.
On November 27, 2020, the Permitting Council, which comprises the Permitting Council Executive Director; 13 Federal agency council members (including the designees of the Secretaries of Agriculture, Army, Commerce, Interior, Energy, Transportation, Defense, Homeland Security, and Housing and Urban Development, the Administrator of the Environmental Protection Agency, and the Chairmen of the Federal Energy Regulatory Commission, Nuclear Regulatory Commission, and the Advisory Council on Historic Preservation); and additional Permitting Council members, the Chairman of the Council on Environmental Quality (CEQ) and the Director of the Office of Management and Budget (OMB);
The Permitting Council reviewed the comments received, and on January 4, 2021, voted whether to designate mining, as defined in the proposed rule, as a FAST-41 sector. A majority of the Permitting Council, including the Executive Director, Permitting Council members representing the Nuclear Regulatory Commission, Advisory Council on Historic Preservation, Department of Commerce, Department of Energy, Environmental Protection Agency, Army Corps of Engineers, Department of the Interior, Department of Agriculture, Department of Transportation, Department of Defense, and Department of Homeland Security, and the Chairman of CEQ voted in favor of the proposal. The Permitting Council member representing the Department of Housing and Urban Development and the Director of OMB abstained from the vote. The Permitting Council member representing the Federal Energy Regulatory Commission did not vote. No Permitting Council member voted against the proposal.
The Permitting Council continues to believe that, like the other FAST-41 sectors, mining is an important infrastructure sector. Mining projects can involve the construction of significant infrastructure, require substantial investment, and necessitate extensive and complex Federal and state environmental reviews and authorizations. Accordingly, like qualified projects from the statutory FAST-41 sectors, mining projects that satisfy the other covered project criteria of 42 U.S.C. 4370m(6) could benefit from the enhanced interagency coordination, transparency, and predictability provided by FAST-41 coverage. Extending FAST-41 coverage to qualified mining projects is consistent with Executive Order (E.O.) 13807, Establishing Discipline and Accountability in the Environmental Review and Permitting Process for Infrastructure Projects, 82 FR 40463 (Aug. 14, 2017) and E.O. 13817, A Federal Strategy to Ensure Secure and Reliable Supplies of Critical Minerals, 82 FR 60835 (Dec. 20, 2017).
Because a majority of the Permitting Council voted in favor of designating mining as a FAST-41 sector pursuant to 42 U.S.C. 4370m(6)(A), the Permitting Council will add part 1900 to title 40 of the Code of Federal Regulations to designate mining as a FAST-41 sector.
The Permitting Council received 6,487 comments, the majority of which were variants of two form letters opposed to adding mining as a FAST-41 sector. Although none of the comments resulted in changes to the proposed rule, the Permitting Council provides the following comment responses to clarify apparent misperceptions in the comment record about the scope and effect of FAST-41 and FAST-41 coverage.
On December 9, 2020, the Permitting Council received a letter undersigned by several non-governmental entities requesting that the Permitting Council extend by an additional 45 days the 30-day comment period for the proposed rule. The letter asserted that the extension was needed because the ongoing COVID-19 crisis and the holiday season limited the ability of potentially affected stakeholders to provide timely comment, particularly given the various and disparate environmental and economic effects of mining. The Permitting Council denied the extension request, explaining that 30 days was sufficient time to provide comment on the proposal, which is administrative in nature and does not make any mining project more or less likely to be approved or implemented, or any environmental or economic effect that may be associated with a mining project to occur.
Numerous commenters incorrectly argue that the scope of the FAST Act is limited to transportation, and that therefore, the Permitting Council is prohibited from designating mining—which is not transportation—as a FAST-41 sector. While much of the FAST Act does deal with transportation issues, 6 of the 10 statutory FAST-41 sectors—renewable energy production, conventional energy production, electricity transmission, water resource projects, broadband, and manufacturing—are not transportation. 42 U.S.C. 4370m(6)(A). Nothing in FAST-41 suggests that the Permitting Council is prohibited from designating new sectors that are not transportation.
Some commenters make the unsubstantiated assertion that Congress intentionally did not include mining as a FAST-41 sector because the environmental effects of mining allegedly are more severe than the effects of the other FAST-41 sectors. The FAST-41 statute contains no evidence of such Congressional intent. The statute places no limitation on the Permitting Council's authority to add a FAST-41 sector based on that sector's perceived environmental impacts. On the contrary, the only limitation
Several commenters argue that designating mining as a FAST-41 sector is inappropriate because mining projects are too complex and diverse for the FAST-41 process and the Permitting Council to manage. One commenter suggested that the Permitting Council lacks adequate resources, funding, and technical expertise to conduct environmental reviews and oversee the permitting process for any covered mining projects, despite the fact that the Permitting Council consists of all the Federal agencies currently responsible for the environmental review and authorization of mining projects and collectively possesses all the technical and environmental expertise that the U.S. government has to bear.
Mining is an appropriate FAST-41 sector precisely because mining projects can be complex and diverse, and can necessitate extensive and coordinated Federal and state environmental review and decision making. The more complex the permitting path, the more likely it is that a project will be able to benefit from the enhanced interagency coordination, transparency, and predictability FAST-41 coverage provides. The Permitting Council's current project portfolio includes some of the largest, most complex, and novel infrastructure projects in the U.S., including multibillion-dollar renewable energy projects (wind and solar) as well as pipeline projects that are hundreds of miles long, cross Federal, state, private, and Tribal lands, and require dozens of permits and authorizations from numerous Federal and state entities. Covered projects also include several unprecedented, multibillion-dollar offshore wind projects, which require close interagency coordination as they are shepherded through the project review and approval process. Two of the FAST-41 covered projects that completed the Federal review process in 2020 are the largest of their kind (a solar renewable energy project and a liquefied natural gas and pipeline project).
Most large-scale infrastructure projects that would be eligible for FAST-41 coverage present environmental, jurisdictional, procedural, and interagency permitting challenges that the Permitting Council works daily to resolve. Through its vote to add mining as a FAST-41 sector, the Permitting Council has signaled its willingness to assist covered mining project sponsors in resolving their complex project review process challenges.
The same commenters who argue that mining projects are too complex and diverse for FAST-41 coverage inconsistently argue that FAST-41 coverage for mining projects is unnecessary because mining permitting in the U.S. is relatively swift, purportedly averaging two years. But the fact that some mining projects may be approved within a relatively short timeframe has no bearing on whether any given mining project may benefit from the enhanced interagency coordination, predictability, efficiency, and transparency that FAST-41 coverage can provide. Additionally, the two-year average permitting timeframe cited by commenters originates in a U.S. Government Accountability Office (GAO) report that only considered the time needed to obtain mining authorizations from Federal land management agencies, and not the estimated time needed to obtain myriad other Federal authorizations and permits that likely would be included in any FAST-41 covered project permitting timetable.
Many of the comments evidence a widespread belief that FAST-41 provides an alternate “expedited” project review and permitting regime that supplants NEPA and potentially other permitting and procedural requirements. This is not the case. The FAST-41 statute expressly does not supersede NEPA or affect any other agency statutory or regulatory requirement.
Although FAST-41 may provide more timely Federal decision making with respect to a covered project, it does not alter the “rigor” of any Federal agency's decision making, as some commenters suggest. Longer permitting timeframes should not be confused with rigorous Federal agency decision making. Much of the time savings associated with FAST-41 coverage has been achieved through coordinating interagency efforts, eliminating needless duplication, and engaging agencies and project sponsors to foster improved communication, and not through subverting applicable project review or decision-making procedures.
Commenters appear to incorrectly presume that FAST-41 coverage would subject mining projects to an arbitrarily inflexible, “expedited” environmental review and authorization process that would prevent Federal decision makers from obtaining and reviewing necessary technical and environmental information, providing opportunities for essential public input, coordinating with relevant state, local, and Tribal governments, and adjusting the FAST-41 project permitting timetable (42 U.S.C. 4370m-2(c)(1)(A), (c)(1)(b)(ii) & (c)(2)) to accommodate adequate NEPA review. But FAST-41 contains precisely the flexibility mechanisms that
Similarly, commenters' concern that agencies are unable to adjust FAST-41 project permitting timetables as needed to accommodate changed circumstances or new information is unfounded. Pursuant to 42 U.S.C. 4370m-2(c)(2)(D)(i)(I) and (II), agencies may adjust permitting timetable milestones where interagency agreement can be reached about the need for the extension and a written explanation is provided for the record. And if an extension of a milestone would extend a final permitting completion date by more than 30 days, the Permitting Council Executive Director may extend the final permitting timetable date after consulting with relevant agencies and determining on the record that that an extension is warranted based on the same “relevant factors” that can be used for deviating from the RPS. 42 U.S.C. 4370m-2(c)(2)(D)(i)(III). In short, nothing in FAST-41 prevents agencies from modifying permitting timetables for the reasons commenters are concerned about.
Commenters' concerns regarding the FAST-41 provision that requires OMB approval and a report to Congress if a permitting timetable exceeds by 50 percent the originally established permitting timetable (150 percent date) are equally misplaced. 42 U.S.C. 4370m-2(c)(2)(D)(iii). Like the milestone extension requirements, the 150 percent date requirement is a transparency and accountability mechanism which, like many of FAST-41's substantive provisions, encourages thoughtful, coordinated, and deliberate agency planning and action. Nothing prevents OMB from granting permitting timetable extensions beyond 50 percent of the original timetable to accommodate any information gap, needed stakeholder consultation, or environmental concern. The Permitting Council agrees with commenters that project sponsor delay can be a significant source of permitting timeline delay. That is why the 150 percent date requirement does not count against an agency when the permitting timetable extension request is for reasons outside the government's control. 42 U.S.C. 4370m-2(c)(2)(D)(iii)(I).
Likewise, and contrary to the assertions of some commenters, FAST-41 does not limit the rights of the public to provide input into the project review process, nor does it affect the discretion of agencies to establish or extend comment periods to obtain essential environmental information. Although FAST-41 establishes default comment periods for various environmental documents,
Finally, the FAST 41 provisions that require early development of NEPA alternatives and specify that agencies may develop preferred alternatives to a higher level of detail than other alternatives do not constrain agency discretion to subsequently develop additional NEPA alternatives when needed, and are entirely consistent with controlling CEQ NEPA implementing regulations. 42 U.S.C. 4370m-4(c);
One commenter expressed concern that the application of FAST-41 may interfere with cooperation between state and Federal officials with respect to review and authorization of covered projects. However, FAST-41 encourages Federal-state cooperation by providing states the opportunity to “opt-in” to the FAST-41 process (42 U.S.C. 4370m-2(c)(3)), and additionally requires Federal agencies to consult with states before taking certain actions, such as establishing a covered project permitting timetable. 43 U.S.C. 4370m-2(c)(2)(A),
Several commenters expressed concern that the two-year FAST-41 limitations period contained in 42 U.S.C. 4370m-6(a)(1)(A) may prevent access to the courts by parties affected by mining pollution or violations by mine operators of permit conditions or applicable regulations. Although the FAST-41 limitations period is shorter than the six-year limitations period for claims against the government brought under the Administrative Procedure Act (APA), 5 U.S.C. 551
Several commenters assert that the Permitting Council is required to engage in government-to-government consultation with Indian Tribal Governments pursuant to section 5 of E.O. 13175 because Tribes are affected by mining projects. Several commenters similarly argue that the Permitting Council is required to identify and address the disproportionate effects that mining can have on minority and low-income populations pursuant to E.O. 12898.
Designating mining as a FAST-41 sector is a ministerial act that has no effect on Tribes and does not disproportionately affect minority or low-income populations. As explained in the preamble to the proposed rule, only prospective covered project
Two commenters recommended that the Permitting Council consider adopting the definition of “mine” from 40 CFR 440.132(g), which includes land and property under or above the surface of an active mining area that is used in, or results from, the work of extracting metal ore or minerals from their natural deposits. The commenters' referenced definition also includes such lands that are used for secondary recovery of metal ore from refuse or other storage piles, wastes, or rock dumps, and mill tailings derived from the mining, cleaning, or concentration of metal ores.
The Permitting Council appreciates the suggestion, but for the purpose of adding a FAST-41 sector pursuant to 42 U.S.C. 4370m(6)(A), the Permitting Council seeks to define “mining,” rather than “mine.” The Permitting Council did not change the definition of “mining” in response to the comment, and believes that the definition in the proposed rule is sufficiently broad to capture the range of mining activities intended (
Adding mining as a sector with infrastructure projects eligible for coverage under FAST-41could result in improved timeliness, predictability, and transparency associated with the projects that ultimately become FAST-41 covered projects, and for the Federal agencies participating in the FAST-41 process for those covered projects. However, quantifying any potential economic benefits that might result from adding mining as a FAST-41 sector is speculative. Simply providing the option of FAST-41 coverage to qualified mining projects does not assure how many, if any, mining project FAST-41 Initiation Notices (FINs) will be submitted to the Permitting Council for coverage, or how many projects ultimately will be covered.
Although the Permitting Council cannot predict precisely how many mining projects may become covered projects, the number will be small. The eligibility criteria for FAST-41 coverage are selective; only the largest projects that are the most prepared for Federal review may become covered projects.
Some commenters expressed the belief that the Permitting Council will receive more interest from potential mining project sponsors, and ultimately cover more mining projects, than estimated in the preamble to the proposed rule. But the Permitting Council continues to anticipate that very few—likely 10 or fewer—mining project FINs will be submitted before the FAST-41 sunset date of December 4, 2022. 42 U.S.C. 4370m-12. This is in part because the Permitting Council expects the sunset date to act as a disincentive to the project sponsors who are likely to be most interested in FAST-41 coverage. Such sponsors include proponents of large or complex mining projects with a significant number of Federal and state authorizations and with longer permitting horizons. It is questionable whether these project sponsors would be able to derive the full benefits of FAST-41 coverage if the FAST-41 program may terminate before the Federal review and decision-making process for the project can be completed.
The Permitting Council notes that the statutory criteria for becoming a FAST-41 covered project is different from the criteria for whether a project is subject to the provisions of E.O. 13807, or E.O. 13766, Expediting Environmental Reviews and Approvals for High Priority Infrastructure Projects, 82 FR 8567 (Jan. 30, 2017). Accordingly, the fact that a federal agency may have determined that a project is subject to one or both of these E.O.s does not indicate that that project is, would, or could become a FAST-41 covered project. The exclusive means by which a project can become a FAST-41 covered project is through the submission and review of a project FIN in accordance with the FAST-41 covered project criteria at 42 U.S.C. 4370m(6), and the subsequent addition of the project to the Permitting Dashboard by the Permitting Council Executive Director in accordance with 42 U.S.C. 4370m-2(b)(2).
Based on historical experience, only a portion of submitted FINs become covered projects. Since the inception of FAST-41, only 20 submitted FINs have become covered projects across all 10 FAST-41 sectors. To date, the Permitting Council has received fewer than five FINs for projects that involve mining that may potentially have been eligible for coverage under the statutory FAST-41 sectors (
Designating mining as a FAST-41 sector could result in reduced costs for any mining project sponsor that obtains FAST-41 coverage for its project and for the Federal agencies with review and permitting responsibilities for the covered project by virtue of potentially improved timeliness, predictability, and transparency, associated increased Federal agency coordination, and reduced duplication of Federal and project sponsor effort. However, these benefits are difficult to quantify, particularly given that the Federal permitting and environmental review requirements and the permitting timetable for each project are unique and vary widely from project to project. Because the Permitting Council does not know in advance how many mining projects will become FAST-41 covered projects, what the permitting or environmental review requirements might be for any potential future covered mining project, or what opportunities might exist to coordinate any Federal agency reviews that might be necessary for any such covered mining project, it is impossible to predict with any specificity what, if any, economic benefit might broadly accrue as a result of designating mining as a FAST-41 sector.
Adding mining as a FAST-41 sector will not directly increase or decrease the costs to agencies of complying with the substantive provisions of FAST-41, although there will be costs to the Permitting Council associated with any additional project that might become a covered project.
FAST-41 does not impose any regulatory requirements on covered project sponsors; FAST-41 implementation obligations fall primarily on the government. However, because FAST-41 is a voluntary program, sponsors of mining projects potentially eligible for FAST-41 coverage would incur some costs associated with seeking FAST-41 coverage. These costs associated with a request to be a covered project likely will be small. Seeking FAST-41 coverage involves formulating and submitting a project FIN, which is expected to take only a few hours.
This action is not a significant regulatory action and was not submitted to OMB for further review.
This rule is an E.O. 13771 deregulatory action. A discussion of the potential economic benefits of this rule can be found in the rule's Economic Analysis section.
Pursuant to 5 U.S.C. 605(b), the Permitting Council certifies that providing the option of FAST-41 coverage for qualified mining projects that are not already eligible for FAST-41 coverage under any of the statutory FAST-41 sectors will not have a significant economic impact on a substantial number of small entities.
The Permitting Council anticipates that the addition of mining as a FAST-41 sector will result in the submission of 10 or fewer mining project FINs, at least some of which, based on the Permitting Council's past experience with project FINs that involve mining, likely will not become FAST-41 covered projects. Though the Permitting Council does not conduct an analysis of the business structures of FAST-41 project sponsors to determine whether they are small entities, it is possible that at least some of the 10 or fewer project sponsors that submit FINs for mining projects could be small entities. However, because 10 or fewer entities likely will be affected, the Permitting Council does not anticipate that adding mining as a FAST-41 sector will affect a substantial number of small entities.
Nor will adding mining as a FAST-41 sector significantly or disproportionately impose costs on any small entity that is affected by the rule. The requirements for submitting a project FIN are simple and not burdensome. The FAST-41 statute only requires the project sponsor to formulate and send to the Permitting Council and the lead or facilitating agency a project FIN that contains: (1) A statement of the purpose and objectives of the project; (2) a description of the general project location; (3) any available geospatial information about project and environmental, cultural, and historic resource locations; (4) a statement regarding the technical and financial ability of the project sponsor to construct the proposed project; (5) a statement of any Federal financing, environmental reviews, and authorizations anticipated to be required to complete the proposed project; and (6) an assessment that the proposed project meets the definition of a covered project pursuant to 42 U.S.C. 4370m(6)(A) with supporting rationale. 42 U.S.C. 4370m-2(a)(1)(A) & (C). Any project sponsor credibly seeking Federal authorization and environmental review for a project that requires $200 million or more in investment will have the information required to submit a project FIN readily available, and preparing and submitting a project FIN should require only a few hours of effort. FAST-41 contains no pre-FIN requirements (although project sponsors are free to consult the Permitting Council with any questions about the FAST-41 program and FIN preparation or submission), and there are no regulations implementing FAST-41 that impose any additional requirements on the project sponsor. The lead or facilitating agency (and in some instances, the Permitting Council Executive Director) will review the FIN in accordance with sections 4.4-4.12 of the FAST-41 Guidance to determine whether the project is a FAST-41 covered project.
This rule is not a “major rule” as defined under 5 U.S.C. 804(2) because it will not cause a major increase in costs or prices for consumers; individual industries; Federal, state, or local government agencies; or geographic regions. The rule will not have an annual effect on the economy of $100 million or more.
This rule does not impose an unfunded mandate on state, local, or tribal governments, or on the private sector of more than $100 million per year. The rule does not have a significant or unique effect on state,
This action does not have federalism implications under E.O. 13132. The rule will not have a substantial direct effect on the states, on the relationship between the Federal Government and the states, or on the distribution of power and responsibilities among the levels of government. The rule affects only the eligibility of mining project proponents to participate in the voluntary FAST-41 program; it will not affect the obligations or rights of states or local governments or state or local governmental entities.
This rule complies with section 3(a) of E.O. 12988, which requires agencies to review all rules to eliminate errors and ambiguity and to write all regulations to minimize litigation. This rule also meets the criteria of section 3(b)(2), which requires agencies to write all regulations in clear language with clear legal standards.
The PRA provides that 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 control number issued by OMB. Collections of information include requests and requirements that an individual, partnership, or corporation obtain information, and report it to a Federal agency.
NEPA requires agencies to consider the reasonably foreseeable environmental consequences of major Federal actions significantly affecting the quality of the human environment. The rule does not make any project-level decisions and does not authorize any activity or commit resources to a project that may affect the environment. Furthermore, under FAST-41 all covered projects are subject to NEPA review. 42 U.S.C. 4370m(6)(A).
FAST-41 focuses on facilitating interagency coordination and agency accountability for meeting self-imposed environmental review and permitting timetables and providing certain legal protections for covered projects. The statute expressly does not supersede NEPA or affect any internal procedure or decision-making authority of any agency.
This rule is not a significant energy action for the purposes of E.O. 13211 because it will not have any discernible effect on the energy supply. Qualified energy-related mining projects such as coal and uranium are eligible for coverage under FAST-41's “conventional energy production” sector. The only additive effect of the rule would be to make mining projects that are unrelated to energy production (and not covered under other statutory FAST-41 sectors) eligible for coverage under FAST-41.
Adding mining as a FAST-41 sector will not extend FAST-41 coverage to any specific project—energy related or otherwise—nor will it permit or authorize any mining project. Qualified applicants must first seek and obtain FAST-41 coverage. Participation in the FAST-41 program does not alter any agency's existing discretion to approve or deny project permits or authorizations, and does not make ultimate project authorization more or less likely. Accordingly, this final rule that adds mining as a FAST-41 sector will not affect the supply, distribution, or use of energy, and is not a “significant energy action” for the purpose of E.O. 13211.
Section 553(d) of the APA generally requires agencies to publish a rule in the
In this circumstance good cause exists to dispense with the 30 day requirement because the rule designating mining as a FAST-41 sector does not impose any short-term requirement or obligation on any party other than the Permitting Council members who promulgated the rule. The other parties affected by the rule are prospective covered project sponsors, who will not be required to take any prompt action or comply with any new regulatory requirements. Instead, the rule extends to prospective covered project sponsors the opportunity to voluntarily apply for and receive FAST-41 coverage benefits at their discretion. The rule does not require timely project sponsor action to receive potential FAST-41 benefits.
Because a 30-day delayed effective date in this circumstance would not serve the purpose of 5 U.S.C. 553(d), good cause exists to dispense with the requirement. Accordingly this rule takes immediate effect upon publication in the
Critical infrastructure, Infrastructure, Mines, Mineral resources, Permitting, Reporting and recordkeeping requirements, Underground mining.
42 U.S.C. 4370m
For the purposes of this part, the following terms shall have the meaning indicated:
Pursuant to 42 U.S.C. 4370m(6)(A), the Federal Permitting Improvement Steering Council has added the following sectors to the statutorily defined list of FAST-41 sectors:
(a) Mining.
(b) [Reserved]
Federal Emergency Management Agency, Department of Homeland Security (DHS).
Final rule.
This final rule adopts, with minor technical edits, an interim final rule with request for comments published in the
Marc Geier, Office of Policy and Program Analysis, 202-924-0196,
On May 13, 2020, FEMA published in the
Section 101 of the Defense Production Act of 1950, as amended (DPA or the Act), authorizes the President to require that performance under contracts or orders (other than contracts of employment) which the President deems necessary or appropriate to promote the national defense take priority over performance under any other contract or order. For the purpose of assuring such priority, the President may require acceptance and performance of such contracts or orders in preference to other contracts or orders by any person the President finds to be capable of their performance.
The interim final rule established the Emergency Management Priorities and Allocations System (EMPAS), which became part of the Federal Priorities and Allocations System (FPAS), the body of regulations that establishes standards and procedures for implementing the President's authority under Section 101(a) of the DPA. This rule finalizes the interim final rule.
The public comment period on the interim final rule closed on June 12, 2020, and four germane public comments were received. One comment was generally supportive of the regulation, pointing out that having the EMPAS rule in place allows FEMA to leverage the DPA in response to the COVID-19 pandemic over an extended period of time or eventually extend it to more general emergency preparedness activities. Given the ongoing COVID-19 pandemic, FEMA is considering use of the EMPAS regulation to combat the COVID-19 pandemic over an extended period of time. Since implementation of the regulation in May, FEMA has modified and extended an order allocating certain scarce and critical materials for domestic use to ensure the resources were not exported from the United States without specific approval by FEMA, and continues to consider options for using EMPAS to address mission needs.
The commenter suggested that EMPAS authority should be extended to include vaccine active ingredients as well as adjuvant or booster additions to vaccines; measures to permit fill and finish of large numbers of vaccine doses, including glass vials and other packaging; and provide for distribution systems and medical facilities to distribute vaccines when available at the most rapid rate. FEMA's authority pursuant to EMPAS is clear; the
The same commenter pointed out that, while FEMA already possesses subdelegated authority to use both the Department of Commerce's Defense Priority and Allocations System (DPAS) and the Department of Agriculture's Agriculture Priority and Allocations System (APAS) regulations, having the EMPAS regulations should enhance predictability. The commenter noted the EMPAS regulations were generally patterned after other Federal Priority and Allocations System (FPAS) regulations, with some exceptions. For example, the EMPAS regulations discuss rated orders placed by FEMA or a Delegate Agency to facilitate sales to third parties. The commenter noted this distinction could refer to contracts placed in support of hospitals or other health entities or serve as a more general reference to the overarching distributor-style role FEMA and other Federal entities have played during the COVID-19 pandemic response to date. The distinction could also set up a type of hybrid rated order/allocation action. FEMA may leverage the EMPAS regulation to facilitate sales to third parties with respect to contracts placed in support of entities seeking scarce and critical health and medical resources and to assist in the distribution of these resources as appropriate. The agency does not intend to create a hybrid rated order/allocation action.
This commenter urged FEMA to be prepared to exercise EMPAS authority and delegate authority to assure the ability to produce, manufacture, fill, and finish coronavirus vaccines, specifically requesting the regulation make clear that emergency authority includes the ability to pre-manufacture vials and syringes as necessary to provide a large number of vaccine doses. As explained above, although vaccines and associated materials are within the authority delegated by Executive Order 13911, HHS is the agency with expertise in vaccine development and FEMA does not anticipate having a role in that process. FEMA believes the regulation provides sufficient clarity regarding the resource authority delegated by Executive Order 13911 and no changes are required in this final rule.
Another commenter offered suggested improvements to § 333.13 regarding timelines for responses to rated order requests. Specifically, the commenter recommended changes to § 333.13(d)(2) to allow for responses within 6 or 12 hours “after confirmation of receipt by vendor/contractor personnel during normal business hours.” FEMA appreciates that the proposed change would allow vendors and contractors more time to handle rated order requests consistent with their normal business practices, but rated orders are designated as such specifically because of the need to handle them differently than ordinary orders. The language in § 333.13(d)(2) mirrors the existing Department of Commerce DPAS regulations at 15 CFR 700.13(d)(2). As explained in the preamble to the interim final rule, FEMA adopted language consistent with the DPAS regulation because rated orders placed for the purpose of emergency preparedness would require a shorter timeframe to ensure delivery in time to provide disaster assistance, emergency response, or similar activities. Further, the timeframes given in § 333.13(d)(2) are the minimum allowed and only apply when “expedited action is necessary or appropriate.” As such, FEMA does not expect 6- or 12-hour response deadlines to be used frequently, and therefore does not expect the regulatory provision to impose a substantial burden on vendors and contractors. To ensure consistency across FPAS regulations, and because of the nature of FEMA's mission, FEMA is retaining the language from the interim final rule in the final rule. Additionally, the commenter suggested the use of the term “immediately” in § 333.13(d)(3) and elsewhere could not be realistically defined. The commenter recommended alternative language, such as, “as soon as reasonably practicable” or “promptly with commercially reasonable efforts.” Again, the language in EMPAS is consistent with the Department of Commerce's DPAS regulations, where this provision has been in use since 2014. Given the exigent circumstances under which FEMA must provide emergency preparedness, mitigation, response, and recovery services, the requirement for immediate notification is necessary to ensure the ultimate timely delivery of these services. In addition, FEMA does not believe that the alternative terms provide a significantly more definite meaning. Therefore, FEMA is retaining the language from the interim final rule to ensure consistency across FPAS regulations.
Two commenters focused their comments exclusively on vaccines, a topic not directly addressed by EMPAS. One commenter requested an ethically produced vaccine that is not developed from aborted fetal cells. The EMPAS regulation does not discuss vaccine development. As explained above, FEMA's EMPAS regulation is limited to establishing standards and procedures for priority and allocation orders for “health and medical resources” as defined in the interim final rule at § 333.8. Although vaccines fall within the scope of “health and medical resources” authority delegated to HHS and to FEMA, FEMA has not played a substantial role in the development of
This rule makes technical changes to the interim final rule. The authority citation for the final rule is being updated to include DHS Delegation Number 09052 Rev. 00 (Jan. 3, 2017), and to make non-substantive formatting revisions to authorities previously included. The interim final rule contained a placeholder reference to an OMB clearance number for an information collection under the Paperwork Reduction Act.
This rule is effective immediately because the delayed effective date generally required by the APA is unnecessary.
Executive Orders 12866 (“Regulatory Planning and Review”) and 13563 (“Improving Regulation and Regulatory Review”) 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 (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. Executive Order 13771 (“Reducing Regulation and Controlling Regulatory Costs”) directs agencies to reduce regulation and control regulatory costs and provides that “for every one new regulation issued, at least two prior regulations be identified for elimination, and that the cost of planned regulations be prudently managed and controlled through a budgeting process.”
This final rule has been drafted and reviewed in accordance with Executive Order 12866. This rule has been designated a “significant regulatory action” and economically significant under Section 3(f) of Executive Order 12866. Accordingly, the rule has been reviewed by the Office of Management and Budget.
This final rule adopts the interim final rule (IFR) that established standards and procedures by which FEMA may require certain contracts or orders that promote the national defense be given priority over other contracts or orders and setting new standards and procedures by which FEMA may allocate materials, services, and facilities to promote the national defense under emergency and non-emergency conditions pursuant to section 101 of the Defense Production Act of 1950, as amended. Accordingly, relative to a post-IFR baseline, this final rule has no economic impact. Below, FEMA also examines the rule's impacts relative to a pre-IFR baseline.
This rule sets criteria and procedures under which FEMA will authorize prioritization of certain orders or contracts as well as criteria under which FEMA will issue orders allocating materials, services, and facilities. Under prioritization, FEMA will designate certain orders as one of two possible priority levels. Once so designated, such orders are referred to as “rated orders.” The recipient of a rated order must give it priority over an unrated order or an order with a lower priority rating. A recipient of a rated order may place orders of the same priority level with their suppliers and subcontractors for supplies and services necessary to fulfill FEMA's rated order. The suppliers and subcontractors must treat the request from the recipient as a rated order with the same priority level as the original rated order. The rule does not require recipients to fulfill rated orders if the price or terms of sale are not consistent with the price or terms of sale of similar non-rated orders. The rule provides a defense from any liability for damages or penalties for any action or inaction required to maintain compliance with the rule.
The impact of EMPAS on private companies receiving priority orders is expected to vary. FEMA's issuance of a priority-rated order will generally only modify the timing in which other orders are completed. Deferred orders may face delays, which impose a burden on potential recipients of these orders. FEMA's exercise of its priorities and allocations authorities under section 101 of the DPA and EMPAS is expected to have an overall positive impact on the U.S. public and industry by creating a framework by which FEMA exercises its delegated authorities, as discussed above.
Since implementation of the regulation in May, FEMA has modified and extended an allocation order allocating certain scarce and critical materials for domestic use to ensure those resources were not exported from the United States without specific approval by FEMA, and FEMA continues to consider options for using EMPAS to address mission needs.
The Regulatory Flexibility Act (RFA) (5 U.S.C. 601
As noted above, no notice of proposed rulemaking was published in advance of this action. Therefore, the written statement provisions of the Unfunded Mandates Reform Act of 1995, as amended, do not apply to this regulatory action.
This rule contains information collections necessary to support FEMA's implementation of the President's priorities and allocations authority under Title I of the Defense Production Act of 1950 (DPA), as amended (50 U.S.C. 4501,
The Requests for Special Priorities Assistance collection, 1660-0149, was submitted under OMB's emergency clearance procedures. Currently, FEMA is seeking public comment on collection 1660-0149 through the normal clearance process (see 85 FR 65066, Oct. 14, 2020
The new Rated Orders, Adjustments, Exceptions, or Appeals Under the Emergency Management Priorities and Allocations System (EMPAS) collection, 1660-0150, cleared OMB's emergency clearance procedures and has an expiration date of 4/30/21. Additionally, FEMA will seek public comments on the collection through the normal clearance process.
Under the Privacy Act of 1974, 5 U.S.C. 552a, an agency must determine whether implementation of a proposed regulation will result in a system of records. A “record” is any item, collection, or grouping of information about an individual that is maintained by an agency, including, but not limited to, his/her education, financial transactions, medical history, and criminal or employment history and that contains his/her name, or the identifying number, symbol, or other identifying particular assigned to the individual, such as a finger or voice print or a photograph. See 5 U.S.C. 552a(a)(4). A “system of records” is a group of records under the control of an agency from which information is retrieved by the name of the individual or by some identifying number, symbol, or other identifying particular assigned to the individual. An agency cannot disclose any record which is contained in a system of records except by following specific procedures.
In accordance with DHS policy, FEMA has completed two Privacy Threshold Analyses (PTAs). DHS has determined that this rulemaking does not affect the 1660-1660-0149 and the 1660-0150 OMB Control Numbers' compliance with the E-Government Act of 2002 or the Privacy Act of 1974, as amended. Specifically, DHS has concluded that the 1660-0149 and 1660-0150 OMB Control Numbers are covered by the DHS/ALL/PIA-065 Electronic Contract Filing System (ECFS) Privacy Impact Assessment (PIA). Additionally, DHS has decided that the 1660-0149 and the 1660-0150 OMB Control Numbers are covered by the DHS/ALL-021 Department of Homeland Security Contractors and Consultants, 73 FR 63179 (Oct. 23, 2008) System of Records Notice (SORN).
Executive Order 13175, “Consultation and Coordination with Indian Tribal Governments,” 65 FR 67249, November 9, 2000, applies to agency regulations that have Tribal implications, that is, regulations that have substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes. Under this Executive order, to the extent practicable and permitted by law, no agency shall promulgate any regulation that has Tribal implications, that imposes substantial direct compliance costs on Indian Tribal governments, and that is not required by statute, unless funds necessary to pay the direct costs incurred by the Indian Tribal government or the Tribe in complying with the regulation are provided by the Federal Government, or the agency consults with Tribal officials.
FEMA has reviewed this final rule under Executive Order 13175 and has determined that this final rule 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.
Executive Order 13132, “Federalism,” 64 FR 43255, August 10, 1999, sets forth principles and criteria that agencies must adhere to in formulating and implementing policies that have federalism implications, that is, 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.” Federal agencies must closely examine the statutory authority supporting any action that would limit the policymaking discretion of the States, and to the extent practicable, must consult with State and local officials before implementing any such action.
FEMA has determined that this rulemaking does not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, and therefore does not have federalism implications as defined by the Executive order.
Under the National Environmental Policy Act of 1969 (NEPA), as amended, 42 U.S.C. 4321
Rulemaking is a major Federal action subject to NEPA. Categorical exclusion A3 included in the list of exclusion categories at Department of Homeland Security Instruction Manual 023-01-001-01, Revision 01, Implementation of the National Environmental Policy Act, Appendix A, issued November 6, 2014, covers the promulgation of rules, issuance of rulings or interpretations, and the development and publication of policies, orders, directives, notices, procedures, manuals, and advisory circulars if they meet certain criteria provided in A3(a-f). This interim final rule meets Categorical Exclusion A3(a), “[t]hose of a strictly administrative or procedural nature,” and A3(b), “[t]hose that implement, without substantive change, statutory or regulatory requirements.”
Under the Congressional Review of Agency Rulemaking Act (CRA), 5 U.S.C. 801-808, before a rule can take effect, the Federal agency promulgating the rule must: Submit to Congress and to the Government Accountability Office (GAO) a copy of the rule; a concise general statement relating to the rule, including whether it is a major rule; the proposed effective date of the rule; a copy of any cost-benefit analysis; descriptions of the agency's actions under the Regulatory Flexibility Act and the Unfunded Mandates Reform Act; and any other information or statements required by relevant Executive orders.
FEMA has submitted this final rule to the Congress and to GAO pursuant to the CRA. The Office of Management and Budget has determined that this rule is a “major rule” within the meaning of the CRA. As this rule contains FEMA's finding for good cause that notice and public procedure are impracticable, unnecessary, or contrary to the public interest, there is not a required delay in the effective date.
Administrative practice and procedure, Business and industry, Government contracts, National defense, Reporting and recordkeeping requirements, Strategic and critical materials.
For the reasons stated in the preamble, the interim rule adding 44 CFR part 333, which was published at 85 FR 28500 on May 13, 2020, is adopted as final with the following changes:
6 U.S.C. 313, 314; 50 U.S.C. 4511,
National Highway Traffic Safety Administration (NHTSA), Department of Transportation.
Final rule; technical corrections.
This document amends Federal Motor Vehicle Safety Standards (FMVSS) Nos. 122 and 123 to allow the use of an internationally recognized symbol. It also relocates the telltale specifications for anti-lock braking system (ABS) malfunction from FMVSS No. 101 to the appropriate table in FMVSS No. 123 since the latter applies to motorcycles. In addition, this final rule makes two technical corrections: It corrects motorcycle category references in S6.3.2 of FMVSS No. 122 and an outdated table reference found in FMVSS No. 135.
This final rule is effective on January 8, 2021.
Petitions for reconsideration of this final rule must refer to the docket number set forth above and be submitted to the Administrator, National Highway Traffic Safety Administration, 1200 New Jersey Avenue SE, Washington, DC 20590.
Michael Pyne, Office of Crash Avoidance Standards, by telephone at 202-366-4171 or Callie Roach, Office of the Chief Counsel, by telephone at 202-366-2992. You may send mail to both officials at the National Highway Traffic Safety Administration, 1200 New Jersey Avenue SE, Washington, DC 20590.
On August 24, 2012, the agency published a final rule amending Federal Motor Vehicle Safety Standard (FMVSS) No. 122,
The revised FMVSS No. 122 adopted performance requirements for antilock brake system (ABS) performance. Although FMVSS No. 122 as amended in 2012 does not require motorcycles to be equipped with ABS, it includes performance requirements for motorcycles that are equipped with ABS. These requirements apply to motorcycles manufactured on or after September 1, 2014.
Both the GTR and the 2008 notice of proposed rulemaking (NPRM) for FMVSS No. 122
The final rule, consistent with other FMVSS addressing ABS system failure,
Several months after the agency published the final rule in August 2012, the American Honda Motor Company (Honda), manufacturer of Honda motorcycles, contacted the agency to inform NHTSA that the ABS-equipped motorcycles it and other manufacturers produce already are equipped with ABS malfunction warning lamps and told the agency that the current practice is to use the International Organization for Standardization (ISO) symbol for ABS
Honda informed NHTSA that the typical height of the symbol on a production motorcycle equipped with ABS is 7 millimeters, and the letters “ABS” are approximately 2 millimeters high, though the dimensions may vary. NHTSA lacks any other information on the range of symbol or letter sizes among various makes and models, and is unaware of a standardized symbol size or letter size to which manufacturers adhere.
According to the information provided by Honda and conversations that the agency had with the Motorcycle Industry Council, Inc. (MIC) and Harley-Davidson Motor Company (Harley-Davidson), to comply with the letter height requirement for the ABS malfunction telltale identifier in FMVSS No. 122, manufacturers would have to enlarge the telltale considerably so that the letters “ABS” contained within the ISO symbol are at least 3/32 inch (2.4 millimeters) in height. Alternatively, they would have to add a separate label using “ABS” or “Antilock” or “Anti-lock” displayed at the specified minimum height in place of, or in addition to, the ISO symbol. Motorcycle manufacturers stated that this would constitute a costly redesign of the telltale or instrument panel on many ABS-equipped motorcycles without any discernible safety benefit from the redesign.
Upon consideration of the concerns raised by the MIC, Honda, and Harley-Davidson, the agency issued an NPRM on November 26, 2014 (79 FR 70491). The agency proposed removing the letter height specification for the ABS malfunction telltale if manufacturers use the ISO symbol for ABS malfunction. However, if only text is used for the ABS malfunction telltale, the minimum letter height requirement would still apply. We also proposed removing the reference to the specifications for ABS malfunction telltales in Table 1 of FMVSS No. 101 because that standard does not apply to motorcycles. Instead, we proposed adding both the FMVSS No. 101 telltale specifications and the ISO ABS malfunction symbol to Table 3 of FMVSS No. 123,
The agency sought comments on whether there should be a minimum height requirement for an ABS malfunction telltale that uses the ISO symbol and, if so, how large the symbol should be. Specifically, we asked whether the 7-millimeter height suggested by Honda as a minimum height (or a different height) would ensure readability without requiring a redesign of the telltale or instrument panel on many ABS-equipped motorcycles.
Furthermore, in light of the proposed changes, the agency announced in the NPRM that it was adopting a policy not to enforce the minimum height requirement for the ABS malfunction telltale for any motorcycle that uses the ISO symbol for ABS malfunction until a final rule implementing the proposal became effective. This non-enforcement policy provided relief to motorcycle manufacturers that use the ISO symbol for ABS malfunction but that could not meet the September 1, 2014, deadline for compliance without redesigning the telltale or instrument panel. Again, we have no information indicating that adverse safety consequences would result from allowing motorcycle manufacturers to use the ISO symbol for the ABS malfunction telltale as an alternative to the currently permissible ABS malfunction telltales.
We also proposed correction of an error in FMVSS No. 122. In paragraph S6.3.2(d), which contains the test procedure for the dry stop test with a single brake control actuated, the brake actuation force specified for motorcycles in categories 3-1, 3-2, 3-3, and 3-5 is specified as ≤ 350 N and, for category 3-4 motorcycles, ≤ 500 N. However, the higher actuation force was intended for category 3-5 motorcycles rather than category 3-4 motorcycles. We proposed this correction in the NPRM to be consistent with GTR No. 3 and with NHTSA's intention in the August 2012 final rule.
NHTSA received 39 comments on the proposal; the MIC, Harley-Davidson, Honda, and 36 individuals provided comments.
In general, the commenters agreed with the proposal. However, two commenters opposed the use of the symbol, stating that the symbol is not easily recognizable. The agency does not agree that the ISO symbol is less recognizable than the currently permissible ABS malfunction telltales because the acronym “ABS,” which is a permissible telltale under the current regulation if it meets the height requirement, is contained in the ISO symbol. Therefore, allowing the ISO symbol to be used as the ABS malfunction telltale does not make the telltale less recognizable than is currently permissible.
Furthermore, the agency believes that unfamiliarity with the ISO telltale symbol does not pose an undue immediate safety risk for the rider because an ABS malfunction warning only indicates that the anti-lock
As stated in the NPRM, the agency has no reason to believe that using the ISO symbol in lieu of text labeling at a minimum height would affect the safety of motorcycles or the public. The types of failure indicated by the ABS malfunction telltale are electronic failures that result in the loss of ABS functionality, but do not cause loss of foundation braking ability. FMVSS No. 122 contains a performance requirement to ensure minimum braking capability in the event of an ABS system malfunction. Moreover, the agency has minimum performance requirements to ensure that a minimum level of braking capability is maintained even if there is a more severe system failure such as a brake fluid leak. Therefore, NHTSA is adopting the proposal in the NPRM to allow the ISO symbol as an alternative to the text “ABS,” “Anti-lock,” or “Antilock.”
NHTSA solicited comments regarding whether there should be a minimum height for the ISO symbol or for the letters “ABS” that appear within the symbol. NHTSA received comments from the MIC, Harley-Davidson, Honda, and 10 individuals opposed to setting a minimum height requirement for the ISO symbol. The MIC, Harley-Davidson, and Honda opposed adding a height requirement for the letters within the ISO symbol, stating that there is no corresponding minimum height requirement in GTR No. 12 and emphasizing their desire for harmonization.
The agency agrees with the commenters that mandating a minimum height is unnecessary because NHTSA does not believe that, in the absence of a minimum height requirement, original equipment manufacturers (OEMs) will create illegible ABS telltales. As Harley-Davidson's comment noted, GTR No. 12 has a qualitative visibility requirement for ABS telltales, specifying that the symbol must be located so that it is “visible to the driver when seated in the driving position.” Although NHTSA is not specifying such a requirement in FMVSS No. 123, NHTSA believes manufacturers will ensure that ABS ISO symbols are large enough to be read by drivers. Additionally, OEMs have been using the symbol for years and, as far as NHTSA is aware, have done so without negative consequences. Moving forward with the proposal, the agency will not implement a height requirement for the ISO symbol which will ensure harmonization with GTR No. 3 and to some extent with GTR No. 12.
Although the agency did not request comment on this issue in the NPRM, NHTSA received comments from the MIC and two individuals suggesting that the agency remove the lettering height requirement for “ABS,” “Anti-lock,” or “Antilock” when the ISO symbol is not used. The MIC states that it is unaware of any science that was relied on to establish or support the use of 3/32-inch letter height for this specific application. The MIC also states that the corresponding GTR does not reference any lettering heights or symbol dimensions.
The agency understands the inconsistency perceived by the MIC in NHTSA not including a lettering height requirement if the ISO symbol is used, but including a lettering height requirement if only text is used. However, the agency is not prepared to implement any changes to the existing height requirement if only text is used and does not believe that there is an inconsistency.
This issue was not included in the NPRM, and there are factors the agency would need to consider and request public comment on should it decide to change or remove this requirement. As stated in the 2012 final rule implementing the requirement, use of a 3/32 inch (2.4 mm) letter height is consistent with other FMVSS.
Further, NHTSA does not believe this is inconsistent with NHTSA's conclusion that a height requirement is unnecessary when the ISO symbol is used because recognition of the ISO symbol comes not only from the letters “ABS,” but also from shape of the symbol as a whole. The ISO symbol is a graphic representation of a brake drum with letters inside of it, and the entire symbol is illuminated in the event of an ABS failure condition. Also, the symbol as a whole will likely be significantly larger than the 2.4-millimeter-high letters that can be used in lieu of the symbol. For example, as noted above, Honda informed NHTSA that the typical height of the ISO symbol on its production motorcycles equipped with ABS is 7 millimeters, and the letters “ABS” are approximately 2 millimeters high. This suggests that the typical height of the ISO symbol will be appreciably larger than the minimum height requirement for the ABS telltale if the ISO symbol is not used. Accordingly, NHTSA concludes that it is appropriate to view the need for a height requirement for telltales that use the ISO symbol differently from telltales that rely exclusively on lettering to warn of ABS failure.
NHTSA received two comments that addressed a technical correction included in the NPRM, and those comments supported the correction. The agency is adopting the correction of the
FMVSS No. 101,
NHTSA received only one comment, from the MIC, on that proposed change. The comment favored the change because it is consistent with GTR No. 12, the global technical regulation concerning the location, identification and operation of motorcycle controls, telltales, and indicators. The agency is amending FMVSS No. 122 S5.1.10.2(c) by replacing the reference to FMVSS No. 101 with a reference to FMVSS No. 123. The agency is amending FMVSS No. 123 by adding the ISO ABS malfunction telltale into FMVSS No. 123, Table 3.
NHTSA received one comment from Harley-Davidson suggesting that the agency include an illumination requirement in FMVSS No. 123 similar to the requirement in FMVSS No. 101 S5.3.3(a) which provides that telltales must be “visible to the driver under daylight and nighttime driving conditions.” Harley-Davidson stated that inserting such language in FMVSS No. 123 would align with a similar illumination requirement specified in GTR No. 12.
The agency recognizes that there is no illumination requirement that applies to FMVSS No. 123. However, FMVSS No. 122 S1.10.2(a) contains a provision which requires the warning lamp to be illuminated by activation of the ignition switch and extinguished when the diagnostic check has been completed. The warning lamp is also required to remain on while a failure condition exists whenever the ignition switch is in the “on” position. While this illumination requirement in FMVSS No. 122 is not as detailed as the requirement in FMVSS No. 101 that Harley-Davidson suggested using, it applies regardless of external lighting conditions, and it seems likely that manufacturers will continue to equip motorcycles with an ABS malfunction telltale that is visible in both daylight and nighttime driving conditions, as they do in current practice. More critically, adding the suggested language to FMVSS No. 123 would be outside the scope of this rulemaking. Therefore, the agency is not amending FMVSS No. 123 to add an illumination requirement.
On August 17, 2005, (70 FR 48295) NHTSA published a final rule amending FMVSS No. 101,
A rule ordinarily cannot take effect earlier than 30 days after it is published pursuant to 5 U.S.C. 553(d) unless the rule falls under one of three enumerated exceptions. In addition, 49 U.S.C. 30111(d) provides that a Federal motor vehicle safety standard may not become effective before the 180th day after the standard is prescribed or later than one year after it is prescribed except when a different effective date is, for good cause shown, in the public interest.
This rule does not impose any substantive requirements. Instead, it removes a restriction by allowing manufacturers of motorcycles to use the ISO symbol which is specified in GTR No. 12. Since this final rule merely provides motorcycle manufacturers the option of using an ISO symbol for the ABS malfunction telltale and thus greater flexibility in meeting the requirements of FMVSS No. 122, the rule falls under the exception at 5 U.S.C. 553(d)(1) as a rule that relieves a restriction. In addition, NHTSA believes that the public interest would be served by not delaying the effective date. This final rule changes NHTSA's FMVSS to reflect NHTSA's current policy to allow the use of an internationally recognized symbol as the antilock brake system (ABS) malfunction telltale on motorcycles and makes technical corrections. NHTSA anticipates that the impact of this rule will be small and limited to providing greater flexibility to manufacturers. Therefore, the agency finds that there is good cause under 49 U.S.C. 30111 to make these amendments effective immediately.
This final rule makes one technical change to the regulatory text that was not proposed in the notice of proposed rulemaking. The final rule merely adjusts an outdated and incorrect cross-reference in a Table in FMVSS No. 135. The technical correction, thus, does not make any substantive change to the standard and the agency has determined that notice and opportunity for public comment pursuant to 5 U.S.C. 553(b) are unnecessary for this technical correction.
NHTSA has considered the impact of this rulemaking action under Executive Order 12866, Executive Order 13563, and the Department of Transportation's administrative procedures at 49 CFR part 5. This rulemaking is not considered significant and was not reviewed by the Office of Management and Budget under Executive Order 12866, “Regulatory Planning and Review.” Given the minimal impact of the rule, we have not prepared a full regulatory evaluation. The agency has further determined that the impact of this final rule is so minimal that the preparation of a full regulatory evaluation is not required.
NHTSA believes this final rule to allow the use of the ISO ABS malfunction symbol without a minimum letter height would not impact motorcycle safety since the rule has no effect on ABS effectiveness and adoption rates. Further, the agency does not believe that these minor changes to the telltale will have any effect on a rider's ability to understand the telltale. However, we estimate that it would positively impact manufacturers by eliminating the need to incur costs to redesign ABS telltales.
The availability of ABS either as standard or optional equipment on
Based on communication with motorcycle manufacturers, NHTSA is aware of at least one large manufacturer and two small-volume manufacturers that currently use ISO symbols that do not meet the letter height requirement. One of the small-volume manufacturers estimated that it would cost approximately $150,000 to redesign their ABS telltales on motorcycles for sale in the U.S. to comply with the letter height requirement. This estimated cost includes tooling, engineering resources, and recertification and homologation. This one-time cost for manufacturers would have been allocated over a number of years of production and was expected to have minimal effect on the consumer price of motorcycles. NHTSA estimates that this final rule prevents a cost to motorcycle manufacturers of at least $450,000 that manufacturers would have had to incur between the publication date of the final rule and its effective date if NHTSA had not announced the non-enforcement policy. This is based on estimated one-time design cost of $150,000 per manufacturer and information from three manufacturers who use ISO symbols that do not meet the letter height requirement. NHTSA believes the actual cost incurred would likely have been larger had all manufacturers complied with the 2012 rule, but does not have sufficient information to estimate how many more manufacturers would benefit from this final rule and how their behavior would or would not have changed had NHTSA determined to keep the original requirements in effect and withdraw the non-enforcement policy.
Pursuant to the Regulatory Flexibility Act (5 U.S.C. 601
NHTSA has considered the effects of this final rule under the Regulatory Flexibility Act and certifies that it will not have a significant economic impact on a substantial number of small entities. This final rule will directly impact manufacturers of motorcycles equipped with ABS. Although NHTSA believes many manufacturers affected by this final rule are considered small businesses, we do not believe this rule will have a significant economic impact on those manufacturers. This final rule will not impose any costs upon manufacturers and may prevent costs from being incurred. This final rule will relieve motorcycle manufacturers of the burden and costs associated with changing from using the ISO symbol to using text of a minimum height to indicate an ABS malfunction.
NHTSA has examined today's final rule pursuant to Executive Order 13132 (64 FR 43255, August 10, 1999) and concluded that no additional consultation with States, local governments, or their representatives is mandated beyond the rulemaking process. The agency has concluded that the rulemaking does not have sufficient federalism implications to warrant consultation with State and local officials or the preparation of a federalism summary impact statement. The final rule does not have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.”
NHTSA rules can preempt in two ways. First, the National Traffic and Motor Vehicle Safety Act contains an express preemption provision: When a motor vehicle safety standard is in effect under this chapter, a State or a political subdivision of a State may prescribe or continue in effect a standard applicable to the same aspect of performance of a motor vehicle or motor vehicle equipment only if the standard is identical to the standard prescribed under this chapter. 49 U.S.C. 30103(b)(1). It is this statutory command by Congress that preempts any non-identical State legislative and administrative law addressing the same aspect of performance.
The express preemption provision described above is subject to a savings clause under which “[c]ompliance with a motor vehicle safety standard prescribed under this chapter does not exempt a person from liability at common law.” 49 U.S.C. 30103(e). Pursuant to this provision, State common law tort causes of action against motor vehicle manufacturers that might otherwise be preempted by the express preemption provision are generally preserved. However, the Supreme Court has recognized the possibility, in some instances, of implied preemption of such State common law tort causes of action by virtue of NHTSA's rules, even if not expressly preempted. This second way that NHTSA rules can preempt is dependent upon an actual conflict between an FMVSS and the higher standard that would effectively be imposed on motor vehicle manufacturers if someone obtained a State common law tort judgment against the manufacturer, notwithstanding the manufacturer's compliance with the NHTSA standard. Because most NHTSA standards established by an FMVSS are minimum standards, a State common law tort cause of action that seeks to impose a higher standard on motor vehicle manufacturers will generally not be preempted. However, if and when such a conflict does exist—for example, when the standard at issue is both a minimum and a maximum standard—the State common law tort cause of action is impliedly preempted.
Pursuant to Executive Orders 13132 and 12988, NHTSA has considered whether this rule could or should preempt State common law causes of action. The agency's ability to announce its conclusion regarding the preemptive effect of one of its rules reduces the
To this end, the agency has examined the nature (
NHTSA has reviewed this final rule for compliance with Executive Order 13771 (“Reducing Regulation and Controlling Regulatory Costs”), which requires Federal agencies to offset the number and cost of new regulations through the repeal, revocation, or revision of existing regulations. As provided in OMB Memorandum M-17-21 (“Implementing E.O. 13771”), a “regulatory action” subject to Executive Order 13771 is a significant regulatory action as defined in section 3(f) of Executive Order 12866 that has been finalized and that imposes total costs greater than zero. For the reasons identified in the previous sections, this final rule is not a significant regulatory action under Executive Order 12866 and thus does not require any offsetting deregulatory action. In fact, this rule is a “deregulatory action” under Executive Order 13771 because it reduces regulatory burden on industry by allowing additional compliance flexibility and improving international harmonization.
With respect to the review of the promulgation of a new regulation, section 3(b) of Executive Order 12988, “Civil Justice Reform” (61 FR 4729; Feb. 7, 1996), requires that Executive agencies make every reasonable effort to ensure that the regulation: (1) Clearly specifies the preemptive effect; (2) clearly specifies the effect on existing Federal law or regulation; (3) provides a clear legal standard for affected conduct, while promoting simplification and burden reduction; (4) clearly specifies the retroactive effect, if any; (5) specifies whether administrative proceedings are to be required before parties file suit in court; (6) adequately defines key terms; and (7) addresses other important issues affecting clarity and general draftsmanship under any guidelines issued by the Attorney General. This document is consistent with that requirement.
Pursuant to this Executive order, NHTSA notes the issue of preemption is discussed above. NHTSA notes further that there is no requirement that individuals submit a petition for reconsideration or pursue other administrative proceedings before they may file suit in court.
Executive Order 13045, “Protection of Children from Environmental Health and Safety Risks” (62 FR 19855, April 23, 1997), applies to any rule that: (1) Is determined to be “economically significant” as defined under Executive Order 12866, and (2) concerns an environmental, health, or safety risk that the agency has reason to believe may have a disproportionate effect on children. If the regulatory action meets both criteria, the agency must evaluate the environmental health or safety effects of the planned rule on children, and explain why the planned regulation is preferable to other potentially effective and reasonably feasible alternatives considered by the agency.
This notice is part of a rulemaking that is not expected to have a disproportionate health or safety impact on children. Consequently, no further analysis is required under Executive Order 13045.
Under the Paperwork Reduction Act of 1995 (PRA), a person is not required to respond to a collection of information by a Federal agency unless the collection displays a valid OMB control number. There is not any information collection requirement associated with this final rule.
Section 12(d) of the National Technology Transfer and Advancement Act (NTTAA) requires NHTSA to evaluate and use existing voluntary consensus standards in its regulatory activities unless doing so would be inconsistent with applicable law (
Examples of organizations generally regarded as voluntary consensus standards bodies include ASTM International, the Society of Automotive Engineers (SAE), and the American National Standards Institute (ANSI). If NHTSA does not use available and potentially applicable voluntary consensus standards, we are required by the Act to provide Congress, through OMB, an explanation of the reasons for not using such standards.
This final rule allows the use of a symbol from an international voluntary standard.
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) requires Federal agencies to prepare a written assessment of the costs, benefits, and other effects of proposed or final rules that include a Federal mandate likely to result in the expenditure by State, local, or tribal governments, in the aggregate, or by the private sector, of more than $100 million annually (adjusted for inflation with base year of 1995). Before promulgating a NHTSA rule for which a written statement is needed, section 205 of the UMRA generally requires the agency to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, most cost-effective, or least burdensome alternative that achieves the objectives of the rule. The provisions of section 205 do not apply when they are inconsistent with applicable law. Moreover, section 205 allows the agency to adopt an alternative other than the least costly, most cost-effective, or least burdensome alternative if the agency publishes with the final rule an explanation of why that alternative was not adopted.
This final rule would not result in any expenditure by State, local, or tribal governments or the private sector of more than $100 million, adjusted for inflation.
NHTSA has analyzed this rulemaking action for the purposes of the National Environmental Policy Act. The agency has determined that implementation of this action would not have any significant impact on the quality of the human environment.
The Department of Transportation assigns a regulation identifier number (RIN) to each regulatory action listed in the Unified Agenda of Federal Regulations. The Regulatory Information Service Center publishes the Unified Agenda in April and October of each year. You may use the RIN contained in the heading at the beginning of this document to find this action in the Unified Agenda.
Anyone may search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the
Pursuant to the Congressional Review Act (5 U.S.C. 801
Imports, Motor vehicle safety, Reporting and recordkeeping requirements, Tires.
In consideration of the foregoing, NHTSA amends 49 CFR part 571 as follows:
49 U.S.C. 322, 30111, 30115, 30117, and 30166; delegation of authority at 49 CFR 1.95.
S5.1.10.2
(c) The warning lamp shall be labeled in accordance with the specifications in Table 3 of Standard No. 123 (49 CFR 571.123) for “ABS Malfunction” (Item No. 13).
S6.3.2
(d) * * *
(2) * * *
(i) ≤350 N for motorcycle categories 3-1, 3-2, 3-3, and 3-4.
(ii) ≤500 N for motorcycle category 3-5.
S5.5.5.
(d) * * *
(3) If a separate indicator is provided for the condition specified in S5.5.1(b), the letters and background shall be of contrasting colors, one of which is yellow. The indicator shall be labeled with the words “Antilock” or “Anti-lock” or “ABS”; or “Brake Proportioning,” in accordance with Table 1 of Standard No. 101.
Issued in Washington, DC, under authority delegated in 49 CFR 1.95 and 501.4.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Temporary rule; closure.
NMFS is prohibiting directed fishing for Pacific cod by American Fisheries Act (AFA) trawl catcher/processors in the Bering Sea and Aleutian Islands management area (BSAI). This action is necessary to prevent exceeding the A season apportionment of the 2021 Pacific cod total allowable catch (TAC) allocated to AFA trawl catcher/processors in the BSAI.
Effective 1200 hours, Alaska local time (A.l.t.), January 20, 2021, through 1200 hours, A.l.t., April 1, 2021.
Krista Milani, 907-581-2062.
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 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 A season apportionment of the 2021 Pacific cod TAC allocated to AFA trawl catcher/processors in the BSAI is 1,928 metric tons (mt) as established by the final 2020 and 2021 harvest specifications for groundfish in the BSAI (85 FR 13553, March 9, 2020) and
In accordance with §§ 679.20(d)(1)(i) and 679.20(d)(1)(ii)(B), the Administrator, Alaska Region, NMFS (Regional Administrator), has determined that the A season apportionment of the 2021 Pacific cod TAC allocated to AFA trawl catcher/processors in the BSAI is necessary to account for the incidental catch in other anticipated fisheries. Therefore, the Regional Administrator is establishing a directed fishing allowance of 0 mt and is setting aside the remaining 1,928 mt as incidental catch to support other anticipated groundfish fisheries. In accordance with § 679.20(d)(1)(iii), the Regional Administrator finds that this directed fishing allowance has been reached. Consequently, NMFS is prohibiting directed fishing for Pacific cod by AFA trawl catcher/processors in the BSAI.
While this closure is effective the maximum retainable amounts at § 679.20(e) and (f) apply at any time during a trip.
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 delay the closure of Pacific cod by AFA trawl catcher/processors in the BSAI. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of December 31, 2020.
16 U.S.C. 1801
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Temporary rule; reallocation.
NMFS is reallocating the projected unused amount of Pacific cod from vessels using jig gear to catcher vessels less than 60 feet (18.3 meters) length overall using hook-and-line or pot gear in the Bering Sea and Aleutian Islands management area. This action is necessary to allow the A season apportionment of the 2021 total allowable catch of Pacific cod to be harvested.
Effective January 7, 2021, through 2400 hours, Alaska local time (A.l.t.), December 31, 2021.
Krista Milani, 907-581-2062.
NMFS manages the groundfish fishery in the Bering Sea and Aleutian Islands (BSAI) 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 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 A season apportionment of the 2021 Pacific cod total allowable catch (TAC) specified for vessels using jig gear in the BSAI is 939 metric tons (mt) as established by the final 2020 and 2021 harvest specifications for groundfish in the BSAI (85 FR 13553, March 9, 2020) and inseason adjustment (85 FR 83473, December 22, 2020).
The 2021 Pacific cod TAC allocated to catcher vessels less than 60 feet (18.3 meters (m)) length overall (LOA) using hook-and-line or pot gear in the BSAI is 2,222 mt as established by final 2020 and 2021 harvest specifications for groundfish in the BSAI (85 FR 13553, March 9, 2020) and inseason adjustment (85 FR 83473, December 22, 2020).
The Administrator, Alaska Region, NMFS, (Regional Administrator) has determined that jig vessels will not be able to harvest 900 mt of the A season apportionment of the 2021 Pacific cod TAC allocated to those vessels under § 679.20(a)(7)(ii)(A)(
The harvest specifications for 2021 Pacific cod included in final 2020 and 2021 harvest specifications for groundfish in the BSAI (85 FR 13553, March 9, 2020) and inseason adjustment (85 FR 83473, December 22, 2020) are revised as follows: 39 mt to the A season apportionment and 665 mt to the annual amount for vessels using jig gear, and 3,122 mt to catcher vessels less than 60 feet (18.3 m) LOA using hook-and-line or pot gear.
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 delay the reallocation of Pacific cod specified from jig vessels to catcher vessels less than 60 feet (18.3 m) LOA using hook-and-line or pot gear. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of December 30, 2020.
16 U.S.C. 1801
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Temporary rule; closure.
NMFS is prohibiting directed fishing for pollock in Statistical Area 610 in the Gulf of Alaska (GOA). This action is necessary to prevent exceeding the A season allowance of the 2021 total allowable catch of pollock for Statistical Area 610 in the GOA.
Effective 1200 hrs, Alaska local time (A.l.t.), January 20, 2021, through 1200 hrs, A.l.t., May 31, 2021.
Krista Milani, 907-581-2062.
NMFS manages the groundfish fishery in the GOA exclusive economic zone according to the Fishery Management Plan for Groundfish of the Gulf of Alaska (FMP) prepared by the North Pacific Fishery Management 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 A season allowance of the 2021 total allowable catch (TAC) of pollock in Statistical Area 610 of the GOA is 799 metric tons (mt) as established by the final 2020 and 2021 harvest specifications for groundfish in the GOA (85 FR 13802, March 10, 2020) and inseason adjustment (85 FR 83834, December 23, 2020).
In accordance with §§ 679.20(d)(1)(i) and 679.20(d)(1)(ii)(B), the Regional Administrator has determined that the A season allowance of the 2021 TAC of pollock in Statistical Area 610 of the GOA is necessary to account for the incidental catch in other anticipated fisheries. Therefore, the Regional Administrator is establishing a directed fishing allowance of 0 mt and is setting aside the remaining 799 mt as bycatch to support other anticipated groundfish fisheries. In accordance with § 679.20(d)(1)(iii), the Regional Administrator finds that this directed fishing allowance has been reached. Consequently, NMFS is prohibiting directed fishing for pollock in Statistical Area 610 of the GOA.
While this closure is effective the maximum retainable amounts at § 679.20(e) and (f) apply at any time during a trip.
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 delay the closure of pollock in Statistical Area 610 in the GOA. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of December 30, 2020.
16 U.S.C. 1801
Board of Governors of the Federal Reserve System.
Notice of proposed rulemaking, request for public comment.
The Board of Governors of the Federal Reserve System (“Board”) proposes to amend its Regulation D (Reserve Requirements of Depository Institutions) to eliminate references to an “interest on required reserves” rate and to an “interest on excess reserves” rate and replace them with a reference to a single “interest on reserve balances” rate. The Board also proposes to simplify the formula used to calculate the amount of interest paid on balances maintained by or on behalf of eligible institutions in master accounts at Federal Reserve Banks, and to make other conforming changes.
Comments must be received on or before March 9, 2021.
You may submit comments, identified by Docket Number R-1737; RIN 7100-AG07, by any of the following methods:
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•
•
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All public comments are available from the Board's website at
Sophia H. Allison, Senior Special Counsel, (202-452-3565), Legal Division, or Matthew Malloy (202-452-2416), Division of Monetary Affairs, or Heather Wiggins (202-452-3674), Division of Monetary Affairs; for users of Telecommunications Device for the Deaf (TDD) only, contact 202-263-4869; Board of Governors of the Federal Reserve System, 20th and C Streets NW, Washington, DC 20551.
Section 19(b)(2) of the Federal Reserve Act (“Act”)
Section 19(b)(12) of the Act provides that balances maintained by or on behalf of “eligible institutions” in accounts at Federal Reserve Banks may receive earnings to be paid by the Reserve Bank at least once each quarter, at a rate or rates not to exceed the general level of short-term interest rates.
Regulation D currently establishes an “interest on required reserves” (“IORR”) rate of 0.10 percent and an “interest on excess reserves” (“IOER”) rate of 0.10 percent.
With the setting of transaction account reserve requirement ratios to zero, depository institutions no longer have to maintain balances to satisfy a reserve balance requirement. To account for such changes, the Board is proposing to amend Regulation D in two ways. First, the proposed amendments would replace references to an IORR rate and an IOER rate with references to a single “interest on reserve balances” (“IORB”) rate. Second, the proposed amendments would streamline the calculation of interest by multiplying the IORB rate on a day by the balances maintained on that day. The proposed amendments would eliminate the unnecessary distinction between institutions that maintain balances above or below an amount related to reserve requirements.
Section 204.2(aa) currently defines an EBA as “an account at a Reserve Bank pursuant to § 204.10(d) of this part that is established by one or more eligible institutions through an agent and in which only excess balances of the participating eligible institutions may at any time be maintained. An excess balance account is not a “pass-through account” for purposes of this part.”
Section 204.10(b) establishes the interest paid on different types of balances maintained by or on behalf of eligible institutions at Reserve Banks. Sections 204.10(b)(1)-(3) describe how the IORR and IOER rates apply to balances of eligible institutions above and below the top of the penalty-free band and how interest is calculated on those balances. Section 204.10(b)(5) sets forth the current IORR and IOER rates. (Section 204.10(b)(4) addresses term deposits; the Board is not proposing any amendments to this section other than the redesignation discussed below.)
The Board proposes to delete current 204.10(b)(1) through (3) and replace them with a new section 204.10(b)(1) that would establish interest on balances maintained in a master account at a Reserve Bank by or on behalf of an eligible institution and describe how that interest is calculated. The Board proposes to establish interest on such balances as the amount equal to the IORB rate on a day multiplied by the total balances maintained on that day.
Section 204.10(b)(5) of Regulation D currently sets forth the IORR rate and the IOER rate. In light of the proposed replacement of such rates with a proposed IORB rate set forth in proposed section 204.10(b)(1), the Board proposes to delete current section 204.10(b)(5) in its entirety.
The Board proposes to redesignate current section 204.10(b)(4), dealing with term deposits, as proposed section 204.10(b)(2). No changes to the content of current section 204.10(b)(4) are proposed.
The Board proposes to add a new section 204.10(b)(3) defining “master account” for purposes of section 204.10 as “the record maintained by a Federal Reserve Bank of the debtor-creditor relationship between the Federal Reserve Bank and a single eligible institution with respect to deposit balances of the eligible institution that are maintained with the Federal Reserve Bank. A `master account' is not a `term deposit,' an `excess balance account,' a `joint account,'
Current section 204.10(d)(1) authorizes the establishment of EBAs and specifies that balances in an EBA represent a liability of the Reserve Bank holding the EBA solely to the participating eligible institutions. Current section 204.10(d)(2) requires eligible institutions participating in an EBA to authorize another institution to act as agent of the participating institutions for purposes of general account management (including transferring balances in and out of the EBA), and requires an EBA to be established at the Reserve Bank holding the agent's master account. Current section 204.10(d)(2) also prohibits the agent from maintaining any of its own balances in the EBA. Current section 204.10(d)(3) provides that balances in an EBA do not satisfy any institution's reserve balance requirement, and current section 204.10(d)(4) provides that EBAs are solely for the purpose of maintaining “excess balances” of participating institutions and may not be used for general payments or other activities. Current section 204.10(d)(5) establishes interest on balances in an EBA as “the amount equal to the IOER rate in effect each day multiplied by the total balances maintained on that day for each day of the maintenance period.” Current section 204.10(d)(6) authorizes Reserve Banks to establish additional terms and conditions with respect to the operation of EBAs.
Proposed section 204.10(d) would remove references to “excess balances” when describing the balances in an EBA and replace them with references to “balances.” The Board proposes to retain the name “excess balance account.” Specifically, the second sentence of proposed section 204.10(d)(1) would delete the reference to “excess balances of eligible institutions” in an EBA and replace it with a reference to “balances maintained by eligible institutions” in an EBA. Proposed section 204.10(d)(2) would delete the word “excess” from the reference to “transferring the excess balances of participating institutions in and out” of an EBA.
Current section 204.10(d)(3) provides that “balances maintained in an excess balance account will not satisfy any institution's reserve balance requirement.” The Board proposes to delete current section 204.10(d)(3) and redesignate current section 204.10(d)(4) as section 204.10(d)(3). Current section 204.10(d)(4) provides that an EBA “must be used exclusively for the purpose of maintaining the excess balances of participants” and may not be used for general payments or other activities. Proposed section 204.10(d)(3) would provide that “[b]alances maintained in an [EBA] may not be used for general payments or other activities.” Finally, proposed section 204.10(d)(4) would delete the references in current section 204.10(d)(5) to the “IOER rate” in establishing interest paid on EBAs and replace it with a reference to the “IORB rate.” Proposed section 204.10(d)(4) would also revise the reference to the rate “in effect each day” and to “total balances maintained on that day for each day of the maintenance period” to provide that interest on balances in an EBA is the amount equal to “the IORB rate in effect on a day
The Board seeks comment on all aspects of the proposed rule.
The Regulatory Flexibility Act (“RFA”)
The Board has considered the potential impact of the proposal on small entities in accordance with the RFA. The Board believes that the proposal will not have a significant economic impact on a substantial number of small entities. As discussed in the Supplementary Information above, the proposed rule would apply to all eligible institutions regardless of size. The Board's proposed rule would also not impose any new recordkeeping, reporting, or compliance requirements. The Board does not believe that the proposed rule duplicates, overlaps, or conflicts with any other Federal rules. The Board also does not believe that there are any significant alternatives to the proposal which accomplish its stated objectives. In light of the foregoing, the Board does not believe that the proposal, if adopted in final form, would have a significant economic impact on a substantial number of small entities. Nonetheless, the Board seeks comment on whether the proposal would impose undue burdens on, or have unintended consequences for, small banking organizations and whether there are ways such potential burdens or consequences could be minimized in a manner consistent with the purpose of the proposal.
In accordance with the Paperwork Reduction Act,
Section 772 of the Gramm-Leach-Bliley Act
Banks, banking, Reporting and recordkeeping requirements.
For the reasons set forth in the
12 U.S.C. 248(a), 248(c), 461, 601, 611, and 3105.
(aa)
(b)
(1) For balances maintained in an eligible institution's master account, interest is the amount equal to the interest on reserve balances rate (“IORB rate”) on a day multiplied by the total balances maintained on that day. The IORB rate is 0.10 percent.
(2) For term deposits, interest is:
(i) The amount equal to the principal amount of the term deposit multiplied by a rate specified in advance by the Board, in light of existing short-term market rates, to maintain the federal funds rate at a level consistent with monetary policy objectives; or
(ii) The amount equal to the principal amount of the term deposit multiplied by a rate determined by the auction through which such term deposits are offered.
(3) For purposes of § 204.10(b), a “master account” is the record maintained by a Federal Reserve Bank of the debtor-creditor relationship between the Federal Reserve Bank and a single eligible institution with respect to deposit balances of the eligible institution that are maintained with the Federal Reserve Bank. A “master account” is not a “term deposit,” an “excess balance account,” a “joint account,” or any deposit account maintained with a Federal Reserve Bank governed by an agreement that states the account is not a master account.
(d)
(2) The participating eligible institutions in an excess balance account shall authorize another institution to act as agent of the participating institutions for purposes of general account management, including but not limited to transferring the balances of participating institutions in and out of the excess balance account. An excess balance account must be established at the Reserve Bank where the agent maintains its master account, unless otherwise determined by the Board. The agent may not commingle its own funds in the excess balance account.
(3) Balances maintained in an excess balance account may not be used for general payments or other activities.
(4) Interest on balances of eligible institutions maintained in an excess balance account is the amount equal to the IORB rate in effect on a day multiplied by the total balances maintained on that day.
By order of the Board of Governors of the Federal Reserve System.
Federal Housing Finance Agency.
Notice of proposed rulemaking; request for comments.
The Federal Housing Finance Agency (FHFA) requests comment on a proposed rule that would implement four liquidity and funding requirements for Fannie Mae and Freddie Mac (the Enterprises). The 2008 financial crisis demonstrated substantial weaknesses in the liquidity positions of the Enterprises. Liquidity and funding challenges were a significant contributing factor to establishment of the conservatorships in September 2008. The proposed rule builds on the improvements made to the U.S. banking supervision framework's regulation of institutions' liquidity requirements, and on experience since the 2008 financial crisis including with the more recent 2020 COVID-19-related financial market stress. FHFA believes that a robust Enterprise liquidity framework will improve market confidence in the Enterprises' ability to fulfill their mission and provide countercyclical support to housing finance markets in times of stress, while further minimizing the likelihood that they will need further taxpayer support. FHFA envisions that an appropriate framework would incent the Enterprises to build their liquidity portfolios in good times, so that it is available to be deployed as necessary in times of stress.
Comments must be received on or before March 9, 2021.
You may submit your comments on the proposed rule, identified by regulatory information number (RIN) 2590-AB09, by any one of the following methods:
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Jamie Newell, Associate Director, Division of Resolutions, (202) 649-3530,
The proposed rule establishes four quantitative liquidity requirements that address the short, intermediate and long-term liquidity needs of the Enterprises. The short-term 30-day liquidity requirement is designed to promote the short-term resilience of the liquidity risk profile of the Enterprises, thereby improving the Enterprise's ability to absorb shocks arising from financial market and economic stresses. In addition, the proposed rule includes an intermediate-term 365-day liquidity requirement to ensure that the Enterprises manage their liquidity needs beyond the short-term, and to provide additional incentives to fund their activities in a more stable fashion. Finally, the proposed rule includes two longer-term liquidity and funding requirements that encourage the issuance of an appropriate mix of longer-term debt to reduce the Enterprises' rollover risk. FHFA expects that this more appropriate mix of longer-term debt will also reduce the risk that the Enterprises would have to sell less-liquid assets in distressed markets.
FHFA invites comments on all aspects of the proposed rule and will take all comments into consideration before issuing a final rule. Copies of all comments will be posted without change, and will include any personal information you provide such as your name, address, email address, and telephone number, on the FHFA website at
Liquidity risk management is a part of any safety and soundness regulatory framework for financial institutions. The 2008 financial crisis demonstrated substantial weaknesses in the liquidity positions of the Enterprises, and liquidity and funding challenges were a significant contributing factor to establishment of the conservatorships in September 2008. The Enterprises had more than five trillion dollars in agency MBS and agency unsecured debt outstanding, held by various types of investors. Certain investors expressed significant concern about the credit worthiness of the Enterprises in the absence of an explicit guarantee from the U.S. government given the possible Enterprise losses arising from the 2008 housing crisis.
On September 6, 2008, the Enterprises were placed into conservatorship by FHFA. In connection with this action, the U.S. Department of the Treasury (U.S. Treasury) agreed to backstop losses by the Enterprises based on the terms of Senior Preferred Stock Purchase Agreements (PSPAs) entered into with each Enterprise in conservatorship. Even after receiving this public support from the U.S. government, the Enterprises had significant difficulty issuing longer term debt in late 2008. Their primary source of funding was through the issuance of short-term discount notes, most of which had maturities significantly less than one year. The Enterprises eventually increased their ability to issue longer-term debt in 2009 and 2010 as the U.S. Treasury amended the PSPAs and increased its support to the Enterprises.
Banks in the United States and globally also experienced difficulty meeting their obligations during the crisis due to a breakdown of funding markets. As a result, many governments and central banks across the world provided unprecedented levels of liquidity support to companies in the financial sector in an effort to sustain the global financial system. In the United States, the Board of Governors of the Federal Reserve System (Federal Reserve Board) and the Federal Deposit Insurance Corporation (FDIC) established various temporary liquidity facilities to provide sources of funding for a range of asset classes.
These severe market stress events came in the wake of a period characterized by ample liquidity in the U.S. financial system. The rapid reversal in market conditions and the declining availability of liquidity during the financial crisis illustrated both the speed with which liquidity can evaporate and the potential for protracted illiquidity during and following these types of market events. In addition, the recent COVID-19-related financial crisis reminded market participants of the speed at which the detrimental effects of a liquidity and funding crisis can manifest, as the majority of funding markets “locked up” in mid-March 2020. For example, the Enterprises had significant difficulty issuing longer-term fixed rate unsecured term debt in mid-March 2020, and that lack of investor demand lasted into June 2020. Market participants noted stress even in the U.S. Treasury markets.
In 2008, the Enterprises' failure to adequately address these challenges was in part due to lapses in basic liquidity risk management practices, such as establishing an adequate portfolio of highly liquid assets to serve as a buffer in a crisis. During the 2008 financial crisis, the Enterprises maintained a liquidity portfolio largely composed of credit card asset backed securities, auto asset backed securities and other corporate unsecured debt, with minimal amounts of U.S. Treasury securities.
Recognizing the need for the Enterprises to improve their liquidity risk management and to control their liquidity risk exposures, in 2009 FHFA convened an interagency task force composed of examiners from the New York Federal Reserve Bank, the Federal Reserve Board, U.S. Treasury staff, Enterprise staff, and FHFA examiners. The discussions included draft standards being developed by U.S. banking and foreign jurisdictions to establish international liquidity standards. These standards included the principles based on supervisory expectations for liquidity risk management in the “Principles for Sound Liquidity Management and Supervision” (Basel Liquidity Principles). In addition to these principles, quantitative standards for liquidity were introduced to the U.S. banking supervision framework in the form of a liquidity coverage ratio (LCR) in 2013 (and subsequently approved in 2014) and a net stable funding ratio (NSFR) in 2016
After consultation with the U.S. banking regulators about these developing liquidity risk quantitative standards and how they might apply to the Enterprises, FHFA issued a supervisory letter in December 2009 that established minimum 30-day and 365-day liquidity requirements for Fannie Mae. FHFA issued similar supervisory guidance to Freddie Mac and added a requirement that Freddie Mac build out the capability to measure the cumulative net daily cash needs out to 365 days. FHFA's supervisory letters also required that 50 percent of the Enterprises' 30-day cumulative net cash need requirement be held in cash at the Federal Reserve or in U.S. Treasury securities, with the balance of the liquidity portfolio limited to other defined highly liquid assets. These FHFA supervisory requirements were adopted by the Enterprises as board liquidity risk limits and serve as the foundation for the currently proposed 30-day and 365-day liquidity requirements.
The most significant change made by the proposed rule to the Enterprises' liquidity management regimes would be the addition of certain assumptions involving stressed cash inflows and outflows. Maintaining a sufficient portfolio of high quality liquid assets to meet these stressed cash outflow and limited cash inflow assumptions would position the Enterprises to provide mortgage market liquidity in times of market stress even if they cannot issue debt. In effect, FHFA proposes to require that certain contingencies, like additional cash outflows from buying loans through the cash window (also known as the whole loan conduit at Fannie Mae), and buying delinquent loans out of pools assuming a distressed mortgage market, be prefunded and backed by an appropriately-sized portfolio of U.S. Treasury securities and other high quality liquid assets.
FHFA standards for safe and sound operations for the Enterprises include those set forth in the Prudential Management and Operations Standards (PMOS)
Furthermore, FHFA's Corporate Governance regulation specifies obligations of Enterprise management and of the Board of Directors regarding, among other things, Enterprise risk management.
In developing and adopting this proposed rule, FHFA exercises general regulatory and supervisory authority under section 1311(b) of the Federal Housing Enterprises Financial Safety and Soundness Act (Safety and Soundness Act) providing that each regulated entity “be subject to the supervision and regulation of the Agency.” 12 U.S.C. 4511(b). By establishing minimum liquidity requirements and a supervisory framework to address shortfalls and exigencies requiring temporary increases to the required minimum liquidity, the proposed rule supports FHFA in carrying out its duty under section 1313(a) of the Safety and Soundness Act “to oversee the prudential operations of each regulated entity” and “to ensure that . . . each regulated entity operates in a safe and sound manner, including maintenance of adequate capital and internal controls.” 12 U.S.C. 4513(a) (FHFA duties also include ensuring that the operations and activities of the Enterprises foster “liquid” national housing finance markets). Section 1313(a) of the Safety and Soundness Act provides maintenance of adequate capital as an example but does not limit the scope of FHFA oversight of Enterprise prudential operations solely to ensuring that the Enterprises maintain adequate capital. Lack of adequate liquidity is a safety and soundness concern in itself but could also affect Enterprise capital. FHFA's oversight of prudential operations necessarily includes oversight of Enterprise liquidity.
The proposed rule also supports FHFA oversight of Enterprise prudential management, including compliance with standards pertaining to “adequacy and maintenance of liquidity and reserves.” 12 U.S.C. 4513b(a)(5). This regulation is an additional standard on that subject. By implementing FHFA authority in a manner to permit, during market stress, temporary reductions in required minimum liquidity and, thus, to allow previously built-up liquidity to be deployed during periods of market stress, the proposed rule also supports Congressional intent for FHFA to maintain the “continued ability” of the Enterprises to accomplish their public missions. 12 U.S.C. 4501(2);
Current FHFA regulations do not require the Enterprises to meet a quantitative liquidity standard. Rather, FHFA evaluates the Enterprises' methods for measuring, monitoring, and managing liquidity risk on a case-by-case basis in conjunction with its supervisory processes and guidance. On August 22, 2018, FHFA issued Advisory Bulletin (AB) 2018-06 titled “Liquidity Risk Management”. The Liquidity Risk Management AB incorporates liquidity risk management elements consistent with the Basel Liquidity Principles. The Liquidity Risk Management AB also emphasizes the central role of corporate governance, cash-flow projections, stress testing, ample liquidity resources, intra-day funding risk management, and formal contingency funding plans as necessary tools for effectively measuring and managing liquidity risk. However, as guidance, these FHFA pronouncements are not quantitative and lack the force of a duly adopted regulation.
The proposed rule would enhance the supervisory efforts and liquidity risk management practices described in AB 2018-06, which are aimed at measuring and managing liquidity risk, by implementing four minimum quantitative liquidity requirements. The proposed rule would establish a minimum short-term liquidity requirement that would be similar to the LCR approved by the Office of the Comptroller of the Currency, Department of the Treasury (OCC), Federal Reserve Board, and FDIC (U.S. banking regulators), with some modifications to reflect characteristics and risks of specific aspects of the Enterprises businesses, as described in this preamble.
FHFA notes that the U.S. banking regulators recently issued a final NSFR rule (NSFR final rule) that was initially included in the Basel liquidity framework when it was first published in 2010. While the Basel III LCR is focused on measuring liquidity resilience over a short-term period of severe stress, the NSFR final rule is intended to promote resilience by creating additional incentives for banking organizations and other financial companies to fund their activities with more stable sources and encouraging a sustainable maturity structure of assets and liabilities. Similarly, to encourage the Enterprises to issue appropriate amounts of longer-term debt and maintain a sustainable debt term structure, FHFA is proposing a 365-day intermediate term and two longer-term liquidity requirements to provide quantitative limits on the liquidity and funding risks of the Enterprises. A key objective of these liquidity and funding requirements is to ensure that the Enterprises have sufficient long-term funding to minimize rollover risk and fund less-liquid assets with longer-term debt and thus avoid having to sell such less-liquid assets into distressed markets.
FHFA is requesting comment on a proposed rule that would implement four liquidity and funding requirements. The proposed rule would also require daily reporting to FHFA of the Enterprises' liquidity positions and other information, as well as monthly disclosures to the public.
• The short-term (30-day) requirement is substantially similar to the U.S. banking regulator's LCR final rule (LCR final rule)
• The intermediate-term (365-day) liquidity requirement is designed to promote intermediate-term management of liquidity risks and to encourage an appropriate amount of longer-term funding to reduce debt rollover risks. It is substantially similar to the 30-day requirement and based on similar stressed assumptions, except that certain stressed assumptions last 365 days. The proposed rule would require the Enterprises to maintain a portfolio of high quality liquid assets, together with mortgage-backed securities (MBS) eligible to be pledged as collateral to the Fixed Income Clearing Corporation (FICC) (subject to a haircut), large enough to cover the worst daily cumulative net cash outflow over 365 calendar days under those stress assumptions. FHFA proposes not to include an excess requirement in connection with the 365-day liquidity requirement.
• The first long-term liquidity requirement is designed to encourage an appropriate amount of long-term unsecured debt to support less-liquid retained portfolio assets so that the Enterprises have the ability to hold such assets for at least a year without having to sell them into potentially distressed markets. Intended to be a simple, transparent metric, this requirement is conceptually similar to the NSFR proposed rule, recently finalized, and would require the Enterprises to maintain a minimum ratio of long-term unsecured debt to less-liquid assets exceeding 120 percent.
• The second long-term requirement is also designed to encourage the Enterprises to issue an appropriate amount of longer-term unsecured debt to support all retained portfolio assets, not just less-liquid assets. This requirement sets a minimum ratio for the duration of an Enterprise's unsecured agency debt over the duration of all its retained portfolio assets and requires that such ratio exceed 60 percent.
As described earlier, the proposed rule's four quantitative minimum liquidity requirements build upon the U.S. banking supervision framework. These new liquidity and funding requirements also build upon existing Enterprise board liquidity risk limits and methodologies used by the Enterprises to assess exposures to contingent liquidity events but are more conservative than the Enterprises' existing board risk limits. The proposed rule would also complement existing FHFA supervisory guidance provided in AB 2018-06, and add to FHFA's standards for safe and sound operations for the Enterprises as set forth in the PMOS.
Given that the Enterprises do not have access to the Federal Reserve Discount Window or a stable customer deposit base, FHFA proposes to define high quality liquid assets as: (i) Cash held in a Federal Reserve account; (ii) U.S. Treasury securities; (iii) Short-term secured loans through U.S. Treasury repurchase agreements that clear through the FICC or are offered by the Federal Reserve Bank of New York; and (iv) A limited amount of unsecured overnight deposits with eligible U.S. banks.
For purposes of the 365-day liquidity requirement only, FHFA proposes to allow the Enterprises to augment the high quality liquid asset portfolio discussed above with cash inflows from pledging FICC-eligible collateral using a repurchase agreement that clears through the FICC as a source of cash to meet the 365-day requirement.
The enterprise-wide cumulative net cash flows includes all daily inflows and outflows of cash from any corporate source and use (as detailed below) and includes, but is not limited to, mortgage operations that use cash, like MBS payments to investors, repayment to servicers for advances of principal and interest (P&I), advancement of P&I to MBS investors, the daily purchase of loans, and any other uses of cash and excludes any cash inflows from expected unsecured debt issuance.
As further described below, the measure of the enterprise-wide cumulative daily net cash flows is meant to include certain stress events experienced during the recent financial crisis, and to position the Enterprises to continue to provide mortgage market liquidity through such stresses. These stressed cash flow assumptions included in the proposed rule take into account the potential impact of idiosyncratic and market-wide shocks, including those that would result in: (1) A complete loss of the Enterprise's ability to issue unsecured debt during the relevant period; (2) An increased cash outflow associated with additional daily single-family and multifamily cash window or whole loan conduit purchases to support the mortgage market, particularly small lenders, during a crisis; (3) A decreased cash inflow due to the assumed increase in the number of borrowers who fail to make their scheduled principal, interest, tax, and insurance payments to the servicers under a stressed economic environment; (4) An increased cash outflow requirement to fund delinquent loan buyouts under a stressed economic environment; (5) An increased cash outflow based on the Enterprise's best estimate of the collateral needed to be posted to support FICC-related activities for the next month; (6) An increased cash outflow from unscheduled draws on committed liquidity facilities that the Enterprises have provided to their clients related to variable-rate demand bonds; and (7) A decreased cash inflow due to the assumed failure of the Enterprise's five top non-bank servicers by unpaid principal balance (UPB) to make timely principal, interest, and tax, and insurance payments to the Enterprises during the next month under a stressed economic environment. To determine decreased cash inflows and increased cash outflows due to higher numbers of delinquent borrowers and to higher loan buy-out from MBS trusts, the proposed rule would require the Enterprises to formulate their projections assuming stressed conditions corresponding to the more severe of FHFA's Dodd-Frank Act Stress Test (DFAST) assumptions or other supervisory stress assumptions as ordered by FHFA.
The proposed rule also sets forth two long-term liquidity and funding requirements. The objective of these two liquidity and funding requirements is to reduce unsecured debt rollover risk, ensure that the Enterprises maintain sufficient long-term unsecured debt so they do not have to sell less-liquid assets into distressed markets, incent the Enterprises to issue an appropriate amount of long-term unsecured debt, and incent the Enterprises to reduce the amount of less-liquid assets funded by unsecured debt held within the retained portfolio that are not eligible collateral for the FICC.
The proposed rule, as described below, would require each Enterprise to report to FHFA its compliance with the four liquidity requirements daily, along with additional information regarding its liquidity position and assumptions as specified by FHFA. The Enterprises shall submit such reports at the close of each business day, treated as Day 0, reflecting the liquidity positions and other required information as of 6 p.m. EST on Day 0. Such reports shall include, at a minimum, the key stress
The proposed rule would require daily minimum liquidity reporting about the short-term, intermediate-term and long-term liquidity and funding profile of the Enterprises to management, and to FHFA supervisory personnel. FHFA, by order, may require supplemental reporting. With this information, the Enterprise's management and supervisors would be better able to assess the Enterprise's ability to meet its projected liquidity needs during periods of liquidity stress; take appropriate actions to address liquidity needs; and, in situations of failure, implement an orderly resolution of the Enterprise.
As noted above, for the 30-day requirement the proposed rule would require the Enterprises to maintain a high quality liquid asset portfolio sufficient in size to meet the highest cumulative net cash need, plus an additional $10 billion excess amount. FHFA recognizes that certain market circumstances, for example, may require that an Enterprise be provided flexibility to meet a reduced 30-day liquidity minimum in order to fund severe stress liquidity needs and to support continued liquidity in the secondary mortgage markets. Therefore, the proposed rule would provide for temporary reductions in minimum liquidity requirements to address economic or market stress conditions. Specifically, it would provide for FHFA to make a determination that, due to economic or market conditions, temporary adjustments to reduce the minimum liquidity requirements are appropriate to address those conditions. FHFA's exercise of this authority would further Enterprise public purposes in supporting secondary mortgage market liquidity consistent with safety and soundness.
The proposed rule would also, as described below, establish a supervisory framework to address Enterprise liquidity shortfalls and non-compliance with the minimum liquidity requirements when an Enterprise's 30-day liquidity coverage metric falls below the $10 billion excess requirement or any of the other three liquidity and funding requirements.
Under the proposed rule, an Enterprise would be required to notify FHFA on any business day that any of the four liquidity requirements is not met, triggering a requirement for the Enterprise to submit a plan for approval to FHFA to achieve compliance, unless FHFA instructs otherwise. Alternatively, if FHFA determines that the Enterprise is otherwise non-compliant with the requirements of this part, FHFA may also require the Enterprise to submit a plan to achieve compliance. FHFA may take additional supervisory or enforcement action at its discretion to address Enterprise non-compliance.
In addition, if FHFA determines that, due to economic, market, or Enterprise-specific circumstances, temporary modified Enterprise liquidity and funding requirements above those established under this part are necessary or appropriate for an Enterprise, a process would be available to modify the minimum requirements. In such an instance, FHFA will notify the Enterprise in writing of the proposed modified Enterprise liquidity and funding requirements and provide the Enterprise with an opportunity to respond before making a determination as set forth in proposed § 1241.31.
These procedures, which are described in further detail in this preamble, are intended to enable FHFA to monitor and respond appropriately to the particular economic, market, or Enterprise-specific circumstances requiring an adjustment to the minimum liquidity requirements. FHFA invites public comment on all aspects of the proposed procedures for FHFA to respond timely and appropriately to address economic, market, Enterprise-specific, or other circumstances affecting Enterprise liquidity, safety and soundness, and ability to meet their public purposes.
The proposed rule's four liquidity requirements would use Enterprise projections based on stressed market assumptions. While the short-term and intermediate-term liquidity requirements would impose specific stress assumptions, FHFA expects the Enterprises to maintain robust stress testing frameworks that incorporate additional scenarios, like lower rate environments that might trigger calling debt. The Enterprises should use these additional scenarios in conjunction with the proposed rule's liquidity requirements to appropriately determine their board and management liquidity and funding buffers. FHFA notes that the four proposed liquidity requirements are minimum requirements, and that organizations like the Enterprises that pose systemic risk to the U.S. financial system, or whose liquidity stress testing indicates a need for higher liquidity and funding buffers, may need to take additional steps beyond meeting the proposed rule's minimum requirements in order to meet supervisory expectations for safe and sound operation. Moreover, nothing in the proposed rule would limit the authority of FHFA under any other provision of law or regulation to take supervisory or enforcement actions, including actions to address unsafe or unsound practices or conditions, deficient liquidity levels, or violations of law.
The proposed rule, once finalized, would be effective as of September 2021. FHFA requests comment on all aspects of the proposed rule, including comment on the specific issues raised throughout this preamble. FHFA requests that commenters provide detailed qualitative or quantitative analysis, as appropriate, as well as any relevant data and impact analysis to support their positions.
As discussed above, the proposed rule would establish four quantitative liquidity requirements for the Enterprises, as well as certain qualitative requirements for risk management practices. The four quantitative liquidity requirements would be measured daily and supported by detailed management reporting:
• A short-term 30-day liquidity requirement based on: (i) The Enterprise's highest cumulative daily net cash outflows over 30 calendar days under certain specified stressed market assumptions, including a complete inability to issue debt; and (ii) An excess requirement in the amount of $10 billion;
• An intermediate 365-day liquidity requirement based on the Enterprise's highest cumulative daily net cash outflows over 365 calendar days under certain specified stressed market assumptions, including a complete inability of the Enterprises to issue debt;
• A simple long-term liquidity and funding requirement based on the amount of an Enterprise's long-term unsecured debt divided by the amount of its less-liquid assets, as defined below; and
• A second, model-based long-term liquidity and funding requirement based on an Enterprise's spread duration of its
The short-term and intermediate-term requirements are cashflow based and will be discussed in this section II.A, while the two long-term liquidity and funding requirements are calculated based on defined ratios discussed in section II.B.
The purpose of these cashflow-based requirements is to establish minimum short-term (discussed throughout as the 30-day requirement) and intermediate-term (discussed throughout as the 365-day requirement) liquidity requirements for the Enterprises. These two requirements are determined based on cash flows under a series of stress assumptions including, among other things, that the Enterprises are unable to access the debt markets for an extended period and, as a result, must fund their enterprise-wide net cash needs, including funding mortgage operations, with an appropriately sized portfolio of high quality liquid assets, as defined below.
Given the lack of Enterprise access to the discount window at any Federal Reserve Bank and the need to provide mortgage market liquidity in a crisis, FHFA proposes to significantly limit those assets that qualify as high quality liquid assets for the liquidity portfolio under this proposed rule. As a result, FHFA proposes that high quality liquid assets be limited to cash held in a Federal Reserve bank account, U.S. Treasury securities, U.S. Treasury repurchase agreements where the Enterprise lends cash secured by U.S. Treasury securities cleared through the FICC or as offered by the Federal Reserve Bank of New York, and a limited amount of unsecured overnight bank deposits with eligible U.S. banks.
To be included in high quality liquid assets, an asset would be required to be unencumbered as provided under the proposed rule. First, the asset must be free of legal, regulatory, contractual, or other restrictions on the ability of an Enterprise to monetize the asset. FHFA believes that, as a general matter, high quality liquid assets should only include assets that could be converted easily into cash. Second, the asset cannot have been pledged, explicitly or implicitly, to secure or provide credit-enhancement to any transaction.
In the United States, Federal Reserve Banks are generally authorized under the Federal Reserve Act to maintain balances only for “depository institutions” and for other limited types of organizations, like the Enterprises. Under the proposed rule, all balances the Enterprises maintain at a Federal Reserve Bank would be considered a high quality liquid asset.
The proposed rule would include the fair market value of securities issued by, or unconditionally guaranteed as to the timely payment of principal and interest by, the U.S. Treasury. U.S. Treasury securities have exhibited high levels of liquidity even in times of extreme stress to the U.S. financial system, and typically are the securities that experience the most “flight to quality” when investors react in a crisis.
FHFA proposes that U.S. Treasury securities qualify as a high quality liquid asset because they are easily and immediately convertible into cash during times of market stress. U.S. Treasury securities have active outright sale or repurchase agreement markets at all times with significant diversity in market participants as well as high volume. U.S. Treasury securities have exhibited this market-based liquidity characteristic historically, including evidence during the 2008 financial crisis and the more recent 2020 COVID-19-related financial market stress. Even during these recent crises, U.S. Treasury securities demonstrated low bid-ask spreads, high trading volumes, a large and diverse number of market participants, and other factors. Diversity of U.S. Treasury security market participants, on both the buy and sell sides, is particularly important because it tends to reduce market concentration and is a key indicator that a market will remain liquid. Also, the presence of multiple committed market makers in U.S. Treasury securities is another sign that a market is liquid.
The proposed rule would allow the Enterprises to treat certain secured loans backed by U.S. Treasury securities as highly liquid assets. Specifically, if the Enterprise lends cash secured by U.S. Treasury securities in a repurchase agreement cleared through the FICC (FICC Treasury repurchase agreements) then it may treat those assets as highly liquid. As the collateral backing investments in FICC Treasury repurchase agreements is legally allowed to be rehypothecated, the proposed rule assumes that the FICC Treasury repurchase agreements are fungible with U.S. Treasury securities and would be counted as such. The proposed rule limits any such investment in FICC Treasury repurchase agreements to those with a remaining maturity term no longer than the greater of: (i) 15 days; or (ii) The number of days until the next agency Uniform Mortgage Backed Security (UMBS) principal and interest payment date which is typically on, or the next business day after, the 25th day of the month.
Under the proposed rule, for collateral received in FICC Treasury repurchase agreements where the Enterprise has rehypothecation rights to withdraw the asset without remuneration at any time during a 30 calendar-day stress period, such collateral if rehypothecated would be included in high quality liquid assets. If the collateral can be substituted with non-U.S. Treasury securities, then the Enterprises cannot count them as high quality liquid assets.
In addition, the Federal Reserve Bank of New York offers a program whereby the Enterprises are eligible to lend cash supported by repurchase agreements backed by U.S. Treasury securities. If an Enterprise lends cash in a secured transaction through this Federal Reserve Bank of New York reverse repurchase agreement program, the proposed rule would allow the Enterprise to treat these as high quality liquid assets. The proposed rule would similarly limit the maturity of secured lending transactions to the greater of 15 days or the number of days until the next agency UMBS principal and interest payment date.
The proposed rule would allow the Enterprises to include as high quality liquid assets a limited amount of unsecured overnight bank deposits provided they are held at a U.S. bank that is subject to quarterly reporting under the Federal Reserve System's FR Y-15 reporting requirements and has at least $250 billion in assets. FHFA believes these overnight deposits can be readily transferred to the Enterprises' Federal Reserve bank accounts early the following morning, which can help the Enterprises better manage intra-day funding requirements. The proposed rule would limit such overnight deposits to a maximum of $10 billion and require that each Enterprise have adequate single-name counterparty credit risk limits in place.
Question 1. Is allowing any amount of unsecured overnight deposits to qualify as highly liquid assets appropriate? If so, is the limitation to banks that are subject to the Federal Reserve Systems' FR Y-15 reporting requirements and have at least $250 billion in assets appropriate? Would greater or lesser restrictions be appropriate?
The proposed rule intentionally limits Enterprise investment in non-mortgage related investments to those high quality liquid assets discussed above. In addition, certain assets that may be highly liquid under normal conditions could experience “wrong-way” risk and could become less liquid during a period of stress and would not be appropriate for consideration as high quality liquid assets. Wrong-way risk is commonly defined as the risk that occurs when exposure to a counterparty is adversely correlated with the credit quality of that counterparty.” Securities issued or guaranteed by the Enterprises have been more prone to lose value and, as a result, become less liquid and lose value in times of liquidity stress due to the high correlation between the health of the Enterprises and the health of the housing markets generally. This correlation was evident during the 2008 financial crisis, as most Enterprise unsecured debt and Enterprise MBS traded at significant discounts for a prolonged period. Because of this high potential for wrong-way risk, the proposed rule would exclude assets issued by the Enterprises from high quality liquid assets.
FHFA understands that most securities issued and guaranteed by the Enterprises consistently trade in very large volumes and generally have been highly liquid. However, the Enterprises remain privately owned corporations, and their obligations do not have the explicit guarantee of the full faith and credit of the United States. The U.S. banking regulatory agencies have long held the view that obligations of the Enterprises should not be accorded the same treatment as obligations that carry the explicit guarantee of the U.S. government and, under the U.S. banking regulatory agencies' capital regulations, have currently and historically assigned a 20 percent risk weight to their obligations and guarantees, rather than the zero percent risk weight assigned to securities guaranteed by the full faith and credit of the United States.
Similarly, the proposed rule does not allow the Enterprises to lend cash through repurchase agreements secured by agency MBS even through strong counterparties, like the FICC. Enterprise MBS, even short-term repurchase agreements secured by agency MBS, that may be highly liquid under normal conditions can experience wrong-way risk and could become less liquid during a period of stress. FHFA does not think it would be appropriate to consider agency MBS, or repurchase agreements backed by agency MBS, to be included as a high quality liquid asset for the 30-day liquidity requirement for the Enterprises.
Question 2. Does the proposed exclusion of repurchase agreements secured by agency MBS appropriately address the concerns expressed above? Are there other ways that FHFA could address those concerns, including wrong-way risk? If so, FHFA encourages commenters to provide historical evidence, including evidence during recent periods of market liquidity stress, of low bid-ask spreads, high trading volumes, a large and diverse number of market participants, and other factors.
Under the proposed rule, to be eligible to be included as a high quality liquid asset, an asset would need to meet the following operational requirements. These operational requirements are intended to better ensure that an Enterprise's high quality liquid assets can in fact be liquidated in times of stress. Several of these requirements relate to the monetization of an asset, by which FHFA means the receipt of funds from the outright sale of an asset or from the transfer of an asset pursuant to a repurchase agreement.
First, an Enterprise would be required to have the operational capability to monetize the high quality liquid assets. This capability would be demonstrated by: (1) Implementing and maintaining appropriate procedures and systems to monetize the asset at any time in accordance with relevant standard settlement periods and procedures; and (2) Periodically monetizing a sample of high quality liquid asset that reasonably reflects the composition of the covered company's total high quality liquid asset portfolio, including with respect to asset type, maturity, and counterparty characteristics. This requirement is designed to ensure an Enterprise's access to the market, the effectiveness of its processes for monetization, and the availability of the assets for monetization and to minimize the risk of negative signaling during a period of actual stress. FHFA would monitor the procedures, systems, and periodic sample liquidations through its supervisory process.
Second, an Enterprise would be required to implement policies that require all high quality liquid assets to be under the control of the management function of the Enterprise that is charged with managing liquidity risk. To do so, an Enterprise would be required either to segregate the assets from other assets, with the sole intent to use them as a source of liquidity, or to demonstrate its ability to monetize the assets and have the resulting funds available to the liquidity risk management function without conflicting with another business or risk management strategy. This requirement is intended to ensure that a central function within the Enterprise has the authority and capability to liquidate high quality liquid asset to meet its obligations in times of stress without exposing the Enterprise to risks associated with specific transactions and structures. There were instances at specific firms during the 2008 financial crisis where unencumbered assets of the firms were not available to meet liquidity demands because the firms' treasury functions were restricted or did not have access to such assets.
Third, an Enterprise would be required to implement and maintain policies and procedures that determine the composition of the assets in its high quality liquid asset portfolio on a daily basis by: (1) Identifying where its high quality liquid assets are held by legal entity, geographical location, currency, custodial or bank account, and other relevant identifying factors; and (2) Determining that the assets included as high quality liquid assets for liquidity compliance continue to qualify as high quality liquid assets under the proposed rule.
FHFA notes that assets that meet the criteria of high quality liquid assets and are held by an Enterprise as “trading”, “available-for-sale”, or “held-to-maturity” can be included as high quality liquid assets, regardless of such designations.
The proposed rule would require the Enterprises to meet the following cash flow-based metrics by holding high quality liquid assets (as defined above) that equal or exceed, under the seven stressed cash flow scenarios described below, the following:
• 30-day Requirement. The sum of: (i) The Highest Cumulative Daily Net Cash Outflows over 30 calendar days under certain specified stressed market assumptions, including a complete inability of the Enterprises to issue
• 365-day Requirement. The Highest Cumulative Daily Net Cash Outflows over 365 days, including cash inflows from possible (though not scheduled) FICC MBS repurchase transactions where the Enterprise pledges its FICC-eligible collateral (assuming a 15 percent haircut) to raise cash on its worst cumulative net cash outflow day. The proposed rule assumes a conservative haircut of 15 percent given FHFA's wrong-way risk concerns. The proposed rule limits this ability to pledge FICC-eligible MBS collateral solely for purposes of meeting the 365-day requirement; such collateral is not eligible for purposes of meeting the 30-day liquidity requirement. Moreover, the proposed rule does not include non-FICC-eligible collateral as eligible for meeting any of the liquidity requirements.
To determine the 30-day requirement as of calculation date, the proposed rule would require an Enterprise to calculate its highest stressed cumulative net cash outflow amount for the next 30 calendar days following the calculation date, thereby establishing the dollar value that must be offset by the high quality liquid asset portfolio. Similarly, to determine the 365-day requirement as of calculation date, the proposed rule would require an Enterprise to calculate its highest stressed cumulative net cash outflow amount for the next 365 calendar days following the calculation date, thereby establishing the dollar value that must be offset by the high quality liquid asset portfolio combined with cash inflows from possible (though not scheduled) secured borrowings using FICC cleared repurchase transactions where the Enterprise raises cash by pledging its FICC-eligible collateral (assuming a 15 percent haircut) on its worst cumulative net cash outflow day.
Under the proposed rule, the highest cumulative daily net cash outflow amount would be the dollar amount on the day within a 30 calendar-day and 365-day stress period that has the highest amount of net cumulative cash outflows, respectively. The FHFA believes that using the highest cumulative daily calculation (rather than using total cash outflows over a 30 calendar-day or 365-day stress period) is necessary because it takes into account potential timing mismatches between an Enterprise's outflows and inflows, that is, the risk that an Enterprise could have a substantial amount of contractual inflows late in a 30 calendar-day stress period while also having substantial outflows earlier in the same period. Such mismatches could threaten the liquidity of the Enterprise. By requiring the recognition of the highest net cumulative outflow day of a particular 30 calendar-day stress period and a particular 365-day stress period, FHFA believes that the proposed liquidity requirements would better capture an Enterprise's liquidity risk and help foster more sound liquidity management.
The proposed rule would require that the high quality liquid asset portfolio be sufficient to fund all enterprise-wide net cash flows, which includes all corporate daily inflows and outflows of cash from whatever source and includes, but is not limited to, mortgage operations that use cash such as MBS payments to investors, reimbursement of servicer advances of P&I payments to the MBS trusts, the continued purchase of loans through the cash window or whole loan conduit, increases in collateral requirements arising from Enterprise derivative positions, and other uses of corporate cash.
Sources of cash include principal and interest payments from servicers that include guaranty fees from the single-family business, including the Temporary Payroll Tax Cut Continuation Act of 2011 fees. Other sources of cash, like existing To-be-announced (TBA) contracts in place as of 6 p.m. EST on Day 0, are assumed to be valid and represent cash inflows on the contract settlement date. Other sources of cash for the 365-day liquidity requirement include the borrowing of cash secured by FICC-eligible securities post 15 percent haircut. Less-liquid assets, like non-performing loans and re-performing loans, are not considered sources of cash unless the assets have been sold and are awaiting settlement. In this case, the Enterprise may assume that the cash inflow occurs on the expected settlement date.
With respect to any MBS trust-related cash flows, an Enterprise must include, at a minimum, the net corporate cash flows to and from the MBS trust(s). The proposed rule stresses the expected corporate cash flows by excluding expected cash inflows from expected future debt issuance (with an exception for Enterprise debt issued but not yet settled, described below), and by imposing six other stress assumptions that increase cash outflows or limit cash inflows (see discussion below).
The proposed rule defines “Daily Net Cash Flows” to mean, for any day, the total cash outflows minus the total cash inflows for that day. The proposed rule further defines the “Cumulative Daily Net Cash Outflows” to mean, for any day, the sum of the Daily Net Cash Flows for each day in the period up through and including the measurement day. The proposed rule further defines the “Highest Cumulative Daily Net Cash Outflows” to mean, with respect to either the 30-day or 365-day metric, the maximum Cumulative Daily Net Cash Outflows amount over the respective period, see the 30-day example in Table 1 below.
Table 1 illustrates the determination of the total net cash outflow amount using hypothetical daily outflow and inflow calculations for a given 30 calendar-day stress period. Based on the example provided, the peak net cash need would occur on Day 25, resulting in a Highest Daily Cumulative Net Cash Outflow of $80 billion.
The proposed rule does not permit an Enterprise to double count items in this computation. For example, if the fair market value of an asset is included as a part of the highly liquid asset portfolio, such asset may not also be counted as a cash inflow on its maturity date.
Question 3. Does the method FHFA is proposing for cumulative net cash outflows appropriately capture the potential mismatch between the timing of inflows and outflows under the 30 calendar-day stress period? Why or why not?
For purposes of the 30-day requirement, the proposed rule would require that the Enterprises must maintain a minimum daily excess requirement of at least $10 billion for each day within the first 30 days (aka the Daily Excess Requirement). The purpose of this Daily Excess Requirement is to address the possibility of errors and other unforeseen operational errors.
Question 4. For the 30-day requirement, does the proposed $10 billion Daily Excess Requirement adequately address possible forecasting errors and other residual liquidity risks? Should FHFA consider a larger Daily Excess Requirement than $10 billion? A smaller amount?
For purposes of the 365-day requirement, the proposed rule would require no minimum Daily Excess Requirement. FHFA does not propose a daily excess requirement for the 365-day requirement because of the longer-term nature of the requirement.
Question 5. For the 365-day requirement, should FHFA consider a Daily Excess Requirement like the one for the 30-day requirement? If so, what would be an appropriate Daily Excess Requirement for the 365-day minimum liquidity requirement?
As noted above, the proposed rule would require each Enterprise to forecast expected corporate cash outflows and expected cash inflows from all sources. As described below, the proposed rule would further require that the measure of the enterprise-wide cumulative net cash flows reflects the impact of the stress events.
Given the importance of the Enterprises as key providers of mortgage market liquidity, the proposed rule would assume seven stressed cash outflow and inflow assumptions. These stressed cash flow assumptions included in the proposed rule take into account the potential impact of idiosyncratic and market-wide shocks, including those that would result in:
(1) A complete loss of Enterprise ability to issue unsecured debt during the relevant period (see section below entitled “Complete Loss of Ability to Issue Unsecured Debt”);
(2) An increased cash outflow associated with additional daily single-family and multifamily cash window or whole loan conduit purchases to support the mortgage market, particularly small lenders, during a crisis (
(3) A decreased cash inflow due to the assumed increase in the number of borrowers who fail to make their scheduled principal, interest, tax, and insurance payments to the servicers under a stressed economic environment (
(4) An increased cash outflow requirement to fund delinquent loan buyouts under a stressed economic environment (
(5) An increased cash outflow based on the Enterprise's best estimate of the collateral it will be required to post with the FICC for the next month (
(6) An increased cash outflow from unscheduled draws on committed liquidity facilities that the Enterprises have provided to their clients related to variable-rate demand bonds (
(7) A decreased cash inflow due to the assumed failure of the Enterprise's five top non-bank servicers by UPB to make timely principal, interest, tax, and insurance payments to the Enterprises during the next month under a stressed economic environment (
To determine decreased cash inflows and increased cash outflows due to higher numbers of delinquent borrowers and to higher loan buy-out from MBS trusts, the proposed rule would require
The proposed rule, specifically the 30-day and 365-day liquidity requirements, would require the Enterprises to assume that they could not issue any new unsecured debt and receive the proceeds. The proposed rule would allow the Enterprises to include cash inflows from unsecured debt already traded but not yet settled on the appropriate settlement date.
FHFA recognizes that each Enterprise has the contractual right to issue discount notes to their respective MBS trusts in exchange for cash. Most MBS trusts receive P&I and other payments in the form of cash from the seller/servicers on or around the 18th of each month and have to pay such principal and interest to investors on the 25th of each month. The proposed rule would not include the cash inflows from such sales of discount notes to their respective MBS trusts. If an Enterprise needed to issue discount notes to an MBS trust to raise cash in an unexpected liquidity event, it could legally do so but FHFA does not expect the Enterprise to rely on such funds in the normal course of liquidity risk management.
The proposed rule also requires that the Enterprises maintain a sufficient portfolio of high quality liquid assets to continue to fund the purchase of single-family loans through the Cash Window or Whole Loan Conduit (CW/WLC) during a short-term crisis of up to 60 days initially, and then 30 days for the remainder of the year. In essence, this stress assumes that the Enterprises cannot sell forward or securitize the single family mortgage loans purchased through the CW/WLC for the next 60 days during the most acute period of assumed stress, and thereafter can only sell such loans after holding them for a minimum of 30 days.
Similarly, the proposed rule would require that the Enterprises maintain a sufficient liquidity portfolio to fund the purchase of multifamily loans during a market crisis for six months. Assuming that an Enterprise can demonstrate that it historically has securitized and sold multifamily loans within six months, the proposed 365-day requirement would allow the Enterprise to assume that it can sell multifamily loans six months after it purchases them through the multifamily cash window. For example, if an Enterprise can document that over the past 12 months, the average time it took to securitize multifamily loans into securities was six months, then FHFA would consider that adequate support. FHFA examiners would validate that there is adequate documentation to support such an assumption. FHFA notes that Fannie Mae's multifamily program uses guarantor swap transactions for the purchase of every multifamily loan and thus does not purchase multifamily loans with cash. If that Fannie Mae business practice were to change and multifamily loans were purchased for cash, then these cash outflows would need to be included in the 30-day and 365-day cash forecasts.
While the proposed rule would allow TBA contracts to count as cash inflows at the contracted settlement dates, an additional stress for the 30-day and 365-day requirements is that forecasted purchases of loans cannot be assumed to be forward sold in the TBA market, nor can they be assumed to be securitized and sold, until day 61. As a result, the proposed rule would require that the Enterprises must have a high quality liquid asset portfolio large enough to prefund the first 60 days of cash window or whole loan conduit purchases during a market crisis.
FHFA recognizes that TBA contracts are a useful risk management tool that allows the Enterprises to minimize the risk arising from purchasing loans through the cash window and whole loan conduit. The proposed rule would allow cash inflows from existing TBA contracts subject to the following limitations as follows:
1. An Enterprise will only be allowed to include expected cash inflows from existing TBA contracts in place on Day 0 as of 6 p.m. EST and an Enterprise will not be allowed to assume cash inflows arising from forecasted (as opposed to existing) TBA contracts for the 30-day and 365-day forecast periods.
2. Existing TBA contracts in excess of the amount needed to minimize the risk of existing loans purchased through the cash window or whole loan conduit or existing commitments to buy loans will not count as cash inflows. FHFA expects that Enterprises will only enter into TBA contracts that offset existing loan purchases or forward commitments to buy loans.
3. To reduce the risk that the associated cash inflow from the TBA contract is not received due to counterparty issues, the proposed rule only permits cash inflows from TBA contracts cleared through the FICC. The proposed rule does not allow the Enterprises to include cash inflows from TBA contracts not cleared through the FICC.
4. Enterprises cannot include cash inflows from the securitization and sale of loans that have an associated TBA contract as this would double count the cash inflows.
Question 6. Should FHFA allow the Enterprises to consider additional TBA contracts as cash inflows on the settlement date or just those TBA contracts cleared through the FICC?
Question 7. Should FHFA not allow the Enterprises to consider any existing TBA contracts as cash inflows on the settlement date?
After Day 30, the proposed rule permits the Enterprises to assume they continue to fund their forecasted 365-day single-family cash window and whole loan conduit needs with a less conservative securitization and sale assumption. The proposed rule assumes that after the first 30 days, forecasted purchases of single-family loans can be securitized and sold after holding for only 30 days.
For example, the Enterprises may assume that single family loans scheduled to be purchased on:
• Day 1 can be securitized and sold on day 61;
• Day 2 can be securitized and sold on day 61;
• Day 31 can be securitized and sold on day 61;
• Day 45 can be securitized and sold on day 75; and
• Day 61 can be securitized and sold on day 91.
For non-delivered single-family loans where the Enterprise has a commitment to buy the loan as of close of business on Day 0, the proposed rule would require that the cash outflow be assumed for the contracted settlement date, and that the cash inflow associated with a corresponding TBA contract settlement date for that commitment to sell provided that if no such TBA contract exists at the close of business on Day 0, then the earliest cash inflow is Day 61 based upon its securitization and sale.
For multifamily loans, the proposed rule would require a liquidity portfolio
For multifamily loans, the typical holding period prior to securitization is approximately three to four months but for some multifamily loans it is much longer. If the Enterprises can demonstrate that they can securitize and sell all of their multifamily loans within 180 days, the proposed rule would allow them to assume that multifamily loans purchased on:
• Day 1 can be securitized and sold on day 181;
• Day 31 can be securitized and sold on day 211; and
• Day 61 can be securitized and sold on day 241.
Question 8. For the 365-day requirement, should the proposed rule allow for a shorter or longer time period than six-month assumption for the securitization and sale of multifamily loans? Should the proposed rule consider an alternative cash inflow process arising from the securitization and sale of multifamily loans?
The proposed rule would require that the 30-day and 365-day requirements have an additional cash inflow stress that assumes that an increased number of borrowers fail to make scheduled principal, interest, tax, and insurance payments consistent with the specified stress scenario. These reduced cash inflows from borrowers would increase cash outflows needed to be made by the Enterprises to the MBS investors and to other entities when the servicers are not required to advance full scheduled payments to the Enterprises, including where servicers are under an “actual”
The proposed rule would require that the Enterprises must fund delinquent single-family loan buyouts from MBS pools assuming an increase in delinquent mortgage loans under an assumed stress scenario prescribed by FHFA under its DFAST scenarios or other stress scenarios by order. The objective is to ensure that the Enterprises have a liquidity portfolio large enough to continue to fund the purchase of delinquent loans from MBS Trusts in a stress scenario. FHFA proposes that the Enterprises estimate these cash outflows based on the greater of the cash outflows estimated using: (1) The most recent DFAST scenario assumptions and resulting delinquencies: or (2) Such other stress scenario(s) prescribed by FHFA order.
For the proposed 30-day and 365-day requirements, the Enterprises must project the cash outflows arising from delinquent loan buyouts over the relevant period assuming the most recent DFAST scenario assumptions and resulting delinquencies or such other stress scenario(s) prescribed by FHFA order. In June 2020, FHFA directed the Enterprises to use the greater of DFAST scenarios or more recent forbearance history if more stressful. Provided that the Enterprises can adequately support the following assumption, the proposed rule would allow the Enterprise to forecast cash inflows based on sales of reperforming loans that were purchased from pools but only after 180 days of re-performance history which would allow them to be readily securitized into MBS assets eligible as collateral for funding transactions cleared through the FICC. For example, if an Enterprise can document that over the past 12 months, the average time it took to securitize reperforming loans into securities was six months, then FHFA would consider that adequate support. The FHFA supervisory team would validate that there is adequate documentation to support such an assumption.
The proposed rule would require that the Enterprises estimate the cash outflow needed to prefund its expected FICC collateral requirement for the next month. The Enterprises heavily rely on the FICC to conduct their mortgage purchase operations and FICC access to clear trades on the appropriate settlement dates, as well as to support U.S. Treasury functions like the purchase of Treasury repurchase agreements through the FICC. The FICC, specifically its capped contingency liquidity facility (CCLF) requires a minimum amount of collateral be posted each month with the FICC. The CCLF collateral requirement has two components, that is, a Mortgage Backed Securities Division within the FICC component arising from the Enterprises TBA clearing activity and a Government Securities Division within the FICC component arising from the Enterprises FICC-cleared repo activity. The proposed rule would require that an Enterprise's liquidity portfolio be large enough to accommodate a cash outflow on Day 1 of the forecast equal to the CCLF collateral requirement for the next month. The FICC provides the Enterprises with the collateral requirement each month based on the Enterprise's use of the FICC.
The proposed rule would require that the Enterprises assume that there is a 100 percent cash outflow for the expected next month's FICC collateral requirement on Day 1.
The proposed rule would require that the Enterprises assume that all contingent liabilities, and associated cashflows, related to the Enterprises' variable-rate demand bonds (VRDBs) are treated as cash outflows on Day 1.
As part of the Enterprises' guarantee arrangements pertaining to certain multifamily housing revenue bonds and securities backed by multifamily housing revenue bonds, in the past the Enterprises provided commitments to advance funds, commonly referred to as “liquidity guarantees.” These liquidity guarantees require the Enterprises to advance funds to third parties that enable them to repurchase tendered bonds or securities that cannot be remarketed during the weekly auction process. Given such weekly auctions, these multifamily customers are likely to need backstop funding in a short-term stress environment, such as those
The proposed rule would require that the Enterprise assume that there is a cash outflow equal to 100 percent of its existing liquidity facilities related to variable-rate demand bonds on Day 1.
The proposed rule would require that the Enterprises must assume that their five largest non-bank single-family seller/servicers (
Question 9. For the 365-day requirement, should the proposed rule allow for the cash inflow on Day 61 related to the repayment by these five non-bank seller/servicers? Should the proposed rule assume a longer period before repayment?
Question 10. FHFA solicits commenters' views on the seven stress scenarios discussed above, their proposed cash outflows and inflows, and the associated underlying assumptions for the proposed treatment. Are there specific cash inflow or outflow assumptions for other types of transactions that have not been included, but should be? If so, please specify the types of transactions and the applicable inflow or outflow rates that should be applied and the reasons for doing so.
The proposed rule does not require the Enterprises to maintain a liquidity portfolio large enough to fund the cash outflows associated with exercising the call option on all unsecured callable debt that was in-the-money at the close of business on Day 0. Because the Enterprises have the right to call, but not the obligation to call, certain callable debt instruments, the proposed rule would allow the Enterprises to assume that the cash outflow is at maturity of the callable debt and not the next call date.
During the 2008 financial crisis, the Enterprises did not efficiently exercise their right to call debt as the debt markets were not liquid enough for them to replace that debt with similar maturity debt instruments. Similarly, in March 2020 during the COVID-19-related financial market stress, the Enterprises did not exercise their right to call debt efficiently because they could not reissue similar longer-term debt. Subsequently, after the March 2020 COVID-19 stress period, both Enterprises were able to exercise calls on the next available date and replace that called debt with similar callable debt or fixed rate debt at favorable terms.
Question 11. FHFA solicits commenters' views on the proposed treatment for Enterprise callable debt. Specifically, what are commenters' views on the proposed provisions that would allow the Enterprises to not call their unsecured callable debt even if it was in-the-money at the close of business on Day 0?
Certain contractual clauses in derivatives and other transaction documents, such as material adverse change clauses and downgrade triggers, are aimed at capturing changes in the Enterprises financial condition and, if triggered, would require an Enterprise to post more collateral or accelerate demand features in certain obligations that require collateral.
The proposed rule would not require an Enterprise to count as an outflow any additional amounts that the Enterprise would need to post or fund as additional collateral under a contract as a result of a change in its financial condition. If the proposed rule did require such an assumption, an Enterprise could calculate this outflow amount by evaluating the terms of such contracts and calculating any incremental additional collateral that would need to be posted as a result of the triggering of clauses tied to a ratings downgrade or similar event, or change in the Enterprise's financial condition.
Question 12. Should the proposed rule require that the Enterprises hold high quality liquid assets to cover potential increases in collateral needed assuming a significant change in their financial condition?
The 2008 financial crisis exposed the vulnerability of the Enterprises to liquidity shocks. For example, before the crisis, the Enterprises and many banking organizations lacked robust liquidity risk management metrics and relied excessively on short-term wholesale funding to support less-liquid assets. In addition, the Enterprises and many banks did not sufficiently plan for longer-term liquidity risks, and the risk management and control functions of the Enterprises failed to challenge such decisions or sufficiently plan for possible disruptions to the Enterprises regular sources of funding. Instead, the risk management and control functions reacted only after demand for longer term agency unsecured debt evaporated.
During the crisis, the Enterprises and many banking organizations experienced severe contractions in the supply of funding. As access to longer-term funding became limited, many in the financial markets were forced to sell and as a result certain asset prices, including for private label securities (PLS), fell significantly. When prices fell, the Enterprises and many banking organizations faced the possibility of significant capital losses and failure. The threat this presented to the U.S. financial system caused the U.S. government to provide significant levels of support to the Enterprises and many U.S. banks to maintain global financial stability. This experience demonstrated a need to address these shortcomings at the Enterprises and banking organizations and to implement a more rigorous approach to identifying, measuring, monitoring, and limiting reliance on short-term sources of funding that results in additional debt rollover risk.
Since the 2008 financial crisis, FHFA (as noted above) has developed qualitative standards focused on strengthening the Enterprises' overall risk management, liquidity positions, and liquidity and funding risk
FHFA has supervisory guidance to address the risks arising from excessive reliance on short-term funding, such as short-term discount notes, that increases rollover risk both before and after the 2008 financial crisis. In 2009, for example, FHFA issued a supervisory letter that required, among other things, that the Enterprises develop capabilities to measure cash inflows and outflows daily for one year.
As previously discussed, AB 2018-06 incorporates liquidity risk management elements consistent with Basel Liquidity Principles. Under the AB, FHFA expects an Enterprise's measurement of liquidity to include metrics for intraday liquidity, short-term cash needs (
The proposed long-term liquidity and funding requirements would complement the proposed short-term 30-day and intermediate-term 365-day requirements. For example, these two long-term liquidity and funding requirements complement the 30-day requirement's goal of improving resilience to short-term economic and financial stress by focusing on the stability of an Enterprise's structural funding profile over a longer, one-year time horizon. In a financial crisis, financial institutions like the Enterprises during the crisis that lack longer-term stable funding sources may be forced by creditors to monetize assets at the same time, driving down asset prices, like those price declines in the PLS market and commercial mortgage backed securities market in the 2008 financial crisis. The proposed rule would mitigate such risks by directly increasing the funding resilience of the Enterprises, thereby indirectly increasing the overall resilience of the U.S. financial system.
The proposed two longer-term requirements would also provide a standardized means for measuring the stability of an Enterprise's funding structure, promote greater comparability of funding structures across the Enterprises, improve transparency, and increase market discipline through the proposed rule's monthly public disclosure requirements.
Given the lack of retail and wholesale deposits and the relative simplicity of the Enterprises' funding structure, FHFA proposes a simplified approach for its first long-term liquidity and funding requirement, which compares the amount of an Enterprise's long-term unsecured debt (
Because the Enterprises lack access to the discount windows of any of the twelve Reserve Banks in the Federal Reserve System, FHFA proposes that only assets that are eligible to be posted as collateral through the FICC can be counted as liquid assets and all other assets, even some agency securities like agency CMOs, would be considered less-liquid and require long-term funding.
To address the funding of other long-term assets, FHFA also proposes to include a second long-term liquidity and funding requirement based on the ratio of the spread duration of the Enterprise's unsecured agency debt divided by the spread duration of its retained portfolio assets. The proposed rule would require that an Enterprise's spread duration ratio exceed 60 percent. This proposed long-term requirement will cause the Enterprises to maintain an appropriate amount of long-term unsecured debt and reduce rollover risk. As a result of this requirement, the Enterprises will have incentive to better match the repricing risk of their debt with the repricing of their assets. It will also minimize the risk that an Enterprise would be forced to sell significant amounts of long-term asset into distressed markets.
The proposed rule would require the Enterprises to meet two long-term liquidity and funding requirements for the purpose of: (i) Reducing Enterprise debt maturity rollover risk; (ii) Ensuring that the Enterprises have sufficient long-term unsecured debt so they do not have to sell less-liquid assets into potentially stressed markets for at least one year; (iii) Incenting the Enterprises to issue an appropriate amount of long-term unsecured debt; and (iv) Incenting the Enterprises to reduce the amount of less-liquid assets held in the retained portfolio that are not eligible collateral for inclusion in the 365-day liquidity requirement. These two long-term liquidity and funding requirements complement each other. The first ensures that less-liquid assets are funded with long-term unsecured debt. The second ensures that the rollover and repricing of the unsecured debt is tied to the repricing of all the retained portfolio assets, not simply the less-liquid assets.
The proposed rule would include a long-term liquidity and funding requirement that the Enterprises manage their issuance of long-term unsecured debt and their holdings of less-liquid securities to ensure that the ratio of the Enterprises' long-term unsecured debt to its less-liquid assets is greater than 1.2, or 120 percent.
Under the proposed rule, the numerator is the three-month moving average of the UPB of all outstanding Enterprise unsecured debt with one year or longer to maturity. The maturity of the unsecured debt is based on the final maturity of unsecured debt and not the call date. The denominator is the three-month moving average of all assets held in the retained portfolio that are not eligible collateral to be pledged to the FICC. For example, CMOs held by the Enterprises are not eligible to be pledged to the FICC and would be included in calculating the denominator.
The proposed rule would allow the Enterprises to exclude certain relatively liquid loans from the denominator. For example, the proposed rule assumes that cash window loans or whole loan conduit loans, and reperforming loans that have no delinquencies in prior six months, can be readily converted into FICC-eligible collateral. Therefore, these loans would not be included in the denominator. In addition, certain multifamily pass-through securities held by the Enterprises are eligible to be pledged to the FICC but other multifamily structured securities arising from the K-deals are not eligible to be pledged to the FICC and would be included in the denominator.
Question 13. Should FHFA broaden the definition of “liquid assets” to include certain non-FICC eligible assets, such as multifamily agency securities arising from K-deal transactions? If so, what criteria should FHFA use?
The proposed rule would include a second long-term requirement that measures the ratio of the spread duration of an Enterprise's unsecured debt to the spread duration of its retained portfolio assets. FHFA recognizes that effective duration is often defined as the percentage change in the price of financial instruments with embedded options from a 100-basis point change in interest rates. Financial instruments with positive duration increase in value as interest rates decline. Conversely, financial instruments with negative duration increase in value as interest rates rise. FHFA also recognizes that spread duration is often defined as the percentage change in the price of financial instruments from a change in spread over the benchmark interest rates. Unlike “effective” duration, spread duration is typically calculated by discounting of an instrument's cashflows, and not by the affecting a change of the underlying cashflows themselves due to optionality. This discounting impact creates a measure that is typically positive, where the instrument increases in value as spreads decline and decrease in value as spreads widen.
Under the proposed rule, the numerator of the ratio is the three-month moving average of the daily spread duration of all Enterprise unsecured debt. The denominator of the ratio is the three-month moving average of the daily spread duration of all Enterprise retained portfolio assets. The proposed rule would require that this ratio exceed 0.6 or 60 percent.
The numerator is the three-month moving average of the daily spread duration of all Enterprise unsecured debt. The daily spread duration of all Enterprise unsecured debt on a particular day equals the weighted average of the individual spread duration for each unsecured debt instrument weighted by the product of the UPB and the market price for the unsecured debt instrument for that day. Determining the spread duration for all unsecured debt requires that an appropriate estimate be made for each unsecured debt instrument. In addition, using a three-month moving average for the weighted balance sheet spread durations reduces potential impact of daily fluctuations on compliance management. The three-month moving average of the daily spread duration of all Enterprise unsecured debt is equal to the sum of the daily spread duration for all Enterprise unsecured debt for each business day over the three-month period preceding the calculation date divided by the total number of business days during the three-month period.
The denominator is the three-month moving average of the daily spread duration of all Enterprise retained portfolio assets. The daily spread duration of all Enterprise assets on a particular day equals the weighted average of the individual spread duration for each asset weighted by the product of the UPB and the market price for the retained portfolio asset for that day. The three-month moving average of the daily spread duration of all Enterprise retained portfolio assets is equal to the sum of the daily spread duration for all Enterprise assets for each business day over the three-month period preceding the calculation date divided by the total number of business days during the three-month period.
The proposed rule would provide additional assumptions that the Enterprises are to use in the calculation of this long-term liquidity and funding requirement. The proposed rule would allow the Enterprises to make the following adjustments to the spread duration of specific retained portfolio assets and unsecured debt:
• For callable unsecured debt, the proposed rule would allow the Enterprises to use the maturity of the callable debt rather than the actual spread duration of the callable debt because the Enterprise does not have the obligation to call the debt early and can, in a liquidity event, decide not to call the bond.
• For certain single-family and multifamily loans in the securitization pipeline, the proposed rule would allow the spread duration to be adjusted to better reflect the expected holding period of the loans before securitization and sale of these loans. For example, provided that the actual experience of the Enterprise can support these pipeline securitization assumptions, the proposed rule would allow a single-family loan in the securitization process to be assigned a two-month spread duration, and a multifamily loan in the securitization pipeline to be assigned a six-month spread duration. FHFA supervision teams will evaluate the underlying support for key assumptions, like this spread duration assumption, as part of ongoing supervisory activities.
• For certain trust structures, like those that are consolidated for GAAP purposes or credit risk transfer related trusts, the proposed rule would allow certain trust related assets to be excluded, as the trust structures are not funded by unsecured corporate debt but rather by debt issued by the trust and backed by the assets in the trust. In essence, the debt issued by MBS trusts and the loans in the MBS trusts that secure the debt are closely matched and the Enterprise does not have funding risk and thus these assets and liabilities are not included in this spread duration requirement. Similarly, certain credit risk transfer trusts, created by Fannie Mae (Connecticut Avenue Securities Credit-Linked Notes) and Freddie Mac (Structured Agency Credit Risk Credit-Linked Notes) are not included in this spread duration requirement. For the original credit risk transfers that did not include a credit-linked note structure, the Enterprises are required to include those as they represent unsecured debt issued by the corporation.
• The proposed rule would allow the Enterprises to exclude high quality liquid assets held in the liquidity portfolio from the denominator of the calculation because these assets are deemed to be liquid securities that do not require term funding and can be readily liquidated into cash. Similarly, the collateral used to post as initial margin is excluded from the spread duration asset calculation for this requirement.
Question 14. FHFA requests comment on whether the spread duration requirement appropriately addresses the concerns noted above, or whether there are alternative approaches to do so? Does the value of including the spread duration requirement exceed the costs and complexity of the calculation?
Under the two longer-term proposed requirements, the Enterprises would be required to identify the maturity of unsecured debt instruments based on their contractual maturity. Other balance sheet sources of funds, like stockholder's equity, typically do not have a contractual maturity. In the case of stockholder's equity, the proposed rule treats these funding sources as short-term funding substitutes and does not attribute any maturity to these sources of funds beyond one year.
Question 15. FHFA requests comment on whether some portion of stockholder's equity should be considered as a longer-term funding source for the long-term liquidity and funding requirements? If so, why? If so, what analytics would support this assumption?
FHFA recognizes that during periods of economic dislocation or market stress, it may be necessary for an
Therefore, the proposed rule would provide for temporary reductions in minimum liquidity requirements to address economic, market, or other circumstances. Specifically, it would provide for FHFA consideration and determination that, due to economic or market conditions, temporary adjustments to reduce the minimum liquidity requirements are needed to address those conditions. FHFA's exercise of this authority is intended to further Enterprise public purposes in supporting secondary mortgage market liquidity during periods of severe economic or market stress.
Question 16. FHFA seeks comment on all aspects of the proposed process for FHFA temporarily to reduce minimum regulatory liquidity requirements to respond appropriately during periods of economic or market stress.
The proposed rule would require each Enterprise to report daily to FHFA its compliance with the minimum liquidity requirements. The Enterprises shall submit such reports at the close of each business day, which is treated as Day 0, reflecting the liquidity positions and other required information as of 6 p.m. EST on Day 0. Such reports shall include, at a minimum, the key stress scenario assumptions discussed in the preamble, including a summary of the respective cash flows and other significant information and any other key assumptions used to calculate the four liquidity requirements. In some cases, this may require supplemental reports to explain individual key stress cash flows, like the purchases of delinquent loans and the purchases of cash window and whole loan conduit loans. These supplemental reports could also include, but are not limited to, the composition of both the FICC-eligible and non-FICC eligible collateral and the components of the spread duration calculations.
The proposed rule would provide enhanced information about the short-term, intermediate-term and long-term liquidity and funding profile of the Enterprises to managers, board directors, and supervisors. With this information, the Enterprise's management and supervisors would be better able to assess the Enterprise's ability to meet its projected liquidity needs during periods of liquidity stress, take appropriate actions to address liquidity needs, and, in situations of failure, to implement an orderly resolution of the Enterprise.
The proposed rule's 30-day and 365-day liquidity requirements would use Enterprise cash flow projections and certain assumptions based on stressed market conditions. While the short-term and intermediate-term liquidity requirements would use specific assumptions specified by FHFA (including by order) for liquidity requirement calculation purposes, FHFA expects the Enterprises would maintain robust stress testing frameworks that incorporate additional scenarios, like lower rate environments that might trigger calling debt. Enterprises should use these additional scenarios in conjunction with the proposed rule's liquidity requirements to appropriately determine their board and management liquidity buffers. FHFA notes that the four liquidity requirements are minimum requirements and organizations, like the Enterprises, that pose more systemic risk to the U.S. financial system or whose liquidity stress testing indicates a need for higher liquidity buffers may need to take additional steps beyond meeting the minimum ratio in order to meet supervisory expectations.
The proposed rule contemplates alignment between the Enterprises for the daily reporting of the liquidity and funding requirements and may, by order, require a common template that demonstrates the sources and uses of cash and the increased cash outflows or reduced cash inflows resulting from the seven stress scenarios. The objective is to ensure that management and supervisors have a transparent and readily comparable view into the key assumptions and resulting cash flows or metrics.
The proposed rule would require each Enterprise to report to the public its compliance with the four liquidity requirements monthly. Each Enterprise currently publishes a monthly volume summary that includes important information that the public consumes. The proposed rule would require the Enterprises to amend their respective monthly volume summaries and provide the average and month-end metrics for each of the four liquidity and funding requirements. In addition to the liquidity metrics, the Enterprises should include key assumptions used to estimate these liquidity metrics. FHFA may, by order, decide to include additional reporting requirements.
Question 17. FHFA invites public comment on all aspects of the proposed process and minimum elements for regulatory, management, and public reporting.
Under the proposed rule, an Enterprise would be required to notify FHFA on any business day that any of the four liquidity requirements is not met. Specifically, if an Enterprise's liquidity position is calculated to be less than any of the minimum liquidity requirements, the Enterprise must promptly submit to FHFA for approval a plan for achieving compliance, unless FHFA instructs otherwise. In addition, if FHFA determines that the Enterprise is otherwise non-compliant with the requirements of this part, FHFA may require the Enterprise to submit to FHFA for approval a plan to remediate the shortfall. The Enterprise plan must include, as applicable: (1) An assessment of the Enterprise's liquidity profile and the reasons for the shortfall; and (2) The actions that the Enterprise has taken and will take to achieve full compliance with this part, including: (i) A plan for adjusting the Enterprise's risk profile, risk management, and funding sources in order to achieve full compliance with this part; (ii) A plan for remediating any operational or management issues that contributed to noncompliance with this part; (iii) Best estimate time frame for achieving full compliance with this part; and (iv) A commitment to report to FHFA daily on Enterprise progress to achieve compliance in accordance with the plan until full compliance with this part is achieved. Finally, the Enterprise plan must include other considerations or actions as may be required for FHFA approval.
FHFA engagement with the Enterprise on a remediation plan does not preclude exercise of other supervisory or enforcement authorities. FHFA may, at its sole discretion, take additional supervisory or enforcement actions to address non-compliance with the requirements of this part, including non-compliance with the minimum liquidity requirements or non-compliance with any requirement to submit a liquidity plan acceptable to FHFA. The liquidity remediation plan is intended to enable FHFA to monitor and respond appropriately to the unique
Question 18. FHFA invites public comment on all aspects of FHFA's proposed process to respond appropriately to Enterprise shortfalls in required liquidity.
The Board of Directors and senior management of the Enterprises have duties under applicable law to oversee, monitor, and manage Enterprise liquidity risk prudently. FHFA recognizes that under certain circumstances, it may be necessary for an Enterprise to enhance its liquidity position commensurate with its business activities. Under the proposed rule, when FHFA determines that, due to economic, market, or Enterprise-specific circumstances, temporary modified Enterprise liquidity requirements above those established under this part are necessary or appropriate for an Enterprise, FHFA will notify the Enterprise in writing of the proposed modified Enterprise liquidity requirements, the timeframe by which the Enterprise is required to achieve and comply with the proposed requirements, and an explanation of why the proposed modified Enterprise liquidity requirements are considered necessary or appropriate for the Enterprise.
The Enterprise may respond in writing within 30 days, or such time as FHFA may require, to any or all of the matters addressed in the notice, including any information which the Enterprise would like FHFA to consider in determining whether to establish the proposed modified liquidity requirements for the Enterprise. Failure to respond shall constitute a waiver of any objections to the proposed modified liquidity requirements or the timeframes for compliance.
After the close of the Enterprise response time period, FHFA will determine whether to establish the temporarily increased requirements for the Enterprise. FHFA will notify the Enterprise of its written determination and order effectuating the modified requirements. As part of its determination, FHFA may require the Enterprise to develop and submit a plan acceptable to FHFA to reach the modified liquidity requirements.
These procedures are intended to enable FHFA to monitor and respond appropriately to the particular economic, market, or Enterprise-specific circumstances by adjusting the minimum liquidity requirements through a temporary increase.
Question 19. FHFA invites public comment on all aspects of FHFA's proposed procedures to respond appropriately and in a timely manner to economic, market, Enterprise-specific, or other circumstances affecting Enterprise liquidity, safety and soundness, and ability to meet their public purposes.
The Paperwork Reduction Act (PRA) (44 U.S.C. 3501
The Regulatory Flexibility Act (5 U.S.C. 601
Administrative practice and procedure, Government-sponsored enterprises, Reporting and recordkeeping requirements.
Accordingly, for the reasons stated in the preamble, under the authority of 12 U.S.C. 4526, FHFA proposes to amend Chapter XII of Title 12 of the Code of Federal Regulations as follows:
12 U.S.C. 4511(b); 12 U.S.C. 4513(a); 12 U.S.C. 4513b; 12 U.S.C. 4514; 12 U.S.C. 4526; 12 U.S.C. 4631-4636.
(a)
(a)
(b)
(c)
For purposes of this part:
(1) Cash deposits held in a Federal Reserve Bank account;
(2) U.S. Treasury securities;
(3) Short-term secured loans to the Federal Reserve Bank of New York secured by U.S. Treasury securities; short-term secured loans held by the Enterprise secured by U.S. Treasury securities that clear through the Fixed Income Clearing Corporation (FICC). For short-term secured loans to the Federal Reserve Bank of New York or those cleared through the FICC, the remaining maturity term of the asset must not be longer than the greater of:
(i) 15 days; or
(ii) The number of days until the next agency mortgage-backed securities (MBS) payment date;
(4) Up to an amount not to exceed $10 billion, and subject to sufficient counterparty credit risk limits on deposits with any single institution and affiliated institutions, unsecured overnight bank deposits with a federally chartered bank where the bank and any holding company controlling the bank are headquartered in the United States, and where the bank is subject to quarterly reporting under the Federal Reserve System's FR Y-15 reporting requirements (or any amended or successor report) and has at least $250 billion in assets as of the most recent reporting date.
(a)
(b)
(c)
(1) Implement and maintain appropriate procedures and systems to monetize the High Quality Liquid Assets at any time in accordance with applicable standard settlement procedures;
(2) Conduct periodic testing of the effectiveness and ability of Enterprise procedures and systems to monetize a sample of High Quality Liquid Assets held;
(3) Implement and maintain policies requiring all High Quality Liquid Assets to be controlled by the Enterprise management function responsible for managing Enterprise liquidity risk, including a requirement that the High Quality Liquid Assets be segregated from other Enterprise assets for the sole purpose of providing liquidity to the Enterprise in times of market stress; and
(4) Implement and maintain policies and procedures that, on a daily basis:
(i) Identify where the High Quality Liquid Asset is held by legal entity, geographic location, currency, custodial or bank account, and other relevant identifying factors; and
(ii) Determine that the assets held as High Quality Liquid Assets continue to qualify as High Quality Liquid Assets.
(d)
(1)
(2)
(A) Assume it must continue to fund all forecasted single-family mortgage purchases based on Enterprise models for 30 days and 365 days, respectively, following the Calculation Date.
(B) Assume that, except for mortgages to be delivered under TBA contracts that are cleared through FICC and held by the Enterprise as of the Elected Calculation Time on the Calculation Date, it is unable to sell or securitize any mortgages until the later of 60 days following the Calculation Date or 30 days following acquisition of the mortgage.
(C) Not include in its cash inflow calculations mortgage sales on existing TBA contracts in excess, as of any Calculation Date, of existing Enterprise mortgage purchases and commitments to purchase mortgages.
(D) Not double-count its cash inflows for the sale or securitization of a mortgage and from cash inflows arising from an existing TBA contract on that mortgage. For example, an Enterprise may include a cash inflow from the sale of a mortgage, but if so, it may not also incorporate a cash inflow from a TBA contract associated with the same mortgage.
(ii)
(A) Assume it must continue to fund all forecasted multifamily mortgage purchases over 30 days and 365 days, respectively, following the Calculation Date.
(B) For any multifamily mortgage that an Enterprise acquires and receives delivery of on or before the Calculation Date, assume it sells or securitizes such mortgage, and receives corresponding cash inflow, starting on day 91 following the Calculation Date, provided that the Enterprise held such a loan for a total of 180 days.
(C) For any multifamily mortgage that an Enterprise acquires and receives delivery of after the Calculation Date, assume it is unable to sell or securitize such mortgage until at least 180 days following acquisition and delivery. An Enterprise may assume, to the extent it sufficiently documents the factual basis for the assumption, that it is able to sell or securitize a multifamily mortgage after a certain number of days following acquisition of the mortgage, provided that the assumed number of days is not less than 180 days.
(3)
(i) The most recent Dodd-Frank Act Stress Test (DFAST) severe stress scenario assumptions provided to the Enterprise by FHFA; or
(ii) Other stress scenarios as FHFA may prescribe by order.
(4)
(A) The most recent DFAST severe stress scenario assumptions provided to the Enterprise by FHFA, or
(B) Other stress scenarios as FHFA may prescribe by order.
(ii) An Enterprise may assume, to the extent that it sufficiently documents the evidentiary basis for the assumption, that it could sell delinquent mortgages forecasted to be repurchased from pools beginning a certain number of days from the forecasted repurchase date, provided that the assumed number of days is not less than 180 days.
(5)
(6)
(a)
(2) As of each Calculation Date, an Enterprise must maintain High Quality Liquid Assets equal to or greater than the sum of:
(i) The Enterprise's Highest Cumulative Daily Net Cash Outflows calculated to occur over the 30-day period beginning the day following the Calculation Date, and;
(ii) The Daily Excess Requirement.
(b)
(2) As of each Calculation Date, an Enterprise must maintain a liquidity portfolio with assets set forth in § 1241.11(b)(3) equal to or greater than the Enterprise's Highest Cumulative Daily Net Cash Outflows calculated to occur over the 365-day period beginning the day following the Calculation Date.
(3) For purposes of meeting the minimum required liquidity to cover the 365-day period following the Calculation Date, an Enterprise must hold assets consisting of:
(i) High Quality Liquid Assets;
(ii) Subject to a discount of 15 percent of the UPB forecasted to remain on the day on which the Highest Cumulative Daily Net Cash Outflows occur, Enterprise-guaranteed MBS that are eligible as collateral for FICC; or
(iii) Subject to a discount of 15 percent of the UPB forecasted to remain on the day on which the Highest Cumulative Daily Net Cash Outflows occur, mortgage loans that the Enterprise purchased through its cash window or whole loan conduit, or re-performing loans previously purchased from Enterprise MBS trusts, that are readily securitized into MBS that would be eligible as collateral for FICC.
(A) A single-family mortgage loan purchased through the cash window or whole loan conduit is deemed not readily securitized within the first 60 days following the Calculation Date, and is deemed readily securitized 30 days following the acquisition date of the loan if the loan was acquired after the first 30 days following the Calculation Date.
(B) For re-performing loans previously purchased out of Enterprise MBS trusts, such loans must be re-performing for at least 180 days in order to be deemed readily securitized into FICC-eligible collateral.
(c)
(i) Total Long-term Unsecured Debt means the three-month moving average of the total UPB outstanding of all unsecured debt issued by the Enterprise with one year or longer to maturity remaining from the Calculation Date.
(ii) Total Less-liquid Retained Portfolio Assets means the three-month moving average of the UPB of all retained portfolio assets that are not eligible collateral to be pledged to the FICC. Loans purchased through the cash window or whole loan conduit and reperforming loans that are readily securitized into FICC-eligible collateral as described in § 1241.11(b)(3)(iii) are not included in Total Less-liquid Retained Portfolio Assets.
(2)
(ii)
(A) The Spread Duration of Unsecured Debt equals the three-month moving average of the daily spread duration of all Enterprise-issued unsecured debt for each business day during the previous three-month period.
(
(
(B) The Spread Duration of Retained Portfolio Assets equals the three-month moving average of the daily spread duration of all Enterprise retained portfolio assets funded in whole or in part by unsecured debt for each business day during the previous three-month period.
(
(
(C) An Enterprise may use the following assumptions or exclusions for the specified assets and unsecured debt to calculate its Spread Duration of Unsecured Debt and Spread Duration of Retained Portfolio Assets:
(
(
(
(
(
An Enterprise is not required to meet one or more of the minimum liquidity requirements if FHFA determines that, due to economic, market, or other circumstances, temporarily reduced liquidity levels are necessary or appropriate for the Enterprises to support liquidity in the secondary mortgage market. Such determination shall be evidenced by an FHFA order, which shall set forth the adjusted minimum liquidity requirements applicable to the Enterprise, and be temporary and time-limited to address the relevant circumstances.
(a)
(1) The daily metric for each of the four liquidity requirements that demonstrates compliance with this part;
(2) Key stress scenario assumptions used to calculate Enterprise liquidity metrics, as well as any significant changes in those assumptions from prior reports;
(3) Summary of the respective cash flows for each of the stressed cash flow scenarios and other significant information related to the 30-day and 365-day metrics,
(4) Supplemental reports explaining the components of the numerator and denominator of the first long-term liquidity and funding requirement,
(5) Supplemental reports explaining the components of the numerator and denominator of the second long-term liquidity and funding requirement,
(b)
(c)
FHFA may, by order, specify or add to the form, manner, or content of required reporting. FHFA may amend such reporting orders from time to time as appropriate.
(a)
(b)
(2) If FHFA determines that the Enterprise is otherwise non-compliant with applicable requirements of this part, FHFA may require the Enterprise to submit a plan for achieving compliance with the requirements.
(3) If the Enterprise is required to submit a plan for achieving compliance with applicable requirements of this part, the Enterprise must promptly submit its plan to FHFA for approval, consistently with § 1236.4.
(4) The Enterprise plan must include, as applicable:
(i) An assessment of the Enterprise's liquidity and funding profile, and the reasons for the shortfall;
(ii) The actions that the Enterprise has taken and will take to achieve full compliance with this part, including:
(A) A plan for adjusting the Enterprise's liquidity and funding risk profile, liquidity portfolio, liquidity and funding risk management practices, and funding sources in order to achieve full compliance with this part;
(B) A plan for remediating any operational or management issues that contributed to noncompliance with this part;
(C) A best estimate time frame for achieving full compliance with this part; and
(D) A commitment to report to FHFA daily on Enterprise progress to achieve compliance in accordance with the plan until full compliance with this part is achieved.
(iii) Other considerations or actions as may be required for FHFA approval.
(c)
(a)
(b)
(2) Failure by the Enterprise to respond within 30 days or such other time period as may be specified by FHFA shall constitute a waiver of any objections to the proposed modified liquidity requirements or the timeframes for compliance.
(c)
(d)
Federal Housing Finance Agency.
Notice of proposed rulemaking.
The Federal Housing Finance Agency (FHFA) is seeking comment on a proposed rule that would require Fannie Mae and Freddie Mac (the Enterprises) to develop plans to facilitate their rapid and orderly resolution in the event FHFA is appointed receiver. A resolution planning rule is an important part of FHFA's on-going effort to develop a robust prudential regulatory framework for the Enterprises, including capital, liquidity, and stress testing requirements, as well as enhanced oversight, which will be critical to FHFA supervision of the Enterprises after they exit the conservatorships. In addition, a resolution plan as proposed to be required would support FHFA if appointed as receiver to, among other things, minimize disruption in the national housing finance markets by providing for the continued operation of an Enterprise's core business lines by a limited-life regulated entity (LLRE); ensure that investors in mortgage-backed securities guaranteed by the Enterprises and in Enterprise unsecured debt bear losses in accordance with the priority of payments set out in the Safety and Soundness Act while minimizing unnecessary losses and costs to these investors; and, help foster market discipline in part through FHFA publication of “public” sections of Enterprise resolution plans.
Comments must be received on or before March 9, 2021.
You may submit your comments on the proposed rule, identified by regulatory information number (RIN) 2590-AB13, by any one of the following methods:
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Ellen S. Bailey, Managing Associate General Counsel, (202) 649-3056,
FHFA invites comments on all aspects of the proposed rule and will take all comments into consideration before issuing a final rule. Copies of all comments will be posted without change, and will include any personal information you provide such as your name, address, email address, and telephone number, on the FHFA website at
Each Enterprise generally organizes its business activity into a single-family business and a multifamily business. The Enterprise business models for supporting single-family and multifamily housing consist primarily of a guarantee business. Mortgage lenders participate in the mortgage-backed securities (MBS) swap and cash window programs, originating loans in accordance with Enterprise standards and either providing those loans to an Enterprise in exchange for securities guaranteed by the Enterprise or selling loans directly to the Enterprise for cash. Among other things, the cash window enables smaller lenders to access the secondary market at competitive rates. In the portfolio business, the Enterprises issue debt and invest the proceeds in whole loans that they hold on their balance sheets rather than securitizing, and in MBS. In the past, the Enterprises have had substantial portfolio businesses. The Enterprises' ability to hold loans on their balance sheets continues to be important to support the cash window acquisition channel and to hold delinquent loans that have been bought out of pools of loans collateralizing MBS.
In both their portfolio and guarantee businesses, the Enterprises assume credit risk on purchased or securitized loans (in the MBS swap and cash programs, the Enterprise assumes the credit risk in exchange for a guarantee fee). Statutory requirements for loan purchase eligibility reduce credit risk somewhat. For example, the Enterprises may not acquire single-family loans with loan-to-value ratios (LTVs) at the time of purchase in excess of 80 percent without additional credit enhancement, the most common form of which is private mortgage insurance.
The Enterprises' mortgage business lines require administration of cashflows derived from payments of principal and interest on underlying mortgage loans. The Enterprises contract with loan servicers (often, sellers of loans to an Enterprise who retain mortgage servicing rights) to administer payments from mortgagors. The Enterprises also jointly own and contract with Common Securitization Solutions, LLC (CSS), which operates a common securitization platform for single-family mortgages and performs certain back-office and administration operations previously conducted by the Enterprises directly (and separately). A common securitization platform also facilitates issuance of a common security, the uniform mortgage-backed security (UMBS), intended to promote liquidity in the secondary mortgage market and eliminate pricing differences between Fannie Mae and Freddie Mac single-family securities. By contrast, each Enterprise securitizes, issues, and administers multifamily MBS for its own account, using distinct collateralization structures.
While there are similarities between the Enterprises' business and that of the Government National Mortgage Association (Ginnie Mae), the Enterprises' guarantee of timely payment of principal and interest to investors is not backed by the full faith and credit of the United States.
FHFA is also authorized to appoint itself as conservator or receiver of an Enterprise if statutory grounds are met.
FHFA's authorities as receiver or conservator were modeled on those provided to the Federal Deposit Insurance Corporation (FDIC) through the Federal Deposit Insurance Act, and the concept of an LLRE is derived from an FDIC-established bridge bank.
In contrast to FDIC resolutions, there is no fund similar to the DIF available to FHFA when conducting an Enterprise resolution.
The 2007-2008 financial crisis began with stresses in the “subprime” and “Alt-A” mortgage market and grew to the traditional mortgage market and other financial sectors in the United States and globally.
FHFA appointed itself as conservator of each Enterprise in September 2008, instead of receiver, in part due to concerns about potential market instability that could have resulted from an unprecedented receivership proceeding for which FHFA and the Enterprises had not planned or prepared, which could have been compounded by market perception that all Enterprise debt was backed to some extent by the U.S. government.
FHFA's current Strategic Plan includes the objective of responsibly ending the conservatorships.
In developing the proposed resolution planning framework, FHFA has considered the resolution planning framework of the FDIC for large IDIs and a framework jointly established by the FDIC and the Federal Reserve Board (FRB) pursuant to section 165(d) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the DFA section 165 rule), which covers large, interconnected bank holding companies and nonbank financial companies designated by the Financial Stability Oversight Council (FSOC) for enhanced supervision by the FRB. While there would be significant differences among FDIC resolution of an IDI, resolution of a bank holding company in a bankruptcy proceeding, and FHFA resolution of an Enterprise, the FDIC's IDI rule and the DFA section 165 rule provided helpful context for FHFA's consideration of the goals and requirements of an appropriate Enterprise resolution planning framework in view of FHFA's statutory authorities and mandates.
Considering the Enterprises' statutory purposes and mission and FHFA's statutory duties and authorities, the goals of Enterprise resolution planning are to facilitate the continuation of Enterprise functions that are essential to maintaining stability in the housing market in the establishment of an LLRE by FHFA as receiver and to allocate losses to creditors in the order of their priority. The Enterprises' combined single-family book of business is in excess of $5 trillion and the combined multifamily book is approximately $650 billion. Given the Enterprises' statutory obligation to provide liquidity to the secondary mortgage market, their market dominance in providing such liquidity, and the potentially significant impact financial stress in the secondary mortgage market could have on the national housing finance markets, financial stability, and the broader economy,
To facilitate FHFA's role as receiver, the proposed rule would establish a
Advance information, strategic analysis, and action, where appropriate, would also support other important goals of a rapid and orderly Enterprise resolution—to minimize disruption in the national housing finance markets, preserve Enterprise franchise and asset value, and ensure creditors bear losses in the order of their priority.
As well, the proposed rule would support transparency in the Enterprises' resolution planning process by requiring each Enterprise resolution plan to include a “public section” that FHFA would publish. FHFA may publish its own high-level assessment of Enterprise resolution plans as the planning process matures. FHFA believes that such transparency would further another important policy goal—fostering market discipline. Despite statutory provisions clarifying that neither the Enterprises themselves nor their securities or obligations are backed by the United States, investors, creditors and others doing business with the Enterprises may perceive that the Enterprises have implicit United States government support. Financial support from the Treasury Department provided through the PSPAs, which continues today, could encourage that perception. To clarify the status of the Enterprises as privately owned corporations, FHFA seeks to make explicit in this resolution planning rule that no extraordinary government support will be available to prevent an Enterprise receivership, indemnify investors against losses, or fund the resolution of an Enterprise. Each Enterprise must incorporate that assumption into its resolution plan, and this assumption must be apparent in the plan's public section.
A similar standard, reflecting FHFA's authorities as receiver and the Enterprises' statutory authorities and obligations, would help the Enterprises, market participants, and the public understand that the proposed rule seeks to achieve a similar, but appropriately tailored, goal—resolution, if necessary, of a large financial intermediary that performs functions other market participants rely on for their efficient operation, and which would be difficult to transfer or for which there are not available substitutes. FHFA views an Enterprise resolution planning rule as similar to the DFA section 165 rule, one purpose of which is to promote U.S. financial stability, and to efforts of other U.S. financial safety and soundness supervisors to align with common goals of the Financial Stability Board, such as improving “the capacity of national authorities to implement orderly resolutions of large and interconnected financial firms.”
FHFA recognizes, however, that statutory provisions creating the Enterprises and authorizing their resolution by FHFA answer some questions that are not determined in advance for other receivers or administrators in bankruptcy—the Safety and Soundness Act directs that the Enterprises' functions as set forth in their charter acts will continue and establishes the framework for the continuation of these functions in a successor LLRE. FHFA's approach to “rapid and orderly resolution” is necessarily formed against that statutory backdrop.
For the foregoing reasons, FHFA proposes to establish “rapid and orderly resolution” as a standard for Enterprise resolution, but to define it in a manner tailored to resolution of an Enterprise contemplated by the Safety and Soundness Act. Thus, FHFA proposes to define “rapid and orderly resolution” as a process for establishing an LLRE as successor to an Enterprise, including transferring Enterprise assets and liabilities to the LLRE, such that succession by LLRE “can be accomplished within a reasonable amount of time and in a manner that substantially mitigates the risk that the failure of the Enterprise would have serious adverse effects on national housing finance markets.” FHFA requests comment on the use of “rapid and orderly resolution,” as defined in the proposed rule, as the standard for an Enterprise resolution.
After core business lines and associated operations, services, functions, and supports are identified, each Enterprise would be required to develop and submit to FHFA a resolution plan that provides strategic analysis and information to facilitate
FHFA would review a received and complete resolution plan and provide notice to the Enterprise identifying deficiencies in its resolution plan, if any, as well as actions or changes set forth by the Enterprise in its resolution plan that FHFA agrees could facilitate a rapid and orderly resolution. FHFA may also provide other feedback, such as on the timing of actions or changes to be undertaken by the Enterprise. An Enterprise receiving a notice of deficiency would be required to submit a revised resolution plan that corrects the deficiency, or addresses what actions will be taken to correct it.
The resolution planning process proposed is an iterative one, involving episodic and periodic reviews (and updates as appropriate) of business lines, and periodic development of revised resolution plans. FHFA would employ its examination authority to assess Enterprise compliance with any final rule on resolution planning and, importantly, to assess or verify Enterprise capabilities that would be critical to facilitate resolution by FHFA, including timely production of accurate information from management information systems. The proposed rule is discussed in greater detail below.
As an example of how the proposed “core business line” definition could operate, application of the concept may result in identification of two core business lines for each Enterprise, a single-family business line and a multifamily business line. Within the single-family business line, associated operations, services, functions, and supports may include purchasing single-family mortgage loans for cash as well as related operations such as loan servicing, credit enhancement, securitization support, information technology support and operations, and essential human resources and personnel support. When identifying associated operations, services, functions, and supports, an Enterprise should consider those functions that it performs directly and those that are performed by an affiliate or provided by a third party, including third parties whose direct relationship is with the borrower, but whose function may benefit an Enterprise (such as the provider of borrower loan-level mortgage insurance).
FHFA notes that the FDIC IDI and DFA section 165 resolution planning rules also require IDIs and bank holding companies, respectively, to identify “core business lines” but define such business lines as those whose failure, in the view of the institution or company, would result in material loss of revenue, profit, or franchise value. FHFA understands such concepts, in the context of those rules, to frame core business lines as those whose value the receiver should prioritize preserving in resolution or for which the receiver may obtain a higher price or find a ready market should such a business line be sold in a resolution. FHFA's proposed definition of “core business line” is different from the definition in the IDI and DFA section 165 resolution planning rules, considering that the Safety and Soundness Act requires FHFA to establish an LLRE for, and the LLRE to succeed to the charter of, an Enterprise in receivership. Consequently, FHFA believes it appropriate for an Enterprise resolution planning rule to focus on continuation of core business lines in an LLRE, and sees less need for the identification of Enterprise core business lines to consider the impact of failure on revenue, profit, or franchise value. FHFA requests comment on whether the proposed definition of “core business line” should be expanded to include consideration of the impact of failure (
FHFA believes that the scope of the proposed “core business line” definition, when considering the Enterprises' statutory purposes and missions and relatively simple corporate structures, makes it unnecessary for an Enterprise resolution planning rule to require identification of “critical operations” (which bank holding companies subject to the DFA section 165 rule must identify) or of “critical services” (which IDIs subject to the FDIC IDI rule must identify). Enterprise resolution planning is a process distinct from the identification of operations, services, functions, and supports associated with an Enterprise core business line. Likewise, FHFA does not believe it would be necessary to define the terms “critical operations” or “critical services,” in an Enterprise resolution planning rule, for reasons set forth below.
In the DFA section 165 rule, “critical operations” is defined as “those operations of the [bank holding] company, including associated services, functions and support, the failure or discontinuance of which would pose a threat to the financial stability of the United States.”
In that light, for purposes of resolution planning, it would be difficult for FHFA to conclude that a business line integral to an Enterprise's statutory purposes and mission could be discontinued without threatening the stability of the secondary mortgage market or another market an Enterprise is required to serve; each Enterprise's appropriate functions, as carried out through its core business lines, are in service to its purposes and mission.
As for “critical services,” the FDIC IDI rule defines these as services and operations of the IDI that are necessary to continue its day-to-day operations, such as servicing, information technology support and operations, and human resources and personnel.
FHFA invites comment on its view that there would be sufficient alignment between the definition of core business lines (those businesses line of the Enterprise that plausibly would continue to operate in an LLRE, considering the purposes, mission, and authorized activities of the Enterprise) and the concept of “critical operations” (operations that, if not performed, could cause disruption or instability in the secondary market for residential mortgages) such that an Enterprise resolution planning rule would not need a separate process for identification of “critical operations.” Also, FHFA requests comment on the conclusion that a definition of “core business line” that includes operations, services, functions, and supports associated with the business line and necessary for it to continue would capture the concept of “critical services” (services and operations of the Enterprise that would be necessary to continue its day-to-day operations), such that an Enterprise resolution planning rule would not need to separately identify those associated operations and services that are “critical.”
The proposed rule would permit FHFA to provide an Enterprise notice of identification of a core business line at any time at FHFA's initiative. To give an Enterprise time to incorporate any core business line newly identified by FHFA into its resolution planning, the Enterprise would not be required to incorporate a core business line identified by FHFA in its next required resolution plan, if that plan is required to be submitted within six months after the date the Enterprise receives notice of identification from FHFA.
The proposed approach to identification is intended to ensure that both the Enterprises and FHFA separately consider the Enterprises' statutory purposes, mission, and authorities when identifying core business lines, bringing both business and supervisory expertise and perspective to bear on identification. The proposed approach leverages each Enterprise's responsibility to meet the purposes of its statutory charter and its understanding of its own business operations, while recognizing FHFA's statutory duties as supervisor to ensure that each Enterprise complies with its charter act and operates in the public interest and FHFA's obligation as receiver to ensure that an LLRE is constituted in a manner to operate in accordance with the charter of the Enterprise for which it is successor.
To identify its core business lines, each Enterprise would be required to develop and implement an identification process, including a methodology to evaluate the Enterprise's participation in activities and markets that are critical to fostering liquidity, efficiency, resilience, stability, and competition in the national housing finance markets or carrying out the statutory mission and purpose of the Enterprise. That methodology should take into account the markets and activities in which the Enterprise participates; the significance of those markets and activities with respect to the national housing finance markets or the Enterprise's fulfillment of its statutory mission and purpose; and, the significance of the Enterprise as a provider or other participant in those markets and activities. An Enterprise's process for identifying its core business lines could incorporate, for example, review and assessment of business activities toward meeting its statutory duty to serve and its statutory affordable housing goals.
FHFA would not be required to utilize any particular methodology for identifying any core business line but believes that it would be appropriate to consider the factors set forth above in the methodology for Enterprise identification. FHFA would be able to consider any other factor it deemed appropriate.
Because FHFA proposes to require the Enterprises periodically to review their business lines to ensure that identification of core business lines is up-to-date, the proposed rule would require each Enterprise periodically to review its identification process and to revise it as necessary to ensure its continued effectiveness. Additional information regarding periodic reviews is set forth below.
Following its initial preliminary identification of core business lines, each Enterprise would be expected to review its business lines periodically, in accordance with the methodology set forth in the proposed rule, and to do so sufficiently in advance of its next resolution plan submission that the Enterprise could complete the notice-and-review process for FHFA identification of any new core business lines and also submit information required to be in the resolution plan for each core business line. Up-to-date identification of core business lines and associated operations, services, functions, and supports is critical for Enterprise resolution planning and to the development of a credible resolution plan.
In line with the proposed definition of “core business line,” in the period from submission of one resolution plan to the next, business lines identified as core may not change. To avoid unnecessary burden on the Enterprises and FHFA which may result if, out of an abundance of caution, an Enterprise conducts more frequent identification processes than necessary, FHFA also proposes to reserve authority to direct the Enterprises as to the timeframe for conducting any subsequent periodic identification process. Such direction would address only the timing of a periodic identification process and would not, for example, relieve an Enterprise of the need to review its business lines if it experienced a “material change,” as addressed below. By reserving authority to direct the timing of periodic identification processes, FHFA seeks to balance the need for up-to-date information about core business lines with the burden of conducting a periodic process, if it becomes apparent that identified core business lines are not changing over the course of several resolution plan submissions.
First, an Enterprise may identify new core business lines when conducting its periodic identification process. Such identification would be a “material change,” which FHFA proposes to define as a change, event, or occurrence that could reasonably be foreseen to have a material effect on the resolvability of the Enterprise, the Enterprise's resolution strategy, or how the Enterprise's resolution plan may be implemented. That “material change” would be an “extraordinary event,” described in the proposed rule as “any material change, merger, reorganization, sale or divestiture of a business unit or material assets, or similar transaction, or any fundamental change to the Enterprise's resolution strategy.” Such a “material change” would thus trigger an Enterprise notice to FHFA within 45 days after the occurrence of the change (the new identification). Relatedly, an “extraordinary event” could occur that gives rise to identification of a new core business line outside of an Enterprise's periodic identification process. In that instance as well, notice to FHFA would be required within 45 days of the identification of the new core business line. Finally, because the definition of “core business line” includes associated operations, services, functions, or supports, a notice of material change would also be required when there is a material change to such operations, services, functions, or supports that could affect the Enterprise's resolution plan.
The proposed rule would also provide a process for FHFA reconsideration of identification of a core business line. Only FHFA may remove the identification of a core business line (including removing the identification of any associated operation, service, function, or support), and it may do so on its own initiative, at any time, upon notice to an Enterprise. An Enterprise would be permitted to initiate a reconsideration, by submitting a written request to FHFA that includes arguments and other material information that the Enterprise believes would be relevant to that reconsideration. The proposed rule would provide FHFA three months to respond to a reconsideration request, unless FHFA extended that review period. If the Enterprise requests FHFA to reconsider a core business line that FHFA has previously reconsidered, pursuant to an earlier Enterprise request, the written request should describe the material differences between the current request and the most recent prior request. The proposed rule does not set forth a process for discussion or negotiation with an Enterprise about reconsideration, but FHFA anticipates that it would engage with an Enterprise as part of an established supervisory process to understand any different views on the nature of a particular business line.
Finally, FHFA recognizes that a resolution plan is necessarily developed at a point in time, while business activities are fluid through time. For that reason, a notice removing identification as a core business line may include an effective date or other delaying conditions or triggers (such as, for example, sufficient decrease in volume of a core business line, after which it would not be necessary to consider that business line in the Enterprise's resolution planning process).
FHFA invites comment on all aspects of the proposed processes for identifying core business lines and changing a core business line identification. FHFA invites comment on a process element that it has not proposed but is considering—whether, due to similarities between the activities each Enterprise is authorized or directed to take in its charter, there would be benefit to FHFA's providing notice to each Enterprise of all core business lines identified or any removal of a core business line identification, across both Enterprises. In contrast to bank holding companies subject to the DFA section 165 rule, where there presumably would not be common core business lines and critical operations across companies, there exist greater possibilities of common core business lines across the Enterprises. This is apparent if core business lines are identified primarily based on the Enterprise charter acts. FHFA believes that there could be alignment of core business lines across
After identifying its core business lines, the proposed rule would require an Enterprise to develop a resolution plan. Each resolution plan would contain strategic analysis and information important to understanding an Enterprise's core business lines and facilitating their continuation, possibly with appropriate changes, in an LLRE established by FHFA as receiver.
Under the proposed rule, a resolution plan would be required to include both strategic analysis and information components, including a description of the Enterprise's corporate governance structure for resolution planning; how the LLRE will be funded throughout its existence and be well capitalized within the timeline provided by statute; information regarding the Enterprise's overall organizational structure; information regarding the Enterprise's management information systems; a description of interconnections and interdependencies among the Enterprise's core business lines, including with CSS and other third-party providers; and, a clear identification of any potential impediments to the strategies developed and Enterprise plans for addressing such obstacles where practicable. An executive summary would also be required. In proposing these components, FHFA reviewed both the FDIC IDI resolution planning rule and the DFA section 165 rule and has incorporated concepts from each framework, and tailored those concepts to reflect Enterprise and FHFA authorities and duties.
Importantly, each Enterprise would be prohibited from assuming that any extraordinary support from the United States government would be continued or provided to the Enterprise to prevent either its becoming in danger of default or in default, including support obtained or negotiated on behalf of the Enterprise by FHFA in its capacity as regulator, conservator, or receiver of the Enterprise through the PSPAs with the Treasury Department. Likewise, each Enterprise's resolution plan would be required to reflect statutory provisions that the Enterprise's “obligations and securities, together with interest thereon, are not guaranteed by the United States and do not constitute a debt or obligation of the United States or any agency or instrumentality thereof other than [the Enterprise].”
Each Enterprise's strategic analysis should therefore detail how, in practice, the Enterprise could be resolved through FHFA's receivership authority by liquidating assets or by transferring them to an LLRE, which would continue to operate the Enterprise's core business lines. The strategic analysis should include the analytical support for the resolution plan and its key assumptions, including any assumptions made concerning the economic or financial conditions that would be present at the time a plan is implemented.
An important element proposed in the strategic analysis is the Enterprise's description of actions or a range actions that the Enterprise could take to facilitate its rapid and orderly resolution, including with respect to its core business lines, in the event of its becoming in danger of default or in default. For example, an Enterprise could review service level agreements to assess likelihood of service continuation after transfer to an LLRE, including whether contracts have “resolution-favorable” terms. The Enterprise should specify those actions that it plans to take and set forth the time period the Enterprise expects would be needed to successfully execute each such action. The Enterprise should also describe any impediments to actions that could be taken, including impediments to actions that it plans to take.
The strategic analysis should identify and address funding, liquidity, support functions, and other resources, mapped to the Enterprise's core business lines. This element would require the Enterprise to identify the amount of capital and capital-like instruments (such as subordinated debt, convertible debt, other contingent capital, mortgage insurance, and CRT transactions) available to absorb losses before imposing losses on creditors or investors and, where applicable, map this loss absorbing capacity to associated assets. The Enterprise's strategy for maintaining and funding its core business lines in an environment when it faces becoming in danger of default or in default should be provided and mapped to its core business lines, and its strategic analysis should demonstrate how such resources would be utilized to facilitate an orderly
The strategic analysis should set forth the Enterprise's strategy in the event of a failure or discontinuation of a core business line, including an associated operation, service, function, or support that is critical to a core business line and the actions that could be taken to prevent or mitigate any adverse effects of such failure or discontinuation on the national housing finance markets. This would include, if appropriate, the Enterprise's strategy for continuing an associated operation, service, function or support provided by an affiliate or the third-party provider that has failed. The ability of each affiliate or third party providing operations, services, functions or supports to function during the Enterprise's resolution should be assessed.
The strategic analysis should describe how and the extent to which claims against the Enterprise by the Enterprise's creditors and counterparties would be satisfied in accordance with FHFA's rule setting forth the priority of expenses and unsecured claims set forth at 12 CFR 1237.9, consistent with continuation of the Enterprise's core business lines by an LLRE. Another element to be included in a strategic analysis is the Enterprise's strategy for transferring or unwinding qualified financial contracts, consistent with applicable statutory requirements.
It is likely that each Enterprise will identify potential material weaknesses or impediments to rapid and orderly resolution as conceived in its plan. The Enterprise's strategic analysis must identify and describe those weaknesses or impediments, and any actions or steps the Enterprise has taken or proposes to take to address them. There may be overlap between these planned actions and other planned actions included in the strategic analysis. The Enterprise should identify actions or steps that other market participants could take to address the identified weaknesses or impediments. The Enterprise would be required to include a timeline for such remedial or other mitigating actions that are under its control.
Finally, FHFA proposes that each Enterprise describe in its strategic analysis the processes the Enterprise employs to determine the current market values and marketability of its core business lines and material asset holdings, as well as to assess the feasibility of the Enterprise's plans (including timeframes) for executing any sales, divestitures, restructurings, recapitalizations, or other similar actions contemplated in the Enterprise's resolution plan. The strategic analysis would include impact of such actions on the value, funding, and operations of the Enterprise and its core business lines.
Each resolution plan would be required to describe any contingency planning or other similar exercise that the Enterprise has conducted since submitting its prior resolution plan to assess the viability of or improve its resolution plan. The proposed rule would require each Enterprise to identify and describe the relevant risk measures it uses to report credit risk exposures both internally to its senior management and board of directors as well as any relevant risk measures reported externally to investors or to FHFA.
In its resolution plan, each Enterprise would be required to provide information about interconnections, mapping the operations, services, functions, and supports associated with each of its core business lines. Mapping should identify the entity, including any third-party providers, responsible for conducting each associated operation or service that supports the functioning of each core business line as well as the Enterprise's material asset holdings. Mapping should identify liabilities related to such operations, services, and core business lines. Such mapping should show the interconnections between core business lines to be transferred to the LLRE and any operations anticipated to be left in the receivership estate.
Enterprise resolution plans would be required to include an unconsolidated balance sheet for the Enterprise and a consolidating schedule for all material entities that are subject to consolidation by the Enterprise. Each Enterprise would be required to describe the material components of its liabilities, mapped to core business lines, identifying types and amounts of short-term and long-term liabilities, secured and unsecured liabilities, and subordinated liabilities, as well as processes used by the Enterprise to determine to whom collateral has been pledged collateral, the identity of the entity (or person) that holds such collateral, and the jurisdiction where collateral is located and the jurisdiction in which the security interest in collateral is enforceable against the Enterprise, if different from the location. Information on material off-balance sheet exposures, practices related to the booking of trading and derivatives activities, and hedges would be required and a description of the process undertaken by the Enterprise to establish exposure limits.
Each Enterprise would be required to include information about third-party providers with which the Enterprise has significant business connections, including descriptions of the business connection (such as the operation, service, function, or support associated
The Enterprises would be required to report on their credit risk exposures to counterparties identified in the proposed rule, including significant sellers of mortgage loans to an Enterprise, significant servicers, and providers of loan-level mortgage insurance. Enterprise resolution plans would be required to analyze whether the failure of a third-party provider would likely have an adverse impact on the Enterprise or likely result in the Enterprise becoming in danger of default or in default. Finally, each Enterprise would be required to identify trading, payment, clearing, and settlement systems of which the Enterprise, directly or indirectly, is a member and on which the Enterprise conducts a material number or material value amount of trades and transactions.
Certain proposed provisions on organizational structure, interconnections, and related information to be included in an Enterprise resolution plan use the term “third-party provider.” FHFA has not proposed a definition of that term. When considering the concept of a “third-party provider” in the context of the proposed rule's provisions that use it, FHFA concluded that third-party providers would be identified through application of those rule provisions, such as provisions that would require each Enterprise to identify the entity performing or providing operations, services, functions, or supports associated with core business lines. In that context, where an appropriate rule definition of “third-party providers” would likely refer to aspects of the rule which, when applied, would result in their identification, FHFA considered that a rule definition of “third-party provider” would not add to the understanding of the rule. FHFA was concerned that a rule definition of “third-party provider” could inadvertently limit application of rule provisions that are intended to be broadly applied. Finally, FHFA notes that the DFA section 165 rule uses the term “major counterparty,” which that rule does not define, to somewhat similar effect as “third-party provider” in FHFA's proposed rule. FHFA chose the term “third-party provider” in this instance to avoid implying that a contractual relationship, financial or otherwise, was required. Notwithstanding these considerations, FHFA requests comment on whether a definition of “third-party provider” should be included in any final rule.
The proposed rule would require each resolution plan to include a description of the capabilities of the Enterprise's management information systems to collect, maintain, and report the information and other data underlying the resolution plan, in a timely manner to Enterprise management to FHFA. Each Enterprise would be required to identity in its resolution plan deficiencies, gaps, or weaknesses in the capabilities of its management information systems and describe actions the Enterprise plans to undertake, including the associated timelines for implementation, to address such deficiencies, gaps, or weaknesses. The goal of the analysis, and any practical steps identified by the Enterprise, is to confirm the continued availability of the key management information systems that support core business lines through resolution, including their availability to the LLRE. Finally, each Enterprise resolution plan would be required to describe the process for FHFA to access the management information systems and applications required to be identified.
FHFA notes that the DFA section 165 rule requires bank holding companies to identify “material entities” in the public sections of their resolution plans.
Based on the DFA section 165 rule definition of “material entity,” FHFA does not view that rule's requirement to identify such entities in the public section of a bank holding company's resolution plan as intending to require the company to identify its major counterparties or third-party providers. Only entities that are “significant to the activities of an identified critical operation or core business line” or “financially or operationally significant” to the bank holding company's resolution
Because FHFA sees little, if any value, in requiring each Enterprise to identify CSS as its single “material entity,” FHFA has not proposed a similar requirement for the public section of an Enterprise resolution plan.
FHFA expects to publish the public section of each Enterprise's resolution plan on its website. If published as proposed, the public section would make clear the assumptions pursuant to which the Enterprise drafted its resolution plan, including the assumption that no government support will be available to prevent the failure of an Enterprise or to fund its resolution. It would indicate the extent to which potential claims by creditors and counterparties against the Enterprise might be satisfied in a resolution, and priority of those claims. By providing the public with greater transparency about the satisfaction of potential claims and the manner in which those claims might be satisfied, FHFA believes publishing the public section of each Enterprise's resolution plan would foster market discipline by making clear to investors in Enterprise-guaranteed MBS and Enterprise debt that they should no longer rely on an implicit government guarantee and that they should price the risk of these investments accordingly. FHFA may also publish other information about Enterprise resolution planning, which may include its high-level assessments of the Enterprises' resolution plans.
With regard to the first resolution plans the Enterprises submit, however, it is plausible FHFA would not publish the public section, but may publish information based on it or drawn from it on FHFA's website or in its Annual Report to Congress. This approach recognizes that the Enterprises and FHFA will learn from the process of developing and reviewing resolution plans, and balances the desire for transparency and market awareness of Enterprise resolution plans with the desire to permit improvement in resolution plans before the public sections are published.
All material that is not in the public section would be presumed to be confidential, and the proposed rule provides that information contained in the confidential section of a resolution plan would be treated as confidential in line with applicable law. The proposed rule would provide a process for an Enterprise to request confidential treatment of information in a resolution plan or any related materials under 5 U.S.C. 552(b)(4), 12 CFR part 1202 (Freedom of Information Act), and 12 CFR part 1214 (availability of non-public information), and states that FHFA will determine confidentiality in accordance with applicable exemptions under the Freedom of Information Act, FHFA's rule implementing that Act, and FHFA's rule on the availability of non-public information and its statutory requirements and authorities.
FHFA expects that it would first assess submitted resolution plans for substantive completeness. If additional information is necessary in order for FHFA to review a plan, the Enterprise would receive notice and be provided
FHFA believes a completeness review would improve the efficiency and effectiveness of the review process, in particular because it establishes a process for obtaining missing information outside of the deficiency identification process (discussed below). FHFA also observes, however, that a resolution plan that is missing substantial information, or as to which an Enterprise does not timely provide missing information, may warrant a deficiency notice.
Because a notice of deficiency would trigger the need for an Enterprise to submit a revised resolution plan that addresses the deficiency, the proposed rule would establish the principle that a deficiency would be something an Enterprise could plausibly address by taking or adding a planned action, considering of additional factors, or undertaking additional strategic analysis. Although there could be an overlap between deficiencies and material weaknesses or impediments identified by the Enterprise in its resolution plan as conceived and described in its strategic analysis, FHFA does not anticipate identifying as deficiencies those material weaknesses or impediments to a well-conceived plan that an Enterprise is reasonably unable to address, or which would be impracticable to change.
FHFA notes that the DFA section 165 rule includes reference to “shortcomings,” defined as “a weakness or gap that raises questions about the feasibility of a [bank holding] company's resolution plan, but does not rise to the level of a deficiency.”
Specifically, FHFA is proposing to consider a resolution plan to be “credible” if, demonstrating consideration of the proposed rule's required and prohibited assumptions, the plan's strategic analysis and detailed information required are well-founded and based on information and data that are observable or otherwise verifiable and employ reasonable projections from current and historical conditions within the broader financial markets. A resolution plan that meets this standard will reflect depth and thoroughness of thought and analysis, clarity and appropriateness of assumptions and projections, and accuracy and detail in supporting data and other information. Under this standard, a resolution plan may be “credible” even if it identifies material weaknesses or impediments to rapid and orderly resolution or if it sets forth steps that an Enterprise indicates it will take to improve the likelihood of its rapid and orderly resolution. FHFA is not proposing to correlate identification of deficiencies with application of the “credible” standard, although it is inevitable that sufficiently significant deficiencies would result in a resolution plan that is not credible.
Through its proposed standard for a “credible” resolution plan, FHFA seeks to clarify that such a plan would not require an Enterprise to produce a roadmap that FHFA would follow to discharge its responsibilities as receiver. This clarification is important for two reasons: (1) To reassure the Enterprises, and inform other stakeholders that Enterprise resolution plans may stop short of an FHFA-executable “playbook” and still be credible; and, (2) To emphasize that resolution of an Enterprise remains FHFA's responsibility, to be carried out pursuant to its statutorily conferred authorities and discretion.
On the other hand, the “credible” standard would make the Enterprises accountable to FHFA on critical aspects of resolution planning as the standard includes concepts of “well-founded” and “verifiable.” FHFA expects to use its examination authority to assess such aspects of an Enterprise's resolution plan as the capabilities of the Enterprise's management information systems to collect and maintain information and data underlying the resolution plan and report it in a timely manner to management of the Enterprise and to FHFA. Such capabilities and the importance of assessing them were both emphasized in consultations with FDIC and FRB staff on their experience implementing the FDIC IDI and DFA section 165 rules.
Verifying capabilities set forth in an Enterprise's resolution plan is not the only area of resolution planning that would be subject to FHFA's examination authority. FHFA may use its examination authority at any time to review Enterprise compliance with a resolution planning
If FHFA provides an Enterprise a notice of deficiency, the Enterprise must submit appropriate revisions to its prior plan within a timeframe established by the Agency. Procedures for submitting revised resolution plans and taking other corrective actions are addressed below.
The proposed rule would require an Enterprise that receives notification from FHFA of any deficiency in its resolution plan to submit a revised resolution plan to FHFA that addresses the deficiency. The proposed rule would also identify the resolution planning rule, in its entirety, as a prudential standard within the meaning of 12 U.S.C. 4513b (section 4513b) and for purposes of 12 CFR part 1236. The interplay of these two elements of the proposed rule is described below.
Section 4513b(b) authorizes FHFA to establish prudential management and operations standards for its regulated entities and provides that if a regulated entity fails to meet a standard, FHFA may require submission of a corrective plan specifying actions that the regulated entity will take to correct the deficiency.
FHFA has determined that it is legally appropriate and would be sound policy to identify its resolution planning rule as a prudential standard. Identifying the rule as a prudential standard provides FHFA access to section 4513b corrective measures, if necessary, to address deficiencies in a resolution plan, an Enterprise's failure to take actions set forth in its resolution plan that FHFA agrees could facilitate the Enterprise's rapid and orderly resolution, or concerns with an Enterprise's resolution planning process.
Because the resolution planning standard would be established as a regulation, FHFA could also bring an enforcement action if appropriate grounds existed and FHFA determined such action to be necessary.
Procedurally, the proposed rule permits FHFA to deem a determination of a deficiency in a resolution plan or an Enterprise's failure to undertake actions or changes that FHFA identified in any notice to an Enterprise following review of a resolution plan to be the failure of a prudential standard and to deem the Enterprise's submission of a revised resolution plan in accordance with any final resolution planning rule to be a corrective plan for purposes of the PMOS regulation. The proposed rule states that FHFA may find an Enterprise to have failed the resolution planning standard if the Enterprise does not undertake any planned action or change set forth by the Enterprise, and which FHFA identified as necessary in its notice to the Enterprise following review of the resolution plan.
In such cases, FHFA could provide the Enterprise a notice of failure in accordance with the PMOS regulation, and would inform the Enterprise of the need to submit a PMOS corrective plan or, a revised resolution plan that is deemed to be a PMOS corrective plan. Within 90 days, absent FHFA establishing a longer or shorter period, the Enterprise would be required to submit a revised resolution plan that addresses: (1) The deficiencies identified and discusses revisions to the plan to address the deficiencies; (2) Any changes to the Enterprise's business operations and corporate structure the Enterprise proposes to undertake to address the deficiencies, and a timeline for completing them; and, (3) Why the Enterprise believes the revised resolution plan is feasible and would facilitate its rapid and orderly resolution by FHFA, as receiver.
If a regulated entity fails to submit a corrective plan (which may be a revised
The proposed rule would require the Enterprise's board of directors to approve each preliminary notice of core business lines prior to submission to FHFA, with approval noted in the minutes. A similar process would be required for any Enterprise request for FHFA reconsideration of a business line.
The proposed rule would require the Enterprise's board to approve each resolution plan prior to its submission to FHFA, with approval noted in the minutes. A revised resolution plan is considered a resolution plan, also requiring board approval. In contrast, an “interim update” (discussed below) would not be considered a resolution plan and would not require board approval. The content of an interim update, however, may warrant board approval, as a matter of appropriate corporate governance related to the nature of such update.
While the effective date for a final rule is uncertain, FHFA is aware that other end-of-year reporting requirements may make it more challenging if the recurring due date for resolution plans were to fall in the fourth quarter of the calendar year. For that reason, among others, the proposed rule includes a provision permitting FHFA to alter the submission date of resolution plans. FHFA would provide notice to an Enterprise of any altered submission due date established by a final rule with the intention of providing the Enterprises two full years to develop their initial resolution plans. FHFA could alter a submission date on any other basis, such as on request by an Enterprise or if financial or economic conditions merit a delay.
An interim update is not considered a resolution plan. Consequently, submission of an interim update would not itself affect the date for submission of the next resolution plan. If FHFA determines that it is appropriate, the Agency could alter that submission date on notice to an Enterprise.
The proposed rule also includes three provisions addressing the effect of an Enterprise resolution plan on such considerations as preservation of privileges, execution of a receivership, and rights of private parties. The proposed rule would clarify and assert that the submission of any nonpublic data or information under FHFA's resolution planning rule would not constitute a waiver of or otherwise affect any privilege arising under Federal or state law, including the rules of any Federal or state court, to which the data or information is otherwise subject. The proposed rule also indicates that FHFA may assert examination privilege for any nonpublic data or information submitted under the rule.
The proposed rule would also clarify that an Enterprise's resolution plan would not have any binding effect on FHFA when appointed as receiver under 12 U.S.C. 4617. The resolution plan would not be binding on FHFA as conservator, either currently or if FHFA is appointed conservator in the future. FHFA proposes to clarify that any final rule would not create any private right of action based on a resolution plan prepared by an Enterprise or submitted to FHFA or based on any action taken by FHFA with respect to any such resolution plan. These provisions support the resolution planning process as a strategic, informational, and assessment regime which is critical to facilitate rapid and orderly resolution, but which does not commit FHFA to any action in exercising its authorities as receiver. FHFA or an Enterprise may take actions that are different from those considered or contained in any resolution plan.
This section of the proposed rule sets forth its purposes and goals related to Enterprise resolution, identifies the rule as a prudential standard for purposes of 12 U.S.C. 4513b and FHFA's implementing regulation at 12 CFR part 1236, and addresses the effect of such identification relative to corrective plans required to be submitted pursuant to section 4513b. FHFA may also enforce this part pursuant to sections 1371, 1372, and 1376 of the Safety and Soundness Act (12 U.S.C. 4631, 4632, and 4636).
This section of the proposed rule refers users to statutory definitions and FHFA's regulation setting forth definitions that are generally applicable (12 CFR part 1201) and sets forth definitions of other words and terms that are not defined by statute or in the Safety and Soundness Act. Words or terms used in the proposed rule that are defined by the Safety and Soundness Act or part 1201 include “affiliate,” “authorizing statutes,” “default,” “in danger of default,” “enterprise,” and “limited-life regulated entity.” The proposed rule sets forth definitions of “credible,” “core business line,” “material change,” and “rapid and orderly resolution.” The proposed meaning of each of those terms is described above, in material relevant to the use of such term.
This section of the proposed rule sets forth requirements related to identification of “core business lines,” including associated operations, services, functions, and supports. The proposed rule would establish a process for identification, including preliminary identification by each Enterprise and FHFA review and determination of core business lines, address the Enterprises' periodic review of business lines,
This section of the proposed rule establishes the requirement for Enterprise resolution plans to facilitate “rapid and orderly resolution” in the event FHFA is appointed receiver, sets forth requirements related to timing and frequency of submission of resolution plans to FHFA, and establishes processes for determining the timing for submission of each Enterprise's initial resolution plan and subsequent plans. This section also addresses interim updates to a resolution plan that may be required by FHFA.
This section establishes the requirement that an Enterprise submit a notice to FHFA on an extraordinary event, which may include a “material change,” as well as the timing and content of such a notice. This section also sets forth other matter related to the development and submission of a resolution plan, including the requirement for Enterprise board approval of a resolution plan prior to submission of the plan for FHFA. Finally, this section addresses the incorporation of material from a prior resolution plan into a subsequent plan by reference and addresses identification of an Enterprise point-of-contact for matters regarding the resolution plan.
This section of the proposed rule sets forth substantive requirements for an Enterprise resolution plan, including important required and prohibited assumptions that must underpin and be reflected throughout each resolution, including in each plan's public section. This section describes the informational content of each resolution plan, including an executive summary, strategic analysis, and information on corporate governance related to resolution planning, organizational structures, management information systems, and interconnections and interdependencies.
This section of the proposed rule sets forth requirements for the form of a resolution plan, which must include a public section and a confidential section. FHFA expects to publish the public section of each resolution plan on its website. This section establishes both the presumption that material not included in the public section is confidential and a process for an Enterprise to request confidential treatment of information for purposes of the Freedom of Information Act and FHFA's implementing regulation, and for purposes of FHFA's regulation on disclosure of nonpublic information. This section of the proposed rule also asserts the non-waiver of otherwise applicable Federal and state privileges, as a result of submitting a resolution plan and asserts the bank examination privilege for any nonpublic information or data in the resolution plan and related materials submitted to FHFA.
This section of the proposed rule addresses FHFA review of a resolution plan, after submission by an Enterprise, including an initial review for completeness, any request by FHFA for missing or additional information, an Enterprise's opportunity to provide such information, and a timeframe for providing missing or additional information. In this section, the proposed rule addresses FHFA's substantive review of a complete resolution plan, which may result in FHFA's determination of a deficiency in the plan. In this section, and for this purpose, the proposed rule defines “deficiency.” The proposed rule establishes a process for FHFA to provide an Enterprise notice of a deficiency (which, in accordance with § 1242.1(b), may be deemed a determination of failure of a prudential standard) and for Enterprise submission of a revised resolution plan to address such a deficiency (which, in accordance with § 1242.1(b) of the proposed rule, may be deemed a corrective plan for purposes of FHFA's PMOS regulation).
This section of the proposed rule also sets forth the timeframe for submission of any revised resolution plan, and includes a provision permitting FHFA to extend timeframes in any resolution planning rule adopted as final, on its own initiative or on request by an Enterprise.
This section of the proposed rule establishes that a resolution plan does not limit or bind FHFA when acting as conservator or receiver, such that FHFA may, or may not, take any action set forth in an Enterprise's resolution plan; and, also that neither a resolution plan nor an FHFA rule requiring such a plan would give rise to any private right of action. An Enterprise resolution plan is intended, among other things, to provide strategic analysis and information to FHFA that it may use for its benefit, including for purposes of any capabilities or other assessment, in FHFA's sole discretion.
As stated above, FHFA invites comments on all aspects of the proposed rule and will take all comments into consideration before issuing a final rule. In addition to comments specifically requested within the description of the proposed rule, above, FHFA also requests comment on the questions set forth below. The most helpful comments reference the specific questions listed, explain the reason for any changes, and include supporting data.
1. Are the stated goals of Enterprise resolution planning clear? Are there goals that should be added, removed, or modified?
2. Would Enterprise resolution planning benefit from the availability of funding mechanisms such as convertible long-term debt or other similar loss-absorbing instruments (as recommended in the
3. What advantages or disadvantages does the corporate organization of the Enterprises as single operating companies present for FHFA receivership?
4. Are the defined terms in the proposed rule clear? Do they require further clarification and if so, how should they be defined?
5. Are there terms used in the proposed rule that should be defined in a final rule?
6. Are there terms or operative concepts used in other resolution planning regimes, such as the DFA section 165 rule or the FDIC IDI rule, that should be incorporated into an FHFA resolution planning rule (
7. Are there resolution planning governance and oversight requirements in the proposed rule that could be clarified? Are there additional governance and oversight requirements that should be included?
8. Is the required frequency of resolution plan submission in the proposed rule appropriate? If not, what frequency would be appropriate?
9. Are the proposed timelines for Enterprise resolution planning (
10. Should the proposed rule provide greater specificity (
11. Should the proposed rule provide greater specificity on the required methodology, assessment, and process for Enterprise identification of core business lines?
12. Is the concept of “core business lines” clear, and is “core business line” defined appropriately? If not, how can FHFA provide additional clarity?
13. Are the informational content elements described in the proposed rule appropriate and adequate for resolution planning? Are there any informational content elements in the proposed rule that create an unnecessary burden or should not be included in an Enterprise resolution plan?
14. Are there informational content elements described in the proposed rule that could be clarified? How can FHFA provide additional clarity?
15. What additional informational content elements should the final rule require? Describe any impediments to collection and production of existing or additional informational elements identified. What changes could FHFA make to reduce the identified burdens and impediments?
16. Should the final rule require any informational content elements to be delivered to FHFA on a more frequent basis (
17. Are the required and prohibited assumptions for Enterprise resolution planning in the proposed rule appropriate? Are there any required or prohibited assumptions for Enterprise resolution planning that require clarification? Are there required or prohibited assumptions that should be added?
18. Are there explicit factors FHFA should consider in determining whether a resolution plan is deficient?
19. Are there portions of the Enterprise resolution plans that should be made available to the public? Are there portions that should remain confidential and privileged? What should FHFA consider in making such determinations?
20. Would greater transparency around Enterprise resolution plans impact market expectations and improve market discipline? If so, identify specific elements where transparency would have the greatest effect and describe how transparency into those elements would improve market discipline. For example, would a public description of Enterprise sources of funding in receivership or a related discussion of how losses may be allocated enhance market discipline? Are there other ways the proposed rule should be modified to improve market discipline, and if so, how should the proposed rule be modified?
The proposed rule would not contain any information collection requirement that would require the approval of the Office of Management and Budget (OMB) under the Paperwork Reduction Act (44 U.S.C. 3501
The Regulatory Flexibility Act (5 U.S.C. 601
Administrative practice and procedure, Government-sponsored enterprises, Reporting and record keeping requirements, Securitizations.
12 U.S.C. 4511; 12 U.S.C. 4513; 12 U.S.C. 4513b; 12 U.S.C. 4514; 12 U.S.C. 4517; 12 U.S.C. 4526; and 12 U.S.C. 4617.
(a)
(1) Minimizes disruption in the national housing finance markets by providing for the continued operation of the core business lines of an Enterprise in receivership by a newly constituted limited-life regulated entity;
(2) Preserves the value of an Enterprise's franchise and assets;
(3) Facilitates the division of assets and liabilities between the limited-life regulated entity and the receivership estate;
(4) Ensures that investors in mortgage-backed securities guaranteed by the Enterprises and in Enterprise unsecured debt bear losses in accordance with the
(5) Fosters market discipline by making clear that no extraordinary government support will be available to indemnify investors against losses or fund the resolution of an Enterprise.
(b)
(1) The determination of a deficiency in a resolution plan; or
(2) The failure to undertake actions or changes identified by FHFA in the notice provided pursuant to § 1242.7(b)(1), to be a failure to meet a standard for purposes of § 1236.4. In its discretion, FHFA may also deem a revised, resubmitted resolution plan to be a corrective plan for purposes of § 1236.4.
Unless otherwise indicated, terms used in this part have the meanings that they have in 12 CFR part 1201 and in the Federal Housing Enterprises Financial Safety and Soundness Act (12 U.S.C. 4501
(1) Demonstrates consideration of required and prohibited assumptions set forth at § 1242.5(b);
(2) Provides strategic analysis and detailed information as required by § 1242.5(c) through (g) that is well-founded and based on information and data related to the Enterprise that are observable or otherwise verifiable and employ reasonable projections from current and historical conditions within the broader financial markets; and
(3) Plausibly achieves the purposes of § 1242.1(a).
(1) The resolvability of the Enterprise;
(2) The Enterprise's resolution strategy; or
(3) How the Enterprise's resolution plan is implemented. Material changes may include the identification of a new core business line or significant increases or decreases in business, operations, funding, or interconnections.
(a)
(2) Each Enterprise shall establish and implement a process to identify each of its core business lines. The process shall include a methodology for evaluating the Enterprise's participation in activities and markets that may be critical to the stability of the national housing finance markets or carrying out the statutory mission and purpose of the Enterprise. The methodology shall be designed, taking into account the nature, size, complexity, and scope of the Enterprise's operations, to identify and assess:
(i) The markets and activities in which the Enterprise participates or has operations;
(ii) The significance of those markets and activities with respect to the national housing finance markets or the Enterprise's obligation to carry out its statutory mission and purpose; and
(iii) The significance of the Enterprise as a provider or other participant in those markets and activities.
(3) Enterprise identification of any business line as a core business line is preliminary and is subject to review by FHFA. Each Enterprise must provide a notice of its preliminary identification of core business lines to FHFA, including a description of its methodology and the basis for identification of each core business line.
(4) The board of directors of the Enterprise shall approve each notice of preliminary identification of core business lines before submission to FHFA, with such approval noted in board minutes.
(5) Each Enterprise must conduct its initial identification process and submit its initial identification of core business lines to FHFA by the date that is three months after the effective date of the final rule. Thereafter, each Enterprise shall conduct periodic identification processes, determining the timing of each periodic process to ensure that the process for identification, including FHFA review and determination required by paragraph (b) of this section, can be complete in sufficient time for each succeeding required resolution plan to include the information required under § 1242.5 for each core business line. FHFA may also direct an Enterprise as to the timeframe for conducting any subsequent identification process.
(6) Each Enterprise must periodically review its identification process and update it as necessary to ensure its continued effectiveness.
(b)
(2) FHFA may identify any business line of the Enterprise as a core business line, considering factors set forth in paragraph (a)(2) of this section or any other factor FHFA deems appropriate, following review of an Enterprise notice of preliminary identification or at any other time, on written notice to an Enterprise.
(3) If FHFA identifies a core business line under paragraph (b)(2) of this section, an Enterprise is not required to include that core business line in a resolution plan if that plan is due within six months after the Enterprise receives notice of identification from FHFA.
(c)
(ii) The board of directors of the Enterprise shall approve each request for reconsideration of identification before submission to FHFA, with such approval noted in board minutes.
(iii) FHFA will respond to an Enterprise request for reconsideration within three months after the date on which a complete request is received.
(2)
(3)
(4)
(a)
(2)
(3)
(b)
(c)
(d)
(e)
(1) The resolution plan seeking to incorporate information by reference clearly indicates:
(i) The information the Enterprise is incorporating by reference; and
(ii) Which of the Enterprise's previously submitted resolution plan(s) originally contained the information the Enterprise is incorporating by reference, including the specific location of that information in the previously submitted resolution plan; and
(2) The information the Enterprise is incorporating by reference remains accurate in all respects that are material to the Enterprise's resolution plan.
(f)
(a)
(b)
(1) Take into account that receivership of the Enterprise may occur under the severely adverse economic conditions provided to the Enterprise by FHFA in conjunction with any stress testing required or in another scenario provided by FHFA;
(2) Not assume the provision or continuation of extraordinary support by the United States to the Enterprise to prevent either its becoming in danger of default or in default (including, in particular, support obtained or negotiated on behalf of the Enterprise by FHFA in its capacity as supervisor, conservator, or receiver of the Enterprise, including the Senior Preferred Stock Purchase Agreements entered into by FHFA and the U.S. Department of the Treasury on September 7, 2008 and any amendments thereto); and
(3) Reflect statutory provisions that obligations and securities of the Enterprise issued pursuant to its authorizing statute, together with interest thereon, are not guaranteed by the United States and do not constitute a debt or obligation of the United States or any agency or instrumentality thereof other than the Enterprise.
(c)
(1) Summary of the key elements of the Enterprise's strategic analysis;
(2) A description of each material change experienced by the Enterprise since submission of the Enterprise's prior resolution plan (or affirmation that no such change has occurred);
(3) Changes to the Enterprise's previously submitted resolution plan resulting from any:
(i) Change in law or regulation;
(ii) Guidance or feedback from FHFA; or
(iii) Material change described pursuant to paragraph (c)(2) of this section; and
(4) Any actions taken by the Enterprise since submitting its prior resolution plan to improve the effectiveness of the resolution plan or remediate or otherwise mitigate any material weaknesses or impediments to a rapid and orderly resolution.
(d)
(1) Include detailed descriptions of—
(i) Key assumptions and supporting analysis underlying the resolution plan, including any assumptions made concerning the economic or financial conditions that would be present at the time resolution would occur;
(ii) Actions, or ranges of actions, which if taken by the Enterprise could facilitate a rapid and orderly resolution and those actions that the Enterprise intends to take;
(iii) The corporate governance framework that supports determination of the specific actions to be taken to facilitate a rapid and orderly resolution as the Enterprise is becoming in danger of default (including identifying the senior management officials responsible for making those determinations and taking those actions);
(iv) Funding, liquidity, and capital needs of, and resources and loss absorbing capacity available to, the Enterprise, which shall be mapped to its core business lines, in the ordinary course of business and in the event the Enterprise becomes in danger of default or in default;
(v) Considering the Enterprise's core business lines, a strategy for identifying assets and liabilities of the Enterprise to be transferred to a limited-life regulated entity; and for transferring operations of, and funding for, the Enterprise to a limited-life regulated entity, which shall be mapped to core business lines;
(vi) A strategy for preventing the failure or discontinuation of each core business line and its associated operations, services, functions, or supports as the core business line is transferred to a limited-life regulated entity, and actions that, in the Enterprise's view, FHFA could take to prevent or mitigate any adverse effects of such failure or discontinuation on the national housing finance markets;
(vii) A strategy for mitigating the effect on the Enterprise of another Enterprise becoming in danger of default or in default, on the continuation of each of the Enterprise's core business lines and its associated operations, services, functions, or supports as any assets or operations of the other Enterprise are transferred to the Enterprise;
(viii) The extent to which claims against the Enterprise by creditors and counterparties would be satisfied in accordance with § 1237.9 and the manner and source of satisfaction of those claims consistent with the continuation of the Enterprise's core business lines by the limited-life regulated entity; and
(ix) A strategy for transferring or unwinding qualified financial contracts, as defined at 12 U.S.C. 4617(d)(8)(D)(i), in a manner consistent with 12 U.S.C. 4617(d)(8) through (11);
(2) Identify the time period(s) the Enterprise expects would be needed to successfully execute each action identified in paragraph (d)(1)(ii) of this section to facilitate rapid and orderly resolution, and any impediments to such actions;
(3) Identify and describe—
(i) Any potential material weaknesses or impediments to rapid and orderly resolution as conceived in the Enterprise's plan;
(ii) Any actions or steps the Enterprise has taken or proposes to take, or which other market participants could take, to remediate or otherwise mitigate the weaknesses or impediments identified by the Enterprise; and
(iii) A timeline for the remedial or other mitigating action that the Enterprise proposes to take; and
(4) Provide a detailed description of the processes the Enterprise employs for—
(i) Determining the current market values and marketability of the core business lines and material asset holdings of the Enterprise;
(ii) Assessing the feasibility of the Enterprise's plans (including timeframes) for executing any sales, divestitures, restructurings, recapitalizations, or other similar actions contemplated in the Enterprise's resolution plan; and
(iii) Assessing the impact of any sales, divestitures, restructurings, recapitalizations, or other similar actions on the value, funding, and operations of the Enterprise and its core business lines.
(e)
(1) Include a detailed description of—
(i) How resolution planning is integrated into the corporate governance structure and processes of the Enterprise;
(ii) The process for identifying core business lines, including a description of the Enterprise's methodology considering the requirements of § 1242.3(a);
(iii) Enterprise policies, procedures, and internal controls governing preparation and approval of the resolution plan; and
(iv) The nature, extent, and frequency of reporting to Enterprise senior executive officers and the board of directors regarding the development, maintenance, and implementation of the Enterprise's resolution plan;
(2) Provide the identity and position of the Enterprise senior management official primarily responsible for overseeing the development, maintenance, implementation, and submission of the Enterprise's resolution plan and for the Enterprise's compliance with this part;
(3) Describe the nature, extent, and results of any contingency planning or similar exercise conducted by the Enterprise since the date of the Enterprise's most recently submitted resolution plan to assess the viability of or improve the resolution plan of the Enterprise; and
(4) Identify and describe the relevant risk measures used by the Enterprise to report credit risk exposures both internally to its senior management and board of directors, as well as any relevant risk measures reported externally to investors or to FHFA.
(f)
(1) Provide a detailed description of the Enterprise's organizational structure, including—
(i) A list of all affiliates and trusts within the Enterprise's organization that identifies for each affiliate and trust (legal entity), the following information (provided that, where such information would be identical across multiple legal entities, it may be presented in relation to a group of identified legal entities):
(A) The percentage of voting and nonvoting equity of each legal entity listed; and
(B) The location, jurisdiction of incorporation, licensing, and key management associated with each material legal entity identified;
(ii) A mapping of the Enterprise's operations, services, functions, and supports associated with each of its core business lines, identifying—
(A) The entity, including any third-party providers, responsible for conducting each associated operation or service that supports the functioning of each core business line as well as the Enterprise's material asset holdings; and
(B) Liabilities related to such operations, services, and core business lines;
(2) Provide an unconsolidated balance sheet for the Enterprise and a consolidating schedule for all securitization trusts consolidated by the Enterprise;
(3) Provide a schedule showing all assets and liabilities of unconsolidated Enterprise securitization trusts;
(4) Include a description of the material components of the liabilities of the Enterprise and each identified core business line that, at a minimum, separately identifies types and amounts of the short-term and long-term liabilities, secured and unsecured liabilities, and subordinated liabilities;
(5) Identify and describe the processes used by the Enterprise to—
(i) Determine to whom the Enterprise has pledged collateral;
(ii) Identify the person or entity that holds such collateral; and
(iii) Identify the jurisdiction in which the collateral is located, and, if different, the jurisdiction in which the security interest in the collateral is enforceable against the Enterprise;
(6) Describe any material off-balance sheet exposures (including guarantees and contractual obligations) of the Enterprise, including a mapping to each of its core business lines;
(7) Describe the practices of the Enterprise and its core business lines related to the booking of trading and derivatives activities;
(8) Identify material hedges of the Enterprise and its core business lines related to trading and derivative activities, including a mapping to legal entity;
(9) Describe the hedging strategies of the Enterprise;
(10) Describe the process undertaken by the Enterprise to establish exposure limits;
(11) Identify the third-party providers with which the Enterprise has significant business connections (including third parties performing or providing operations, services, functions, or supports associated with each core business line) and describe the business connections, dependencies and relationships with such third party;
(12) Report on the counterparty credit risk exposure to—
(i) The 20 largest single-family mortgage sellers and the 20 largest single-family mortgage servicers to the Enterprise (where “largest” is determined as of the end of the quarter preceding submission of a resolution plan, and the Enterprise includes an entity that is among the largest in both categories in each separate report category); and
(ii) All multifamily sellers and servicers to the Enterprise, based on purchasing volume during the preceding year.
(13) Report on insurance in force, risk in force, and exposure and potential future exposure related to all providers of loan-level mortgage insurance;
(14) Analyze whether the failure of a third-party provider to an Enterprise would likely have an adverse impact on an Enterprise or result in the Enterprise becoming in danger of default or in default, the availability of alternative providers, and the ability of the Enterprise to change providers when necessary; and
(15) Identify each trading, payment, clearing, or settlement system of which the Enterprise, directly or indirectly, is a member and on which the Enterprise conducts a material number or value amount of trades or transactions, and map membership in each such system to the Enterprise and its core business lines.
(g)
(i) A detailed inventory and description of the key management information systems and applications, including systems and applications for risk management, automated underwriting, valuation, accounting, and financial and regulatory reporting, used by the Enterprise, and systems and applications containing records used to manage all qualified financial contracts. The description of each system or application provided shall identify the legal owner or licensor, the use or function of the system or application, service level agreements related thereto, any software and system licenses, and any intellectual property associated therewith;
(ii) A mapping of the key management information systems and applications to core business lines of the Enterprise that use or rely on such systems and applications;
(iii) An identification of the scope, content, and frequency of the key internal reports that senior management of the Enterprise and core business lines use to monitor the financial health, risks, and operation of the Enterprise and core business lines;
(iv) A description of the process for FHFA to access the management information systems and applications identified in this paragraph (g); and
(v) A description and analysis of—
(A) The capabilities of the Enterprise's management information systems to collect, maintain, and report, in a timely manner to management of the Enterprise and to FHFA, the information and data underlying the resolution plan; and
(B) Any gaps or weaknesses in such capabilities, and a description of the actions the Enterprise intends to take to promptly address such gaps, or weaknesses, and the timeframe for implementing such actions.
(h)
(a)
(2)
(i) A description of each core business line, including associated operations and services;
(ii) Consolidated or segment financial information regarding assets, liabilities, capital and major funding sources;
(iii) A description of derivative activities, hedging activities, and credit risk transfer instruments;
(iv) A list of memberships in material payment, clearing and settlement systems;
(v) The identities of the principal officers;
(vi) A description of the corporate governance structure and processes related to resolution planning;
(vii) A description of material management information systems; and
(viii) A description, at a high level, of strategies to facilitate resolution,
(b)
(2) An Enterprise submitting a resolution plan or related materials pursuant to this part that desires confidential treatment of the information under 5 U.S.C. 552(b)(4), 12 CFR part 1202 (Freedom of Information Act), and 12 CFR part 1214 (availability of non-public information) may file a request for confidential treatment in accordance with those rules.
(3) To the extent permitted by law, information comprising the confidential section of a resolution plan will be treated as confidential.
(4) To the extent permitted by law, the submission of any nonpublic data or information under this part shall not constitute a waiver of, or otherwise affect, any privilege arising under Federal or state law (including the rules of any Federal or state court) to which the data or information is otherwise subject. The submission of any nonpublic data or information under this part shall be subject to the examination privilege.
(a)
(2) If FHFA determines that a resolution plan is incomplete or that substantial additional information is necessary to facilitate review of the resolution plan:
(i) FHFA shall provide notice to the Enterprise in writing of the area(s) in which the resolution plan is incomplete or with respect to which additional information is required; and
(ii) Within 30 days after receiving such notice (or such other time period as FHFA may establish in the notice), the Enterprise shall resubmit a complete resolution plan or such additional information as requested to facilitate review of the resolution plan.
(b)
(i) Identifies any deficiencies in the Enterprise's resolution plan (or confirms that no deficiencies were identified);
(ii) Identifies any planned actions or changes set forth by the Enterprise that FHFA agrees could facilitate a rapid and orderly resolution of the Enterprise; and
(iii) Provides any other feedback on the resolution plan (including feedback on timing of actions or changes to be undertaken by the Enterprise). FHFA will send the notification no later than 12 months after accepting a complete plan, unless FHFA determines in its discretion that extenuating circumstances exist that require delay.
(2) A deficiency is an aspect of an Enterprise's resolution plan that FHFA determines presents a weakness that, individually or in conjunction with other aspects, could undermine the feasibility of the Enterprise's resolution plan.
(c)
(1) Revisions to the plan made by the Enterprise to address the identified deficiencies;
(2) Any changes to the Enterprise's business operations and corporate structure that the Enterprise proposes to undertake to address a deficiency (including a timeline for completing such changes); and
(3) Why the Enterprise believes that the revised resolution plan is feasible and would facilitate a rapid and orderly resolution by FHFA as receiver.
(a)
(b)
Environmental Protection Agency (EPA).
Proposed rule.
The Environmental Protection Agency (EPA) is proposing to approve in part and to disapprove in part the state implementation plan (SIP) revision submitted by the State of Arizona to meet Clean Air Act (CAA or “Act”) requirements for the 1987 PM
Written comments must arrive on or before February 8, 2021.
Submit your comments, identified by Docket ID No. EPA-R09-OAR-2020-0618 at
Jerry Wamsley, Air Planning Office (ARD-2), EPA Region IX, 75 Hawthorne Street, San Francisco, CA 94105, (415) 947-4111, or by email at
Throughout this document, “we,” “us,” and “our” refer to the EPA.
The EPA sets the National Ambient Air Quality Standard (NAAQS) for certain ambient air pollutants at levels required to protect human health and the environment. Particulate matter with an aerodynamic diameter less than or equal to a nominal ten micrometers, or PM
An area attains the 24-hour PM
Most of Pinal County, Arizona, including what is now the West Pinal County PM
On October 14, 2009, under CAA section 107(d)(3)(A), the EPA notified the Governor of Arizona and four tribal leaders (whose areas of Indian country are located entirely, or in part, within Pinal County) that the designation for Pinal County, and any nearby areas that may be contributing to the monitored violations in Pinal County, should be revised.
Effective July 2, 2012, the EPA designated a portion of state lands in Pinal County, Arizona (“West Pinal County”) as nonattainment for the 1987 PM
As a result of the nonattainment designation, EPA classified West Pinal County as a “Moderate” PM
CAA section 188(b)(2) requires the EPA to determine whether a state has
The basis for the EPA's June 24, 2020 finding of failure to attain the PM
Along with the new designations, classifications, and attainment dates, the Clean Air Act Amendments of 1990 established new nonattainment area planning requirements. The air quality planning requirements for Moderate PM
As a result of the May 31, 2012 nonattainment designation, West Pinal County was classified as a Moderate PM
On December 21, 2015, Arizona submitted the West Pinal County PM
Appendices G, H, and I contain control measures submitted with the West Pinal County PM
CAA sections 110(a) and 110(l) require a state to provide reasonable public notice and opportunity for public hearing prior to the adoption and submission of a SIP revision to the EPA
The Arizona Department of Environmental Quality (ADEQ) provided public notice and opportunity for public comment on the West Pinal County PM
Based on information provided in the SIP submissions summarized above, the EPA has determined that the public hearing was properly noticed. Therefore, we find that the submittal of the West Pinal County PM
CAA section 172(c)(3) requires a state to submit for each PM
The state must meet several general requirements for base year emissions inventories, consistent with CAA section 172(c)(3). First, the emissions inventory year must be one of the 3 years used for the EPA PM
A state must meet similar CAA section 172(c)(3) requirements in the projected attainment year inventory for the most expeditious year in which the state can show attainment of the PM
Future attainment year and related baseline emissions inventories must reflect the most recent population, employment, travel and congestion estimates for the area. In this context, “baseline” emissions inventories refer to emissions estimates for a given year and area that reflect rules and regulations and other measures that are already adopted in a state's EPA approved SIP and assumed within the attainment demonstration. Future baseline emissions inventories are necessary to show the projected effectiveness of SIP control measures designed to result in attainment by the applicable attainment year. Both the base year and future year, baseline and attainment inventories are necessary inputs to any modeling or other analyses required to demonstrate attainment of the PM
The West Pinal County PM
The 2018 attainment year emissions inventories reflect State of Arizona and Pinal County rules adopted concurrently with the West Pinal County PM
In general, the term “point sources” typically refers to permitted facilities that have one or more identified and fixed pieces of equipment and emissions points. “Area sources” typically consist of widespread and numerous smaller emissions sources, such as small permitted facilities and households. The “mobile sources” category refers to vehicles and is typically divided into two major subcategories, “on-road” and “non-road” mobile sources. On-road mobile sources include light-duty automobiles, light-, medium-, and heavy-duty trucks, and motorcycles. In addition to tailpipe, brake, and tire wear, on-road mobile emissions estimates for PM
In the West Pinal County PM
ADEQ calculated the 2008 base year on-road emissions inventories in the West Pinal PM
As described previously, the State grouped direct PM
Table 2 presents ADEQ's direct PM
Tables 1 and 2 provide a summary of the West Pinal County 2008 base year direct PM
We have reviewed the 2008 base year emissions inventory for direct PM
First, we find that although the 2008 base year inventory reports annual PM
Second, we find that the 2008 base year emissions inventory in the West Pinal County PM
Third, we find that ADEQ's selection of 2008 for the base year emissions inventory is appropriate because it is chosen from one of the three years, 2006-2008, in which the area was designated nonattainment. The 2008 emissions inventory is representative of the sources of direct PM
Section 189(e) of the Act requires that the control requirements for major stationary sources of direct PM
The provisions of subpart 4 of part D, title I of the CAA do not define the term “precursor” for purposes of PM
Appendix B, Exhibit BXVI contains ADEQ's demonstration that emissions of SO
Appendix B, Exhibit BXVI, Table BXVI-1 provides the maximum particle mass concentration and chemical composition (
Next, ADEQ processed Pinal County 2008 EPA NEI reported emissions for NO
We identified several issues with the analysis that ADEQ presented. First, SO
Second, it is unclear whether the chemical composition values presented in Appendix B, Exhibit BXVI, Table BXVI-1 reflect one maximum day sample, or the maximum chemical composition measured for each individual component during the entire CMBC study. If the latter approach was used, then the resulting percentages would not reflect percentages measured on any actual exceedance day and could overrepresent or underrepresent the various chemicals when compared to actual exceedance days. If the chemical composition values represent one maximum day sample, then: (a) The individual components listed in Table BXVI-1 when totaled together should equal that day's total mass, which they do not; and (b) this would only represent a single day—therefore, a single type of exceedance day. ADEQ modeled two meteorological scenarios causing exceedances, high wind conditions and stagnant or low wind conditions. The emission sources affecting the PM
Third, ADEQ applied the 5 μg/m
Finally, ADEQ used an annual inventory to partition the source category contribution to PM
The State has not adequately shown that PM
In conclusion, because of the omissions and uncertainties in ADEQ's PM
CAA section 172(c)(1) requires that each attainment plan provide for the implementation of all RACM/RACT as expeditiously as practicable (including such reductions in emissions from sources in the area through implementation of reasonably available control technology) and for attainment of the NAAQS. Consistent with section 189(a)(1)(C), each state with a Moderate PM
Section 189(a)(1)(B) of the CAA requires states to demonstrate attainment of the PM
To address this requirement to adopt all RACM/RACT and meet the PM
The EPA has provided guidance interpreting the RACM requirement in the General Preamble for the Implementation of the Clean Air Act Amendments of 1990 (“General Preamble”). This guidance includes the following elements and concepts: A recommended list of potential PM
For the West Pinal County PM
As a first step in the RACM/RACT analysis, ADEQ prepared a detailed inventory of direct PM
With this process, ADEQ attempted to evaluate and analyze the universe of potential RACM/RACT level controls for sources of direct PM
ADEQ did not provide a complete or systematic analysis of whether the control measures it did not adopt based on concerns about a lack of immediate emission reduction effect, if taken together, would advance the area's attainment date. Nonetheless, ADEQ did adopt those control measures, implemented them over the 2016-2018 timeframe, and allocated them to serve as contingency measures in the Plan. ADEQ designated the portion of the AgBMP Rules for Pinal County applicable to dairy operations (R18-2-611 and -611.03), along with the Pinal County Fugitive Dust Rule and the Pinal County Construction Dust Rule, as contingency measures because these rules provided additional emissions reductions not relied upon within the Plan's attainment demonstration.
As described above, ADEQ evaluated a wide range of potentially available measures for the West Pinal County PM
The Plan described the adopted control measures and concluded that a subset was reasonable and would achieve the NAAQS by the attainment date; therefore, the State concluded that the RACM/RACT-designated subset of adopted control measures constituted the necessary RACM/RACT for the area.
Despite the RACM/RACT-designated rules and contingency measures adopted and implemented by the State, we find that the State failed to adopt RACM/RACT sufficient to achieve the PM
Section 189(a)(1)(B) of the CAA requires that a plan for a Moderate PM
In addition to reviewing the attainment demonstration modeling and related analyses, we evaluate the Plan's control strategy and the efficacy of the Plan's adopted controls to meet the PM
ADEQ applied a form of proportional roll back and dispersion modeling using a micro-emissions inventory method to model attainment of the PM
The State's attainment demonstration approach is described in the Plan within the following documents: Chapter 7, “Attainment Demonstration and Reasonable Further Progress”; Appendix A, “Pinal County PM Inventory Preparation Plan” (“IPP”); Appendix B, “Pinal County PM
The West Pinal County PM
As noted, the West Pinal County PM
• ADEQ developed a high wind day scenario for Cowtown, Maricopa, Pinal County Housing, and Stanfield monitors and surrounding area micro-emissions inventories. Each monitor has its own two domain micro-emissions inventory for modeling: High wind hours/windblown dust; and, low wind hours/activity-based emissions. The high wind scenario used a proportional rollback approach that accounts for the timing
• ADEQ developed a stagnation day scenario for Cowtown, Pinal County Housing, and Stanfield monitors and surrounding area micro-emissions inventories. The stagnant day scenarios used dispersion modeling from the American Meteorological Society (AMS)/EPA Regulatory Model (AERMOD). ADEQ chose design days from the fall season, September through November 2008 for this analysis.
ADEQ relied on the following portions of the AgBMP Rules for Pinal County to provide for attainment of the PM
The State adopted and pre-implemented control measures to meet the contingency measures requirement within the Plan: The portion of the AgBMP Rules for Pinal County applicable to dairy operations (R18-2-611 and -611.03), along with the Pinal County Fugitive Dust Rule and the Pinal County Construction Dust Rule.
As previously discussed, the EPA issued a finding that the West Pinal County area failed to attain the PM
First, when considering the number of exceedances of the PM
Second, design value trends show that the number of expected exceedances remain well above the PM
The West Pinal County 2015 PM
Given the ambient monitoring data unequivocally indicate that the Plan was insufficient to achieve attainment by the 2018 attainment date, we do not provide an exhaustive evaluation of the attainment demonstration analyses in the West Pinal County PM
First, we find the design days that ADEQ selected for modeling the Cowtown monitor under stagnation
Second, we conclude that several data inputs and assumptions associated with modeling the control strategy were unsupported, overstated, or insufficiently conservative leading to an overestimate of the overall efficacy of the control strategy within the attainment demonstration. Specifically, in calculating the control effectiveness of the rules in the control strategy, two component assumptions or estimates were the primary cause of this overestimate: (1) Rule effectiveness,
Based on our evaluation of the design days and modeling and control effectiveness assumptions in the Plan, we find that these several deficiencies in the analyses preclude approval of the attainment demonstration. In addition, after reviewing past and recent PM
• There is no clear evidence of a sustained decrease in the number of exceedances in recent years as control measures have been implemented (2015-2018);
• PM
• The Plan's control strategy, whether considered as adopted RACM/RACT or as the entire suite of rules submitted with the Plan, was inadequate to attain the PM
Consequently, we propose to disapprove the modeled attainment demonstration in the West Pinal County PM
The requirement for RFP in PM
The West Pinal County PM
Based in part on our review of the 2016-2018 ambient data and in part on the flaws identified in the West Pinal County PM
Regarding quantitative milestones, given the EPA's 2012 designation of nonattainment for West Pinal County, the State should have included quantitative milestones for mid-2016 and mid-2019 within the West Pinal County PM
For these reasons, we have determined that the West Pinal County PM
Under the CAA, states must include contingency measures consistent with section 172(c)(9) in their nonattainment plan SIP submissions. Contingency measures are additional controls or measures to be implemented in the event the area fails to meet RFP or to attain the NAAQS by the applicable attainment date. The SIP should contain trigger mechanisms for the contingency measures, specify a schedule for implementation, and indicate that the measure will be implemented without significant further action by the state or the EPA.
Neither the CAA nor the EPA's implementing regulations establish a specific level of emissions reductions that implementation of contingency measures must achieve, but the General Preamble reiterates the EPA's guidance recommendation that contingency measures should generally provide for emissions reductions approximately equivalent to one year's worth of RFP in the area.
It has been the EPA's longstanding interpretation of CAA section 172(c)(9) that states may meet the contingency measure requirement by relying on Federal measures (
In
ADEQ developed the West Pinal County PM
Arizona is within the geographic jurisdiction of the Ninth Circuit Court of Appeals; therefore, after the
Section 176(c) of the CAA requires Federal actions in nonattainment and maintenance areas to conform to the goals of the state's SIP to eliminate or reduce the severity and number of violations of the NAAQS and achieve timely attainment of the standards. Conformity to the goals of the SIP means that such actions will not: (1) Cause or contribute to violations of a NAAQS, (2) worsen the severity of an existing violation, or (3) delay timely attainment of any NAAQS or any interim milestone.
Actions involving Federal Highway Administration (FHWA) or Federal Transit Administration (FTA) funding or approval are subject to the EPA's transportation conformity rule, codified at 40 CFR part 93, subpart A. Under this rule, metropolitan planning organizations (MPOs) in nonattainment and maintenance areas coordinate with state and local air quality and transportation agencies, the EPA, the FHWA, and the FTA to demonstrate that an area's regional transportation plans and transportation improvement programs conform to the applicable SIP. This demonstration is typically done by showing that estimated emissions from existing and planned highway and transit systems are less than or equal to the motor vehicle emissions budgets (MVEBs or “budgets”) contained in all control strategy attainment plans designed to attain the NAAQSs. Budgets are generally established for specific years and specific pollutants or precursors. Attainment plans for PM
For budgets to be approvable, they must meet, at a minimum, the EPA's adequacy criteria at 40 CFR 93.118(e)(4). To meet these requirements, the budgets must be consistent with the attainment and RFP requirements and reflect all the motor vehicle control measures contained in the attainment and RFP demonstrations.
The EPA's process for determining adequacy of a budget consists of three basic steps: (1) Providing public notification of a SIP submission; (2) providing the public the opportunity to comment on the budget during a public comment period; and (3) making a finding of adequacy or inadequacy.
The West Pinal County PM
The methodologies ADEQ used to develop the motor vehicle emissions budget are provided in Appendix B of the West Pinal County PM
The EPA has neither found this 2018 budget to be adequate, nor have we acted on it in the past.
As part of our review of the approvability of the motor vehicle emissions budget in the West Pinal County PM
First and foremost, § 93.118(e)(4)(iv) requires that a budget, when considered together with all other emissions sources, be consistent with applicable requirements for RFP, attainment, or maintenance (whichever is relevant to a given implementation plan submission). In this case, the West Pinal County area budget is not consistent with the requirements for attainment and RFP, as discussed in Sections III.D and E of this proposal and our proposed disapproval of these two Plan elements. Secondly, the West Pinal County budget is presented in a tons per year format for an attainment plan intended to meet the 24-hour PM
We have reviewed the motor vehicle emissions budget in the West Pinal County PM
If our proposed disapproval of the 2018 budget is finalized, upon the effective date of our final rule, the area would be subject to a conformity freeze under § 93.120 of the Transportation Conformity rule. No transportation project outside of the first four years of the currently conforming transportation plan and transportation improvement plan (TIP) or that meets the requirements of § 93.104(f) during the resulting conformity freeze may be found to conform until Arizona submits a new PM
For the reasons discussed in this notice, under CAA section 110(k)(3), the EPA is proposing to approve and disapprove the following portions of the West Pinal County PM
• We propose to approve the 2008 base year emissions inventory element for direct PM
• We propose to disapprove the precursor demonstration in the West Pinal County PM
• We propose to disapprove the RACM/RACT demonstration element in the West Pinal County PM
• We propose to disapprove the modeled attainment demonstration element for the 1987 p.m.
• We propose to disapprove the RFP demonstration element in the West Pinal County PM
• We propose to disapprove the quantitative milestones element in the West Pinal County PM
• We propose to disapprove the contingency measures element of the West Pinal County PM
• We propose to disapprove the motor vehicle emissions budget in West Pinal County PM
The EPA is soliciting public comments on the issues discussed in this proposed rule. We will accept comments from the public on this proposal for the next 30 days and will consider those comments before taking final action.
Additional information about these statutes and Executive orders can be found at
This action is not a significant regulatory action and was therefore not submitted to the Office of Management and Budget (OMB) for review.
This action is not an Executive Order 13771 regulatory action because SIP approvals, including partial approvals, are exempted under Executive Order 12866.
This action does not impose an information collection burden under the PRA because this action does not impose additional requirements beyond those imposed by state law.
I certify that this action will not have a significant economic impact on a substantial number of small entities under the RFA. This action will not impose any requirements on small entities beyond those imposed by state law.
This action does not contain any unfunded mandate as described in UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect small governments. This action does not impose additional requirements beyond those imposed by state law. Accordingly, no additional costs to state, local, or tribal governments, or to the private sector, will result from this action.
This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the National Government and the states, or on the
This action does not have tribal implications, as specified in Executive Order 13175, because the SIP is not approved to apply on any Indian reservation land or in any other area where the EPA or an Indian tribe has demonstrated that a tribe has jurisdiction, and will not impose substantial direct costs on tribal governments or preempt tribal law. Thus, Executive Order 13175 does not apply to this action.
The EPA interprets Executive Order 13045 as applying only to those regulatory actions that concern environmental health or safety risks that the EPA has reason to believe may disproportionately affect children, per the definition of “covered regulatory action” in section 2-202 of the Executive order. This action is not subject to Executive Order 13045 because it does not impose additional requirements beyond those imposed by state law.
This action is not subject to Executive Order 13211, because it is not a significant regulatory action under Executive Order 12866.
Section 12(d) of the NTTAA directs the EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. The EPA believes that this action is not subject to the requirements of section 12(d) of the NTTAA because application of those requirements would be inconsistent with the CAA.
The EPA lacks the discretionary authority to address environmental justice in this rulemaking.
Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Particulate matter, Reporting and recordkeeping requirements.
42 U.S.C. 7401
Environmental Protection Agency (EPA).
Proposed rule.
The U.S. Environmental Protection Agency (EPA) is proposing the results of the residual risk and technology review (RTR) of the National Emission Standards for Hazardous Air Pollutants (NESHAP) for mercury emissions from Mercury Cell Chlor-Alkali Plants, as required by the Clean Air Act (CAA). The EPA is proposing to find risks due to emissions of hazardous air pollutants (HAP) to be acceptable from the Mercury Cell Chlor-Alkali Plants source category, and to determine that the current NESHAP provides an ample margin of safety to protect public health and that no more stringent standards are necessary to prevent, taking into consideration costs, energy, safety, and other relevant factors, an adverse environmental effect. The EPA is proposing to amend the requirements for cell room fugitive mercury emissions to require work practice standards for the cell rooms and to require instrumental monitoring of cell room fugitive mercury emissions under the technology review. Furthermore, under our technology review and maximum achievable control technology (MACT) analysis, we are proposing to not require conversion to non-mercury production technology and invite comments and data and information regarding this proposed determination. In addition, the EPA is proposing standards for fugitive chlorine emissions from mercury cell chlor-alkali plants, which are not currently regulated under the NESHAP. The EPA is proposing to address applicability for thermal mercury recovery units when chlorine and caustic are no longer produced in mercury cells. The EPA is also proposing revisions related to emissions during periods of startup, shutdown, and malfunction (SSM); provisions for electronic submission of performance test results, performance evaluation reports, and Notification of Compliance Status (NOCS) reports; and correction of various compliance errors in the current rule.
You may send comments, identified by Docket ID No. EPA-HQ-OAR-2020-0560, by any of the following methods:
•
•
•
•
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For questions about this proposed action, contact Phil Mulrine, Sector Policies and Programs Division (D243-02), Office of Air Quality Planning and Standards, U.S. Environmental Protection Agency, Research Triangle Park, North Carolina 27711; telephone number: (919) 541-5289; fax number: (919) 541-4991; and email address:
To request a virtual public hearing, contact (888) 372-8699 or by email at
The EPA will begin pre-registering speakers for the hearing upon publication of this document in the
The EPA will make every effort to follow the schedule as closely as possible on the day of the hearing; however, please plan for the hearings to run either ahead of schedule or behind schedule.
Each commenter will have 5 minutes to provide oral testimony. The EPA encourages commenters to provide the EPA with a copy of their oral testimony electronically (via email) by emailing it to Phil Mulrine at
The EPA may ask clarifying questions during the oral presentations but will not respond to the presentations at that time. Written statements and supporting information submitted during the comment period will be considered with the same weight as oral testimony and supporting information presented at the public hearing.
Please note that any updates made to any aspect of the hearing is posted online at
If you require the services of a translator or a special accommodation such as audio description, please pre-register for the hearing with the public hearing team and describe your needs by January 15, 2021. The EPA may not be able to arrange accommodations without advanced notice.
The EPA may publish any comment received to its public docket. Multimedia submissions (audio, video, etc.) must be accompanied by a written comment. The written comment is considered the official comment and should include discussion of all points you wish to make. The EPA will generally not consider comments or comment contents located outside of the primary submission (
The
The EPA is temporarily 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 CDC, local area health departments, and our Federal partners so that we can respond rapidly as conditions change regarding COVID-19.
The source category that is the subject of this proposal is Mercury Cell Chlor-Alkali Plants regulated under 40 CFR part 63, subpart IIIII. The North American Industry Classification System (NAICS) code for the chlor-alkali industry is 325180. The proposed standards, once promulgated, will be directly applicable to the affected sources. Federal, state, local, and tribal government entities would not be affected by this proposed action.
In the
In addition to being available in the docket, an electronic copy of this action is available on the internet. Following signature by the EPA Administrator, the EPA will post a copy of this proposed action at
The proposed changes to the CFR that would be necessary to incorporate the changes proposed in this action are set out in an attachment to the memorandum titled
The statutory authority for this action is provided by sections 112 and 301 of the CAA, as amended (42 U.S.C. 7401
In the first stage of the CAA section 112 standard setting process, the EPA promulgates technology-based standards under CAA section 112(d) for categories of sources identified as emitting one or more of the HAP listed in CAA section 112(b). Sources of HAP emissions are either major sources or area sources, and CAA section 112 establishes different requirements for major source standards and area source standards. “Major sources” are defined in CAA section 112(a)(1) as those that emit or have the potential to emit 10 tons per year (tpy) or more of a single HAP or 25 tpy or more of any combination of HAP. All other sources (not including motor vehicles or nonroad vehicles) are “area sources,” as defined in CAA section 112(a)(2). For major sources, CAA section 112(d)(2) provides that the technology-based NESHAP must reflect the maximum degree of emission reductions of HAP achievable (after considering cost, energy requirements, and non-air quality health and environmental impacts). These standards are commonly referred to as MACT standards. CAA section 112(d)(3) also establishes a minimum control level for MACT standards, known as the MACT “floor.” In certain instances, as provided in CAA section 112(h), the EPA may set work practice standards in lieu of numerical emission standards. The EPA must also consider control options that are more stringent than the floor. Standards more stringent than the floor are commonly referred to as beyond-the-floor standards. For area sources, CAA section 112(d)(5) gives the EPA discretion to set standards based on generally available control technologies or management practices (GACT standards) in lieu of MACT standards.
The second stage in standard-setting focuses on identifying and addressing any remaining (
The approach incorporated into the CAA and used by the EPA to evaluate residual risk and to develop standards under CAA section 112(f)(2) is a two-step approach. In the first step, the EPA determines whether risks are acceptable. This determination “considers all health information, including risk estimation uncertainty, and includes a presumptive limit on maximum individual lifetime [cancer] risk (MIR)
CAA section 112(d)(6) separately requires the EPA to review standards promulgated under CAA section 112 and revise them “as necessary (taking into account developments in practices, processes, and control technologies)” no less often than every 8 years. In conducting this review, which we call the “technology review,” the EPA is not required to recalculate the MACT floor.
The Chlorine Production source category was initially listed as a category of major sources of HAP pursuant to section 112(c)(1) of the CAA on July 16, 1992 (57 FR 31576). At the time of the initial listing, the EPA defined the Chlorine Production source category as follows:
The Chlorine Production Source Category includes any facility engaged in the production of chlorine. The category includes, but is not limited to, facilities producing chlorine by the following production methods: Diaphragm cell, mercury cell, membrane cell, hybrid fuel cell, Downs cell, potash manufacture, hydrochloric acid decomposition, nitrosyl chloride process, nitric acid/salt process, Kel-Chlor process, and sodium chloride/sulfuric acid process.
Based on the differences in the production methods and the HAP emitted, the EPA decided to divide the Chlorine Production source category into two subcategories: (1) Mercury cell chlor-alkali plants; and (2) chlorine production plants that do not rely upon mercury cells for chlorine production (diaphragm cell chlor-alkali plants, membrane cell chlor-alkali plants, etc.). On July 3, 2002, the EPA issued separate proposals to address emissions of mercury from the mercury cell chlor-alkali plant subcategory sources (67 FR 44672) and emissions of chlorine and hydrochloric acid (HCl) from both subcategories (67 FR 44713). Separate final actions were taken on both proposals on December 19, 2003. As part of these separate final actions, the EPA deleted the non-mercury cell subcategory under the authority of CAA section 112(c)(9)(B)(ii) of the CAA (68 FR 70948).
The final rule for the Mercury Cell Chlor-Alkali Plants subcategory (68 FR 70904, December 19, 2003, codified at 40 CFR part 63 subpart IIIII), which covers both major and area sources, included standards for mercury emissions from two types of affected sources at plant sites where chlorine and caustic are produced in mercury cells: Mercury cell chlor-alkali production facilty affected sources and mercury recovery facility affected sources. The rule prohibits mercury emissions from new and reconstructed mercury cell chlor-alkali production facilities. 40 CFR 63.8190(a)(1). For existing mercury cell chlor-alkali production facilities, the standards include emission limitations for mercury emissions from process vents (including emissions from end-box ventilation systems and hydrogen systems) and work practices for fugitive mercury emissions from the cell room. 40 CFR 8190(a)(2), 8192(a) through (f). For new, reconstructed, and existing mercury recovery facilities, the NESHAP includes emission limitations for mercury emissions from oven type thermal recovery unit vents and non-oven type thermal recovery unit vents. 40 CFR 63.8190(a)(3). The rule did not include standards for chlorine or HCl, citing the authority of section 112(d)(4) of the CAA (68 FR 70906). In its 2003 action (68 FR 70904), the EPA promulgated the initial Mercury Cell Chlor-Alkali Plants NESHAP pursuant to CAA section 112(d)(2) and added the source category to the EPA's Source Category List under CAA sections 112(c)(1), as well as under (c)(3) and (k)(3)(B) and (c)(6), in each case because of the mercury emissions.
Following promulgation of the 2003 Mercury Cell Chlor-Alkali Plants NESHAP, the EPA received a petition to reconsider several aspects of the rule from the Natural Resources Defense Council (NRDC). NRDC also filed a petition for judicial review of the rule in the U.S. Court of Appeals for the District of Columbia Circuit. In a letter dated April 8, 2004, the EPA granted NRDC's petition for reconsideration and on July 20, 2004, the court placed the petition for judicial review in abeyance pending the EPA's action on reconsideration. The EPA issued proposals on June 11, 2008 (73 FR 33258), and on March 14, 2011 (76 FR 13852), to respond to the reconsideration petition. We discuss the reconsideration and the 2008 and 2011 proposals further in section IV.A.2 of this preamble.
The use of mercury cell technology has been declining for decades due to conversions to non-mercury processes and closures. For example, in 1993, there were about 13 facilities in the U.S., and when we initiated the development of this RTR proposed rule in early 2020, there were two facilities operating. Since that time, one facility (Ashta Chemicals in Ohio) ceased operating the mercury cell process.
Data sources used for this effort include the 2017 National Emissions Inventory (NEI), title V permit information, conversations with the West Virginia Department of Environmental Protection, and conversations with facility representatives. The NEI data were examined, and the processes and related emission sources associated with the mercury cell chlor-alkali plant were identified. In addition, information from data collection efforts from previous regulatory efforts for the source category were consulted, including studies that were conducted for the 2002 proposals, the 2003 final actions, and the 2008 and 2011 proposals cited above.
There are other sources that are often used by the EPA in obtaining information for RTRs. Examples include the EPA's Enforcement and Compliance History Online (ECHO) database, the Reasonably Available Control Technology/Best Available Control Technology/Lowest Achievable Emission Rate Clearinghouse, and NESHAP for similar industries. However, these sources were not utilized for the review for the Mercury Cell Chlor-Alkali Plants NESHAP because (1) the mercury cell processes are primarily sources of fugitive emissions and are unique such that control measures and work practices from other industries would not be applicable, and (2) since there is only one operating facility, it was more practical to focus on the specifics of that single facility.
In this section, we describe the analyses performed to support the proposed decisions for the RTR and other issues addressed in this proposal.
As discussed in section II.A of this preamble and in the Benzene NESHAP, in evaluating and developing standards under CAA section 112(f)(2), we apply a two-step approach to determine whether or not risks are acceptable and to determine if the standards provide an ample margin of safety to protect public health. As explained in the Benzene NESHAP, “the first step judgment on acceptability cannot be reduced to any single factor” and, thus, “[t]he Administrator believes that the acceptability of risk under section 112 is best judged on the basis of a broad set of health risk measures and information.” (54 FR at 38046). Similarly, with regard to the ample margin of safety determination, “the Agency again considers all of the health risk and other health information considered in the first step. Beyond that information, additional factors relating to the appropriate level of control will also be considered, including cost and economic impacts of controls, technological feasibility, uncertainties, and any other relevant factors.”
The Benzene NESHAP approach provides flexibility regarding factors the EPA may consider in making determinations and how the EPA may weigh those factors for each source category. The EPA conducts a risk assessment that provides estimates of the MIR posed by emissions of HAP that are carcinogens from each source in the source category, the hazard index (HI) for chronic exposures to HAP with the potential to cause noncancer health effects, and the hazard quotient (HQ) for acute exposures to HAP with the potential to cause noncancer health effects.
The policy chosen by the Administrator permits consideration of multiple measures of health risk. Not only can the MIR figure be considered, but also incidence, the presence of non-cancer health effects, and the uncertainties of the risk estimates. In this way, the effect on the most exposed individuals can be reviewed as well as the impact on the general public. These factors can then be weighed in each individual case. This approach complies with the
The EPA notes that it has not considered certain health information to date in making residual risk determinations. At this time, we do not attempt to quantify the HAP risk that may be associated with emissions from other facilities that do not include the source category under review, mobile source emissions, natural source emissions, persistent environmental pollution, or atmospheric transformation in the vicinity of the sources in the category.
The EPA understands the potential importance of considering an individual's total exposure to HAP in addition to considering exposure to HAP emissions from the source category and facility. We recognize that such consideration may be particularly important when assessing noncancer risk, where pollutant-specific exposure health reference levels (
In response to the SAB recommendations, the EPA incorporates cumulative risk analyses into its RTR risk assessments. The Agency (1) conducts facility-wide assessments, which include source category emission points, as well as other emission points within the facilities; (2) combines exposures from multiple sources in the same category that could affect the same individuals; and (3) for some persistent and bioaccumulative pollutants, analyzes the ingestion route of exposure. In addition, the RTR risk assessments consider aggregate cancer risk from all carcinogens and aggregated noncancer HQs for all noncarcinogens affecting the same target organ or target organ system.
Although we are interested in placing source category and facility-wide HAP risk in the context of total HAP risk from all sources combined in the vicinity of each source, we are concerned about the uncertainties of doing so. Estimates of total HAP risk from emission sources other than those that we have studied in depth during this RTR review would have significantly greater associated uncertainties than the source category or facility-wide estimates. Such aggregate or cumulative assessments would compound those uncertainties, making the assessments too unreliable.
Our technology review primarily focuses on the identification and evaluation of developments in practices, processes, and control technologies that have occurred since the MACT standards were promulgated. Where we identify such developments, we analyze their technical feasibility, estimated costs, energy implications, and non-air environmental impacts. We also consider the emission reductions associated with applying each development. This analysis informs our decision of whether it is “necessary” to revise the emissions standards. In addition, we consider the appropriateness of applying controls to new sources versus retrofitting existing sources. For this exercise, we consider any of the following to be a “development”:
• Any add-on control technology or other equipment that was not identified and considered during development of the original MACT standards;
• Any improvements in add-on control technology or other equipment (that were identified and considered during development of the original MACT standards) that could result in additional emissions reduction;
• Any work practice or operational procedure that was not identified or considered during development of the original MACT standards;
• Any process change or pollution prevention alternative that could be broadly applied to the industry and that was not identified or considered during development of the original MACT standards; and
• Any significant changes in the cost (including cost effectiveness) of applying controls (including controls the EPA considered during the development of the original MACT standards).
In addition to reviewing the practices, processes, and control technologies that were considered at the time we originally developed the NESHAP, we review a variety of data sources in our investigation of potential practices, processes, or controls to consider. We also review the NESHAP and the available data to determine if there are any unregulated emissions of HAP within the source category and evaluate this data for use in developing new emission standards. See sections II.C and II.D of this preamble for information on the specific data sources that were reviewed as part of the technology review.
In this section, we provide a complete description of the types of analyses that we generally perform during the risk assessment process. In some cases, we do not perform a specific analysis because it is not relevant. For example, in the absence of emissions of HAP known to be persistent and bioaccumulative in the environment (PB-HAP), we would not perform a multipathway exposure assessment. Where we do not perform an analysis, we state that we do not and provide the reason. While we present all of our risk assessment methods, we only present risk assessment results for the analyses actually conducted (see section IV.B of this preamble).
The EPA conducts a risk assessment that provides estimates of the MIR for cancer posed by the HAP emissions
The HAP emissions from the single mercury cell chlor-alkali plant includes mercury and chlorine. Hydrochloric acid historically had been associated with these facilities, but based on recent reviews of available information and discussions with Westlake Chemical, we conclude that any HCl emissions from the remaining operating facility in West Virginia are due to non-source category emissions sources such as HCl production operations (
The available emissions data in the RTR emissions dataset include estimates of the mass of HAP emitted during a specified annual time period. These “actual” emission levels are often lower than the emission levels allowed under the requirements of the current MACT standards. The emissions allowed under the MACT standards are referred to as the “MACT-allowable” emissions. We discussed the consideration of both MACT-allowable and actual emissions in the final Coke Oven Batteries RTR (70 FR 19992, 19998 through 19999, April 15, 2005) and in the proposed and final Hazardous Organic NESHAP RTR (71 FR 34421, 34428, June 14, 2006, and 71 FR 76603, 76609, December 21, 2006, respectively). In those actions, we noted that assessing the risk at the MACT-allowable level is inherently reasonable since that risk reflects the maximum level facilities could emit and still comply with national emission standards. We also explained that it is reasonable to consider actual emissions, where such data are available, in both steps of the risk analysis, in accordance with the Benzene NESHAP approach. (54 FR 38044)
For the Mercury Cell Chlor-Alkali Plants source category, the EPA assumed actual emissions are equal to allowable emissions. Allowable emissions are the estimated emissions that would occur under normal full-capacity operating conditions and as allowed under the applicable MACT standards. There is no available data that suggests the facility is operating at less than full capacity. There is also no evidence that the facility is controlling point source emissions to a degree greater than the emission limitations or that they are performing practices in excess of the required work practices for the control of fugitive emissions. This means that they are not reducing emissions beyond the levels required by the MACT standards which would result in actual emissions being less than allowable emissions. In addition, a review of ECHO indicates no enforcement actions for violations of the title V operating limits over the last 5 years, which would result in actual emissions being greater than allowable. Therefore, we are comfortable with the assumption that actual emissions are equal to the allowable emissions.
Both long-term and short-term inhalation exposure concentrations and health risk from the source category addressed in this proposal were estimated using the Human Exposure Model (HEM-3).
The air dispersion model AERMOD, used by the HEM-3 model, is one of the EPA's preferred models for assessing air pollutant concentrations from industrial facilities.
In developing the risk assessment for chronic exposures, we use the estimated annual average ambient air concentrations of each HAP emitted by each source in the source category. The HAP air concentrations at each nearby census block centroid located within 50 km of the facility are a surrogate for the chronic inhalation exposure concentration for all the people who reside in that census block. A distance of 50 km is consistent with both the analysis supporting the 1989 Benzene NESHAP (54 FR 38044) and the limitations of Gaussian dispersion models, including AERMOD.
For each facility, we calculate the MIR as the cancer risk associated with a continuous lifetime (24 hours per day, 7 days per week, 52 weeks per year, 70 years) exposure to the maximum concentration at the centroid of each inhabited census block. We calculate individual cancer risk by multiplying the estimated lifetime exposure to the ambient concentration of each HAP (in micrograms per cubic meter (μg/m
To estimate individual lifetime cancer risks associated with exposure to HAP emissions from each facility in the source category, we sum the risks for each of the carcinogenic HAP
To assess the risk of noncancer health effects from chronic exposure to HAP, we calculate either an HQ or a target organ-specific hazard index (TOSHI). We calculate an HQ when a single noncancer HAP is emitted. Where more than one noncancer HAP is emitted, we sum the HQ for each of the HAP that affects a common target organ or target organ system to obtain a TOSHI. The HQ is the estimated exposure divided by the chronic noncancer dose-response value, which is a value selected from one of several sources. The preferred chronic noncancer dose-response value is the EPA RfC, defined as “an estimate (with uncertainty spanning perhaps an order of magnitude) of a continuous inhalation exposure to the human population (including sensitive subgroups) that is likely to be without an appreciable risk of deleterious effects during a lifetime” (
For each HAP for which appropriate acute inhalation dose-response values are available, the EPA also assesses the potential health risks due to acute exposure. For these assessments, the EPA makes conservative assumptions about emission rates, meteorology, and exposure location. As part of our efforts to continually improve our methodologies to evaluate the risks that HAP emitted from categories of industrial sources pose to human health and the environment,
To assess the potential acute risk to the maximally exposed individual, we use the peak hourly emission rate for each emission point,
To characterize the potential health risks associated with estimated acute inhalation exposures to a HAP, we generally use multiple acute dose-response values, including acute RELs, acute exposure guideline levels (AEGLs), and emergency response planning guidelines (ERPG) for 1-hour exposure durations, if available, to calculate acute HQs. The acute HQ is calculated by dividing the estimated acute exposure concentration by the acute dose-response value. For each HAP for which acute dose-response values are available, the EPA calculates acute HQs.
An acute REL is defined as “the concentration level at or below which no adverse health effects are anticipated for a specified exposure duration.”
ERPGs are “developed for emergency planning and are intended as health-based guideline concentrations for single exposures to chemicals.”
An acute REL for 1-hour exposure durations is typically lower than its corresponding AEGL-1 and ERPG-1. Even though their definitions are slightly different, AEGL-1s are often the same as the corresponding ERPG-1s, and AEGL-2s are often equal to ERPG-2s. The maximum HQs from our acute inhalation screening risk assessment typically result when we use the acute REL for a HAP. In cases where the maximum acute HQ exceeds 1, we also report the HQ based on the next highest acute dose-response value (usually the AEGL-1 and/or the ERPG-1).
For this source category, we used a default acute emissions multiplier of 10 as we have no information to suggest another factor to account for variability in hourly emissions data is more appropriate.
In our acute inhalation screening risk assessment, acute impacts are deemed negligible for HAP for which acute HQs are less than or equal to 1, and no further analysis is performed for these HAP. In cases where an acute HQ from the screening step is greater than 1, we assess the site-specific data to ensure that the acute HQ is at an off-site location. For this source category, the data refinements employed consisted of estimating the highest HQ that might occur outside facility boundaries with the use of satellite imagery of the facility with receptor locations. These refinements are discussed more fully in the
The EPA conducts a tiered screening assessment examining the potential for significant human health risks due to exposures via routes other than inhalation (
For the Mercury Cell Chlor-Alkali Plant source category, mercury emissions were the only PB-HAP emitted by the source category, so we
We derive the Tier 1 screening threshold emission rates for these PB-HAP (other than lead compounds) to correspond to a maximum excess lifetime cancer risk of 1-in-1 million (
In the Tier 2 screening assessment, the location of each facility that exceeds a Tier 1 screening threshold emission rate is used to refine the assumptions associated with the Tier 1 fisher and farmer exposure scenarios at that facility. A key assumption in the Tier 1 screening assessment is that a lake and/or farm is located near the facility. As part of the Tier 2 screening assessment, we use a U.S. Geological Survey (USGS) database to identify actual waterbodies within 50 km of each facility and assume the fisher only consumes fish from lakes within that 50 km zone. We also examine the differences between local meteorology near the facility and the meteorology used in the Tier 1 screening assessment. We then adjust the previously-developed Tier 1 screening threshold emission rates for each PB-HAP for each facility based on an understanding of how exposure concentrations estimated for the screening scenario change with the use of local meteorology and the USGS lakes database.
In the Tier 2 farmer scenario, we maintain an assumption that the farm is located within 0.5 km of the facility and that the farmer consumes meat, eggs, dairy, vegetables, and fruit produced near the facility. We may further refine the Tier 2 screening analysis by assessing a gardener scenario to characterize a range of exposures, with the gardener scenario being more plausible in RTR evaluations. Under the gardener scenario, we assume the gardener consumes home-produced eggs, vegetables, and fruit products at the same ingestion rate as the farmer. The Tier 2 screen continues to rely on the high-end food intake assumptions that were applied in Tier 1 for local fish (adult female angler at 99th percentile fish consumption
Agency, Washington, DC, EPA/600/R-09/052F, 2011.
There are several analyses that can be included in a Tier 3 screening assessment, depending upon the extent of refinement warranted, including validating that the lakes are fishable, locating residential/garden locations for urban and/or rural settings, considering plume-rise to estimate emissions lost above the mixing layer, and considering hourly effects of meteorology and plume-rise on chemical fate and transport (a time-series analysis). If necessary, the EPA may further refine the screening assessment through a site-specific assessment.
For further information on the multipathway assessment approach, see the
The EPA conducts a screening assessment to examine the potential for an adverse environmental effect as required under section 112(f)(2)(A) of the CAA. Section 112(a)(7) of the CAA defines “adverse environmental effect” as “any significant and widespread adverse effect, which may reasonably be anticipated, to wildlife, aquatic life, or other natural resources, including adverse impacts on populations of endangered or threatened species or significant degradation of environmental quality over broad areas.”
The EPA focuses on eight HAP, which are referred to as “environmental HAP,” in its screening assessment: Six PB-HAP and two acid gases. The PB-HAP included in the screening assessment are arsenic compounds, cadmium compounds, dioxins/furans, POM, mercury (both inorganic mercury and methyl mercury), and lead compounds. The acid gases included in the screening assessment are HCl and hydrogen fluoride (HF).
HAP that persist and bioaccumulate are of particular environmental concern because they accumulate in the soil, sediment, and water. The acid gases, HCl and HF, are included due to their well-documented potential to cause direct damage to terrestrial plants. In the environmental risk screening assessment, we evaluate the following four exposure media: Terrestrial soils, surface water bodies (includes water-
An ecological benchmark represents a concentration of HAP that has been linked to a particular environmental effect level. For each environmental HAP, we identified the available ecological benchmarks for each assessment endpoint. We identified, where possible, ecological benchmarks at the following effect levels: Probable effect levels, lowest-observed-adverse-effect level, and no-observed-adverse-effect level. In cases where multiple effect levels were available for a particular PB-HAP and assessment endpoint, we use all of the available effect levels to help us to determine whether ecological risks exist and, if so, whether the risks could be considered significant and widespread.
For further information on how the environmental risk screening assessment was conducted, including a discussion of the risk metrics used, how the environmental HAP were identified, and how the ecological benchmarks were selected, see Appendix 9 of the
For the environmental risk screening assessment, the EPA first determined whether any facilities in the Mercury Cell Chlor-Alkali Plant source category emitted any of the environmental HAP. For the Mercury Cell Chlor-Alkali Plant source category, we identified emissions of mercury and HCl. Because one or more of the environmental HAP evaluated are emitted by at least one facility in the source category, we proceeded to the second step of the evaluation.
The environmental screening assessment includes six PB-HAP, arsenic compounds, cadmium compounds, dioxins/furans, POM, mercury (both inorganic mercury and methyl mercury), and lead compounds. With the exception of lead, the environmental risk screening assessment for PB-HAP consists of three tiers. The first tier of the environmental risk screening assessment uses the same health-protective conceptual model that is used for the Tier 1 human health screening assessment. TRIM.FaTE model simulations were used to back-calculate Tier 1 screening threshold emission rates. The screening threshold emission rates represent the emission rate in tons of pollutant per year that results in media concentrations at the facility that equal the relevant ecological benchmark. To assess emissions from each facility in the category, the reported emission rate for each PB-HAP was compared to the Tier 1 screening threshold emission rate for that PB-HAP for each assessment endpoint and effect level. If emissions from a facility do not exceed the Tier 1 screening threshold emission rate, the facility “passes” the screening assessment, and, therefore, is not evaluated further under the screening approach. If emissions from a facility exceed the Tier 1 screening threshold emission rate, we evaluate the facility further in Tier 2.
In Tier 2 of the environmental screening assessment, the screening threshold emission rates are adjusted to account for local meteorology and the actual location of lakes in the vicinity of facilities that did not pass the Tier 1 screening assessment. For soils, we evaluate the average soil concentration for all soil parcels within a 7.5-km radius for each facility and PB-HAP. For the water, sediment, and fish tissue concentrations, the highest value for each facility for each pollutant is used. If emission concentrations from a facility do not exceed the Tier 2 screening threshold emission rate, the facility “passes” the screening assessment and typically is not evaluated further. If emissions from a facility exceed the Tier 2 screening threshold emission rate, we evaluate the facility further in Tier 3.
As in the multipathway human health risk assessment, in Tier 3 of the environmental screening assessment, we examine the suitability of the lakes around the facilities to support life and remove those that are not suitable (
To evaluate the potential for an adverse environmental effect from lead, we compared the average modeled air concentrations (from HEM-3) of lead around each facility in the source category to the level of the secondary National Ambient Air Quality Standards (NAAQS) for lead. The secondary lead NAAQS is a reasonable means of evaluating environmental risk because it is set to provide substantial protection against adverse welfare effects which can include “effects on soils, water, crops, vegetation, man-made materials, animals, wildlife, weather, visibility and climate, damage to and deterioration of property, and hazards to transportation, as well as effects on economic values and on personal comfort and well-being.”
The environmental screening assessment for acid gases evaluates the potential phytotoxicity and reduced productivity of plants due to chronic exposure to HF and HCl. The environmental risk screening methodology for acid gases is a single-tier screening assessment that compares modeled ambient air concentrations (from AERMOD) to the ecological benchmarks for each acid gas. To identify a potential adverse environmental effect (as defined in section 112(a)(7) of the CAA) from emissions of HF and HCl, we evaluate the following metrics: The size of the modeled area around each facility that exceeds the ecological benchmark for each acid gas, in acres and square kilometers; the percentage of the modeled area around each facility that exceeds the ecological benchmark for each acid gas; and the area-weighted average SV around each facility (calculated by dividing the area-weighted average concentration over the 50-km modeling domain by the ecological benchmark for each acid gas). For further information on the environmental screening assessment approach, see Appendix 9 of the
To put the source category risks in context, we typically examine the risks
For this source category, we conducted the facility-wide assessment using a dataset compiled from the 2014 NEI. The source category records of that NEI dataset were removed, evaluated, and updated as described in section II.C of this preamble. Once a quality assured source category dataset was available, it was placed back with the remaining records from the NEI for that facility. The facility-wide file was then used to analyze risks due to the inhalation of HAP that are emitted “facility-wide” for the populations residing within 50 km of each facility, consistent with the methods used for the source category analysis described above. For these facility-wide risk analyses, the modeled source category risks were compared to the facility-wide risks to determine the portion of the facility-wide risks that could be attributed to the source category addressed in this proposal. We also specifically examined the facility that was associated with the highest estimate of risk and determined the percentage of that risk attributable to the source category of interest. The
For this source category, we conducted the facility-wide assessment using a dataset that the EPA compiled from the 2017 NEI. We used the NEI data for the facility and did not adjust any category or “non-category” data. Therefore, there could be differences in the dataset from that used for the source category assessments described in this preamble. We analyzed risks due to the inhalation of HAP that are emitted “facility-wide” for the populations residing within 50 km of each facility, consistent with the methods used for the source category analysis described above. For these facility-wide risk analyses, we made a reasonable attempt to identify the source category risks, and these risks were compared to the facility-wide risks to determine the portion of facility-wide risks that could be attributed to the source category addressed in this proposal. We also specifically examined the facility that was associated with the highest estimate of risk and determined the percentage of that risk attributable to the source category of interest. The
Uncertainty and the potential for bias are inherent in all risk assessments, including those performed for this proposal. Although uncertainty exists, we believe that our approach, which used conservative tools and assumptions, ensures that our decisions are health and environmentally protective. A brief discussion of the uncertainties in the RTR emissions dataset, dispersion modeling, inhalation exposure estimates, and dose-response relationships follows below. Also included are those uncertainties specific to our acute screening assessments, multipathway screening assessments, and our environmental risk screening assessments. A more thorough discussion of these uncertainties is included in the
Although the development of the RTR emissions dataset involved quality assurance/quality control processes, the accuracy of emissions values will vary depending on the source of the data, the degree to which data are incomplete or missing, the degree to which assumptions made to complete the datasets are accurate, errors in emission estimates, and other factors. The emission estimates considered in this analysis generally are annual totals for certain years, and they do not reflect short-term fluctuations during the course of a year or variations from year to year. The estimates of peak hourly emission rates for the acute effects screening assessment were based on an emission adjustment factor applied to the average annual hourly emission rates, which are intended to account for emission fluctuations due to normal facility operations.
We recognize there is uncertainty in ambient concentration estimates associated with any model, including the EPA's recommended regulatory dispersion model, AERMOD. In using a model to estimate ambient pollutant concentrations, the user chooses certain options to apply. For RTR assessments, we select some model options that have the potential to overestimate ambient air concentrations (
Although every effort is made to identify all of the relevant facilities and emission points, as well as to develop accurate estimates of the annual emission rates for all relevant HAP, the uncertainties in our emission inventory likely dominate the uncertainties in the exposure assessment. Some uncertainties in our exposure assessment include human mobility, using the centroid of each census block, assuming lifetime exposure, and assuming only outdoor exposures. For most of these factors, there is neither an under nor overestimate when looking at the maximum individual risk or the incidence, but the shape of the distribution of risks may be affected. With respect to outdoor exposures, actual exposures may not be as high if people spend time indoors, especially
There are uncertainties inherent in the development of the dose-response values used in our risk assessments for cancer effects from chronic exposures and noncancer effects from both chronic and acute exposures. Some uncertainties are generally expressed quantitatively, and others are generally expressed in qualitative terms. We note, as a preface to this discussion, a point on dose-response uncertainty that is stated in the EPA's
Cancer UREs used in our risk assessments are those that have been developed to generally provide an upper bound estimate of risk.
Many of the UFs used to account for variability and uncertainty in the development of acute dose-response values are quite similar to those developed for chronic durations. Additional adjustments are often applied to account for uncertainty in extrapolation from observations at one exposure duration (
Uncertainty also exists in the selection of ecological benchmarks for the environmental risk screening assessment. We established a hierarchy of preferred benchmark sources to allow selection of benchmarks for each environmental HAP at each ecological assessment endpoint. We searched for benchmarks for three effect levels (
For a group of compounds that are unspeciated (
In addition to the uncertainties highlighted above, there are several factors specific to the acute exposure assessment that the EPA conducts as part of the risk review under section 112 of the CAA. The accuracy of an acute inhalation exposure assessment depends on the simultaneous occurrence of independent factors that may vary greatly, such as hourly emissions rates, meteorology, and the presence of a person. In the acute screening assessment that we conduct under the RTR program, we assume that peak emissions from the source category and reasonable worst-case air dispersion conditions (
For each source category, we generally rely on site-specific levels of PB-HAP or environmental HAP emissions to determine whether a refined assessment of the impacts from multipathway exposures is necessary or whether it is necessary to perform an environmental screening assessment. This determination is based on the results of a three-tiered screening assessment that relies on the outputs from models—TRIM.FaTE and AERMOD—that estimate environmental pollutant concentrations and human exposures for five PB-HAP (dioxins, POM, mercury, cadmium, and arsenic) and two acid gases (HF and HCl). For lead, we use AERMOD to determine ambient air concentrations, which are then compared to the secondary NAAQS standard for lead. Two important types of uncertainty associated with the use of these models in RTR risk assessments and inherent to any assessment that relies on environmental modeling are model uncertainty and input uncertainty.
Model uncertainty concerns whether the model adequately represents the actual processes (
Input uncertainty is concerned with how accurately the models have been configured and parameterized for the assessment at hand. For Tier 1 of the multipathway and environmental screening assessments, we configured the models to avoid underestimating exposure and risk. This was accomplished by selecting upper-end values from nationally representative datasets for the more influential parameters in the environmental model, including selection and spatial configuration of the area of interest, lake location and size, meteorology, surface water, soil characteristics, and structure of the aquatic food web. We also assume an ingestion exposure scenario and values for human exposure factors that represent reasonable maximum exposures.
In Tier 2 of the multipathway and environmental screening assessments, we refine the model inputs to account for meteorological patterns in the vicinity of the facility versus using upper-end national values, and we identify the actual location of lakes near the facility rather than the default lake location that we apply in Tier 1. By refining the screening approach in Tier 2 to account for local geographical and meteorological data, we decrease the likelihood that concentrations in environmental media are overestimated, thereby increasing the usefulness of the screening assessment. In Tier 3 of the screening assessments, we refine the model inputs again to account for hour-by-hour plume-rise and the height of the mixing layer. We can also use those hour-by-hour meteorological data in a TRIM.FaTE run using the screening configuration corresponding to the lake location. These refinements produce a more accurate estimate of chemical concentrations in the media of interest, thereby reducing the uncertainty with those estimates. The assumptions and the associated uncertainties regarding the selected ingestion exposure scenario are the same for all three tiers.
For the environmental screening assessment for acid gases, we employ a single-tiered approach. We use the modeled air concentrations and compare those with ecological benchmarks.
For all tiers of the multipathway and environmental screening assessments, our approach to addressing model input uncertainty is generally cautious. We choose model inputs from the upper end of the range of possible values for the influential parameters used in the models, and we assume that the exposed individual exhibits ingestion behavior that would lead to a high total exposure. This approach reduces the likelihood of not identifying high risks for adverse impacts.
Despite the uncertainties, when individual pollutants or facilities do not exceed screening threshold emission rates (
The EPA evaluates the following HAP in the multipathway and/or environmental risk screening assessments, where applicable: Arsenic, cadmium, dioxins/furans, lead, mercury (both inorganic and methyl mercury), POM, HCl, and HF. These HAP represent pollutants that can cause adverse impacts either through direct exposure to HAP in the air or through exposure to HAP that are deposited from the air onto soils and surface waters and then through the environment into the food web. These HAP represent those HAP for which we can conduct a meaningful multipathway or environmental screening risk assessment. For other HAP not included in our screening assessments, the model has not been parameterized such that it can be used for that purpose. In some cases, depending on the HAP, we may not have appropriate multipathway models that allow us to predict the concentration of that pollutant. The EPA acknowledges that other HAP beyond these that we are evaluating may have the potential to cause adverse effects and, therefore, the EPA may evaluate other relevant HAP in the future, as modeling science and resources allow.
In addition to mercury, based on the NEI, the Westlake, West Virginia, mercury cell chlor-alkali facility emits an estimated 0.24 tpy fugitive emissions of chlorine from the mercury cell chlor-alkali production facility affected source. Chlorine is not emitted from mercury thermal recovery units and furthermore, the facility does not have a mercury thermal recovery unit at the site. In the 2003 final rule, the EPA made the decision not to regulate chlorine and HCl in the Mercury Cell Chlor-Alkali Plant NESHAP based on the authority under section 112(d)(4) of the CAA. Specifically, the EPA based this decision on the “determination that no further control is necessary because chlorine and HCl are “health threshold pollutants,” and chlorine and HCl levels emitted from chlorine production processes are below their threshold values within an ample margin of safety.” (68 FR 70906, December 19, 2003).
However, the EPA has determined that it must now propose standards for all HAP emissions from the source category, including emissions of chlorine, pursuant to CAA section 112(d)(2) and (3).
Fugitive chlorine emissions occur from equipment leaks in the cell room and throughout the other parts of the mercury cell chlor-alkali production facility affected source that handle and process the chlorine gas produced. As stated previously, mercury recovery units are not sources of chlorine emissions.
Section 112 of the CAA generally directs that standards be specified as numerical emission standards, if possible. However, if it is determined that it is not feasible to prescribe or enforce a numerical emission standard, CAA section 112(h) indicates that a design, equipment, work practice, or operational standard may be specified, provided the criteria of CAA section 112(h)(2) are met. Those criteria define “not feasible to prescribe or enforce an emission standard” to mean any situation in which the EPA determines that: (1) A HAP or pollutants cannot be emitted through a conveyance designed and constructed to emit or capture such pollutant, or that any requirement for, or use of, such a conveyance would be inconsistent with any federal, state, or local law, or (2) the application of measurement methodology to a particular class of sources is not practicable due to technological and economic reasons. Most fugitive chlorine emission sources at mercury cell chlor-alkali plants are associated with cell rooms. Potential fugitive chlorine emissions are also located in the chlorine processing area. For both the cell room and the chlorine processing area, the fugitive chlorine emissions are primarily due to equipment leaks. Due to the nature of equipment leaks (
There are many incentives for the identification and correction of chlorine leaks and to reduce fugitive chlorine emissions throughout the mecury cell chlor-alkali plant. First, chlorine is a primary product of the process, so lost chlorine equals lost product and lost profit. Second, chlorine, particularly “wet” chlorine, is very corrosive to process equipment. Therefore, prompt repair of chlorine leaks reduces damange to process equipment. These corrosive properties also mean that small leaks can quickly become large leaks, which could result in chlorine releases that are dangerous to plant workers and the surrounding community. For these reasons, the Westlake, West Virginia, facility has a program in place to identify and repair fugitive chlorine leaks across the plant. Specifically, Westlake operators perform inspections during each shift to identify leaks of chlorine. Therefore, leaks are detected and corrective actions implemented to minimize and reduce any fugitive chlorine emissions. Based on available information, we understand that the method Westlake uses to identify leaks of chlorine from each piece of equipment is olfactory observations of chlorine gas. If leaks are detected using the olfactory method, the facility takes immediate actions to fix the identified leaks. Furthermore, Westlake has chlorine sensors installed and operated throughout the relevant process units. If one of these sensors measures a chlorine concentration of 2 parts per million by volume (ppmv) or greater, the facility takes action to identify and fix leaks. Since there is only one currently operating mercury cell chlor-alkali plant in the country, the MACT floor for existing sources is represented by the practices in place at the Westlake facility to reduce chlorine fugitive emissions.
As noted above, it is technologically and economically impractical to collect the emissions from every potential leak source at a facility and route them to a control device. The cell room building is generally under negative pressure and the air is routed through the roof vents. As a beyond-the-floor option for fugitive chlorine emissions, we considered requiring the air from the roof vents to be routed to a scrubber or other control device. However, the volume of the air flow from the Westlake cell room is over 700 million cubic feet per day, or almost 500,000 cubic feet per minute. It would be technically infeasible for any control device to handle this volume of gas throughput. Therefore, we rejected this beyond-the-floor option.
Therefore, we are proposing the MACT floor level of control which represents the procedures in place at the Westlake, West Virginia, site. We developed the work practices in the proposed amendments to reflect these procedures, along with associated recordkeeping and reporting requirements to demonstrate compliance. Specifically, we are proposing that facilities must identify and inspect each piece of equipment that contains chlorine gas with a concentration of at least 5 percent chlorine by volume throughout the mercury cell chlor-alkali production facility affected source for leaks at least once each 12 hours. We are requesting comment on whether the 5 percent by volume threshold for defining equipment that must be inspected for chlorine leaks is the appropriate threshold for identifying equipment with the potential to generate fugitive emissions of chlorine gas. Equipment that is under negative pressure would be excluded from this requirement. The method that we are proposing to identify leaks of chlorine from each piece of equipment is olfactory observations of chlorine gas. However, we solicit comments regarding other methods (
When a leak is detected, we are proposing that a first attempt at repair be conducted within 1 hour of detection and that the leak be repaired within 1 day of detection. We are proposing that a leak is repaired when the evidence of the olfactory observation is eliminated.
Additionally, we are proposing that chlorine sensors be installed and operated continuously (at least one measure every 15 minutes) throughout the affected source. Each time one of these sensors measures a chlorine concentration of 2 ppmv or greater, the proposed rule would require a complete inspection for leaks of all equipment containing 5 percent chlorine by volume within 1 hour of detection. The chlorine sensors that the facility uses must have a detection limit of 2 ppm or less. Furthermore, we propose the sensor must be calibrated and maintained following the manufacturer's recommendations.
We are requesting comment on several aspects of the proposed requirements related to the use of chlorine sensors to identify leaks that may occur between the 12-hour regular inspections. First, we are requesting comment on where these ambient sensors should be located to ensure that chlorine emissions are detected by the ambient monitors. The proposed rule requires that they be placed throughout the mercury cell chlor-alkali manufacturing facility affected source, which includes “all cell rooms and ancillary operations used in the manufacture of product chlorine, product caustic, and by-product hydrogen.” We are requesting comment whether the rule should specify areas of the facility where sensors should be located and whether it should specify a
The proposed rule would require that initial attempts at corrective actions of leaks be taken within 1 hour of detection, and the leak be repaired within 1 day of the date of detection. Records would be required to document the equipment containing more than 5 percent by volume of chlorine and the dates and times the inspections occurred. For each leak identified, records would also be required identifying the piece of equipment with the leak, the date and time it was identified, the date and time a first attempt to repair the leak was performed, the date and time the leak was stopped and repaired, and a description of the repair made to stop the leak. Records would also be required of any deviation from these work practices. Also, the number of leaks found and repaired during the reporting timeframe and any deviations from the work practices would be included in the periodic report.
In early 2004, the EPA received a petition for reconsideration pursuant to CAA section 307(d)(7)(B) and a petition for judicial review under CAA section 307(b)(1) from the NRDC regarding the 2003 Mercury Cell Chlor-Alkali MACT standards. In the petition for reconsideration, NRDC claimed that the EPA failed to conduct the required beyond-the-floor analysis under CAA section 112(d)(2) regarding whether to prohibit mercury emissions from existing sources, as the rule did for new and reconstructed sources. In a letter dated April 8, 2004, the EPA informed NRDC that it had granted the petition for reconsideration and would respond to NRDC's petition in a subsequent notice of proposed rulemaking. On July 20, 2004, the court put the litigation into abeyance and directed the EPA to file periodic status reports.
In 2006 and 2007, the EPA conducted a testing program to measure fugitive mercury emissions at two selected facilities to inform the reconsideration. The EPA provided final reports regarding the results of the study to NRDC as required by a joint stipulation filed in the litigation. Both of the studied facilities are no longer operational. On June 11, 2008 (73 FR 33258), the EPA published a proposed rule that provided the EPA's proposed response to the petition for reconsideration, which would require facilities to install and operate a continuous mercury monitoring system in the “upper portions of the cell room” and continue to perform the work practice standards (with reduced recordkeeping and reporting requirements and no floor-level monitoring). The EPA received comments from Oceana, PPG Industries, the Chlorine Institute, Olin Chlor-alkali Products, and an anonymous submittal.
Subsequently, in 2011, the EPA published a new proposed rulemaking in response to the petition for reconsideration (76 FR 13852, March 14, 2011). The new proposed rule contained two options that the EPA was considering. The first option was to require remaining existing facilities to convert to a non-mercury technology to produce chlorine as a beyond-the-floor measure under CAA section 112(d)(2). The second option included the combination of the continuous cell room monitoring program and work practice program originally proposed in 2008 as a beyond-the-floor measure. Like for the 2008 proposed rule, the EPA received a number of comments from various stakeholders both for and against the 2011 proposed rulemaking. All of the EPA's technical analyses for the proposed rulemakings, public comments, and other supporting information regarding the 2008 and 2011 proposals are available in the docket for the proposals (Docket ID No. EPA-HQ-OAR-2002-0017). No final action has been taken on the 2008 or 2011 proposals, or to respond to the petition for reconsideration, and the litigation concerning the 2003 NESHAP remains in abeyance with the EPA still subject to the court's order to file periodic status reports.
In conjunction with this proposed RTR action under CAA sections 112(d)(6) and 112(f)(2), the EPA, pursuant to CAA sections 112(d)(2) and (3), re-evaluated whether a beyond-the-floor requirement that facilities must convert to a non-mercury technology within 3 years would still be appropriate based on updated analyses compared to those supporting the 2011 proposal. In 2011 there were four such facilities still in operation. Two of these facilities were the subject of the EPA's studies of fugitive mercury emissions over 2006 and 2007, and they have since shut down. As described above, only one operating facility remains in the U.S. that uses the mercury cell process to produce chlorine. Based on our updated analysis, contained in the docket for this proposed rule, we estimate the capital costs would be about $69 million for the one remaining facility to convert to a non-mercury process. However, there would be savings over time due to the elimination of compliance costs associated with mercury and the higher efficiency and energy savings of switching to the membrane technology. The estimated annual costs, after accounting for the expected savings, are $2.8 million per year for the one remaining mercury cell facility. Based on reported mercury emissions, the cost effectiveness of the conversion is estimated to be $22,000 per pound of mercury emissions eliminated. However, we also note that the cost-effectiveness estimate is uncertain because, first, mercury emissions are based on calculations and assumptions regarding the facility's emissions (no test data are available for this facility), and second, because there are uncertainties with the cost estimates from the 2011 proposal as being transferable to the remaining facility. In the 2011 proposal, the estimated cost effectiveness was $20,000 per pound for the industry (see 76 FR 13852, March 14, 2011), but this was substantially based on the studies conducted for the two no longer operating sources.
Based on consideration of the updated costs and cost effectiveness and uncertainties, and given the passage of time, and the fact that the cost-effectiveness data and analysis done in 2011 were based on two facilities that are no longer operating, we question whether those 2011 analyses would still be transferable to the one remaining operating facility. Consequently, we are not proposing in this action to require the elimination of mercury as a beyond-
As described above, for the Mercury Cell Chlor-Alkali Plant source category, we conducted an inhalation risk assessment for all HAP emitted, a multipathway screening assessment for the PB-HAP emitted, and an environmental risk screening assessment for the PB-HAP emitted from the source category. When we initiated this RTR and developed the risk input files, there were two facilities operating in the source category (Ashta in Ohio and Westlake in West Virginia); however, as noted above, Ashta has since permanently shut down the mercury cell process. We also conducted an environmental screening for HCl, because we initially had some HCl emissions in our data set, but as described above, after further review, we conclude those HCl emissions are due to non-category sources. We present results of the risk assessment briefly below and in more detail in the
The EPA estimated inhalation risk is based on actual and allowable emissions. The estimated baseline MIR posed by the source category is less than 1-in-1 million based on actual emissions and MACT-allowable emissions. The total estimated cancer incidence based on actual or allowable emission levels is 0.0000003 excess cancer cases per year, or one case every 3 million years. Emissions of 1,3-dichloropropene from the mercury cell building at Ashta accounted for 100 percent of the cancer incidence. No one is exposed to cancer risk greater than or equal to 1-in-1 million based upon actual and allowable emissions (see Table 1 of this preamble). However, based on the available data, the 1,3-dichloropropene was only emitted from Ashta, which is no longer operating as a mercury cell facility, as discussed above. Furthermore, we have no indication or data suggesting that this pollutant is emitted from the one remaining facility.
The maximum chronic noncancer TOSHI values for the source category were estimated to be less than 1 (0.05) based on actual and allowable emissions. For both actual and allowable emissions, respiratory risks were driven by chlorine emissions from the mercury cell building.
Based on our refined screening analysis of reasonable worst-case acute exposure to actual emissions from the category, both facilities exceeded an HQ of 1 (the HQ was 2) when compared to the 1-hour REL for mercury (elemental). As discussed in section III.C.3.c of this preamble, we used an acute hourly multiplier of 10 for all emission processes. For this HAP, there are no AEGL-1 or ERPG-1 values for comparison, but AEGL-2 or ERPG-2 values are available. For elemental mercury, when the maximum off-site concentration is compared with the AEGL-2 and ERPG-2, the maximum acute noncancer HQ is well below 1 (0.0007).
PB-HAP emissions (based on estimates of actual emissions) were reported from both facilities in the source category with both exceeding the Tier 1 non-cancer screening threshold emission rate for mercury. A Tier 2 screening analysis was conducted with no facilities having an SV greater than 1 for any scenario (the fisher and farmer had the highest SV at 0.4). There are no carcinogenic PB-HAP emitted from the source category. So, there are no cancer SVs to report. Further details on the Tier 2 screening analysis can be found in the
An SV in any of the tiers is not an estimate of the cancer risk or a noncancer HQ. Rather, an SV represents a high-end estimate of what the risk or HQ may be. For example, facility emissions resulting in an SV of 2 for a non-carcinogen can be interpreted to mean that we are confident that the HQ would be lower than 2. Similarly, facility emissions resulting in a cancer SV of 20 for a carcinogen means that we are confident that the cancer risk is lower than 20-in-1 million. Our confidence comes from the health-protective assumptions that are incorporated into the screens: we choose inputs from the upper end of the range of possible values for the influential parameters used in the screens, and we assume food consumption behaviors that would lead to high total exposure. This risk assessment estimates the maximum hazard for mercury through fish consumption based on upper bound screens. As discussed above, the maximum mercury Tier 2 noncancer SV based upon the fisher scenario resulted in an SV less than 1.
As described in section III.A of this preamble, we conducted an environmental risk screening assessment for the Mercury Cell Chlor-Alkali Plant source category for the following pollutants: HCl and mercury (methyl mercury and mercuric chloride). However, as noted above, we subsequently determined that the HCl emissions are due to non-category sources such as co-located HCl production.
In the Tier 1 screening analysis, methyl mercury and divalent mercury resulted in exceedances of ecological benchmarks by two facilities. Divalent mercury emissions had Tier 1 exceedances for the following benchmarks: Surface soil threshold level—invertebrate communities by a maximum SV of 4. Methyl mercury had Tier 1 exceedances for the following benchmarks: No Observed Adverse Effect Level (NOAEL)—avian ground insectivores (woodcock) by a maximum SV of 6.
A Tier 2 screening analysis was performed for divalent mercury and methyl mercury. In the Tier 2 screening analysis, divalent mercury emissions had no Tier 2 exceedances. Methyl mercury had Tier 2 exceedances for one facility exceeding the following benchmark: Surface soil NOAEL for avian ground insectivores (woodcock) by a maximum SV of 2 with 0.1 percent of the soil area being above an SV of 2.
For HCl, only one facility reported emissions. The average modeled concentration around this facility (
The EPA estimated inhalation risk based on facility-wide emissions to be 0.3-in-1 million, with an 0.0001 excess cancer cases per year, or one case every 10,000 years. Emissions of metals (arsenic, chromium VI, and nickel) from non-category sources account for 100 percent of the cancer incidence. No one is exposed to cancer risk greater than or equal to 1-in-1 million (see Table 1 of this preamble). The maximum chronic noncancer TOSHI value for the source category was the same for both actual emissions and allowable emissions with an HI less than 1 (0.05) for respiratory risks driven by chlorine emissions from the mercury cell building.
To examine the potential for any environmental justice issues that might be associated with the source category, we performed a demographic analysis, which is an assessment of risks to individual demographic groups of the populations living within 5 km and within 50 km of the facilities. In the analysis, we evaluated the distribution of HAP-related cancer and noncancer risks from the mercury cell chlor-alkali plant source category across different demographic groups within the populations living near the two facilities.
Results of the demographic analysis indicate that, for three of the 11 demographic groups, age greater than or equal to 65, age greater than or equal to 25 years of age without a high school diploma, and people below the poverty level, the percentage of the population living within 5 km of facilities in the source category is greater than the corresponding national percentage for the same demographic groups. When examining the risk levels of those exposed to emissions from mercury cell chlor-alkali plant facilities, we find that no one is exposed to a cancer risk at or above 1-in-1 million or to a chronic noncancer TOSHI greater than 1.
The methodology and the results of the demographic analysis are presented in a technical report,
As explained in section II.A of this preamble, the EPA sets standards under CAA section 112(f)(2) using “a two-step standard-setting approach, with an analytical first step to determine an `acceptable risk' that considers all health information, including risk estimation uncertainty, and includes a presumptive limit on MIR of approximately 1-in-10 thousand” (54 FR 38045, September 14, 1989). The EPA weighed all health risk measures and information, including science policy assumptions and estimation uncertainties, in determining whether risk posed by emissions from the source category is acceptable.
As described above, the maximum cancer risk for inhalation exposure to actual and allowable emissions from the Mercury Cell Chlor-Alkali Plant source category is 0.004-in-1 million, which is more than four orders of magnitude below 100-in-1 million, which is the presumptive upper limit of acceptable risk. The EPA estimates emissions from the category would result in a cancer incidence of 0.0000003 excess cancer cases per year, or one case every 3 million years. Furthermore, as described above, the facility estimated to pose those cancer risks is no longer operating as a mercury cell facility. Inhalation exposures to HAP associated with chronic noncancer health effects result in a TOSHI of 0.05 based on actual and allowable emissions, 20 times below an exposure that the EPA has determined is without appreciable risk of adverse health effects. Exposures to HAP associated with acute noncancer health effects result in an HQ less than or equal to 2 based upon the 1-hour REL for elemental mercury, and when the maximum off-site concentration is compared with the AEGL-2 and ERPG-2, the maximum acute noncancer HQ is
As directed by CAA section 112(f)(2), we conducted an analysis to determine whether the current emissions standards provide an ample margin of safety to protect public health. Under the ample margin of safety analysis, we evaluated the cost and feasibility of available control technologies and other measures (including the controls, measures, and costs reviewed under the technology review) that could be applied to this source category to further reduce the risks (or potential risks) due to emissions of HAP from the source category.
As described above, the only HAP emitted from this source category posing any risks of potential concern is elemental mercury, with a maximum noncancer acute HQ of 2 based on the REL. Therefore, we considered potential options to reduce mercury emissions under the ample margin of safety analysis. The options we considered under the ample margin of safety analysis are the exact same control options described under the technology review section of this preamble (see section IV.D below).
First, as described in greater detail under the technology review section, we evaluated the option of requiring a combination of implementing a cell room monitoring program and performing work practices as an approach to minimize mercury emissions. Under the technology review section, we determined that this option does constitutes a development in emissions control practices pursuant to CAA section 112(d)(6) with very low costs, and, therefore, we are proposing these requirements under the technology review. However, since the one operating facility already conducts these two actions, we do not expect any actual reductions in emissions and, therefore, we would expect no actual reductions in risks. Since this option is not expected to result in any risk reductions, we are not proposing to adopt those requirements pursuant to CAA section 112(f).
The other option we considered under the CAA section 112(d)(6) technology review (described in section IV.D of this preamble) as well as under CAA sections 112(d)(2) and (3), as described in section IV.A of this preamble, is to require zero mercury emissions from existing sources, which is the requirement for new and reconstructed mercury cell chlor-alkali production sources. This option would eliminate process vent and fugitive mercury emissions as it would force the remaining facility to convert the operation to a non-mercury process or close the mercury cell operation. As described in more detail in sections IV.A and IV.D of this preamble, we estimate the capital cost of converting the one remaining mercury cell facility to membrane cells is just over $69 million. The estimated emissions of mercury would be reduced from 126 pounds to zero pounds per year. Considering the costs of conversion annualized over a time period of 20 years, the annual costs are estimated to be approximately $2.8 million, which results in a cost effectiveness of approximately $22,000 per pound of mercury emissions eliminated. With regard to reductions in risks due to HAP emissions as a result of this option, since this option would force conversion or closure of the remaining one mercury cell facility, the risks due to emissions of HAP for the source category would be zero, since there would be no facilities in the source category.
Nevertheless, after considering the options described above, since the risks due to mercury emissions are already low (with a maximum acute noncancer HQ of less than or equal to 2 based upon the 1-hour REL and a maximum HQ of 0.0007 based on AEGL-2 and ERPG-2), and given the costs described above, and because of the substantial uncertainties in the emissions estimates and cost estimates, we are not proposing any additional standards for mercury under CAA section 112(f).
In summary, considering the very low cancer risks (MIR far less than 1-in-1 million) and very low chronic noncancer risks (HI of 0.05) to individuals exposed to HAP emitted from this source category, and after considering possible options for mercury as described above, we are proposing a determination that the existing standards provide an ample margin of safety to protect public health.
Based on the results of the environmental risk screening analysis, we do not expect an adverse environmental effect, as defined by CAA section 112(a)(7), as a result of HAP emissions from this source category, and we are proposing that it is not necessary to set a more stringent standard to prevent, taking into consideration costs, energy, safety, and other relevant factors, an adverse environmental effect.
As noted above, 40 CFR part 63, subpart IIIII currently includes emission limitations for mercury emissions from process vents (including emissions from end-box ventilation systems, hydrogen systems, and mercury recovery facilities) and work practices for fugitive mercury emissions from the cell room. We have identified a development for cell room fugitive mercury emissions.
With regard to fugitive mercury emissions from the cell room, the current rule at 40 CFR 63.8192(a) through (f) requires a suite of equipment standards and work practices. It also provides the option, in lieu of the work practices otherwise required under CAA sections 63.8192(a) through (d), to institute a cell room monitoring program to continuously monitor the mercury vapor concentration in the upper portion of each cell room. See 40 CFR 63.8192 introductory text, and 40 CFR 63.8192(g). The single mercury cell facility still operating complies via this alternative. However, while not required to do so under the current regulation, the facility also performs all the work practices. Therefore, the EPA determined that the combination of implementing a cell room monitoring program and performing work practices constitutes a development in emissions control practices. This combination was the proposed option in the June 11, 2008, action (73 FR 33258), and also included as a co-proposal in the March 14, 2011 (76 FR 13852), action. Since the only facility in the source category is already implementing the monitoring program and performing these work practices, there would be no costs (with the exception of additional recordkeeping and reporting costs) or additional mercury emission reductions associated with implementing a standard that requires a combination of these practices.
We also identified the option to require zero mercury emissions from existing sources, which is the requirement for new and reconstructed mercury cell chlor-alkali production sources. This option would eliminate process vent and fugitive mercury emissions as it would force the remaining facility to convert the operation to a non-mercury process, or close the mercury cell operation, by a date no later than 3 years of the date of publication of the final rule. See CAA section 112(i)(3)(A). When the EPA originally listed the Chlorine Production source category in 1992, there were 13 mercury cell chlor-alkali plants in the U.S. Since that time, the number of facilities has steadily declined to the current situation with only one facility. Many owners of mercury cell facilities converted to the more efficient and more environmentally friendly membrane cell technology, while other mercury cell chlor-alkali plant owners have concluded the investment decision was currently not in their company's interest given their assessment of future economic conditions and have shut down their mercury cell chlor-alkali plants entirely. Therefore, the zero mercury emissions option is a demonstrated potential development in processes pursuant to CAA section 112(d)(6).
The EPA has considered this option previously since the promulgation of the regulation in 2003, in the context of evaluating whether a prohibition on mercury emissions would be a reasonable beyond-the-floor MACT measure under CAA section 112(d)(2). As discussed above, in 2008, the EPA proposed amendments to 40 CFR part 63, subpart IIIII (73 FR 33258, June 11, 2008). One of the options evaluated for this 2008 proposal was to require zero mercury emissions, and the EPA evaluated the impacts of requiring conversion of mercury cell chlor-alkali production plants to non-mercury technology. The EPA proposed “to reject conversion to non-mercury technology as a beyond-the-floor control requirement because of the high cost impact this forced conversion would impose on the facilities in the industry.” As noted above, the EPA proposed the combination of mercury cell room monitoring and work practices in the 2008 action (73 FR 33275).
Considering comments received on the 2008 proposed cost and impacts analysis of the option to convert to non-mercury technology, the EPA significantly refined the analysis. The results of the revised analyses were published in 2011, along with two proposed options to reduce mercury emissions. One was an option to require all mercury cell chlor-alkali facilities to comply with a zero-mercury emissions limitation within 3 years of the finalization of the proposal (76 FR 13852, March 14, 2011). The other proposed option was to require continuous monitoring of mercury in the upper regions of the cell room along with work practices, as under the 2008 proposal (and as being proposed here under CAA section 112(d)(6)). The revised analysis of the impacts of conversion from mercury cells to membrane cells is discussed in detail in the 2011 proposal and supporting documentation.
Comments were received on the updated analysis and supplemental 2011 proposal. An environmental advocacy commenter (Docket Item No. EPA-HQ-OAR-2002-0017-0152) supported the proposed zero-mercury option but also commented that the EPA had overstated the costs and understated the emission reductions and other benefits. Conversely, three industry representatives (Docket Item Nos. EPA-HQ-OAR-2002-0017-0150, -0151, and -0157) commented that the EPA's revised analysis had underestimated the costs and negative economic impacts and overstated the benefits. One industry representative (Docket ID No.EPA-HQ-OAR-2002-0150) provided an analysis of the impacts of conversion specific to the West Virginia facility (which is, as discussed previously, the only mercury cell plant currently still in operation). The commenter indicated that the cost of conversion estimated by the EPA for this facility (around $43 million) was considerably less than the estimates calculated by the facility (around $60 million). The commenter also provided a cost-effectiveness analysis, which showed a cost of over $77,000 per pound of mercury emissions eliminated for this facility. The EPA has not yet finalized either of the options included in the 2011 supplemental proposal, or otherwise issued a final beyond-the-floor MACT determination under CAA section 112(d)(2) for existing source mercury emissions, as discussed above.
For this proposal, the EPA re-examined the impacts of a zero-mercury option. Specifically, the EPA evaluated the costs and cost effectiveness of the replacement of the West Virginia mercury cell facility with a membrane cell facility. As pointed out above, the EPA's 2011 estimate for the capital cost to convert the West Virginia facility was just over $43 million and an annual cost of $2.6 million per year. The EPA updated this estimate by adjusting the costs to 2019 dollars and incorporating the actual costs of conversion incurred by the Ohio facility for their 2019/2020 conversion. The resulting updated estimate is that the capital cost of converting the West Virginia mercury cell facility to membrane cells is just over $69 million. The estimated emissions of mercury would be reduced from 126 pounds to zero pounds per year. Considering the costs of conversion annualized over a time period of 20 years, the annual costs are estimated to be approximately $2.8 million, which results in a cost effectiveness of approximately $22,000 per pound of mercury emissions eliminated.
The EPA also examined the non-air impacts associated with switching from mercury cell to non-mercury cell processes. For 2019, the West Virginia facility reported a total of 898.1 pounds of non-air mercury releases. This consists of 9 pounds to streams/water bodies, 883.3 pounds to Resource
Based on these factors, we are not proposing the option of a zero-mercury standard as part of our CAA section 112(d)(6) technology review for this source category at this time. Moreover, as we are now uncertain whether the assessments supporting the 2011 proposed option to require elimination of mercury emissions from existing sources continue to represent accurate estimates of the costs of requiring such elimination at the single remaining plant, we are proposing that promulgating a zero-mercury standard for existing sources would not be a reasonable beyond-the-floor MACT standard under CAA section 112(d)(2). However, we are soliciting comments, data, and other information regarding these proposed decisions, including data and information regarding the costs, cost effectiveness, non-air, and economic impacts and other relevant information regarding whether the NESHAP should include a zero-mercury standard as either a beyond-the-floor MACT standard or a revised standard under the technology review, and whether the proposed work practices for chlorine emissions and proposed amendments to the mercury work practices would be necessary if a zero-mercury standard were to be adopted. We intend to consider any such submitted data and information, in addition to the data and information contained in the records for the 2008 and 2011 proposals and in this proposal, in reaching final conclusions under CAA sections 112(d)(2) and (6) regarding a zero-mercury standard.
Based on the analyses discussed above, we are proposing the first option, which is to amend the rule to require both a cell room monitoring program and work practice standards. Specifically, the proposed amendments would require, beginning 6 months after the final rule is published, compliance with all work practices in the rule and associated recordkeeping and reporting requirements plus the cell room monitoring program. The exception is the work practice to develop and follow a floor-level mercury vapor measurement program required at 40 CFR 63.8192(d). The cell room monitoring program is similar to the floor-level program, except that it is more comprehensive and effective as it detects increased mercury levels throughout the cell room, while the floor-level program only detects increased levels near the floor-level walkways.
In addition to the proposed actions described above, we are proposing additional revisions to the NESHAP. We are proposing revisions to the SSM provisions of the MACT rule in order to ensure they are consistent with the decision in
In its 2008 decision in
Consistent with
The EPA has attempted to ensure that the provisions we are proposing to eliminate are inappropriate, unnecessary, or redundant in the absence of the SSM exemption. We are specifically seeking comment on whether we have successfully done so.
In proposing the standards in this rule, the EPA has considered startup and shutdown periods and, for the reasons explained below, is not proposing alternate standards for those periods. In 2011, the EPA proposed similar revisions to the SSM provisions as those being proposed here. During the comment period for the 2011 rule, the mercury cell chlor-alkali industry indicated that there were safety concerns associated with complying with the emissions standards during startup for the hydrogen vent stream. The industry provided general information that suggested that the control device could not be operated until the exhaust stream composition could be regulated. However, no additional data or information has been received since 2011, and it is unclear whether the one operating facility in the source category would violate its emissions standards during these startup times, whether the facility has changed operations since the 2011 rule to be able to comply with the emissions standards during startup, or whether there are other practices or standards that could apply during these periods to ensure emissions are limited or reduced. In the absence of evidence that the emissions standards cannot be met during startup, the EPA is proposing that the emissions standards apply at all times. However, we solicit comment and detailed information for any situations where separate standards, such as work practices, would be more appropriate during periods of startup and shutdown rather than the current standard.
Periods of startup, normal operations, and shutdown are all predictable and routine aspects of a source's operations. Malfunctions, in contrast, are neither predictable nor routine. Instead they are, by definition, sudden, infrequent, and not reasonably preventable failures of emissions control, process, or monitoring equipment. (40 CFR 63.2) (definition of malfunction). The EPA interprets CAA section 112 as not requiring emissions that occur during periods of malfunction to be factored into development of CAA section 112 standards, and this reading has been upheld as reasonable by the court in
As the court recognized in
In the unlikely event that a source fails to comply with the applicable CAA section 112(d) standards as a result of a malfunction event, the EPA would determine an appropriate response based on, among other things, the good faith efforts of the source to minimize emissions during malfunction periods, including preventative and corrective actions, as well as root cause analyses to ascertain and rectify excess emissions. The EPA would also consider whether the source's failure to comply with the CAA section 112(d) standard was, in fact, sudden, infrequent, not reasonably preventable, and was not instead caused, in part, by poor maintenance or careless operation. 40 CFR 63.2 (definition of malfunction).
If the EPA determines in a particular case that an enforcement action against a source for violation of an emission standard is warranted, the source can raise any and all defenses in that enforcement action and the federal district court will determine what, if any, relief is appropriate. The same is true for citizen enforcement actions. Similarly, the presiding officer in an administrative proceeding can consider any defense raised and determine whether administrative penalties are appropriate.
In summary, the EPA interpretation of the CAA and, in particular, CAA section 112 is reasonable and encourages practices that will avoid malfunctions and judicial procedures for addressing exceedances of the standards fully recognize that violations may occur despite good faith efforts to comply and can accommodate those situations.
We are proposing to revise the General Provisions Applicability Table (Table 10) entry for “§ 63.6(a)-(g), (i), (j)” to “§ 63.6(a)-(g), (i), (j), except for (e)(1)(i) and (ii), (e)(3), and (f)(1)” and to add a new entry for “§ 63.6(e)(1)(i) and (ii), (e)(3), and (f)(1),” in which a “No” entry would be included in the column, “Applies to Subpart IIIII.” Section 63.6(e)(1)(i) describes the general duty to minimize emissions. Some of the language in that section is no longer necessary or appropriate in light of the elimination of the SSM exemption. We are proposing instead to add general duty regulatory text at 40 CFR 63.8222 that reflects the general duty to minimize emissions while eliminating the reference to periods covered by an SSM exemption. The current language in 40 CFR 63.6(e)(1)(i) characterizes what the general duty entails during periods of SSM. With the elimination of the SSM exemption, there is no need to differentiate between normal operations
We are proposing to revise the General Provisions Applicability Table (Table 10) entry for “§ 63.7(a)(1),(b)-(h)” to “§ 63.7(a)-(h), except for (a)(2) and (e)(1)” and to add a new entry for “§ 63.7(e)(1),” in which a “No” entry would be included in the column, “Applies to Subpart IIIII.” Section 63.7(e)(1) describes performance testing requirements. The EPA is instead proposing to add a performance testing requirement at 40 CFR 63.8232(a). The performance testing requirements we are proposing to add differ from the General Provisions performance testing provisions in several respects. The regulatory text removes the cross-reference to 40 CFR 63.7(e)(1) and does not include the language in 40 CFR 63.7(e)(1) that restated the SSM exemption and language that precluded startup and shutdown periods from being considered “representative” for purposes of performance testing. The proposed performance testing provisions will not allow performance testing during startup and shutdown events. As in 40 CFR 63.7(e)(1), performance tests conducted under this subpart should not be conducted during malfunctions because conditions during malfunctions are often not representative of normal operating conditions. The EPA is proposing to add language that requires the owner or operator to record the process information that is necessary to document operating conditions during the test and include in such record an explanation to support that such conditions represent normal operation. Section 63.7(e) requires that the owner or operator make available to the Administrator such records “as may be necessary to determine the condition of the performance test” available to the Administrator upon request but does not specifically require the information to be recorded. The regulatory text the EPA is proposing to add to this provision builds on that requirement and makes explicit the requirement to record the information.
We are proposing to revise the General Provisions Applicability Table (Table 10) entry for “§ 63.8(a)(1), (a)(3); (b); (c)(1)-(4), (6)-(8); (d); (e); and (f)(1)-(5)” to “§ 63.8(a)(1), (a)(3); (b); (c)(1)(ii), (2)-(4), (6)-(8); (d)(1)-(2); (e); and (f)(1)-(5)” and to add entries for “§ 63.8(c)(1)(i) and (iii)” and “§ 63.8(d)(3)” in which a “No” entry would be included in the column, “Applies to Subpart IIIII,” for the new entries. The cross-references to the general duty and SSM plan requirements in subparagraphs 40 CFR 63.8(c)(1)(i) and (iii) are not necessary in light of other requirements of 40 CFR 63.8 that require good air pollution control practices (40 CFR 63.8(c)(1)) and that set out the requirements of a quality control program for monitoring equipment (40 CFR 63.8(d)). In addition, the final sentence in 40 CFR 63.8(d)(3) refers to the General Provisions' SSM plan requirement which is no longer applicable. The EPA is proposing to add to the rule at 40 CFR 63.8242(a)(3)(v) text that is identical to 40 CFR 63.8(d)(3) except for the final sentence with the reference to SSM.
We are proposing to revise the General Provisions Applicability Table (Table 10) entry for “§ 63.10(a); (b)(1); (b)(2)(i)-(xii), (xiv); (b)(3); (c); (d)(1)-(2), (4)-(5); (e); (f)” to “§ 63.10(a); (b)(1); (b)(2)(vi)-(xii), (xiv); (b)(3); (c)(1)-(14); (d)(1)-(2), (4); (e); (f)” and to add entries for “§ 63.10(b)(2)(i)-(v),” “§ 63.10(c)(15),” and “§ 63.10(d)(5),” in which a “No” entry would be included in the column, “Applies to Subpart IIIII,” for the new entries. Section 63.10(b)(2)(i) describes the recordkeeping requirements during startup and shutdown. These recording provisions are no longer necessary because the EPA is proposing that recordkeeping and reporting applicable to normal operations will apply to startup and shutdown. In the absence of special provisions applicable to startup and shutdown, such as a startup and shutdown plan, there is no reason to retain additional recordkeeping for startup and shutdown periods.
Section 63.10(b)(2)(ii) describes the recordkeeping requirements during a malfunction. The EPA is proposing to add such requirement to 40 CFR 63.8256(a)(2). The regulatory text we are proposing to add differs from the General Provisions it is replacing in that the General Provisions requires the creation and retention of a record of the occurrence and duration of each malfunction of process, air pollution control, and monitoring equipment. The EPA is proposing that this requirement apply to any deviation from an applicable requirement, which would include malfunctions, and is requiring that the source record the date, time, and duration of the deviation rather than the “occurrence.” The EPA is also proposing to add requirements to 40 CFR 63.8256(a)(2) a requirement that sources keep records that include a list of the affected source or equipment and actions taken to minimize emissions, an estimate of the quantity of each regulated pollutant emitted over the standard for which the source failed to meet the standard, and a description of the method used to estimate the emissions. Examples of such methods would include product loss calculations, mass balance calculations, measurements when available, or engineering judgment based on known process parameters. The EPA is proposing to require that sources keep records of this information to ensure there is adequate information to allow the EPA to determine the severity of any failure to meet a standard, and to provide data that may document how the source met the general duty to minimize emissions when the source has failed to meet an applicable standard.
When applicable, 40 CFR 63.10(b)(2)(iv) requires sources to record actions taken during SSM events when actions were inconsistent with their SSM plan. The requirement is no longer appropriate because SSM plans will no longer be required. The requirement previously applicable under 40 CFR 63.10(b)(2)(iv)(B) to record actions to minimize emissions and record corrective actions is required by 40 CFR 63.8256(a)(2).
When applicable, 40 CFR 63.10(b)(2)(v) requires sources to record actions taken during SSM events to show that actions taken were consistent with their SSM plan. The requirement is no longer appropriate because SSM plans will no longer be required.
The EPA is also proposing that 40 CFR 63.10(c)(15) no longer applies. When applicable, the provision allows an owner or operator to use the affected source's SSM plan or records kept to satisfy the recordkeeping requirements of the SSM plan, specified in 40 CFR 63.6(e), to also satisfy the requirements of 40 CFR 63.10(c)(10) through (12). The EPA is proposing to eliminate this requirement because SSM plans would no longer be required, and, therefore, 40 CFR 63.10(c)(15) no longer serves any useful purpose for affected units.
Section 63.10(d)(5) describes the reporting requirements for SSM. To replace the General Provisions reporting requirement, the EPA is proposing to add reporting requirements to 40 CFR 63.8254(b)(8) and (9). This language differs from the General Provisions requirement in that it does not require a stand-alone report. With this revision, we are proposing that sources that fail to meet an applicable standard or regulatory requirement at any time report the information concerning such events in the semi-annual compliance report already required under this rule. We are proposing that the report must contain the number, date, time, duration, and the cause of such events (including unknown cause, if applicable), a list of the affected source or equipment, an estimate of the quantity of each regulated pollutant emitted over any emission limit, and a description of the method used to estimate the emissions.
Examples of such methods would include product-loss calculations, mass balance calculations, measurements when available, or engineering judgment based on known process parameters. The EPA is proposing this requirement to ensure that there is adequate information to determine compliance, to allow the EPA to determine the severity of the failure to meet an applicable standard, and to provide data that may document how the source met the general duty to minimize emissions during a failure to meet an applicable standard.
We will no longer require owners or operators to determine whether actions taken to correct a malfunction are consistent with an SSM plan, because SSM plans would no longer be required. The proposed amendments, therefore, eliminate the cross-reference to 40 CFR 63.10(d)(5)(i) that contains the description of the previously required SSM report format and submittal schedule from this section. These specifications are no longer necessary because the events will be reported in otherwise required reports with similar format and submittal requirements.
Section 63.10(d)(5)(ii) describes an immediate report for startups, shutdown, and malfunctions when a source failed to meet an applicable standard but did not follow the SSM plan. We will no longer require owners or operators to report when actions taken during a startup, shutdown, or malfunction were not consistent with an SSM plan, because plans would no longer be required.
The EPA is proposing that owners and operators of mercury cell chlor-alkali plants submit electronic copies of required performance test reports, notifications, and reports through the EPA's Central Data Exchange (CDX) using the Compliance and Emissions Data Reporting Interface (CEDRI). A description of the electronic data submission process is provided in the memorandum,
Additionally, the EPA has identified two broad circumstances in which electronic reporting extensions may be provided. These circumstances are (1) outages of the EPA's CDX or CEDRI which preclude an owner or operator from accessing the system and submitting required reports and (2)
The electronic submittal of the reports addressed in this proposed rulemaking will increase the usefulness of the data contained in those reports, is in keeping with current trends in data availability and transparency, will further assist in the protection of public health and the environment, will improve compliance by facilitating the ability of regulated facilities to demonstrate compliance with requirements and by facilitating the ability of delegated state, local, tribal, and territorial air agencies and the EPA to assess and determine compliance, and will ultimately reduce burden on regulated facilities, delegated air agencies, and the EPA. Electronic reporting also eliminates paper-based, manual processes, thereby saving time and resources, simplifying data entry, eliminating redundancies, minimizing data reporting errors, and providing data quickly and accurately to the affected facilities, air agencies, the EPA, and the public. Moreover, electronic reporting is consistent with the EPA's plan
We are proposing amendments to correct errors and improve the compliance provisions of the rule. These changes, which are described below, were included in the March 14, 2011, proposal (76 FR 13865) and the June 2008 proposal (73 FR 33275).
Paragraph 63.8242 (a)(2) requires mercury continuous monitor analyzers to have a detector capable of detecting a mercury concentration at or below 0.5 times the mercury concentration level measured during the performance test. Since promulgation of the NESHAP, we have realized that detecting a concentration of 0.5 times the mercury concentration could, in cases of low mercury concentrations, be infeasible for the monitoring devices on the market. Information available to us at this time shows that 0.1 μg/m3 is the detection limit of commonly commercially available analyzers. Analyzers with detection limits at this level are more than sufficient to determine compliance with the limitations in the NESHAP. Therefore, we are proposing to revise this paragraph to require a detector capable of detecting a mercury concentration at or below 0.5 times the mercury concentration measured during the test or 0.1 μg/m3.
The NESHAP is inconsistent as to whether the rule requires a daily average or an hourly average to determine continuous compliance with the emissions standard for mercury recovery units. While 40 CFR 63.8243(b) indicates that this averaging period is daily, another paragraph, 40 CFR 63.8246(b), states that limit is based on the average hourly concentration of mercury. It was our intention for compliance to be based on a daily average, and the inclusion of “hourly” in 40 CFR 63.8246 (b) was a drafting error. Therefore, we are proposing to correct this error by replacing “hourly” in 40 CFR 63.8246(b) with “daily.”
As discussed previously, all but one mercury cell plant has closed or converted to membrane cells since the promulgation of the 2003 Mercury Cell Chlor-Alkali Plants MACT. When these situations have occurred at plants with on-site thermal mercury recovery units, it has been common for these units to continue to operate to assist in the treatment of wastes associated with the shutdown/conversion. We are not aware of any mercury recovery units still in operation and the Westlake, West Virginia, facility does not operate a thermal mercury recovery unit that is subject to the emission limitations in the rule. Regardless, under the applicability of the 2003 Mercury Cell Chlor-Alkali Plants MACT, these units would no longer be an affected source after the chlorine production facility ceased operating. Furthermore, while the NESHAP already effectively prohibits the construction or reconstruction of a new mercury cell chlor-alkali production facility, it does not do the same for mercury recovery facilities. Therefore, there exists the possibility that there is an existing mercury recovery unit of which we are unaware or that a mercury recovery facility subject to new source standards could be constructed or reconstructed. Therefore, these proposed amendments would require any mercury recovery unit to comply with the requirements of the Mercury Cell Chlor-Alkali Plants MACT for such units, as long as the mercury recovery unit operates to recover mercury from wastes generated by a mercury cell chlor-alkali plant.
From our assessment of the time frame needed for compliance with the entirety of the revised requirements, the EPA considers a period of 6 months to be the most expeditious compliance period practicable and, thus, is proposing that the affected source be in compliance with all of this regulation's revised requirements within 6 months of the regulation's effective date.
For existing sources, we are proposing two changes to the work practice standards. While these proposed work practice standards are based on the practices in place at the single facility in the source category, they will require some modifications to the procedures currently employed at the facility. Specifically, they will need to develop and implement a recordkeeping system to record and maintain the records required for the mercury cell work practices and to incorporate the required material in the requisite reports. Also, while the facility has standard operating procedures in place to reduce fugitive emissions of chlorine upon which the proposed requirements are based, they will need to develop and implement a recordkeeping system to record and maintain the records required for the fugitive chlorine inspection requirements and to incorporate the required material in the requisite reports. We propose that a 6-month period of time would be adequate for these activities.
In addition, we are proposing to add a requirement that notifications, performance test results, and compliance reports be submitted electronically. We are also proposing to change the requirements for SSM by removing the exemption from the requirements to meet the standards during SSM periods and by removing the requirement to develop and implement an SSM plan. Our experience with similar industries that are required to convert reporting mechanisms to install necessary hardware and software, become familiar with the process of submitting performance test results electronically through the EPA's CEDRI, test these new electronic submission capabilities, and reliably employ electronic reporting shows that a time period of a minimum of 3 months, and, more typically, 6 months is generally necessary to successfully accomplish these revisions. Our experience with similar industries further shows that this sort of regulated facility generally requires a time period of 6 months to read and understand the amended rule requirements; to evaluate their operations to ensure that they can meet the standards during periods of startup and shutdown as defined in the rule and make any necessary adjustments; and to update their operation, maintenance, and monitoring plans to reflect the revised requirements.
We solicit comment on the proposed compliance periods, and we specifically request submission of information from sources in this source category regarding specific actions that would need to be undertaken to comply with the proposed amended requirements and the time needed to make the adjustments for compliance with any of the revised requirements. We note that information provided may result in changes to the proposed compliance dates.
There is only one mercury cell chlor-alkali facility currently operating in the U.S. The facility will be subject to the Mercury Cell Chlor-Alkali Plants NESHAP affected by the proposed amendments to 40 CFR part 63, subpart IIIII.
We are not proposing revisions to the mercury emission limits for process vents other than to make them applicable during SSM periods, and we do not anticipate any air quality impacts as a result of this proposed amendment, since the one subject facility is already in compliance with emission limits during all periods, including SSM. We are proposing changes to require both the mercury cell room monitoring program and the work practice standards for fugitive mercury emissions, and are proposing new work practice standards for fugitive chlorine emissions. However, these proposed changes are based on the current practices in place at the one subject facility. Therefore, we also do not anticipate any air quality impacts as a result of these proposed amendments to the work practices.
As noted earlier, the single facility in the source category is complying with the alternative cell room monitoring program. While not currently required, the facility is also implementing the work practices. Therefore, the only costs that would be incurred with the proposed requirement to comply with both the cell room monitoring program and the work practices are those costs associated with the work practice recordkeeping and reporting. We estimate these costs to be $36,000 per year for the mercury work practices recordkeeping and reporting and $49,000 for the chlorine inspection program recordkeeping and reporting (all costs in 2020 dollars). Another way to present these costs is to show them in terms of present value, in which the stream over time of costs per year for the proposal requirement is discounted to the present day. For this proposal, the present value of the costs in total is $445,000 in 2020 dollars, calculated over an 8-year period from 2022 to 2029 (assuming promulgation in 2021), estimated at a 7 percent discount rate and discounted to 2020. The equivalent annualized value of these costs, which is an annualized value of costs consistent with the present value, is $74,500 in 2020 dollars, and also estimated at a 7 percent discount rate and discounted to 2020.
Economic impact analyses focus on changes in market prices and output levels. If changes in market prices and output levels in the primary markets as a result of complying with the rule are significant enough, impacts on other markets may also be examined. Both the magnitude of costs needed to comply with a proposed rule and the distribution of these costs among affected facilities can have a role in determining how the market prices and output levels will change in response to a proposed rule. The total cost associated with this proposed rule is estimated to be $85,000 per year in 2020 dollars, which is the cost associated with additional recordkeeping and reporting costs. The economic impact associated with this cost, calculated as an annual cost per sales, for the parent firm owning the single affected facility is 0.001 percent, and is not expected to result in a significant market impact, regardless of whether it is fully passed on to the consumer or fully absorbed by the affected firm.
The EPA does not anticipate reductions in HAP emissions as a result of the proposed amendments to the Mercury Cell Chlor-Alkali Plants NESHAP. However, the proposed amendments would improve the rule by codifying the existing practices to reduce emissions into enforceable requirements, ensuring that the standards apply at all times. Also, requiring electronic submittal of initial notifications, performance test results, and reports will increase the usefulness of the data and ultimately result in less burden on the regulated community. Because these proposed amendments are not considered economically significant, as defined by Executive Order 12866, and because no emission reductions were estimated, we did not estimate any health benefits from reducing emissions.
We solicit comments on this proposed action. In addition to general comments on this proposed action, we are also interested in additional data that may improve the risk assessments and other analyses. We are specifically interested in receiving any improvements to the data used in the site-specific emissions profiles used for risk modeling. Such data should include supporting documentation in sufficient detail to allow characterization of the quality and representativeness of the data or information. Section VII of this preamble provides more information on submitting data.
The site-specific emissions profiles used in the source category risk and demographic analyses and instructions are available for download on the RTR website at
If you believe that the data are not representative or are inaccurate, please identify the data in question, provide your reason for concern, and provide any “improved” data that you have, if available. When you submit data, we request that you provide documentation of the basis for the revised values to support your suggested changes. To submit comments on the data downloaded from the RTR website, complete the following steps:
1. Within this downloaded file, enter suggested revisions to the data fields appropriate for that information.
2. Fill in the commenter information fields for each suggested revision (
3. Gather documentation for any suggested emissions revisions (
4. Send the entire downloaded file with suggested revisions in Microsoft® Access format and all accompanying documentation to Docket ID No. EPA-HQ-OAR-2020-0560 (through the method described in the
5. If you are providing comments on a single facility or multiple facilities, you need only submit one file for all facilities. The file should contain all suggested changes for all sources at that facility (or facilities). We request that all data revision comments be submitted in the form of updated Microsoft® Excel files that are generated by the Microsoft® Access file. These files are provided on the project website at
Additional information about these statutes and Executive Orders can be found at
This action is not a significant regulatory action and was, therefore, not submitted to OMB for review.
This action is not expected to be an Executive Order 13771 regulatory action because this action is not significant under Executive Order 12866.
The information collection activities in this rule have been submitted for approval to OMB under the PRA. The Information Collection Request (ICR) document that the EPA prepared has been assigned EPA ICR number 2046.10. You can find a copy of the ICR in the docket for this rule, and it is briefly summarized here.
The information requirements in this rulemaking are based on the notification, recordkeeping, and reporting requirements in the NESHAP General Provisions (40 CFR part 63, subpart A), which are mandatory for all operators subject to national emission standards. These notifications, reports, and records are essential in determining compliance, and are specifically authorized by CAA section 114 (42 U.S.C. 7414). All information submitted to the EPA pursuant to the recordkeeping and reporting requirements for which a claim of confidentiality is made is safeguarded according to Agency policies set forth in 40 CFR part 2, subpart B.
The EPA is proposing amendments that revise provisions pertaining to emissions during periods of SSM; add requirements for electronic reporting of notifications and reports and performance test results; and make other minor clarifications and corrections. This information will be collected to assure compliance with the Mercury Cell Chlor-Alkali Plants NESHAP.
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 OMB control numbers for the EPA's regulations in 40 CFR are listed in 40 CFR part 9.
Submit your comments on the Agency's need for this information, the accuracy of the provided burden estimates, and any suggested methods for minimizing respondent burden to the EPA using the docket identified at the beginning of this rule. You may also send your ICR-related comments to OMB's Office of Information and Regulatory Affairs via email to
I certify that this action will not have a significant economic impact on a substantial number of small entities under the RFA. This action will not impose any requirements on small entities. The parent company for the single affected facility in the source category is not a small entity given the Small Business Administration small business size definition for this industry (1,000 employees or greater for NAICS 325180).
This action does not contain an unfunded mandate of $100 million or more as described in UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect small governments. The action imposes no enforceable duty on any state, local, or tribal governments or the private sector.
This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.
This action does not have tribal implications, as specified in Executive Order 13175. The mercury cell chlor-alkali plant affected by this proposed action is not owned or operated by tribal governments or located within tribal lands. Thus, Executive Order 13175 does not apply to this action.
This action is not subject to Executive Order 13045 because it is not economically significant as defined in Executive Order 12866, and because the EPA does not believe the environmental health or safety risks addressed by this action present a disproportionate risk to children. As the proposed rule amendments would not change emissions of HAP and risk to anyone exposed, the EPA estimates that the proposed rule amendments would have no effect on risks to children. This action's health and risk assessments are contained in section IV.B of this preamble and the document,
This action is not subject to Executive Order 13211, because it is not a significant regulatory action under Executive Order 12866.
This rulemaking does not change the existing technical standards in the rule.
The EPA believes that this action does not have disproportionately high and adverse human health or environmental effects on minority populations, low-income populations, and/or indigenous peoples, as specified in Executive Order 12898 (59 FR 7629, February 16, 1994) because it does not change the level of environmental protection for any affected populations and does not have any disproportionately high and adverse human health or environmental effects on any population, including any
To gain a better understanding of the source category and near source populations, the EPA conducted a demographic analysis for mercury cell chlor-alkali facilities to identify any overrepresentation of minority, low income, or indigenous populations with cancer risks above 1-in-1 million. This analysis only gives some indication of the prevalence of sub-populations that may be exposed to air pollution from the sources; it does not identify the demographic characteristics of the most highly affected individuals or communities, nor does it quantify the level of risk faced by those individuals or communities. More information on the source category's risk can be found in section IV of this preamble. The complete demographic analysis results and the details concerning its development are presented in the technical report,
Environmental protection, Air pollution control, Hazardous substances, Reporting and recordkeeping requirements.
Environmental Protection Agency (EPA).
Proposed rule.
This proposal presents the results of the U.S. Environmental Protection Agency's (EPA's) residual risk and technology review (RTR) for the National Emission Standards for the Hazardous Air Pollutants (NESHAP) for Primary Magnesium Refining, as required under the Clean Air Act (CAA). Based on the results of the risk review, the EPA is proposing that risks from emissions of air toxics from this source category are acceptable and that after removing the exemptions for startup, shutdown, and malfunction (SSM), the NESHAP provides an ample margin of safety. Furthermore, under the technology review, we are proposing one development in technology and practices that will require continuous pH monitoring for all control devices used to meet the acid gas emission limits of this subpart. In addition, as part of the technology review, the EPA is addressing a previously unregulated source of chlorine emissions, known as the chlorine bypass stack (CBS), by proposing a maximum achievable control technology (MACT) emissions standard for chlorine emissions from this source. The EPA also is proposing amendments to the regulatory provisions related to emissions during periods of SSM, including removing exemptions for periods of SSM and adding a work practice standard for malfunction events associated with the chlorine reduction burner (CRB); all emission limits will apply at all other times. In addition, the EPA is proposing electronic reporting of performance test results and performance evaluation reports.
You may send comments, identified by Docket ID No. EPA-HQ-OAR-2020-0535, by any of the following methods:
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For questions about this proposed action, contact Michael Moeller, Sector Policies and Programs Division, Office of Air Quality Planning and Standards, U.S. Environmental Protection Agency, Research Triangle Park, North Carolina 27711; telephone number: (919) 541-2766; fax number: (919) 541-4991 and email address:
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The source category that is the subject of this proposal is the Primary Magnesium Refining major sources regulated under 40 CFR part 63, subpart TTTTT. The North American Industry Classification System (NAICS) code for the primary magnesium refining industry is 331410. This category and NAICS code are not intended to be exhaustive, but rather provide a guide for readers regarding the entities that this proposed action is likely to affect. The proposed standards, once promulgated, will be directly applicable to the affected sources. Federal, state, local, and tribal government entities would not be affected by this proposed action. As defined in the
In addition to being available in the docket, an electronic copy of this action is available on the internet. Following signature by the EPA Administrator, the EPA will post a copy of this proposed action at
The proposed changes to the CFR that would be necessary to incorporate the changes proposed in this action are set out in an attachment to the memorandum titled
The statutory authority for this action is provided by sections 112 and 301 of the CAA, as amended (42 U.S.C. 7401
In the first stage of the CAA section 112 standard setting process, the EPA promulgates technology-based standards under CAA section 112(d) for categories of sources identified as emitting one or more of the HAP listed in CAA section 112(b). Sources of HAP emissions are either major sources or area sources, and CAA section 112 establishes different requirements for major source standards and area source standards. “Major sources” are those that emit or have the potential to emit 10 tons per year (tpy) or more of a single HAP or 25 tpy or more of any combination of HAP. All other sources are “area sources.” For major sources, CAA section 112(d)(2) provides that the technology-based NESHAP must reflect the maximum degree of emission reductions of HAP achievable (after considering cost, energy requirements, and non-air quality health and environmental impacts). These standards are commonly referred to as MACT standards. CAA section 112(d)(3) also establishes a minimum control level for MACT standards, known as the MACT “floor.” In certain instances, as provided in CAA section 112(h), the EPA may set work practice standards in lieu of numerical emission standards. The EPA must also consider control options that are more stringent than the floor. Standards more stringent than the floor are commonly referred to as beyond-the-floor standards. For area sources, CAA section 112(d)(5) gives the EPA discretion to set standards based on generally available control technologies or management practices (GACT standards) in lieu of MACT standards.
The second stage in standard-setting focuses on identifying and addressing any remaining (
The approach incorporated into the CAA and used by the EPA to evaluate residual risk and to develop standards under CAA section 112(f)(2) is a two-step approach. In the first step, the EPA determines whether risks are acceptable. This determination “considers all health information, including risk estimation uncertainty, and includes a presumptive limit on maximum individual lifetime [cancer] risk (MIR)
CAA section 112(d)(6) separately requires the EPA to review standards promulgated under CAA section 112 and revise them “as necessary (taking into account developments in practices, processes, and control technologies)” no less often than every 8 years. In conducting this review, which we call the “technology review,” the EPA is not required to recalculate the MACT floor.
The EPA initially promulgated the Primary Magnesium Refining NESHAP on October 10, 2003 (68 FR 58615), and it is codified at 40 CFR part 63, subpart TTTTT. This NESHAP regulates HAP emissions from new and existing primary magnesium refining facilities that are major sources of HAP. The source category is comprised of one plant that is owned by US Magnesium LLC and located in Rowley, Utah.
The plant produces magnesium from brine (salt water) taken from the Great Salt Lake. The production process concentrates the magnesium salts in the brine, then processes the brine to remove impurities that would affect metal quality. After the brine solution is converted to a powder mixture of magnesium chloride and magnesium oxide in the spray dryers, the powder is conveyed to the melt/reactors. The melt/reactor melts the powder mixture and converts the remaining magnesium oxide to magnesium chloride by injecting chlorine into the molten salt. The purified molten salt is then transferred to the electrolytic cells where it is separated into magnesium metal and chlorine by electrolysis. The electrolysis process passes a direct electric current through the molten magnesium chloride, causing the dissociation of the salt and resulting in the generation of chlorine gas and magnesium metal. The magnesium metal is then transferred to the foundry for casting into ingots for sale. The chlorine produced is piped to a chlorine plant where it is liquefied for reuse or sale.
The HAP emitted from the Primary Magnesium Refining source category are chlorine, hydrochloric acid (HCl), dioxin/furan, and trace amounts of HAP metals. Emission controls include various combinations of wet scrubbers (venturi and packed-bed scrubber) for acid gas and particulate matter (PM) control.
Chlorine is emitted from the melting and purification of reactor cell product and is controlled by conversion to HCl in the CRB and subsequent absorption of the HCl in venturi and packed-bed scrubber. Using these control technologies, upwards of 99.9 percent control of chlorine is achieved. The electrowinning of the melted magnesium chloride to magnesium metal produces as a byproduct chlorine gas which is recovered at the chlorine plant. When the chlorine plant is inoperable, the chlorine produced at the electrolytic cells is routed through the CBS which contains a packed-bed scrubber and uses ferrous chloride as the adsorbing medium.
HCl is emitted from the spray drying and storage of magnesium chloride powder and the melting and purification of reactor cell product prior to the electrowinning process. HCl emissions are controlled by venturi and packed-bed scrubbers.
Dioxins/furans are generated in the melt/reactor and are subject to incidental control by the wet scrubbers used to control chlorine, HCl, and PM.
The current rule requires compliance with emission limits, operating limits for control devices, and work practice standards. The emission limits include mass rate emission limits in pounds per hour (lbs/hr) for chlorine, HCl, PM, and particulate matter less than or equal to 10 microns (PM
The current rule also includes an emission limit for each melt/reactor system of 36 nanograms of dioxin/furan toxicity equivalents per dry standard cubic meter corrected to 7 percent oxygen.
Performance tests are required to demonstrate compliance with the emission limits and must be conducted at least twice during each title V operating permit term (at midterm and renewal). The source is also required to monitor operating parameters for control devices subject to operating limits established during the performance tests and carry out the procedures in their fugitive dust emissions control plan and their operation and maintenance plan. For wet scrubbers, the source is required to use continuous parameter monitoring systems (CPMS) to measure and record the hourly average pressure drop and scrubber water flow rate. To
For the Primary Magnesium Refining source category, the EPA used emissions and supporting data from the 2017 National Emissions Inventory (NEI) as the primary data to develop the model input file for the residual risk assessment. The NEI is a database that contains information about sources that emit criteria air pollutants, their precursors, and HAP. The database includes estimates of annual air pollutant emissions from point, nonpoint, and mobile sources in the 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. The EPA collects this information and releases an updated version of the NEI database every 3 years. The NEI includes data necessary for conducting risk modeling, including annual HAP emissions estimates from individual emission sources at facilities and the related emissions release parameters. Additional information on the development of the modeling file can be found in Appendix 1 to the
Information used to estimate emissions from the primary magnesium refining facility was obtained primarily from the EPA's 2017 NEI database, available at:
In this section, we describe the analyses performed to support the proposed decisions for the RTR and other issues addressed in this proposal.
As discussed in section II.A of this preamble and in the Benzene NESHAP, in evaluating and developing standards under CAA section 112(f)(2), we apply a two-step approach to determine whether or not risks are acceptable and to determine if the standards provide an ample margin of safety to protect public health. As explained in the Benzene NESHAP, “the first step judgment on acceptability cannot be reduced to any single factor” and, thus, “[t]he Administrator believes that the acceptability of risk under section 112 is best judged on the basis of a broad set of health risk measures and information.” (54 FR 38046). Similarly, with regard to the ample margin of safety determination, “the Agency again considers all of the health risk and other health information considered in the first step. Beyond that information, additional factors relating to the appropriate level of control will also be considered, including cost and economic impacts of controls, technological feasibility, uncertainties, and any other relevant factors.”
The Benzene NESHAP approach provides flexibility regarding factors the EPA may consider in making determinations and how the EPA may weigh those factors for each source category. The EPA conducts a risk assessment that provides estimates of the MIR posed by emissions of HAP that are carcinogens from each source in the source category, the hazard index (HI) for chronic exposures to HAP with the potential to cause noncancer health effects, and the hazard quotient (HQ) for acute exposures to HAP with the potential to cause noncancer health effects.
The policy chosen by the Administrator permits consideration of multiple measures of health risk. Not only can the MIR figure be considered, but also incidence, the presence of non-cancer health effects, and the uncertainties of the risk estimates. In this way, the effect on the most exposed individuals can be reviewed as well as the impact on the general public. These factors can then be weighed in each individual case. This approach complies with the
The EPA notes that it has not considered certain health information to date in making residual risk determinations. At this time, we do not attempt to quantify the HAP risk that may be associated with emissions from other facilities that do not include the source category under review, mobile source emissions, natural source emissions, persistent environmental pollution, or atmospheric transformation in the vicinity of the sources in the category.
The EPA understands the potential importance of considering an individual's total exposure to HAP in addition to considering exposure to HAP emissions from the source category and facility. We recognize that such consideration may be particularly important when assessing noncancer risk, where pollutant-specific exposure health reference levels (
In response to the SAB recommendations, the EPA incorporates cumulative risk analyses into its RTR risk assessments. The Agency (1) conducts facility-wide assessments, which include source category emission points, as well as other emission points within the facilities; (2) combines exposures from multiple sources in the same category that could affect the same individuals; and (3) for some persistent and bioaccumulative pollutants, analyzes the ingestion route of exposure. In addition, the RTR risk assessments consider aggregate cancer risk from all carcinogens and aggregated noncancer HQs for all noncarcinogens affecting the same target organ or target organ system.
Although we are interested in placing source category and facility-wide HAP risk in the context of total HAP risk from all sources combined in the vicinity of each source, we are concerned about the uncertainties of doing so. Estimates of total HAP risk from emission sources other than those that we have studied in depth during this RTR review would have significantly greater associated uncertainties than the source category or facility-wide estimates. Such aggregate or cumulative assessments would compound those uncertainties, making the assessments too unreliable.
Our technology review primarily focuses on the identification and evaluation of developments in practices, processes, and control technologies that have occurred since the MACT standards were promulgated. Where we identify such developments, we analyze their technical feasibility, estimated costs, energy implications, and non-air environmental impacts. We also consider the emission reductions associated with applying each development. This analysis informs our decision of whether it is “necessary” to revise the emissions standards. In addition, we consider the appropriateness of applying controls to new sources versus retrofitting existing sources. For this exercise, we consider any of the following to be a “development”:
• Any add-on control technology or other equipment that was not identified and considered during development of the original MACT standards;
• Any improvements in add-on control technology or other equipment (that were identified and considered during development of the original MACT standards) that could result in additional emissions reduction;
• Any work practice or operational procedure that was not identified or considered during development of the original MACT standards;
• Any process change or pollution prevention alternative that could be broadly applied to the industry and that was not identified or considered during development of the original MACT standards; and
• Any significant changes in the cost (including cost effectiveness) of applying controls (including controls the EPA considered during the development of the original MACT standards).
In addition to reviewing the practices, processes, and control technologies that were considered at the time we originally developed the NESHAP, we review a variety of data sources in our investigation of potential practices, processes, or controls. We also review the NESHAP and the available data to determine if there are any unregulated emissions of HAP within the source category and evaluate this data for use in developing new emission standards. See sections II.C and II.D of this preamble for information on the specific data sources that were reviewed as part of the technology review.
In this section, we provide a complete description of the types of analyses that we generally perform during the risk assessment process. In some cases, we do not perform a specific analysis because it is not relevant. For example, in the absence of emissions of HAP known to be persistent and bioaccumulative in the environment (PB-HAP), we would not perform a multipathway exposure assessment. Where we do not perform an analysis, we state that we do not and provide the reason. While we present all of our risk assessment methods, we only present risk assessment results for the analyses actually conducted (see section IV.B of this preamble).
The EPA conducts a risk assessment that provides estimates of the MIR for cancer posed by the HAP emissions from each source in the source category, the HI for chronic exposures to HAP with the potential to cause noncancer health effects, and the HQ for acute exposures to HAP with the potential to
The HAP emissions from US Magnesium fall into the following pollutant categories: Acid gases (
The available emissions data in the RTR emissions dataset include estimates of the mass of HAP emitted during a specified annual time period. These “actual” emission levels are often lower than the emission levels allowed under the requirements of the current MACT standards. The emissions allowed under the MACT standards are referred to as the “MACT-allowable” emissions. We discussed the consideration of both MACT-allowable and actual emissions in the final Coke Oven Batteries RTR (70 FR 19992, 19998 and 19999, April 15, 2005) and in the proposed and final Hazardous Organic NESHAP RTR (71 FR 34421, 34428, June 14, 2006, and 71 FR 76603, 76609, December 21, 2006, respectively). In those actions, we noted that assessing the risk at the MACT-allowable level is inherently reasonable since that risk reflects the maximum level facilities could emit and still comply with national emission standards. We also explained that it is reasonable to consider actual emissions, where such data are available, in both steps of the risk analysis, in accordance with the Benzene NESHAP approach. (54 FR 38044.)
Allowable emission rates for US Magnesium were developed based on the MACT emission limits. Specifically, given that the facility operates continuously throughout the year, the pound per hour emission limits for each emission process groups were used to calculate allowable emission totals. For sources without MACT limits in the current NESHAP, allowable emissions were assumed to equal to actual emissions since the facility operated continuously, at or near maximum capacity, during calendar year 2017. For a detailed description of the estimation of allowable emissions, see Appendix 1 to the
Both long-term and short-term inhalation exposure concentrations and health risk from the source category addressed in this proposal were estimated using the Human Exposure Model (HEM-3).
The air dispersion model AERMOD, used by the HEM-3 model, is one of the EPA's preferred models for assessing air pollutant concentrations from industrial facilities.
In developing the risk assessment for chronic exposures, we use the estimated annual average ambient air concentrations of each HAP emitted by each source in the source category. The HAP air concentrations at each nearby census block centroid located within 50 km of the facility are a surrogate for the chronic inhalation exposure concentration for all the people who reside in that census block. A distance of 50 km is consistent with both the analysis supporting the 1989 Benzene
For each facility, we calculate the MIR as the cancer risk associated with a continuous lifetime (24 hours per day, 7 days per week, 52 weeks per year, 70 years) exposure to the maximum concentration at the centroid of each inhabited census block. We calculate individual cancer risk by multiplying the estimated lifetime exposure to the ambient concentration of each HAP (in micrograms per cubic meter (μg/m
To estimate individual lifetime cancer risks associated with exposure to HAP emissions from each facility in the source category, we sum the risks for each of the carcinogenic HAP
To assess the risk of noncancer health effects from chronic exposure to HAP, we calculate either an HQ or a target organ-specific hazard index (TOSHI). We calculate an HQ when a single noncancer HAP is emitted. Where more than one noncancer HAP is emitted, we sum the HQ for each of the HAP that affects a common target organ or target organ system to obtain a TOSHI. The HQ is the estimated exposure divided by the chronic noncancer dose-response value, which is a value selected from one of several sources. The preferred chronic noncancer dose-response value is the EPA RfC, defined as “an estimate (with uncertainty spanning perhaps an order of magnitude) of a continuous inhalation exposure to the human population (including sensitive subgroups) that is likely to be without an appreciable risk of deleterious effects during a lifetime” (
For each HAP for which appropriate acute inhalation dose-response values are available, the EPA also assesses the potential health risks due to acute exposure. For these assessments, the EPA makes conservative assumptions about emission rates, meteorology, and exposure location. As part of our efforts to continually improve our methodologies to evaluate the risks that HAP emitted from categories of industrial sources pose to human health and the environment,
To assess the potential acute risk to the maximally exposed individual, we use the peak hourly emission rate for each emission point,
To characterize the potential health risks associated with estimated acute inhalation exposures to a HAP, we generally use multiple acute dose-response values, including acute RELs, acute exposure guideline levels (AEGLs), and emergency response planning guidelines (ERPG) for 1-hour exposure durations, if available, to calculate acute HQs. The acute HQ is calculated by dividing the estimated acute exposure concentration by the acute dose-response value. For each HAP for which acute dose-response values are available, the EPA calculates acute HQs.
An acute REL is defined as “the concentration level at or below which no adverse health effects are anticipated for a specified exposure duration.”
ERPGs are “developed for emergency planning and are intended as health-based guideline concentrations for single exposures to chemicals.”
An acute REL for 1-hour exposure durations is typically lower than its corresponding AEGL-1 and ERPG-1. Even though their definitions are slightly different, AEGL-1s are often the same as the corresponding ERPG-1s, and AEGL-2s are often equal to ERPG-2s. The maximum HQs from our acute inhalation screening risk assessment typically result when we use the acute REL for a HAP. In cases where the maximum acute HQ exceeds 1, we also report the HQ based on the next highest acute dose-response value (usually the AEGL-1 and/or the ERPG-1).
For this source category, maximum hourly emission estimates were available, so we did not use the default emissions multiplier of 10. For the melt/reactor system and CBS, hourly emission estimates were initially based on an upper peak-to-mean ratio (
In our acute inhalation screening risk assessment, acute impacts are deemed negligible for HAP for which acute HQs are less than or equal to 1, and no further analysis is performed for these HAP. In cases where an acute HQ from the screening step is greater than 1, we assess the site-specific data to ensure that the acute HQ is at an off-site location. For this source category, the data refinements employed consisted of reviewing modeling results to ensure we were evaluating locations and risks that were off-site, in places where the public could congregate for an hour or more, and also evaluating further the potential peak estimated actual emissions reported by the facility, which we assume could occur during rebuild/rehabilitative maintenance of the melt/reactor CRB control device. The CRB has an infrequent, but, periodic rebuild cycle where the refractory needs to be replaced and rebuilt about every 6 to 7 years. During this period, based on available information, we estimate the acute factor could be as high as 29, which is about 3.5 times higher than the initial modeled melt/reactor acute factor. These refinements are discussed more fully in the
The EPA conducts a tiered screening assessment examining the potential for significant human health risks due to exposures via routes other than inhalation (
For the Primary Magnesium Refining source category, we identified potential PB-HAP emissions for arsenic compounds, lead compounds, cadmium compounds, mercury compounds, and dioxins/furans, so we proceeded to the next step of the evaluation. Except for lead, the human health risk screening assessment for PB-HAP consists of three progressive tiers. In a Tier 1 screening assessment, we determine whether the magnitude of the facility-specific emissions of PB-HAP warrants further evaluation to characterize human health risk through ingestion exposure. To facilitate this step, we evaluate emissions against previously developed screening threshold emission rates for several PB-HAP that are based on a hypothetical upper-end screening exposure scenario developed for use in conjunction with the EPA's Total Risk Integrated Methodology.Fate, Transport, and Ecological Exposure (TRIM.FaTE) model. The PB-HAP with screening threshold emission rates are arsenic compounds, cadmium compounds, chlorinated dibenzodioxins and furans, mercury compounds, and polycyclic organic matter (POM). Based on the EPA estimates of toxicity and bioaccumulation potential, these pollutants represent a conservative list for inclusion in multipathway risk assessments for RTR rules. (See Volume 1, Appendix D at
We derive the Tier 1 screening threshold emission rates for these PB-HAP (other than lead compounds) to correspond to a maximum excess lifetime cancer risk of 1-in-1 million (
In the Tier 2 screening assessment, the location of each facility that exceeds a Tier 1 screening threshold emission rate is used to refine the assumptions associated with the Tier 1 fisher and farmer exposure scenarios at that facility. A key assumption in the Tier 1 screening assessment is that a lake and/or farm is located near the facility. As part of the Tier 2 screening assessment, we use a U.S. Geological Survey (USGS) database to identify actual waterbodies within 50 km of each facility and assume the fisher only consumes fish from lakes within that 50 km zone. We also examine the differences between local meteorology near the facility and the meteorology used in the Tier 1 screening assessment. We then adjust the previously-developed Tier 1 screening threshold emission rates for each PB-HAP for each facility based on an understanding of how exposure concentrations estimated for the screening scenario change with the use of local meteorology and the USGS lakes database.
In the Tier 2 farmer scenario, we maintain an assumption that the farm is located within 0.5 km of the facility and that the farmer consumes meat, eggs, dairy, vegetables, and fruit produced near the facility. We may further refine the Tier 2 screening analysis by assessing a gardener scenario to characterize a range of exposures, with the gardener scenario being more plausible in RTR evaluations. Under the gardener scenario, we assume the gardener consumes home-produced eggs, vegetables, and fruit products at the same ingestion rate as the farmer. The Tier 2 screen continues to rely on the high-end food intake assumptions that were applied in Tier 1 for local fish (adult female angler at 99th percentile fish consumption
There are several analyses that can be included in a Tier 3 screening assessment, depending upon the extent of refinement warranted, including validating that the lakes are fishable, locating residential/garden locations for urban and/or rural settings, considering plume-rise to estimate emissions lost above the mixing layer, and considering hourly effects of meteorology and plume-rise on chemical fate and transport (a time-series analysis). If necessary, the EPA may further refine the screening assessment through a site-specific assessment.
In evaluating the potential multipathway risk from emissions of lead compounds, rather than developing a screening threshold emission rate, we compare maximum estimated chronic inhalation exposure concentrations to the level of the current National Ambient Air Quality Standard (NAAQS) for lead.
For further information on the multipathway assessment approach, see the
The EPA conducts a screening assessment to examine the potential for an adverse environmental effect as required under section 112(f)(2)(A) of the CAA. Section 112(a)(7) of the CAA defines “adverse environmental effect” as “any significant and widespread adverse effect, which may reasonably be anticipated, to wildlife, aquatic life, or other natural resources, including adverse impacts on populations of endangered or threatened species or significant degradation of environmental quality over broad areas.”
The EPA focuses on eight HAP, which are referred to as “environmental HAP,” in its screening assessment: Six PB-HAP and two acid gases. The PB-HAP included in the screening assessment are arsenic compounds, cadmium compounds, dioxins/furans, POM, mercury (both inorganic mercury and methyl mercury), and lead compounds. The acid gases included in the screening assessment are HCl and hydrogen fluoride (HF).
HAP that persist and bioaccumulate are of particular environmental concern because they accumulate in the soil, sediment, and water. The acid gases, HCl and HF, are included due to their well-documented potential to cause direct damage to terrestrial plants. In the environmental risk screening assessment, we evaluate the following four exposure media: Terrestrial soils, surface water bodies (includes water-column and benthic sediments), fish consumed by wildlife, and air. Within these four exposure media, we evaluate nine ecological assessment endpoints, which are defined by the ecological entity and its attributes. For PB-HAP (other than lead), both community-level and population-level endpoints are included. For acid gases, the ecological assessment evaluated is terrestrial plant communities.
An ecological benchmark represents a concentration of HAP that has been linked to a particular environmental effect level. For each environmental HAP, we identified the available ecological benchmarks for each assessment endpoint. We identified, where possible, ecological benchmarks at the following effect levels: Probable effect levels, lowest-observed-adverse-effect level (LOAEL), and no-observed-adverse-effect level (NOAEL). In cases where multiple effect levels were available for a particular PB-HAP and assessment endpoint, we use all of the available effect levels to help us to determine whether ecological risks exist and, if so, whether the risks could be considered significant and widespread.
For further information on how the environmental risk screening assessment was conducted, including a discussion of the risk metrics used, how the environmental HAP were identified, and how the ecological benchmarks were selected, see Appendix 9 of the
For the environmental risk screening assessment, the EPA first determined whether any facilities in the Primary Magnesium Refining source category emitted any of the environmental HAP. For the Primary Magnesium Refining source category, we identified emissions of HCl and dioxins, and potential emissions of arsenic, cadmium, and mercury. Because one or more of the environmental HAP evaluated are emitted by at least one facility in the source category, we proceeded to the second step of the evaluation.
The environmental screening assessment includes six PB-HAP, arsenic compounds, cadmium compounds, dioxins/furans, POM, mercury (both inorganic mercury and methyl mercury), and lead compounds. With the exception of lead, the environmental risk screening assessment for PB-HAP consists of three tiers. The first tier of the environmental risk screening assessment uses the same health-protective conceptual model that is used for the Tier 1 human health screening assessment. TRIM.FaTE model simulations were used to back-calculate Tier 1 screening threshold emission rates. The screening threshold emission rates represent the emission rate in tons of pollutant per year that results in media concentrations at the facility that equal the relevant ecological benchmark. To assess emissions from each facility in the category, the reported emission rate for each PB-HAP was compared to the Tier 1 screening threshold emission rate for that PB-HAP for each assessment endpoint and effect level. If emissions from a facility do not exceed the Tier 1 screening threshold emission rate, the facility “passes” the screening assessment, and, therefore, is not evaluated further under the screening approach. If emissions from a facility exceed the Tier 1 screening threshold emission rate, we evaluate the facility further in Tier 2.
In Tier 2 of the environmental screening assessment, the screening threshold emission rates are adjusted to account for local meteorology and the actual location of lakes in the vicinity of facilities that did not pass the Tier 1 screening assessment. For soils, we evaluate the average soil concentration for all soil parcels within a 7.5-km radius for each facility and PB-HAP. For the water, sediment, and fish tissue concentrations, the highest value for each facility for each pollutant is used. If emission concentrations from a facility do not exceed the Tier 2 screening threshold emission rate, the facility “passes” the screening assessment and typically is not evaluated further. If emissions from a facility exceed the Tier 2 screening threshold emission rate, we evaluate the facility further in Tier 3.
As in the multipathway human health risk assessment, in Tier 3 of the environmental screening assessment, we examine the suitability of the lakes around the facilities to support life and remove those that are not suitable (
To evaluate the potential for an adverse environmental effect from lead, we compared the average modeled air concentrations (from HEM-3) of lead around each facility in the source category to the level of the secondary NAAQS for lead. The secondary lead NAAQS is a reasonable means of evaluating environmental risk because it is set to provide substantial protection against adverse welfare effects which can include “effects on soils, water, crops, vegetation, man-made materials, animals, wildlife, weather, visibility and climate, damage to and deterioration of property, and hazards to transportation, as well as effects on economic values and on personal comfort and well-being.”
The environmental screening assessment for acid gases evaluates the potential phytotoxicity and reduced productivity of plants due to chronic exposure to HF and HCl. The environmental risk screening methodology for acid gases is a single-tier screening assessment that compares modeled ambient air concentrations (from AERMOD) to the ecological benchmarks for each acid gas. To identify a potential adverse environmental effect (as defined in section 112(a)(7) of the CAA) from emissions of HF and HCl, we evaluate the following metrics: The size of the modeled area around each facility that exceeds the ecological benchmark for each acid gas, in acres and square kilometers; the percentage of the modeled area around each facility that exceeds the ecological benchmark for each acid gas; and the area-weighted average screening value around each facility (calculated by dividing the area-weighted average concentration over the 50-km modeling domain by the ecological benchmark for each acid gas). For further information on the environmental screening assessment approach, see Appendix 9 of the
To put the source category risks in context, we typically examine the risks from the entire “facility,” where the facility includes all HAP-emitting operations within a contiguous area and under common control. In other words, we examine the HAP emissions not only from the source category emission points of interest, but also emissions of HAP from all other emission sources at the facility for which we have data. For this source category, we conducted the facility-wide assessment using a dataset compiled from the 2017 NEI. The source category records of that NEI dataset were removed, evaluated, and updated as described in section II.C of this preamble: What data collection activities were conducted to support this action? Once a quality assured source category dataset was available, it was placed back with the remaining records from the NEI for that facility. The facility-wide file was then used to analyze risks due to the inhalation of HAP that are emitted “facility-wide” for the populations residing within 50 km of each facility, consistent with the methods used for the source category analysis described above. For these facility-wide risk analyses, the modeled source category risks were compared to the facility-wide risks to determine the portion of the facility-wide risks that could be attributed to the source category addressed in this proposal. We also specifically examined the facility that was associated with the highest estimate of risk and determined the percentage of that risk attributable to the source category of interest. The
Uncertainty and the potential for bias are inherent in all risk assessments, including those performed for this proposal. Although uncertainty exists, we believe that our approach, which used conservative tools and assumptions, ensures that our decisions are health and environmentally protective. A brief discussion of the uncertainties in the RTR emissions dataset, dispersion modeling, inhalation exposure estimates, and dose-response relationships follows below. Also included are those uncertainties specific to our acute screening assessments, multipathway screening assessments, and our environmental risk screening assessments. A more thorough discussion of these uncertainties is included in the
Although the development of the RTR emissions dataset involved quality assurance/quality control processes, the accuracy of emissions values will vary depending on the source of the data, the degree to which data are incomplete or missing, the degree to which assumptions made to complete the datasets are accurate, errors in emission estimates, and other factors. The emission estimates considered in this analysis generally are annual totals for certain years, and they do not reflect short-term fluctuations during the course of a year or variations from year to year. The estimates of peak hourly emission rates for the acute effects screening assessment were based on an emission adjustment factor applied to the average annual hourly emission rates, which are intended to account for emission fluctuations due to normal facility operations.
We recognize there is uncertainty in ambient concentration estimates associated with any model, including the EPA's recommended regulatory dispersion model, AERMOD. In using a model to estimate ambient pollutant concentrations, the user chooses certain options to apply. For RTR assessments, we select some model options that have the potential to overestimate ambient air concentrations (
Although every effort is made to identify all of the relevant facilities and emission points, as well as to develop accurate estimates of the annual emission rates for all relevant HAP, the uncertainties in our emission inventory likely dominate the uncertainties in the exposure assessment. Some uncertainties in our exposure assessment include human mobility, using the centroid of each census block, assuming lifetime exposure, and
There are uncertainties inherent in the development of the dose-response values used in our risk assessments for cancer effects from chronic exposures and noncancer effects from both chronic and acute exposures. Some uncertainties are generally expressed quantitatively, and others are generally expressed in qualitative terms. We note, as a preface to this discussion, a point on dose-response uncertainty that is stated in the EPA's
Cancer UREs used in our risk assessments are those that have been developed to generally provide an upper bound estimate of risk.
Many of the UFs used to account for variability and uncertainty in the development of acute dose-response values are quite similar to those developed for chronic durations. Additional adjustments are often applied to account for uncertainty in extrapolation from observations at one exposure duration (
Uncertainty also exists in the selection of ecological benchmarks for the environmental risk screening assessment. We established a hierarchy of preferred benchmark sources to allow selection of benchmarks for each environmental HAP at each ecological assessment endpoint. We searched for benchmarks for three effect levels (
Although we make every effort to identify appropriate human health effect dose-response values for all pollutants emitted by the sources in this risk assessment, some HAP emitted by this source category are lacking dose-response assessments. Accordingly, these pollutants cannot be included in the quantitative risk assessment, which could result in quantitative estimates understating HAP risk. To help to alleviate this potential underestimate, where we conclude similarity with a HAP for which a dose-response value is available, we use that value as a surrogate for the assessment of the HAP for which no value is available. To the extent use of surrogates indicates appreciable risk, we may identify a need to increase priority for an IRIS assessment for that substance. We additionally note that, generally speaking, HAP of greatest concern due to environmental exposures and hazard are those for which dose-response assessments have been performed, reducing the likelihood of understating risk. Further, HAP not included in the quantitative assessment are assessed qualitatively and considered in the risk characterization that informs the risk management decisions, including consideration of HAP reductions achieved by various control options.
For a group of compounds that are unspeciated (
In addition to the uncertainties highlighted above, there are several factors specific to the acute exposure assessment that the EPA conducts as part of the risk review under section 112 of the CAA. The accuracy of an acute inhalation exposure assessment depends on the simultaneous occurrence of independent factors that may vary greatly, such as hourly emissions rates, meteorology, and the presence of a person. In the acute screening assessment that we conduct under the RTR program, we assume that peak emissions from the source category and reasonable worst-case air dispersion conditions (
For each source category, we generally rely on site-specific levels of PB-HAP or environmental HAP emissions to determine whether a refined assessment of the impacts from multipathway exposures is necessary or whether it is necessary to perform an environmental screening assessment. This determination is based on the results of a three-tiered screening assessment that relies on the outputs from models—TRIM.FaTE and AERMOD—that estimate environmental pollutant concentrations and human exposures for five PB-HAP (dioxins, POM, mercury, cadmium, and arsenic) and two acid gases (HF and HCl). For lead, we use AERMOD to determine ambient air concentrations, which are then compared to the secondary NAAQS standard for lead. Two important types of uncertainty associated with the use of these models in RTR risk assessments and inherent to any assessment that relies on environmental modeling are model uncertainty and input uncertainty.
Model uncertainty concerns whether the model adequately represents the actual processes (
Input uncertainty is concerned with how accurately the models have been configured and parameterized for the assessment at hand. For Tier 1 of the multipathway and environmental screening assessments, we configured the models to avoid underestimating exposure and risk. This was accomplished by selecting upper-end values from nationally representative datasets for the more influential parameters in the environmental model, including selection and spatial configuration of the area of interest, lake location and size, meteorology, surface water, soil characteristics, and structure of the aquatic food web. We also assume an ingestion exposure scenario and values for human exposure factors that represent reasonable maximum exposures.
In Tier 2 of the multipathway and environmental screening assessments, we refine the model inputs to account for meteorological patterns in the vicinity of the facility versus using upper-end national values, and we identify the actual location of lakes near the facility rather than the default lake location that we apply in Tier 1. By refining the screening approach in Tier 2 to account for local geographical and meteorological data, we decrease the likelihood that concentrations in environmental media are overestimated, thereby increasing the usefulness of the screening assessment. In Tier 3 of the screening assessments, we refine the model inputs again to account for hour-by-hour plume-rise and the height of the mixing layer. We can also use those hour-by-hour meteorological data in a TRIM.FaTE run using the screening configuration corresponding to the lake location. These refinements produce a more accurate estimate of chemical concentrations in the media of interest, thereby reducing the uncertainty with those estimates. The assumptions and the associated uncertainties regarding the selected ingestion exposure scenario are the same for all three tiers.
For the environmental screening assessment for acid gases, we employ a single-tiered approach. We use the modeled air concentrations and compare those with ecological benchmarks.
For all tiers of the multipathway and environmental screening assessments, our approach to addressing model input uncertainty is generally cautious. We choose model inputs from the upper end of the range of possible values for the influential parameters used in the models, and we assume that the exposed individual exhibits ingestion behavior that would lead to a high total exposure. This approach reduces the likelihood of not identifying high risks for adverse impacts.
Despite the uncertainties, when individual pollutants or facilities do not exceed screening threshold emission rates (
The EPA evaluates the following HAP in the multipathway and/or environmental risk screening assessments, where applicable: Arsenic, cadmium, dioxins/furans, lead, mercury (both inorganic and methyl mercury), POM, HCl, and HF. These HAP represent pollutants that can cause adverse impacts either through direct exposure to HAP in the air or through exposure to HAP that are deposited from the air onto soils and surface waters and then through the environment into the food web. These HAP represent those HAP for which we can conduct a meaningful multipathway or environmental screening risk assessment. For other HAP not included in our screening assessments, the model has not been parameterized such that it can be used for that purpose. In some cases, depending on the HAP, we may not have appropriate multipathway models that allow us to predict the concentration of that pollutant. The EPA acknowledges that other HAP beyond these that we are evaluating may have the potential to cause adverse effects and, therefore, the EPA may evaluate other relevant HAP in the future, as modeling science and resources allow.
In this proposal, pursuant to CAA section 112(d)(2) and (3) , we are proposing to establish an emission standard requiring MACT level control of chlorine emissions from the CBS. The results and proposed decisions based on the analyses performed pursuant to CAA section 112(d)(2) and (3) are presented below.
In the primary magnesium refining process, the electrowinning of the melted magnesium chloride to magnesium metal produces as a byproduct chlorine gas which is piped to, and recovered at, the co-located chlorine plant. At the chlorine plant, the chlorine gas is liquified and then stored for either reuse back into the magnesium refining process or sold to the market. When the chlorine plant is inoperable (
Based on available information from the facility and the current title V permit, we estimate the scrubbers achieve at least 95 percent control efficiency and that the remaining chlorine gas (up to 5 percent) is emitted to the atmosphere. As a potentially significant source of chlorine emissions from the refining process, we are proposing to establish an emission standard requiring MACT level control of chlorine emissions from the CBS.
MACT standards must reflect the maximum degree of emissions reduction achievable through the application of measures, processes, methods, systems or techniques, including, but not limited to, measures that: (1) Reduce the volume of or eliminate pollutants through process changes, substitution of materials or other modifications; (2) enclose systems or processes to eliminate emissions; (3) capture or treat pollutants when released from a process, stack, storage, or fugitive emissions point; (4) are design, equipment, work practice, or operational standards (including requirements for operator training or certification); or (5) are a combination of the above. See CAA section 112(d)(2)(A) through (E). The MACT standards may take the form of design, equipment, work practice, or operational standards where the EPA determines either that: (1) A pollutant cannot be emitted through a conveyance designed and constructed to emit or capture the pollutant, or that any requirement for, or use of, such a conveyance would be inconsistent with law; or (2) the application of measurement methodology to a particular class of sources is not practicable due to technological and economic limitations. See CAA section 112(h)(1) and (2).
The MACT “floor” is the minimum control level required for MACT standards promulgated under CAA section 112(d) and may not be based on cost considerations. For new sources, the MACT floor cannot be less stringent than the emissions control that is achieved in practice by the best-controlled similar source. The MACT floor for existing sources can be less stringent than floors for new sources, but not less stringent than the average emissions limitation achieved by the best-performing 12 percent of existing sources in the category or subcategory (or the best-performing five sources for categories or subcategories with fewer than 30 sources). Once the EPA has set the MACT floor, it may then impose stricter standards (“beyond-the-floor” limits) if the EPA determines them to be achievable taking into consideration the cost of achieving the emission reductions, any non-air quality health and environmental impacts, and energy requirements.
Since there is only one primary magnesium refinery in the source category, the MACT floor for new and existing sources is established by the emission limitation achieved at that source. As described above, currently the CBS chlorine emissions are controlled by a ferrous chloride packed-bed scrubber. A representative from US Magnesium explained that chlorine removal can be calculated to be up to 100 percent stoichiometrically under fixed mass flow and ferric chloride recirculation rates. However, due to high variability in flow rates during the range of normal operations, the actual efficiency is expected to be less than 100 percent (for more information see email from Rob Hartman, US Magnesium, to Michael Moeller, EPA, which is available in the docket for this proposed rulemaking). Based on the limited available information and applying engineering judgement as described above, the facility and the state of Utah assume that the scrubbers achieve an average removal efficiency of 95 percent for purposes of determining and reporting daily chlorine emissions as required by the tile V permit. However, there are no stack test data available to confirm this value. Therefore, based on the available information, we propose 95 percent reduction of chlorine emissions as the MACT floor for the CBS for new and existing sources in the source category.
In addition to determining the MACT floor level of control, as part of our development of the proposed MACT standard, we assessed whether stricter standards (“beyond-the-floor” limits) are achievable taking into consideration the cost of achieving additional emission reductions, any non-air quality health and environmental impacts, and energy requirements. We identified one potential control option, using a combination of a thermal incinerator coupled with a wet scrubber, that could achieve chlorine control efficiencies greater than the current 95 percent. The thermal incinerator reacts chlorine with natural gas to produce HCl gas. This process is highly efficient at converting chlorine into HCl and based on the available information, we estimate that 99 percent of the chlorine is converted to HCl. The HCl gas stream, which has greater solubility than chlorine, is then controlled through absorption via a wet scrubber. The wet scrubber removal efficiency of HCl is estimated to be 99 percent. This combination of controls could be expected to achieve 98 percent reduction of chlorine emissions. With regard to costs of achieving these additional emission reductions, based on limited information, we estimate the capital costs for these beyond-the-floor controls would be about $1.3 million, annualized costs would be about $1.4 million, and would achieve an estimated 300 tpy reduction, with estimated cost effectiveness of $4,657 per ton of chlorine reductions. However, as explained in the technical memorandum cited below, we note that there are substantial uncertainties with the baseline emissions estimates, the emissions reductions that would be achieved, and the cost estimates. This is primarily due to lack of test data and lack of information regarding flow rates, renovation costs, and other factors. For example, without test data to corroborate, the actual efficiency of the current control could be higher (or lower) than the estimated 95 percent. The facility has determined that chlorine removal, under stoichiometrically ideal conditions, can be calculated to be up to 100 percent. If the current control is higher than the 95 percent, the additional emission reductions and the cost effectiveness would be reduced. If the current control approaches 98 percent, there would be no additional reductions to achieve. In regard to uncertainties with the cost estimates, there is a large range of values for the costs associated with the installation and operating of a thermal incinerator and wet scrubber devices. To account for this, we used the midpoint of the cost range; however, due to the unique nature of this industry and without additional information about the CBS, the actual costs could be anywhere within the range and even beyond it. Using the upper end estimates of the cost range, capital costs could be as high as $2.1 million, annualized costs up to $2.5 million and an estimated cost effectiveness of $8,152 per ton. In addition, there would be additional economic impacts beyond these estimated costs due to the loss of facility revenue from the elimination of the production of a valuable by-product
We note that the cost-effectiveness is within the range of cost effectiveness accepted for beyond-the-floor controls for some other HAP in NESHAP for other source categories (
Nevertheless, given the issues and substantial uncertainties described above, we are not proposing this beyond-the-floor standard. We also note that we did not identify any relevant non-air quality health and environmental impacts, and energy requirements. Although we are not proposing this beyond-the-floor standard, we are soliciting comments, data and other information regarding the beyond-the-floor analysis (including costs estimates, baseline emissions, emissions reductions, and loss of product/revenue), and we are soliciting comments regarding our proposed determination and whether it would be appropriate to require these beyond-the-floor controls under the NESHAP, and if so, why.
Therefore, based on all the analyses presented above, we are proposing a MACT floor emissions standard for the CBS that will require new and existing sources in the source category to operate the control device and demonstrate 95 percent reduction of chlorine emissions. Specifically, we propose the following conditions: The facility must operate the control device (
Although we are proposing a MACT floor level of control for new and existing sources of 95 percent reduction of chlorine emissions based on the information presented above, we acknowledge there are some uncertainties regarding the actual control efficiency achieved under normal variable operations. Therefore, we are soliciting comments, data, or other information regarding the 95 percent control efficiency limit and whether a different limit, higher or lower, would be appropriate and, if so, why such a different limit would be appropriate to represent the MACT floor level of control. As described above, we are not proposing a beyond-the-floor option primarily due to significant uncertainties in the emissions and in the costs of achieving additional emission reductions. We conclude that the current scrubbing system represents MACT for the CBS. However, we are soliciting comments, data, and other information regarding the analyses for our proposed MACT floor standard and the beyond-the-floor option and our determinations. For more information regarding the beyond-the-floor analysis and our conclusions, see the
Table 2 of this preamble provides a summary of the results of the chronic inhalation risk assessment for HAP emissions for the source category, and an upper-end assessment of acute inhalation risks (based on the 95th percentile of 2017 hourly emissions estimates). Additional analyses and refinements regarding potential acute risks, including potential higher-end acute risks, are described later in this section. More detailed information on the risk assessment can be found in the document titled
Results of the inhalation risk assessment based on estimates of actual emissions indicate that the maximum lifetime individual cancer risk (or MIR) posed by the single facility is 0.08-in-1 million, with arsenic compounds, dioxins/furans, chromium (VI) compounds, and nickel compounds predominantly emitted from spray dryers and the melt/reactor system as the major contributors to the risk. The total estimated cancer incidence from this source category is 0.00001 excess cancer cases per year, or one excess case in every 100,000 years. No people are estimated to have inhalation cancer risks above 1-in-1 million due to HAP emitted from the facility in this source category. The HEM-3 model predicted the maximum chronic noncancer HI value for the source category could be up to 2 (respiratory effects), driven by emissions of chlorine from the melt/reactor system and that two people could be expected to be exposed to TOSHI levels above 1. However, due to the large distance to the nearest residential areas, the MIR and maximum chronic HI receptor is approximately 26 km from the plant. Based upon the distance of the plant to the MIR receptor with a local average wind of 5 meters per second, the facility's plume would reach this receptor in approximately 1.4 hours. After reviewing the decay rates for chlorine and receptor distances for this facility, we determined that these emission sources should be modeled taking photo-decay into account. The HEM-3 model does not consider photo-decay. Therefore, a separate refined analysis considering decay was performed to assess the impact on the chronic noncancer HI. Based upon the reactivity of chlorine and the time to reach the MIR location, we would expect the chlorine concentration at the MIR to decrease by approximately 44 percent when accounting for photo-decay, resulting in a chronic noncancer HI value for the source category of 1 (respiratory) with no people expected to be exposed to a HI of greater than 1. Details on this refinement is presented in Appendix 12 of the source category risk report, which is available in the docket for this action.
Considering MACT-allowable emissions, results of the inhalation risk assessment indicate that the cancer MIR is 0.08-in-1 million, again with arsenic compounds, dioxins/furans, chromium (VI) compounds, and nickel compounds predominantly emitted from spray dryers and the melt/reactor system as the major contributors to the risk. The total estimated cancer incidence from this source category based on allowable emissions is 0.00001 excess cancer cases per year, or one excess case in every 100,000 years. No people are estimated to have cancer risks above 1-in-1 million from HAP emitted from the facility in this source category. No individuals are estimated to have exposures that result in a noncancer HI at or above 1 at allowable emission rates.
To better characterize the potential health risks associated with estimated worst-case acute exposures to HAP, and in response to a key recommendation from the SAB's peer review of the EPA's RTR risk assessment methodologies, we examined a wider range of available acute health metrics than we do for our chronic risk assessments. This is in acknowledgement that there are generally more data gaps and uncertainties in acute reference values than there are in chronic reference values. By definition, the acute REL represents a health-protective level of exposure, with effects not anticipated below those levels, even for repeated exposures. However, the level of exposure that would cause health effects is not specifically known. Therefore, when an REL is exceeded and an AEGL-1 or ERPG-1 level is available (
Based on our initial acute risk assessment, the maximum acute HQs from actual baseline emissions, based on a review of all modeled receptors for the US Magnesium facility, identified an exceedance of one acute benchmark (for chlorine) with an HQ of 8 based on the 1-hour REL, but that receptor is located on-site with no public access. We then evaluated the off-site receptors, which resulted in a highest refined (off-site) screening acute HQ for chlorine of 3 (based on the acute REL for chlorine). For this initial model run, we assumed an upper-end estimate of hourly potential acute emissions from the primary source of the chlorine emissions (
However, we also evaluated the potential acute HQ values based on estimated worst-case emissions, which we understand have occurred during periodic rebuilding and rehabilitative maintenance events of the melt/reactor control device (
The lone facility in the source category reported estimated emissions of carcinogenic PB-HAP (arsenic and dioxins) and non-carcinogenic PB-HAP (cadmium and mercury). The facility reported emissions of carcinogenic PB-HAP (arsenic and dioxins) that exceeded a Tier 1 cancer screening threshold emission rate and reported emissions of non-carcinogenic PB-HAP (mercury) that exceeded a Tier 1 noncancer screening threshold emission rate. Because the facility exceeded the Tier 1 multipathway screening threshold emission rate for one or more PB-HAP, we used additional facility site-specific information to perform a Tier 2 assessment and determine the maximum chronic cancer and noncancer impacts for the source category. Based on the Tier 2 multipathway cancer assessment, the dioxin emissions exceeded the Tier 2 screening threshold emission rate by a factor of 20 and a factor of 40 for arsenic. The multipathway risk screening Tier 2 assessment resulted in a combined dioxin and arsenic emission rate that exceeded the Tier 2 cancer screening value by a factor of 60 for the gardener scenario. The Tier 2 screening value for all other PB-HAP potentially emitted from the source category (mercury compounds and cadmium compounds) were less than 1.
A Tier 3 cancer screening assessment was conducted for both the fisher and gardener scenarios. Based on this Tier 3 screening assessment, a refined lake screening was conducted as well as identification of a residential receptor location (
An exceedance of a screening threshold emission rate in any of the tiers cannot be equated with a risk value or an HQ (or HI). Rather, it represents a high-end estimate of what the risk or hazard may be. For example, screening threshold emission rate of 2 for a non-carcinogen can be interpreted to mean that we are confident that the HQ would be lower than 2. Similarly, a tier screening threshold emission rate of 7 for a carcinogen means that we are confident that the risk is lower than 7-in-1 million. Our confidence comes from the conservative, or health-protective, assumptions encompassed in the screening tiers: We choose inputs from the upper end of the range of possible values for the influential parameters used in the screening tiers, and we assume that the exposed individual exhibits ingestion behavior that would lead to a high total exposure.
As described in section III.A of this document, we conducted an environmental risk screening assessment for the Primary Magnesium Refining source category for the following pollutants: Arsenic, cadmium, dioxins/furans, HCl, lead, and mercury.
In the Tier 1 screening analysis for PB-HAP (other than lead, which was evaluated differently), arsenic, cadmium, and divalent mercury emissions had no Tier 1 exceedances for any ecological benchmark. Dioxin/furan emissions at one facility had Tier 1 exceedances for the surface soil NOAEL (mammalian insectivores—shrew) benchmark by a maximum screening value of 400. Methyl mercury at one facility had Tier 1 exceedances for the surface soil NOAEL (avian ground insectivores—woodcock) by a maximum screening value of 2.
A Tier 2 screening assessment was performed for methyl mercury and dioxin/furan emissions. Methyl mercury had no Tier 2 exceedances for any ecological benchmark. Dioxin/furan emissions had Tier 2 exceedances for the surface soil NOAEL (mammalian insectivores—shrew) benchmark by a maximum screening value of 4. This screening value was refined by removing soil areas located on-site. The refined Tier 2 screening value for dioxins/furans is 3.
A Tier 3 screening analysis was performed for dioxin emissions. In the Tier 3 screen, after incorporating chemical losses due to plume-rise into the calculation, the screening value remained 3 (surface soil NOAEL). Also in the Tier 3 screen, we conducted runs of the screening scenario within TRIM.FaTE with the following site-specific time-series data: Hourly meteorology, time series of leaf litterfall and air-leaf chemical exchanges, facility emissions, and hourly values of emission release height equivalent to hourly plume-rise height. After incorporating these time-series data in the analysis, the screening value is 2 (surface soil NOAEL). No other dioxin/furan benchmarks were exceeded in Tier 2 or 3. Specifically, the following dioxin/furan benchmarks were not exceeded in the Tier 2 or 3 screen:
For lead, we did not estimate any exceedances of the secondary lead NAAQS.
For HCl, the average modeled concentration around the facility (
Based on the results of the environmental risk screening analysis, we do not expect an adverse environmental effect as a result of HAP emissions from this source category.
Facility-wide risks were estimated using the NEI-based data described in section III.C of this preamble. The maximum facility-wide cancer MIR is 0.08-in-1 million, mainly driven by arsenic compounds, dioxins/furans, chromium (VI) compounds, and nickel compounds predominantly emitted
To examine the potential for any environmental justice issues that might be associated with the source category, we performed a demographic analysis, which is an assessment of risk to individual demographic groups of the populations living near the facilities at different risk levels. However, because no one is exposed to a cancer risk greater than 1-in-1 million or a chronic noncancer HQ greater than 1, we only evaluated the population distributions living near the facility.
The results of the demographic analysis are summarized in Table 3 below. These results, for various demographic groups, are based on the population living within 50 km of the facility (the nearest resident is over 20 km from the facility).
The results of the Primary Magnesium Refining source category demographic analysis indicate that for the population subgroups living within 50-km of the facility only one subgroup (people 0 to 17 years) is above its corresponding national average (40 percent versus 23 percent nationally).
The methodology and the results of the demographic analysis are presented in further details in a technical report,
As noted in section III of this preamble, the EPA sets standards under CAA section 112(f)(2) using “a two-step standard-setting approach, with an analytical first step to determine an `acceptable risk' that considers all health information, including risk estimation uncertainty, and includes a presumptive limit on MIR of approximately 1-in-10 thousand” (see 54 FR 38045, September 14, 1989). In this proposal, the EPA estimated risks based on actual and allowable emissions under the current NESHAP from the Primary Magnesium Refining source category.
The estimated inhalation cancer risk to the individual most exposed to actual or allowable emissions from the source category is 0.08-in-1 million. The estimated incidence of cancer due to inhalation exposures is 0.00001 excess cancer cases per year, or 1 excess case every 100,000 years. No people are estimated to have cancer risks above 1-in-1 million from HAP emitted from the facility in this source category.
The estimated, refined, maximum chronic noncancer TOSHI from inhalation exposure for this source category is 1, indicating low likelihood of adverse noncancer effects from long-term inhalation exposures.
The multipathway risk assessment results indicate a maximum cancer risk of 7-in-1 million based on ingestion exposures estimated for dioxins using the health protective risk screening assumptions of a Tier 3 fisher exposure scenario.
The initial acute risk screening assessment of upper-end estimates of acute inhalation impacts (which were based on the 95th percentile estimate of hourly emissions) indicates a maximum off-site acute HQ (REL) of 3, located at an adjacent facility. A review of the surrounding property off-site of the US Magnesium facility also identified public land managed by the Bureau of Land Management with an HQ of 2. Access highways to the facilities off of the highway (I-80) show an HQ of 0.4, with the MIR residential location for the source category having an HQ of 0.3.
After the initial acute risk assessment, we also evaluated the potential risks associated with an estimate of the worst-case actual hourly peak emissions, which we understand can occur during rebuilding/rehabilitative maintenance events of the CRB. During these events, we estimate that maximum off-site acute HQ (REL) can be as high as 11 in the parking lot shared with the neighboring facility, 7 on public uninhabited lands, and 1 at the nearest residential location. However, as is discussed in section IV.E of this preamble, by removing the SSM exemptions in this proposed action, proposing work practice standards for periods of malfunction, and with current emission limits in the NESHAP applying at all other times, including rebuild/rehabilitative maintenance of the CRB, this potential elevated acute risk will be significantly reduced. Therefore, based on this assessment, the refined acute results indicate that at baseline, the acute HQ could be as high as 11, but once the proposed rule is finalized, including the removal of the exemptions, peak emissions are unlikely to pose significant risk.
Considering all of the health risk information and factors discussed
As directed by CAA section 112(f)(2), we conducted an analysis to determine whether the current emissions standards provide an ample margin of safety to protect public health. Under the ample margin of safety analysis, the EPA considers all health factors evaluated in the risk assessment and evaluates the cost and feasibility of available control technologies and other measures (including the controls, measures, and costs reviewed under the technology review) that could be applied to this source category to further reduce the risks (or potential risks) due to emissions of HAP identified in our risk assessment. In this analysis, we considered the results of the technology review, risk assessment, and other aspects of the NESHAP review to determine whether there are any emission reduction measures necessary to provide an ample margin of safety with respect to the risks associated with these emissions.
The inhalation cancer risk due to HAP emissions from the Primary Magnesium Refining source category is less than 1-in-1 million and the chronic noncancer TOSHI due to inhalation exposures is estimated to be 1 and no one exposed to an HI greater than 1. Additionally, the results of the acute screening analysis showed that risks were below a level of concern during normal operations.
As described above, there are potential elevated acute risks associated with CRB controls on the melt/reactor; however, by removing the SSM exemptions in this proposed action, proposing work practice standards for periods of malfunction, and with current emission limits applying at all other times, including rebuild/rehabilitative maintenance of the CRB, these potential elevated acute risks will be significantly reduced.
With regard to PB-HAP, we identified and investigated the installation of activated carbon injection (ACI) and a baghouse with catalytic filters as an option to further reduce dioxin emissions and risks. The use of ACI plus catalytic filters to reduce dioxin emissions was evaluated and determined not to be cost effective during the original NESHAP. Based on our current review of that information, we do not believe the associated costs for installing and operating a baghouse have changed significantly since the original NESHAP. When evaluating the cost effectiveness of installing ACI and a baghouse with catalytic filters during the development of the 2003 Primary Magnesium Refining NESHAP, a full cost analysis was performed for the facility. Based on our reevaluation of this information and an updated analysis, we estimate these controls would have capital cost of about $1 million, annual costs of $600,000, and would achieve about 2 grams reduction per year (95 percent reduction), with cost effectiveness of $289,000 per gram of dioxin removal, and the maximum cancer risk would be reduced from 7-in-1 million to about 1-in-1 million (for more details see Legacy Docket A-2002-0043, Document II-B-5). Due to the relatively high cost, coupled with the small reduction in dioxin emissions, we conclude that these controls are not cost effective, and would only achieve modest reduction in risks. We did not identify any relevant non-air quality health and environmental impacts, and energy requirements. Based upon the relatively low baseline risks, minimal available risk reductions, and lack of cost-effective control options to reduce emissions, we are not proposing revised standards for dioxins and furans in this action.
In summary, we are proposing that baseline risks from the source category are acceptable, and we are proposing rule changes (described above) to remove SSM exemptions and add work practice standards for CRB malfunction events. With these proposed revisions along with the current emissions limits for chlorine and other HAP applying at all times, the potential acute risks of chlorine will be addressed. Furthermore, we did not identify cost-effective controls for dioxins. Therefore, we are proposing that after the rule changes described above are finalized, the NESHAP will provide an ample margin of safety to protect public health. Since the removal of the SSM exemptions and addition of work practices for malfunctions help address the acute risks, we are proposing to adopt these amendments under CAA section 112(f), in addition to authorities 112(d)(2), 112(d)(3), or 112(h), as described elsewhere in this preamble.
As described in section III.A of this preamble, we conducted an environmental risk screening assessment for the Primary Magnesium Refining source category. We do not expect there to be an adverse environmental effect as a result of HAP emissions from this source category and we are proposing that it is not necessary to set any additional standards, beyond those described above, to prevent, taking into consideration costs, energy, safety, and other relevant factors, an adverse environmental effect.
As described in section III.B of this preamble, the technology review focuses on the identification and evaluation of developments in practices, processes, and control technologies that have occurred since the MACT standards were promulgated. We also evaluate, during the technology review, whether there are any unregulated emissions of HAP within the source category, and we establish standards if we identify unregulated emissions. In conducting the technology review, we reviewed various informational sources regarding the emissions from the Primary Magnesium Refining source category. The review included a search of the internet and Reasonably Available Control Technology, Best Available Control Technology, and Lowest Achievable Emission Rate Clearinghouse database, reviews of air permits, and discussions with industry representatives. We reviewed these data sources for information on practices, processes, and control technologies that were not considered during the development of the Primary Magnesium Refining NESHAP. We also looked for information on improvements in practices, processes, and control technologies that have occurred since the development of the Primary Magnesium Refining NESHAP.
Based on this review, the EPA identified a development in technology and practices regarding pH monitoring for acid gas control devices. Specifically, the EPA is proposing to amend the emission limitations and operating parameters set forth in 40 CFR 63.9890(b) to include pH as an additional operational parameter for all control devices used to meet the acid gas emission limits of this subpart. We have determined that this change reflects a development in technology and practices pursuant to CAA section 112(d)(6), that is consistent with other
Furthermore, as described above in section IV.A, we evaluated the potential to require an incinerator and wet scrubber to achieve additional reductions of chlorine from the CBS, however, due to significant uncertainties in emissions and costs of controls, we are not proposing such controls under CAA section 112(d)(2) or (d)(3). For the same reasons, we are also not proposing such controls under CAA section 112(d)(6).
In addition, as part of the technology review, we identified a previously unregulated process and pollutant, and are regulating them under CAA sections 112(d)(2) and (3), as described in section IV.A, above.
In summary, after reviewing all of this information, we identified one development in technology and practices regarding pH monitoring for acid gas control devices. We did not identify any additional cost-effective developments in practices, processes, or control technologies used at primary magnesium refining facilities since promulgation of the MACT standard that warrant revision to the NESHAP pursuant to CAA section 112(d)(6) at this time. For all four emission points, US Magnesium uses wet scrubbers (packed-bed and venturi scrubbers) to achieve the emission limits. We concluded that wet scrubbing systems are the most appropriate and practical control systems and that there is no other control equipment or methods of control that would be more effective for reducing their emissions taking into consideration cost, feasibility, and uncertainties.
In addition to the proposed actions described above, we are proposing additional revisions to the NESHAP. We are proposing revisions to the SSM provisions of the MACT rule in order to ensure that they are consistent with the decision in
In its 2008 decision in
Consistent with
The EPA has attempted to ensure that the provisions we are proposing to eliminate are inappropriate, unnecessary, or redundant in the absence of the SSM exemption. We are specifically seeking comment on whether we have successfully done so.
In proposing the standards in this rule, the EPA has considered startup and shutdown periods and, for the reasons explained below, is not proposing alternate standards for those periods. The primary magnesium refining production process is continuous, with control equipment operating at all times. The industry has not identified (and there are no data indicating) any specific problems with removing the provisions for startup and shutdown. However, we solicit comment on whether any situations exist where separate standards, such as work practices, would be more appropriate during periods of startup and shutdown rather than the current standard.
Periods of startup, normal operations, and shutdown are all predictable and routine aspects of a source's operations. Malfunctions, in contrast, are neither predictable nor routine. Instead they are, by definition, sudden, infrequent, and not reasonably preventable failures of emissions control, process, or monitoring equipment. (40 CFR 63.2) (definition of malfunction). The EPA interprets CAA section 112 as not requiring emissions that occur during periods of malfunction to be factored into development of CAA section 112 standards and this reading has been upheld as reasonable by the court in
As the court recognized in
Although no statutory language compels the EPA to set separate standards for malfunctions, the EPA has the discretion to do so where feasible. For example, in the Petroleum Refinery Sector RTR, the EPA established a work practice standard for unique types of malfunction that result in releases from pressure relief devices or emergency flaring events because the EPA had information to determine that such work practices reflected the level of control that applies to the best performers. 80 FR 75178, 75211 through 14 (December 1, 2015). The EPA will consider whether circumstances warrant setting standards for a particular type of malfunction and, if so, whether the EPA has sufficient information to identify the relevant best performing sources and establish a standard for such malfunctions. (We also encourage commenters to provide any such information.)
Given the EPA's discretion to set separate standards for malfunctions, we are proposing a standard for this source category to address the CRB emission point. Based on our knowledge of the processes and engineering judgement, we expect that the standard for normal operations for the melt/reactor (100 lbs/hr) cannot be met during malfunctions of the CRB (unavoidable and unanticipated breakdowns), unless the melt/reactor is stopped, which the facility has indicated cannot be done instantaneously due to the molten process. The CRB is the primary chlorine control device for the melt/reactor system. The CRB converts the chlorine gas stream from the melt/reactor to HCl. A high percentage of the HCl is then captured through a series of wet scrubbers. If the CRB is offline, the chlorine emissions continue to pass through the wet scrubbers; however, without the conversion to HCl, removal is significantly reduced. Therefore, the EPA anticipates that malfunctions of the CRB will result in violations of the current chlorine standard (
As noted in CAA section 112(h)(1), “if it is not feasible in the judgment of the Administrator to prescribe or enforce an emission standard for control of a hazardous air pollutant or pollutants, the Administrator may, in lieu thereof, promulgate a design, equipment, work practice, or operational standard, or combination thereof, which in the Administrator's judgment is consistent with the provisions of subsection (d) or (f).” CAA section 112(h)(2) defines the phrase “not feasible to prescribe or enforce an emission standard” as any situation in which the Administrator determines that either “a hazardous air pollutant or pollutants cannot be emitted through a conveyance designed and constructed to emit or capture such pollutant, or that any requirement for, or use of, such a conveyance would be inconsistent with any Federal, State or local law” or “the application of measurement methodology to a particular class of sources is not practicable due to technological and economic limitations.”
Based on the information described above, the EPA is proposing work practice standards pursuant to CAA section 112(h) that will apply to the melt/reactor and the CRB during periods when a malfunction occurs to the CRB. We are proposing the following work practices for these periods that include the following requirements: (1) During unplanned/unavoidable CRB malfunction events, the facility must shutdown the reactor as soon as practicable but not later than 15 minutes after such event occurs and keep the reactor offline during the CRB repair process; and (2) operators must perform a root cause analysis/corrective action. This includes conducting a root cause analysis to determine the source, nature, and cause of each malfunction event and identifying corrective measures to prevent future such malfunction events as soon as practicable, but no later than 45 days after a malfunction event.
With regard to other emissions sources (
In the unlikely event that a source fails to comply with the applicable CAA section 112(d) standards as a result of a malfunction event, the EPA would determine an appropriate response based on, among other things, the good faith efforts of the source to minimize emissions during malfunction periods, including preventative and corrective actions, as well as root cause analyses to ascertain and rectify excess emissions. The EPA would also consider whether the source's failure to comply with the CAA section 112(d) standard was, in fact, sudden, infrequent, not reasonably preventable, and was not instead caused, in part, by poor maintenance or careless operation. 40 CFR 63.2 (definition of malfunction).
If the EPA determines in a particular case that an enforcement action against a source for violation of an emission standard is warranted, the source can raise any and all defenses in that enforcement action and the federal district court will determine what, if any, relief is appropriate. The same is true for citizen enforcement actions. Similarly, the presiding officer in an administrative proceeding can consider any defense raised and determine whether administrative penalties are appropriate.
In summary, the EPA interpretation of the CAA and, in particular, CAA section 112, is reasonable and encourages practices that will avoid malfunctions and judicial procedures for addressing exceedances of the standards fully recognize that violations may occur despite good faith efforts to comply and can accommodate those situations.
We are also proposing several revisions to the General Provisions Applicability Table (Table 5) which are explained in more detail below as follows. We are proposing to revise the General Provisions Applicability Table (Table 5) entry for 40 CFR 63.6(e)(1)(i) by changing the “yes” in the column titled “Applies to Subpart TTTTT” to a “no.” Section 63.6(e)(1)(i) describes the general duty to minimize emissions. Some of the language in that section is no longer necessary or appropriate in light of the elimination of the SSM exemption. We are proposing instead to add general duty regulatory text at 40 CFR 63.9910(b) that reflects the general duty to minimize emissions while eliminating the reference to periods covered by an SSM exemption. The current language in 40 CFR 63.6(e)(1)(i) characterizes what the general duty entails during periods of SSM. With the elimination of the SSM exemption, there is no need to differentiate between normal operations and SSM events in describing the general duty. Therefore, the language the EPA is proposing for 40 CFR 63.9910(b) does not include that language from 40 CFR 63.6(e)(1).
We are also proposing to revise the General Provisions Applicability Table (Table 5) entry for 40 CFR 63.6(e)(1)(ii) by changing the “yes” in the column titled “Applies to Subpart TTTTT” to a “no.” Section 63.6(e)(1)(ii) imposes requirements that are not necessary with the elimination of the SSM exemption or are redundant with the general duty requirement being added at 40 CFR 63.9910(b).
We are proposing to revise the General Provisions Applicability Table (Table 5) entry for 40 CFR 63.6(e)(3) by changing the “yes” in the column titled “Applies to Subpart TTTTT” to a “no.” Generally, these paragraphs require development of an SSM plan and specify SSM recordkeeping and reporting requirements related to the SSM plan. As noted, the EPA is proposing to remove the SSM exemptions. Therefore, affected units will be subject to an emission standard during such events. The applicability of a standard during such events will ensure that sources have ample incentive to plan for and achieve compliance and, thus, the SSM plan requirements are no longer necessary.
We are proposing to revise the General Provisions Applicability Table (Table 5) entry for 40 CFR 63.6(f)(1) by changing the “yes” in the column titled “Applies to Subpart TTTTT” to a “no.” The current language of 40 CFR 63.6(f)(1) exempts sources from nonopacity standards during periods of SSM. As discussed above, the court in
We are proposing to revise the General Provisions Applicability Table (Table 5) entry for 40 CFR 63.7(e)(1) by changing the “yes” in the column titled “Applies to Subpart TTTTT” to a “no.” Section 63.7(e)(1) describes performance testing requirements. The EPA is instead proposing to add a performance testing requirement at 40 CFR 63.9913(a). The performance testing requirements we are proposing to add differ from the General Provisions performance testing provisions in several respects. The regulatory text removes the cross-reference to 40 CFR 63.7(e)(1) and does not include the language in 40 CFR 63.7(e)(1) that restated the SSM exemption and language that precluded startup and shutdown periods from being considered “representative” for purposes of performance testing. The proposed performance testing provisions will not allow performance testing during malfunctions. As in 40 CFR 63.7(e)(1), performance tests conducted under this subpart should not be conducted during malfunctions because conditions during malfunctions are often not representative of normal operating conditions. The EPA is proposing to add language that requires the owner or operator to record the process information that is necessary to document operating conditions during
We are proposing to revise the General Provisions Applicability Table (Table 5) entry for 40 CFR 63.8(c)(1)(i) and (iii) by changing the “yes” in the column titled “Applies to Subpart TTTTT” to a “no.” The cross-references to the general duty and SSM plan requirements in those subparagraphs are not necessary in light of other requirements of 40 CFR 63.8 that require good air pollution control practices (40 CFR 63.8(c)(1)) and that set out the requirements of a quality control program for monitoring equipment (40 CFR 63.8(d)).
We are proposing to revise the General Provisions Applicability Table (Table 5) entry for 40 CFR 63.10(b)(2)(i) by changing the “yes” in the column titled “Applies to Subpart TTTTT” to a “no.” Section 63.10(b)(2)(i) describes the recordkeeping requirements during startup and shutdown. These recording provisions are no longer necessary because the EPA is proposing that recordkeeping and reporting applicable to normal operations will apply to startup and shutdown. In the absence of special provisions applicable to startup and shutdown, such as a startup and shutdown plan, there is no reason to retain additional recordkeeping for startup and shutdown periods.
We are proposing to revise the General Provisions Applicability Table (Table 5) entry for 40 CFR 63.10(b)(2)(ii) by changing the “yes” in the column titled “Applies to Subpart TTTTT” to a “no.” Section 63.10(b)(2)(ii) describes the recordkeeping requirements during a malfunction. The EPA is proposing to add such requirements to 40 CFR 63.9932. The regulatory text we are proposing to add differs from the General Provisions it is replacing in that the General Provisions requires the creation and retention of a record of the occurrence and duration of each malfunction of process, air pollution control, and monitoring equipment. The EPA is proposing that this requirement apply to any failure to meet an applicable standard and is requiring that the source record the date, time, and duration of the failure rather than the “occurrence.” The EPA is also proposing to add to 40 CFR 63.9932 a requirement that sources keep records that include a list of the affected source or equipment and actions taken to minimize emissions, an estimate of the quantity of each regulated pollutant emitted over the standard for which the source failed to meet the standard, and a description of the method used to estimate the emissions. Examples of such methods would include product loss calculations, mass balance calculations, measurements when available, or engineering judgment based on known process parameters. The EPA is proposing to require that sources keep records of this information to ensure that there is adequate information to allow the EPA to determine the severity of any failure to meet a standard, and to provide data that may document how the source met the general duty to minimize emissions when the source has failed to meet an applicable standard.
We are proposing to revise the General Provisions Applicability Table (Table 5) entry for 40 CFR 63.10(b)(2)(iv) by changing the “yes” in the column titled “Applies to Subpart TTTTT” to a “no.” When applicable, the provision requires sources to record actions taken during SSM events when actions were inconsistent with their SSM plan. The requirement is no longer appropriate because SSM plans will no longer be required. The requirement previously applicable under 40 CFR 63.10(b)(2)(iv)(B) to record actions to minimize emissions and record corrective actions is now applicable by reference to 40 CFR 63.9932.
We are proposing to revise the General Provisions Applicability Table (Table 5) entry for 40 CFR 63.10(b)(2)(v) by changing the “yes” in the column titled “Applies to Subpart TTTTT” to a “no.” When applicable, the provision requires sources to record actions taken during SSM events to show that actions taken were consistent with their SSM plan. The requirement is no longer appropriate because SSM plans will no longer be required.
We are proposing to revise the General Provisions Applicability Table (Table 5) entry for 40 CFR 63.10(c)(15) by changing the “yes” in the column titled “Applies to Subpart TTTTT” to a “no.” The EPA is proposing that 40 CFR 63.10(c)(15) no longer applies. When applicable, the provision allows an owner or operator to use the affected source's SSM plan or records kept to satisfy the recordkeeping requirements of the SSM plan, specified in 40 CFR 63.6(e), to also satisfy the requirements of 40 CFR 63.10(c)(10) through (12). The EPA is proposing to eliminate this requirement because SSM plans would no longer be required, and, therefore, 40 CFR 63.10(c)(15) no longer serves any useful purpose for affected units.
We are proposing to revise the General Provisions Applicability Table (Table 5) entry for 40 CFR 63.10(d)(5) by changing the “yes” in the column titled “Applies to Subpart TTTTT” to a “no.” Section 63.10(d)(5) describes the reporting requirements for startups, shutdowns, and malfunctions. To replace the General Provisions reporting requirement, the EPA is proposing to add reporting requirements to 40 CFR 63.9931(b)(4). The replacement language differs from the General Provisions requirement in that it eliminates periodic SSM reports as a stand-alone report. We are proposing language that requires sources that fail to meet an applicable standard at any time to report the information concerning such events in the semi-annual compliance report already required under this rule. We are proposing that the report must contain the number, date, time, duration, and the cause of such events (including unknown cause, if applicable), a list of the affected source or equipment, an estimate of the quantity of each regulated pollutant emitted over any emission limit, and a description of the method used to estimate the emissions. Examples of such methods would include product-loss calculations, mass balance calculations, measurements when available, or engineering judgment based on known process parameters. The EPA is proposing this requirement to ensure that there is adequate information to determine compliance, to allow the EPA to determine the severity of the failure to meet an applicable standard, and to provide data that may document how the source met the general duty to minimize emissions during a failure to meet an applicable standard.
We will no longer require owners or operators to determine whether actions taken to correct a malfunction are consistent with an SSM plan, because SSM plans would no longer be required. The proposed amendments, therefore, eliminate the cross-reference to 40 CFR 63.10(d)(5)(i) that contains the description of the previously required SSM report format and submittal schedule from this section. These specifications are no longer necessary because the events will be reported in otherwise required reports with similar format and submittal requirements.
The proposed amendments eliminate the cross-reference to 40 CFR 63.10(d)(5)(ii), which requires an
The EPA is proposing that owners and operators of primary magnesium refining facilities submit electronic copies of required performance test reports and performance evaluation reports through the EPA's Central Data Exchange (CDX) using the Compliance and Emissions Data Reporting Interface (CEDRI). A description of the electronic data submission process is provided in the memorandum,
Additionally, the EPA has identified two broad circumstances in which electronic reporting extensions may be provided. These circumstances are (1) outages of the EPA's CDX or CEDRI which preclude an owner or operator from accessing the system and submitting required reports and (2)
The electronic submittal of the reports addressed in this proposed rulemaking will increase the usefulness of the data contained in those reports, is in keeping with current trends in data availability and transparency, will further assist in the protection of public health and the environment, will improve compliance by facilitating the ability of regulated facilities to demonstrate compliance with requirements, and by facilitating the ability of delegated state, local, tribal, and territorial air agencies and the EPA to assess and determine compliance, and will ultimately reduce burden on regulated facilities, delegated air agencies, and the EPA. Electronic reporting also eliminates paper-based, manual processes, thereby saving time and resources, simplifying data entry, eliminating redundancies, minimizing data reporting errors, and providing data quickly and accurately to the affected facilities, air agencies, the EPA, and the public. Moreover, electronic reporting is consistent with the EPA's plan
The EPA is proposing two separate compliance dates for affected facilities, based on the different amendments in the rulemaking. For the proposed amendments regarding the MACT standard for the CBS, the work practice standard for CRB malfunctions, the elimination of SSM exemptions, and electronic reporting requirements, we are proposing that affected facilities that have constructed or reconstructed on or before January 8, 2021, must comply by the effective date of the final rule. For the proposed requirement to add pH as an additional control device operational parameter, we propose that the affected facilities that have constructed or reconstructed on or before January 8, 2021, must comply no later than 180 days after the effective date of the final rule. For affected facilities that commence construction or reconstruction after January 8, 2021, owners or operators must comply with all requirements of the subpart, including all the amendments being proposed, no later than the effective date of the final rule or upon startup, whichever is later.
Based on our understanding of the facility operations and experience with similar industries, we believe that the effective date of the final rule is appropriate for the proposed MACT CBS standard, CRB work practice standard, elimination of SSM exemptions, and electronic reporting requirement. Regarding these new proposed CBS and CRB requirements, the facility already routinely performs these operations. The CRB work practice for malfunctions require minimal additional effort to implement (
The EPA is also proposing to amend the emission limitations and operating parameters set forth in 40 CFR 63.9890(b) to include pH as an additional operational parameter for all control devices used to meet the acid gas emission limits of this subpart. The facility currently monitors and maintains the hourly average pressure drops and liquid flow rates for all control devices; however, the additional requirement to monitor pH would require the installation and implementation of continuous pH monitors. Therefore, in order to provide time for implementation, we are proposing that it is necessary to provide 180 days after the effective date of the final rule for all affected facilities that have constructed or reconstructed on or before January 8, 2021, to comply with the new pH operational parameters. For affected facilities that commence construction or reconstruction after January 8, 2021, we are proposing owners or operators comply with the new pH operational parameters by the effective date of the final rule (or upon startup, whichever is later).
We solicit comment on the proposed compliance periods, and we specifically request submission of information from sources in this source category regarding specific actions that would need to be undertaken to comply with the proposed amended requirements and the time needed to make the adjustments for compliance with any of the revised requirements.
The Primary Magnesium Refining source category comprises one plant, US Magnesium, located in Rowley, Utah. US Magnesium was the sole facility when the original NESHAP was promulgated in 2011; this has not changed since then nor are there new facilities anticipated.
We are proposing to establish an emission standard requiring MACT level control of chlorine emissions from the CBS that requires the facility to operate the associated control device and demonstrate 95 percent control efficiency of chlorine emissions. Since the facility already routinely operates the CBS control device, we expect minimal associated emissions reductions. However, this will ensure that the emissions remain controlled and minimized moving forward. The proposed amendments also include removal of the SSM exemptions and the addition of a work practice standard for malfunction events related to the melt/reactor system. Although we are unable to quantify the emission reduction associated with these changes, we expect that emissions will be reduced by requiring the facility to meet the applicable standard during periods of SSM and that the work practice standard will minimize malfunction related emissions.
The proposed amendments include a work practice standard for malfunctions of the CRB and a MACT level chlorine emission standard for the CBS. The costs associated with the proposed amendments are expected to be minimal. The CRB work practice standard will require labor related with the root cause analysis condition. However, it is current facility policy to conduct such analyses following a malfunction related event; therefore, we expect no additional associated costs to comply with the proposed work practice standard. The proposed emission standard for the CBS will have costs related to recordkeeping and repeat performance testing. The additional inlet and outlet performance test is expected to cost an estimated $30,000 every 2.5 years. There will likely also be some initial costs to drill and establish inlet and outlet ports on the current stack, which currently has no ports. We expect no further costs associated with the CBS standard (
Economic impact analyses focus on changes in market prices and output levels that result from compliance costs imposed as a result of this action. Because the costs associated with the proposed revisions are minimal, no significant economic impacts from the proposed amendments are anticipated.
Although the EPA does not anticipate any significant reductions in HAP emissions as a result of the proposed amendments, we believe that the action, if finalized as proposed, would result in some unquantified reductions in chlorine emissions—albeit minimal—and improvements to the rule and the further protection of public health and the environment. Furthermore, pursuant to CAA section 112(d)(2) and (3), by establishing a MACT standard for chlorine emissions from the CBS, we are ensuring that the associated control device is operational during any emission release and meets demonstratable performance criteria. Additionally, the proposed amendments requiring electronic submittal of initial notifications, performance test results, and semiannual reports will increase the usefulness of the data, are in keeping with current trends of data availability, will further assist in the protection of public health and the environment, and will ultimately result in less burden on the regulated community. See section IV.D.3 of this preamble for more information.
We solicit comments on this proposed action. In addition to general comments on this proposed action, we are also interested in additional data that may improve the risk assessments and other analyses. We are specifically interested in receiving any improvements to the data used in the site-specific emissions profiles used for risk modeling. Such data should include supporting documentation in sufficient detail to allow characterization of the quality and representativeness of the data or information. Section VII of this preamble provides more information on submitting data.
The site-specific emissions profiles used in the source category risk and demographic analyses and instructions are available for download on the RTR
If you believe that the data are not representative or are inaccurate, please identify the data in question, provide your reason for concern, and provide any “improved” data that you have, if available. When you submit data, we request that you provide documentation of the basis for the revised values to support your suggested changes. To submit comments on the data downloaded from the RTR website, complete the following steps:
1. Within this downloaded file, enter suggested revisions to the data fields appropriate for that information.
2. Fill in the commenter information fields for each suggested revision (
3. Gather documentation for any suggested emissions revisions (
4. Send the entire downloaded file with suggested revisions in Microsoft® Access format and all accompanying documentation to Docket ID No. EPA-HQ-OAR-2020-0535 (through the method described in the
5. If you are providing comments on a single facility or multiple facilities, you need only submit one file for all facilities. The file should contain all suggested changes for all sources at that facility (or facilities). We request that all data revision comments be submitted in the form of updated Microsoft® Excel files that are generated by the Microsoft® Access file. These files are provided on the project website at
Additional information about these statutes and Executive Orders can be found at
This action is not a significant regulatory action and was, therefore, not submitted to OMB for review.
This action is not expected to be an Executive Order 13771 regulatory action because this action is not significant under Executive Order 12866.
The information collection activities in this proposed rule have been submitted for approval to OMB under the PRA. The Information Collection Request (ICR) document that the EPA prepared has been assigned EPA ICR number 2098.09. You can find a copy of the ICR in the docket for this rule, and it is briefly summarized here.
These amendments require electronic reporting; remove the SSM exemptions; and impose other revisions that affect reporting and recordkeeping for primary magnesium refining facilities. This information is collected to assure compliance with 40 CFR part 63, subpart TTTTT.
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 OMB control numbers for the EPA's regulations in 40 CFR are listed in 40 CFR part 9.
Submit your comments on the Agency's need for this information, the accuracy of the provided burden estimates, and any suggested methods for minimizing respondent burden to the EPA using the docket identified at the beginning of this rule. You may also send your ICR-related comments to OMB's Office of Information and Regulatory Affairs via email to
I certify that this action will not have a significant economic impact on a substantial number of small entities under the RFA. This action will not impose any requirements on small entities. Based on the Small Business Administration size category for this source category, no small entities are subject to this action.
This action does not contain any unfunded mandate as described in UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect small governments. The action imposes no enforceable duty on any state, local, or tribal governments or the private sector.
This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.
This action does not have tribal implications as specified in Executive Order 13175. No tribal governments own facilities subject to this proposed action. Thus, Executive Order 13175 does not apply to this action. However, since a magnesium facility is located within 50 miles of tribal lands, consistent with the EPA Policy on Consultation and Coordination with Indian Tribes, we will offer tribal consultation for this rulemaking.
This action is not subject to Executive Order 13045 because it is not economically significant as defined in Executive Order 12866, and because the EPA does not believe the environmental health or safety risks addressed by this action present a disproportionate risk to children. This action's health and risk assessments are contained in section IV of this preamble and in the
This action is not subject to Executive Order 13211, because it is not a
This action involves technical standards. Therefore, the EPA conducted searches for National Emission Standards for Hazardous Air Pollutants: Primary Magnesium Refining Residual Risk and Technology Review through the Enhanced NSSN Database managed by the American National Standards Institute (ANSI). We also contacted voluntary consensus standards (VCS) organizations and accessed and searched their databases. Searches were conducted for EPA Methods 1, 2, 2F, 2G, 3, 3A, 3B, 4, 5, 5D, 23, 26, 26A, of 40 CFR part 60, appendix A, and EPA Methods 201 and 201A of 40 CFR part 51, appendix M. No applicable VCS were identified for EPA Methods 1, 2, 2F, 2G, 5D, 23, 201 and 201A.
During the search, if the title or abstract (if provided) of the VCS described technical sampling and analytical procedures that are similar to the EPA's reference method, the EPA considered it as a potential equivalent method. All potential standards were reviewed to determine the practicality of the VCS for this rule. This review requires significant method validation data which meets the requirements of EPA Method 301 for accepting alternative methods or scientific, engineering, and policy equivalence to procedures in EPA reference methods. The EPA may reconsider determinations of impracticality when additional information is available for particular VCS.
Two VCS were identified as an acceptable alternative to EPA test methods for the purposes of this rule. The VCS, ANSI/ASME PTC 19-10-1981 Part 10 (2010), “Flue and Exhaust Gas Analyses,” is an acceptable alternative to EPA Method 3B manual portion only and not the instrumental portion. The VCS, ASTM D6735-01(2009), “Standard Test Method for Measurement of Gaseous Chlorides and Fluorides from Mineral Calcining Exhaust Sources Impinger Method,” is an acceptable alternative to EPA Method 26 and 26A. The search identified 18 VCS that were potentially applicable for these rules in lieu of EPA reference methods. After reviewing the available standards, the EPA determined that 18 candidate VCS (ASTM D3154-00 (2014), ASTM D3464-96 (2014), ASTM 3796-09 (2016), ISO 10780:1994 (2016), ASME B133.9-1994 (2001), ISO 10396:(2007), ISO 12039:2001(2012), ASTM D5835-95 (2013), ASTM D6522-11, CAN/CSA Z223.2-M86 (R1999), ISO 9096:1992 (2003), ANSI/ASME PTC-38-1980 (1985), ASTM D3685/D3685M-98-13, CAN/CSA Z223.1-M1977, ISO 10397:1993, ASTM D6331 (2014), EN 1948-3 (1996), EN 1911:2010) identified for measuring emissions of pollutants or their surrogates subject to emission standards in the rule would not be practical due to lack of equivalency, documentation, validation data, and other important technical and policy considerations. Additional information for the VCS search and determinations can be found in the memorandum,
The EPA welcomes comments on this aspect of the proposed rulemaking and, specifically, invites the public to identify potentially applicable VCS and to explain why such standards should be used in this regulation.
The EPA believes that this action does not have disproportionately high and adverse human health or environmental effects on minority populations, low-income populations, and/or indigenous peoples, as specified in Executive Order 12898 (59 FR 7629, February 16, 1994). This action's health and risk assessments are contained in section IV of this preamble. The documentation for this decision is contained in section IV.A.1 of this preamble and in the
Environmental protection, Air pollution control, Hazardous substances, Incorporation by reference, Reporting and recordkeeping requirements.
Federal Railroad Administration (FRA), Department of Transportation (DOT).
Notice of proposed rulemaking.
In response to a Congressional mandate in the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (SUPPORT Act), FRA is proposing to expand the scope of its alcohol and drug regulation to cover mechanical (MECH) employees who test or inspect railroad rolling equipment. FRA is also proposing miscellaneous, clarifying amendments to its alcohol and drug regulation.
Written comments on this proposed rule must be received on or before March 9, 2021. Comments received after that date will be considered to the extent possible without incurring additional expense or delay.
Gerald Powers, Drug and Alcohol Program Manager, Office of Railroad Safety—Office of Technical Oversight, telephone: 202-493-6313; email:
In 2018, Congress enacted the SUPPORT Act.
This proposed rule, which responds to that mandate, proposes to add MECH employees to the scope of part 219, and makes miscellaneous clarifying amendments. With certain exceptions, FRA proposes to define a MECH employee as an employee of a railroad, or a railroad contractor or subcontractor, who tests or inspects railroad rolling equipment. As proposed, individuals who perform those duties typically performed by railroad carmen would be included within the definition of MECH employee.
Under existing part 219, with the exception of maintenance-of-way (MOW) employees, employees in non-covered service crafts (
Since 2015, two employees who would be considered MECH employees under this NPRM have died in such incidents, and post-mortem PAT testing results of both employees were positive. One employee was fatally injured in a yard incident and tested positive for delta 9-tetrahydrocannabinol (THC, the primary psychoactive constituent of marijuana) in whole blood and liver in FRA post-mortem post-accident testing. Based on the identified concentrations of THC found, and those of the carboxy metabolite (THCA) identified in urine, whole blood, and liver, the employee's last use of the drug likely occurred shortly before his death. The second employee was fatally injured by a remote control locomotive, and PAT testing found that he had a blood alcohol concentration (BAC) of 0.218, over five times the 0.04 BAC limit for an FRA alcohol positive.
Prior to Congress' mandate in section 8102 of the SUPPORT Act, the National Transportation Safety Board (NTSB) recommended that FRA expand the scope of part 219 to cover all employees and agents performing safety-sensitive functions as defined in §§ 209.301 and 209.303.
In a 2018 petition for rulemaking, the Association of American Railroads (AAR) also requested that FRA make MECH employees, like covered service employees and MOW employees, fully subject to part 219. In support of its request, the AAR cited the success of DOT random testing programs in deterring drug abuse and alcohol misuse, and concerns about increased opioid use and State legalization of marijuana use. The AAR estimated that only 30 percent of MECH employees are currently covered by some form of DOT testing (
In response to the SUPPORT Act's mandate, FRA is proposing to make MECH employees subject to part 219 in the same manner as MOW employees. Like this proposed rule, the MOW rule also responded to a Congressional mandate
In addition to changes to part 219 directly related to the addition of MECH employees, FRA also proposes other amendments to part 219. To lessen the burden on small railroads, FRA proposes to amend part 219 to exempt small railroads from subpart K (Referral Programs) because small railroads may lack the expertise and resources necessary to maintain referral programs.
Further, in May 2019, FRA removed the penalty schedules for its rules from the Code of Federal Regulations and republished them on FRA's website. In part 219, the penalty schedule was formerly in appendix A. FRA now also proposes to remove appendix B, which designates the name and contact information of FRA's PAT testing laboratory, and appendix C, which contains instructions for post-mortem collection of PAT testing specimens. Copies of the information contained in both appendices are included in FRA's PAT testing shipping kits, and can also be found at the FRA website and post-accident testing app. FRA is therefore proposing a global deletion of references to both appendices B and C throughout part 219, along with the removal of both appendices.
As the SUPPORT Act mandates, this NPRM proposes to make MECH employees subject to all part 219 prohibitions and testing requirements (pre-employment, random, PAT, reasonable suspicion, return-to-duty, and follow-up). Under the proposal, railroads, contractors, and subcontractors would be subject to the same reporting, recordkeeping, and referral requirements for MECH employees as they are for covered service and MOW employees.
As noted above, before the addition of MOW employees, part 219 addressed only covered service employees. To incorporate MOW employees, FRA adopted the term “regulated employee,” and defined the term to include both covered service employees and MOW employees subject to part 219. FRA is proposing to amend the term “regulated employee” to include MECH employees and to make additional amendments throughout the rule text, in order to incorporate MECH employees into part 219.
Currently, part 219 excepts small railroads (defined as railroads with 15 or fewer covered service employees and having minimal joint operations with other railroads) from both reasonable cause and random testing.
Consistent with part 219's treatment of MOW employees, as proposed, a contractor would have its required level of part 219 compliance determined by the size of the railroad(s) for which it performs MECH activities, not its size as a contractor. A contractor who performs MECH activities exclusively for small railroads that are excepted from full compliance with part 219 would also be excepted from full compliance, while a contractor who performs MECH activities for at least one railroad required to be in full compliance with part 219, would also be required to be in full compliance with part 219.
As proposed, FRA would require each railroad to submit for FRA approval a revised random testing plan under subpart G of part 219 that would include MECH employees, as FRA required for MOW employees. A railroad would also be responsible for ensuring that its MECH contractor and subcontractor employees are subject to random testing. A railroad could do so either by including these contractor and subcontractor employees in its own random testing plan, or by requiring contractors and subcontractors to submit their own random testing plans to FRA for acceptance using the Model Railroad Contractor Compliance Plan available on the FRA Drug and Alcohol Program web page.
As FRA did for MOW employees, FRA is proposing to exempt all current MECH employees from the pre-employment drug testing requirements of subpart F of part 219. Under FRA's proposal, only those MECH employees hired by a railroad, or railroad contractor or subcontractor, after the effective date of the final rule would be required to have a negative DOT pre-employment drug test before performing regulated service for the first time. This exemption would apply only so long as the MECH employee continues to perform work for the same DOT-regulated employer. An initially exempted MECH employee would be required to have a negative DOT pre-employment drug test result before performing regulated service for a different or additional DOT-regulated employer.
Interested parties should note that FRA's proposal to exempt current MECH employees from FRA pre-employment drug testing would not exempt these employees from DOT's background check requirement. DOT's background check requirement is a separate requirement under 49 CFR 40.25 and requires an employer to check an employee's previous two years of DOT drug and alcohol testing results within 30 days of when the employee performs safety-sensitive duties for that employer for the first time. For part 219 purposes, FRA has designated regulated service as a DOT safety-sensitive function which requires a § 40.25 background check.
Consistent with part 219's treatment of MOW employees, as proposed, FRA would not require a contractor or subcontractor employee who performs MECH activities for multiple railroads to have a negative Federal pre-employment drug test result for each railroad, provided that the contractor or subcontractor employee has a negative Federal pre-employment drug test result on file with the contractor who is his or her direct employer.
FRA would set the initial minimum annual random testing rates for MECH employees at 50 percent for drugs and 25 percent for alcohol, the same levels it initially set for MOW employees when they first became subject to FRA testing.
FRA would amend the authority citation for part 219 to add a reference to section 8102 of the SUPPORT Act, which mandates the expansion of part 219 to cover “all employees of railroad carriers who perform mechanical activities.”
FRA proposes to remove and reserve paragraph (b) in its entirety. Currently, paragraph (b)(1) applies to railroads and paragraphs (b)(2) and (3) apply to contractors. Existing paragraph (b)(1) is redundant with § 219.800(a)'s annual report requirements for railroads. In addition, to consolidate its railroad and contractor annual report requirements, FRA proposes to move the reporting requirements for contractors in existing paragraphs (b)(2) and (3) to new paragraph (g) of § 219.800 in subpart I.
As noted in II.B above, FRA would continue to except small railroads, defined as railroads with 15 or fewer covered service employees with minimal joint operations, from reasonable cause and random testing requirements (subparts E and G). FRA would continue to count only covered service employees (not MECH or MOW employees) to determine whether a railroad is a small railroad for purposes of this exception.
To lessen the burden on small railroads, FRA also proposes to amend this paragraph to exempt small railroads from subpart K (Referral Programs) because small railroads may lack the expertise and resources necessary to maintain referral programs.
FRA is proposing to amend the definitions section of part 219 to add several new definitions and to revise and clarify certain existing definitions.
FRA would amend this definition to include the categories of covered service, maintenance-of-way, and mechanical employees (as defined in this section). For the purposes of determining random testing rates under § 219.625, if an individual performs covered service, maintenance-of-way activities, and/or mechanical activities, he or she would belong in the category of regulated employee that corresponds with the majority of the employee's regulated service.
The term “employee” is currently defined to include “any individual (including a volunteer or a probationary employee) performing activities for a railroad or a contractor to a railroad.” FRA proposes to amend this definition to include any individual performing activities for a subcontractor to a railroad.
FRA proposes to define a mechanical (MECH) employee generally as any employee who, on behalf of a railroad, performs mechanical tests or inspections required by parts 215, 221, 229, 230, 232, or 238 of this chapter on railroad rolling equipment, or its components. FRA's proposed MECH employee definition focuses on the testing and inspection of railroad rolling equipment required by FRA regulation, because these MECH activities directly affect railroad safety. Accordingly, FRA proposes to except employees who perform activities that have a negligible effect on rail safety from this definition. Specifically, a MECH employee would not include an employee who performs only one or more of the following duties:
• Cleaning and/or supplying cabooses, locomotives, or passenger cars with ice, food concession items, drinking water, tools, sanitary supplies, or flagging equipment;
• Servicing activities on locomotives such as fueling, replenishing engine oils and engine water, sanding, and toilet discharge and recharge;
• Checking lading for pilferage or vandalism; or
• Loading, unloading, or shifting car loads.
To avoid duplication with the application of requirements to covered service employees, FRA also proposes to exclude from the definition an employee who is a member of a train and engine crew assigned to perform tests or inspections on railroad rolling equipment that is part of a train or yard movement the employee has been called to operate.
Notably, by focusing the definition of MECH employee on the testing and inspection of railroad rolling equipment required by FRA regulation, employees who only repair railroad rolling equipment are specifically excluded from the definition.
FRA also makes clear that a MECH employee would not include any individual involved only in the original manufacturing, or in testing or inspection of railroad rolling equipment or its components on the manufacturer's behalf, and who does not perform any FRA-mandated final tests or inspections on behalf of a railroad. However, regardless of an individual's employer (original equipment manufacturer, railroad, or contractor or subcontractor to a railroad), an individual who performs an FRA-mandated inspection or test (
Currently, this definition includes a covered service employee or MOW employee who performs regulated service for an entity subject to the requirements of this part. FRA would expand this definition to include a MECH employee (as defined in this section) who performs regulated service (as defined in this section).
Currently, “regulated service” means activities a covered service employee or MOW employee performs that makes such an employee subject to this part. FRA would expand this definition to
FRA proposes to add a definition of railroad rolling equipment as locomotives, railroad cars, and one or more locomotives coupled to one or more cars, based on the definition of rolling equipment provided in FRA's Railroad Operating Practices regulation (49 CFR 218.5).
The term “side collision” is currently defined to mean “a collision at a turnout where one consist strikes the side of another consist.” FRA is proposing to clarify that the term also includes collisions at switches or highway-rail grade crossings. FRA intends this proposed revision as a clarification only and does not believe the proposed revision is a substantive change from the existing definition.
FRA proposes to substitute the term “regulated employee” for “employee” to clarify that this section would apply to MOW, MECH, and covered service employees.
As mentioned above, FRA is proposing to remove references to appendices B and C throughout the rule, along with the appendices themselves.
This section sets forth requirements for a railroad's Federal alcohol and drug testing policy, including requirements for railroads to provide employees educational materials explaining the requirements of this part, as well as the railroad's policies and procedures with respect to meeting those requirements.
FRA would substitute the term “regulated employee” for “employee,” to clarify that the requirements of this section apply to MOW, MECH, and covered service employees.
FRA proposes to revise paragraph (c)(2) to require railroads to make hard copies of the required educational materials in this section available to each MECH employee for a minimum of three years after the effective date of the final rule. When FRA added MOW employees to the scope of part 219, it required railroads to make the same hard copy distribution to those employees for the same three-year period to introduce them to part 219. Because that three-year period for MOW employees will end after June 12, 2020, existing paragraph (c)(2) will become unnecessary. FRA is therefore proposing to revise paragraph (c)(2) to address the addition of MECH employees and remove the reference to MOW employees.
FRA would amend this paragraph to identify specifically MECH employees as subject to the provisions in this part.
As mentioned above, FRA is proposing to remove references to appendices B and C throughout the rule, along with the appendices themselves. FRA would remove “and appendix C to this part” at the end of this paragraph.
Currently, if a railroad does not complete specimen collection within four hours of a PAT testing event, the railroad must notify the FRA Drug and Alcohol Program Manager and submit a concise written explanation for the delay within 30 days after the expiration of the month during which the accident or incident occurred. FRA is proposing to remove the requirement to provide a written explanation for the delay. FRA has found that the immediate, telephonic notification and related discussion between the railroad and FRA about the testing provide sufficient information to explain the testing delay. Further, § 219.209(b) would continue to require each railroad to provide both immediate, telephonic notification and a follow-up, written report to FRA when, for whatever reason, a specimen cannot be collected and provided to FRA as required by this subpart.
This section contains several references to both appendices B and C. As mentioned above, FRA is proposing to remove references to appendices B and C throughout the rule, along with the appendices themselves. FRA is proposing to remove references to these appendices in paragraphs (a), (c)(1), (c)(2), (d), and (e).
This section contains a reference to appendix C. As mentioned above, FRA is proposing to remove references to appendix C throughout the rule, along with the appendix itself.
This section contains the requirements for PAT testing in the event of an employee fatality in an accident or incident described in § 219.101.
Paragraph (c) lists the individuals who are authorized to collect post-mortem body fluid and tissue samples from a deceased employee for FRA PAT testing. FRA proposes to remove “Aviation Medical Examiners” (AMEs) from the list of authorized professionals. AMEs appointed by the FAA primarily conduct airman medical examinations to support FAA medical certification requirements. In selecting an AME, the Federal Air Surgeon or an authorized representative, considers a number of factors regarding the applicant's medical qualifications but does not specifically consider whether the applicant has post-mortem expertise or expertise in collecting samples from fatally injured persons, unlike the other professionals listed in this paragraph, namely, coroners, medical examiners, and pathologists.
This section contains a reference to appendix C. As mentioned above, FRA is proposing to remove references to appendix C throughout the rule, along with the appendix itself.
In addition to allowing reports and requests to be submitted to FRA by email as well as hard copy, FRA would simplify and clarify the language in this section. No substantive changes are intended other than the proposed amendments discussed below.
This section contains a reference to appendix B. As mentioned above, FRA is proposing to remove references to appendix B throughout the rule, along with the appendix itself. FRA proposes to remove the reference to appendix B in this paragraph and make conforming changes.
With regard to surviving employees, existing paragraph (c) requires a PAT test reported as positive for alcohol or a controlled substance to be reviewed by the railroad's Medical Review Officer (MRO) with respect to any claim of use or administration of medications (consistent with § 219.103) that could account for the laboratory findings. Currently, this paragraph requires the MRO to report the results of each review “in writing” to FRA's Associate Administrator for Railroad Safety and specifies that the envelope in which each report is provided must be marked as confidential. As proposed, FRA would allow an MRO to submit the report either by hard copy to FRA's Drug and Alcohol Program Manager, or by email to an email box specifically set up for receipt of MRO reports (
Currently, an employee may submit a response by hard copy to the FRA Drug and Alcohol Program Manager within 45 days of receipt of his or her PAT test results prior to the preparation of any final report of investigation concerning the accident or incident. Within the 45-day limit, FRA would also allow an employee to email the response to
Currently, an employee may request a retest of his or her PAT test specimen within 60 days of receipt of the applicable toxicology report. FRA would allow an employee to submit a request for a retest either by hard copy to the FRA Drug and Alcohol Program Manager or by email to
FRA is also proposing to conform this paragraph to reflect FRA's standard procedures for handling employee requests for retests of PAT testing specimens. FRA's PAT testing program pre-dates DOT's Workplace Testing Procedures (49 CFR part 40), is excepted from its requirements, and tests for more substances and specimen types than other DOT tests conducted under part 40.
Currently, paragraph (i) authorizes a PAT testing retest to be performed by FRA's PAT laboratory or by a different laboratory certified by the Department of Health and Human Services (HHS). FRA proposes to remove the language authorizing an HHS-certified laboratory to conduct a PAT retest, because HHS certification only qualifies a laboratory to conduct part 40 urine tests. A referee laboratory must, however, have the capacity to test the same type of post-accident specimen type(s) for the same analyte(s) identified in the employee's test result.
FRA would also make several clarifying changes to conform this paragraph to its PAT testing procedures. FRA would change the term “split specimen” to “specimen,” because FRA does not collect split specimens for PAT testing. When an employee requests a PAT retest, FRA sends an aliquot of the employee's PAT testing specimen to the referee laboratory for retesting. FRA also proposes to replace the term “compound” with the more specific term “analyte,” and to replace the term “fluid” with “specimen,” as FRA PAT testing may test specimens that are not fluids.
This section authorizes railroads to conduct FRA reasonable cause testing as a result of a regulated employee's involvement in certain accidents or incidents, or a regulated employee's direct involvement in certain rule violations or “other errors.” FRA proposes revisions to the introductory paragraph of this section to make clear that for reasonable cause testing based on a rule violation, a railroad that elects to test under FRA authority may only use rule violations listed in paragraph (b) as bases for testing.
Existing paragraph (b) sets forth the rule violations that may constitute reasonable cause for the administration of alcohol and/or drug tests under this part. FRA proposes to remove “or other errors” from this paragraph to clarify that a railroad that has chosen to conduct reasonable cause testing for rule violations under FRA authority may do so only for a rule violation specified in paragraph (b).
FRA would also expand the list of rule violations in paragraph (b) by adding rule violations involving common mechanical activities such as setting derails, performing brake tests, and initiating appropriate blue flag protection. In addition, FRA would add a rule violation for positive train control (PTC) enforcement to address PTC requirements that became applicable after the publication of the MOW rule.
Specifically, the additional rule violations would be:
• Noncompliance with a train order, track warrant, track bulletin, track permit, stop and flag order, timetable, signal indication, special instruction, or other directive with respect to movement of railroad on-track equipment that involves a failure to take appropriate action, resulting in the enforcement of a PTC system;
• Failure to comply with blue signal protection of workers in accordance with § 218.23 through § 218.30 of this chapter;
• Failure to perform or have knowledge that a required brake test was performed pursuant to the Class I, Class IA, Class II, Class III, or transfer train brake test provisions of part 232, or the running brake test provisions of part 238, of this chapter;
• Failure to comply with prohibitions against tampering with locomotive mounted safety devices, or permitting a train to be operated with an unauthorized disabled safety device in the controlling locomotive; or
• Failure to have a derailing device in proper position and locked if required in accordance with § 218.109 of this chapter.
FRA is proposing to clarify that: (1) Covered employees performing regulated service for small railroads are exempted from pre-employment drug testing only if they were performing regulated service for the railroad before June 12, 2017; and (2) MOW employees
FRA is also proposing to exempt from pre-employment drug testing MECH employees who were performing regulated service for a railroad, or contractor or subcontractor of a railroad, before (EFFECTIVE DATE OF FINAL RULE).
An exempted employee would be required to have a negative pre-employment drug test before performing regulated service for a new or additional employing railroad, or contractor or subcontractor of a railroad, on or after June 12, 2017, for exempted covered employees and maintenance-of-way employees, and after (EFFECTIVE DATE OF FINAL RULE) for MECH employees.
To clarify how the proposed revisions in this section fit with the existing requirements of part 40, as also discussed in II.D above, FRA proposes to add paragraph (f) to clarify that § 40.25 of DOT's Workplace Testing Procedures (49 CFR part 40) applies to a MOW or MECH employee who was or would be exempted from FRA pre-employment drug testing. To comply with § 40.25, a railroad must still conduct a drug and alcohol records check of an exempted MOW or MECH employee's previous two years of employment within 30 days of when the employee performs regulated service for the first time. FRA does not intend this as a substantive change to the current requirement and is proposing this revision merely as a clarification of existing requirements.
Existing paragraph (a) requires railroads to submit random testing plans to FRA in writing for FRA approval. FRA would allow a railroad to submit its random testing plan by email or letter. A railroad that chooses to submit its random testing plan by email should send it to the FRA Drug and Alcohol Program Manager at
FRA proposes to amend this paragraph to subject an employee who performs MECH activities to the same random testing requirements as one who performs covered service or MOW activities. Accordingly, each railroad or contractor or subcontractor to a railroad must submit for FRA approval or acceptance a random testing plan ensuring that each MECH employee reasonably anticipates that he or she is subject to random testing without advance warning each time the employee is on-duty and subject to performing MECH activities. FRA has developed model random testing plans for MOW employees and contractors that could also serve as templates for MECH employees and contractors.
FRA proposes to revise paragraph (c) of this section to reflect the application of railroad random testing plans to MECH employees. Specifically, new paragraph (c)(3) would require railroad random testing plans to identify the total number of mechanical employees, including mechanical contractor employees and volunteers. Existing paragraph (c)(3) would be redesignated as paragraph (c)(4), and the remainder of paragraph (c) would be redesignated in conformance. FRA is also proposing minor clarifications to newly redesignated paragraphs (c)(7), (9) and (14) (existing paragraphs (c)(6), (8), and (13)).
FRA proposes to revise paragraph (e)(3) to state that a railroad must inform “each regulated employee” that he or she has been selected for random testing at the time the employee is notified—rather than inform “an regulated employee,” as paragraph (e)(3) currently reads. FRA does not intend this as a substantive change to the current requirement and is proposing this revision merely as a clarification and grammatical correction of an existing requirement.
FRA proposes to substitute the term “regulated employee” for “employee” in paragraph (a)(3), to clarify that the requirements of this section would apply to MOW, MECH, and covered service employees.
As stated above, FRA is proposing to subject an employee who performs MECH activities to the same random testing requirements as one who performs covered service. Currently, this paragraph authorizes the Administrator to amend the minimum annual random testing rates, which are initially set at 50 percent for drugs and 25 percent for alcohol, for a new category of regulated employee after the compilation of 18 months of Management Information System (MIS) data. FRA found, however, that MOW contractors were still submitting random testing plans for its approval 18 months after the effective date of the MOW rule. To allow sufficient time for the implementation of random testing by MECH contractors, FRA is proposing to revise this paragraph to require two consecutive calendar years of MIS data before the initial minimum annual random testing rates for regulated employees could be raised or lowered. This would be consistent with the MIS data requirements that FRA had set for adjustment of the minimum annual random testing rates for covered employees.
A railroad required to file an MIS report must summarize both its alcohol misuse and drug abuse results for the previous calendar year. As a clarifying change, FRA would re-insert “and drug abuse,” which had been inadvertently omitted from this paragraph, to state that the summary includes both alcohol misuse and drug abuse information.
FRA would revise this paragraph to require a railroad to submit its annual MIS report with separate sections for its covered service employees, MOW employees, and MECH employees.
As noted in the discussion of § 219.3 above, for ease of reference, FRA would move § 219.3(b)'s annual MIS reporting requirements for contractors to this subpart to consolidate and clarify its railroad and contractor MIS reporting requirements.
As discussed above in the Executive Summary, FRA is proposing to remove appendices B and C to this part, because these appendices duplicate information that can be found in FRA's PAT testing shipping kits or on the FRA website and post-accident testing app. For ease of reference, each FRA PAT testing shipping kit includes the address of FRA's PAT testing laboratory, and each FRA fatality PAT testing shipping kit contains instructions for the post-mortem collection of body fluid and tissue specimens.
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 made this determination by finding that this proposed regulatory action would not exceed the $100 million annual threshold defined by E.O. 12866. Details on the estimated cost savings of this proposed rule can be found in the proposed rule's Regulatory Evaluation, which FRA has prepared and placed in the docket (FRA-2019-0071). The Regulatory Evaluation details the estimated costs and benefits of those entities who are expected to be impacted by the rule, are likely to see over a 10-year period.
FRA is proposing to expand the definition of regulated employee to include mechanical employees in part 219, as mandated by section 8102 of the Support Act.
The proposed rule generates costs related to provisions on random testing, reasonable cause/reasonable suspicion testing, pre-employment drug testing, peer support, and co-worker referral policies and reporting. As shown in Table ES.1, over the 10-year period of analysis the proposed rule would result in a total discounted cost of $13.9 million (PV 7%).
The benefits of the proposed rule would come from reducing the number of mechanical employees who have a substance use disorder (SUD). FRA determined that testing programs would provide a deterrent effect, which would provide a reduction in the number of existing mechanical employees with an SUD. The deterrent effect would induce mechanical employees with an SUD to self-correct their behavior and no longer misuse alcohol or abuse drugs. Pre-employment drug testing would prevent individuals with SUDs from being hired as mechanical employees. Random testing and reasonable cause/suspicion testing would allow railroads to identify mechanical employees with SUDs so that they can enter rehabilitation.
Over a 10-year period of analysis, this analysis estimates the proposed rule's benefit by multiplying the reduction in the number of employee work years that mechanical employees with an SUD are employed (21,977 employee work years) by the annual cost of having a mechanical employee with a SUD ($3,200) on the payroll. As shown in Table ES.2, the proposed rule would result in total benefits of $52.8 million (PV 7%).
The Regulatory Flexibility Act of 1980
FRA is submitting the information collection requirements in this proposed rule to the Office of Management and Budget (OMB) for approval under the Paperwork Reduction Act of 1995.
All
Under 44 U.S.C. 3506(c)(2)(B), FRA solicits comments concerning: Whether these information collection requirements are necessary for the proper performance of the functions of FRA, including whether the information has practical utility; the accuracy of FRA's estimates of the burden of the information collection requirements; the quality, utility, and clarity of the information to be collected; and whether the burden of collection of information on those who are to respond, including through the use of automated collection techniques or other forms of information technology, may be minimized.
For information, a copy of the paperwork package submitted to OMB, or to submit comments on the collection of information requirements, contact Ms. Hodan Wells, Information Collection Clearance Officer, Office of Railroad Safety, Regulatory Analysis Division at
OMB must 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 that 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, and will announce the OMB control number, when assigned, by separate notice in the
Consistent with the National Environmental Policy Act
The purpose of this rulemaking is to propose expanding the scope of FRA's alcohol and drug regulation to cover MECH employees who test or inspect railroad rolling equipment. This proposed rule would not directly or indirectly impact any environmental resources and would not result in significantly increased emissions of air or water pollutants or noise. Instead, the proposed rule would likely 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 5610.2(a)
Executive Order 13132, “Federalism,”
FRA has analyzed the proposed rule under the principles and criteria contained in Executive Order 13132. This proposed rule complies with a statutory mandate and would not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. In addition, FRA has determined that the proposed rule would not impose substantial direct compliance costs on State and local governments. Therefore, the consultation and funding requirements of Executive Order 13132 would not apply. However, this proposed rule could have preemptive effect by operation of law under certain provisions of the Federal railroad safety statutes, specifically the former Federal Railroad Safety Act of 1970, repealed and recodified at 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) or the Secretary of Homeland Security (with respect to railroad security matters), except when the State law, regulation, or order qualifies under the “essentially local safety or security hazard” exception to section 20106.
In sum, FRA has analyzed this proposed rule under the principles and criteria in Executive Order 13132. As explained above, FRA has determined this proposed rule has no federalism implications, other than the possible preemption of State laws under Federal railroad safety statutes, specifically 49 U.S.C. 20106. Therefore, preparation of a federalism summary impact statement for this proposed rule is not required.
Pursuant to section 201 of the Unfunded Mandates Reform Act of
Executive Order 13211 requires Federal agencies to prepare a Statement of Energy Effects for any “significant energy action.”
Executive Order 13783, “Promoting Energy Independence and Economic Growth,” requires Federal agencies to review regulations to determine whether they potentially burden the development or use of domestically produced energy resources, with particular attention to oil, natural gas, coal, and nuclear energy resources.
FRA has evaluated this proposed rule under the principles and criteria in Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, dated November 6, 2000. This proposed rule would not have a substantial direct effect on one or more Indian tribes, would not impose substantial direct compliance costs on Indian tribal governments, and would not preempt tribal laws. Therefore, the funding and consultation requirements of Executive Order 13175 do not apply, and a tribal summary impact statement is not required.
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
Alcohol abuse, Drug abuse, Drug testing, Penalties, Railroad safety, Reporting and recordkeeping requirements, Safety, Transportation.
49 U.S.C. 20103, 20107, 20140, 21301, 21304, 21311; 28 U.S.C. 2461, note; Sec. 412, Pub. L. 110-432, 122 Stat. 4889; Sec. 8108, Div. A, Pub. L. 115-271, 132 Stat. 3894; and 49 CFR 1.89.
(b) [Reserved]
(c)
(i) Has a total of 15 or fewer employees who are covered by the hours of service laws at 49 U.S.C. 21103, 21104, or 21105, or who would be subject to the hours of service laws at 49 U.S.C. 21103, 21104, or 21105 if their services were performed in the United States; and
(ii) Does not have joint operations, as defined in § 219.5, with another railroad that operates in the United States, except as necessary for purposes of interchange.
(2) An employee performing only MOW or MECH activities, as defined in § 219.5, does not count towards a railroad's total number of covered service employees for the purpose of determining whether it qualifies for the small railroad exception.
(3) A contractor performing MOW or MECH activities exclusively for small railroads also qualifies for the small railroad exception (
(4) If a contractor is subject to all of part 219 of this chapter because it performs regulated service for multiple railroads, not all of which qualify for the small railroad exception, the responsibility for ensuring that the contractor complies with subparts E and G of this part is shared between the contractor and any railroad using the contractor that does not qualify for the small railroad exception.
(1) Any employee who, on behalf of a railroad, performs mechanical tests or inspections required by parts 215, 221, 229, 230, 232, or 238 of this chapter on railroad rolling equipment, or its components, except for:
(i) An employee who is a member of a train crew assigned to test or inspect railroad rolling equipment that is part of a train or yard movement the employee has been called to operate; or
(ii) An employee who only performs one or more of the following duties:
(A) Cleaning and/or supplying cabooses, locomotives, or passenger cars with ice, food concession items, drinking water, tools, sanitary supplies, or flagging equipment;
(B) Servicing activities on locomotives such as fueling, replenishing engine oils and engine water, sanding, and toilet discharge and recharge;
(C) Checking lading for pilferage or vandalism; or
(D) Loading, unloading, or shifting car loads.
(2) An employee who only performs work related to the original manufacturing, testing, or inspection of railroad rolling equipment, or its components, on the manufacturer's behalf, is not a mechanical employee or MECH employee.
Any person, as defined by § 219.5, who violates any requirement of this part or causes the violation of any such requirement is subject to a civil penalty of at least $892 and not more than $29,192 per violation, except that: Penalties may be assessed against individuals only for willful violations; where a grossly negligent violation or a pattern of repeated violations has created an imminent hazard of death or injury, or has caused death or injury, a penalty not to exceed $116,766 per violation may be assessed; and the standard of liability for a railroad will vary depending upon the requirement involved. See,
(g) Each supervisor responsible for regulated employees (except a working supervisor who is a co-worker as defined in § 219.5) must be trained in the signs and symptoms of alcohol and drug influence, intoxication, and misuse consistent with a program of instruction to be made available for inspection upon demand by FRA. Such a program shall, at a minimum, provide information concerning the acute behavioral and apparent physiological effects of alcohol, the major drug groups on the controlled substances list, and other impairing drugs. The program must also provide training on the qualifying criteria for post-accident toxicological testing contained in subpart C of this part, and the role of the supervisor in post-accident collections described in subpart C.
(a) Whenever a breath or body fluid test is required of a regulated employee under this part, the railroad (either through a railroad employee or a designated agent, such as a contracted collector) must provide clear and unequivocal written notice to the employee that the test is being required under FRA regulations and is being conducted under Federal authority. * * *
(c) * * *
(2) For a minimum of three years after (EFFECTIVE DATE OF FINAL RULE), also ensuring that a hard copy of these materials is provided to each mechanical employee.
(d) * * *
(2) The specific classes or crafts of employee who are subject to the provisions of this part, such as engineers, conductors, MOW employees, MECH employees, signal maintainers, or train dispatchers;
(a)
(d) * * *
(1) A railroad must make every reasonable effort to assure that specimens are provided as soon as possible after the accident or incident, preferably within four hours. Specimens that are not collected within four hours after a qualifying accident or incident must be collected as soon thereafter as practicable. If a specimen is not collected within four hours of a qualifying event, the railroad must immediately notify the FRA Drug and Alcohol Program Manager at 202-493-6313 and provide detailed information regarding the failure (either verbally or via a voicemail).
(a)
(c) * * *
(1) FRA makes available for purchase a limited number of standard shipping kits for the purpose of routine handling of post-accident toxicological specimens under this subpart. Specimens must be
(2) Standard shipping kits may be ordered by requesting an order form from FRA's Drug and Alcohol Program Manager at 202-493-6313. * * *
(d)
(e)
Documentation of breath test results must be made available to FRA consistent with the requirements of this subpart.
(c) A coroner, medical examiner, pathologist, or other qualified professional is authorized to remove the required body fluid and tissue specimens from the remains on request of the railroad or FRA pursuant to this part; and in so acting, such person is the delegate of the FRA Administrator under sections 20107 and 20108 of title 49, United States Code (but not the agent of the Secretary for purposes of the Federal Tort Claims Act (chapter 71 of Title 28, United States Code). A qualified professional may rely upon the representations of the railroad or FRA representative with respect to the occurrence of the event requiring that toxicological tests be conducted and the coverage of the deceased employee under this part.
(d) The instructions included inside the shipping kits specify body fluid and tissue specimens required for toxicological analysis in the case of a fatality.
(a) Specimens are analyzed for alcohol, controlled substances, and non-controlled substances specified by FRA under protocols specified by FRA. These substances may be tested for in any form, whether naturally or synthetically derived. Specimens may be analyzed for other impairing substances specified by FRA as necessary to the particular accident investigation.
(c) With respect to a surviving employee, a test reported as positive for alcohol or a controlled substance must be reviewed by the railroad's Medical Review Officer (MRO) with respect to any claim of use or administration of medications (consistent with § 219.103) that could account for the laboratory findings. The MRO must promptly report the results of each review by hard copy or email to the FRA Drug and Alcohol Program Manager. Emailed reports must be sent to
(e) An employee may respond within 45 days of receipt of his or her test results prior to the preparation of any final investigative report concerning the accident or incident by hard copy or email to the FRA Drug and Alcohol Program Manager. Emailed responses should be sent to
(i) An employee may, within 60 days of receipt of the toxicology report, request a retest of his or her PAT testing specimen by hard copy or email to the FRA Drug and Alcohol Program Manager. Emailed requests must be sent to
Each railroad's decision process regarding whether reasonable cause testing is authorized must be completed before the reasonable cause testing is performed and documented according to the requirements of § 219.405. The following circumstances constitute reasonable cause for the administration of alcohol and/or drug tests under the authority of this subpart. For reasonable cause testing based on a rule violation as authorized in paragraph (b) of this section, a railroad that elects to test under FRA authority may only use the rule violations listed in paragraph (b) of this section as bases for reasonable cause testing.
(b) * * *
(1) Noncompliance with a train order, track warrant, track bulletin, track permit, stop and flag order, timetable,
(i) Occupancy of a block or other segment of track to which entry was not authorized;
(ii) Failure to clear a track to permit opposing or following movements to pass;
(iii) Moving across a railroad crossing at grade without authorization;
(iv) Passing an absolute restrictive signal or passing a restrictive signal without stopping (if required); or
(v) Failure to take appropriate action, resulting in the enforcement of a positive train control system.
(17) Improper use of individual train detection in a manual interlocking or control point;
(18) Failure to apply three point protection (fully apply the locomotive and train brakes, center the reverser, and place the generator field switch in the off position) that results in a reportable injury to a regulated employee;
(19) Failure to display blue signals in accordance with § 218.25 through § 218.30 of this chapter;
(20) Failure to perform or have knowledge that a required brake test was performed pursuant to the Class I, Class IA, Class II, or Class III, or transfer train brake test provisions of part 232, or the running brake test provisions of part 238, of this chapter;
(21) Failure to comply with prohibitions against tampering with locomotive mounted safety devices, or permitting a train to be operated with an unauthorized disabled safety device in the controlling locomotive; or
(22) Failure to have a derailing device in proper position and locked if required in accordance with § 218.109 of this chapter.
(e)(1) The pre-employment drug testing requirements of this section do not apply to:
(i) Covered service employees of railroads qualifying for the small railroad exception (see § 219.3(c)) who were performing regulated service for the qualifying railroad, or a contractor or subcontractor of a qualifying railroad, before June 12, 2017;
(ii) Maintenance-of-way employees who were performing regulated service for a railroad, or a contractor or subcontractor of a railroad, before June 12, 2017; or
(iii) MECH employees who were performing regulated service for a railroad, or contractor or subcontractor of a railroad, before (Effective Date of Final Rule).
(2) An exempted employee under paragraph (e)(1) of this section must have a negative pre-employment drug test before performing regulated service for a new or additional employing railroad, or contractor or subcontractor of a railroad, on or after June 12, 2017, for exempted covered employees and maintenance-of-way employees, and after (Effective Date of Final Rule) for MECH employees.
(f) A railroad, or contractor or subcontractor of a railroad, must comply with 49 CFR 40.25 by performing a records check on any of its MOW or MECH employees who have been exempted from pre-employment testing before the employee first performs regulated service. An employee may not perform regulated service after 30 days from the date on which the employee first performed regulated service, unless this information has been obtained or a good faith effort to obtain this information has been made and documented.
(a)
(2) A railroad may submit separate random testing plans for each category of regulated employees (as defined in § 219.5), combine all categories into a single plan, or amend its current FRA-approved plan to add additional categories of regulated employees, as defined by this part.
(e)
(c) * * *
(3) Total number of mechanical employees, including mechanical contractor employees and volunteers;
(7) Name, address, and contact information for any service providers, including the railroad's Medical Review Officers (MROs), Substance Abuse and Mental Health Services Administration (SAMHSA) certified drug testing laboratory(ies), Drug and Alcohol Counselors (DACs), Substance Abuse Professionals (SAPs), and Consortium/Third Party Administrators (C/TPAs) or collection site management companies. Individual collection sites do not have to be identified;
(9) Target random testing rates meeting or exceeding the minimum annual random testing rates;
(14) Designated testing window. A designated testing window extends from the beginning to the end of the designated testing period established in the railroad's FRA-approved random plan (see § 219.603), after which time any individual selections for that designated testing window that have not been collected are no longer active; and
(e) * * *
(3) A railroad must inform each regulated employee that he or she has been selected for random testing at the time the employee is notified. * * *
(a) * * *
(3) A railroad may excuse a regulated employee who has been notified of his
or her selection for random testing only if the employee can substantiate that a medical emergency involving the employee or an immediate family member (
(c) * * *
(1) These initial testing rates are subject to amendment by the Administrator in accordance with paragraphs (d) and (e) of this section after at least two consecutive calendar years of MIS data have been compiled for the category of regulated employee.
(a) Each railroad that has a total of 400,000 or more employee hours (including hours worked by all employees of the railroad, regardless of occupation, not only while in the United States, but also while outside the United States), must submit to* FRA by March 15 of each year a report covering the previous calendar year (January 1-December 31), summarizing the results of its alcohol misuse and drug abuse prevention program. * * *
(f) A railroad required to submit an MIS report under this section must submit separate reports for covered service employees, MOW employees, and MECH employees.
(g)(1) This subpart does not apply to any contractor that performs regulated service exclusively for railroads with fewer than 400,000 total employee annual work hours, including hours worked by all employees of the railroad, regardless of occupation, not only while in the United States, but also while outside the United States.
(2) When a contractor performs regulated service for at least one railroad with 400,000 or more total annual employee work hours, including hours worked by all employees of the railroad, regardless of occupation, not only while in the United States, but also while outside the United States, this subpart applies as follows:
(i) A railroad with 400,000 or more total employee annual work hours must comply with this subpart regarding any contractor employees it integrates into its own alcohol and drug program under this part; and
(ii) If a contractor establishes an independent alcohol and drug testing program that meets the requirements of this part and is acceptable to the railroad, the contractor must comply with this subpart if it has 200 or more regulated employees.
Issued in Washington, DC
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Proposed rule; request for comments.
We, the National Marine Fisheries Service (NMFS), propose to designate critical habitat for the Beringia distinct population segment (DPS) of the Pacific bearded seal subspecies
Comments must be received by March 9, 2020. Public hearings on the proposed rule will be held in Alaska. The dates and times of these hearings will be provided in a subsequent
You may submit data, information, or comments on this document, identified by NOAA-NMFS-2020-0029, and on the associated Draft Impact Analysis Report (
•
•
Electronic copies of the Draft Impact Analysis Report for this proposed rule and a complete list of references cited in this proposed rule are available on the Federal eRulemaking Portal at
Tammy Olson, NMFS Alaska Region, (907) 271-5006; Jon Kurland, NMFS
Section 3(5)(A) of the ESA defines critical habitat as (1) the specific areas within the geographical area occupied by the species, at the time it is listed, on which are found those physical or biological features essential to the conservation of the species and which may require special management considerations or protection; and (2) specific areas outside the geographical area occupied by the species at the time it is listed, upon a determination by the Secretary of Commerce (Secretary) that such areas are essential for the conservation of the species (16 U.S.C. 1532(5)(A)). Conservation is defined in section 3(3) of the ESA as the use of all methods and procedures which are necessary to bring any endangered species or threatened species to the point at which the measures provided pursuant to this Act are no longer necessary (16 U.S.C. 1532(3)). Section 3(5)(C) of the ESA provides that, except in those circumstances determined by the Secretary, critical habitat shall not include the entire geographical area which can be occupied by the threatened or endangered species. Also, by regulation, critical habitat shall not be designated within foreign countries or in other areas outside U.S. jurisdiction (50 CFR 424.12(g)).
Section 4(b)(2) of the ESA requires the Secretary to designate critical habitat for threatened and endangered species on the basis of the best scientific data available and after taking into consideration the economic impact, the impact on national security, and any other relevant impact of specifying any particular area as critical habitat. This section also grants the Secretary discretion to exclude any area from critical habitat if he determines the benefits of such exclusion outweigh the benefits of specifying such area as part of the critical habitat. However, the Secretary may not exclude areas if such exclusion will result in the extinction of the species (16 U.S.C. 1533(b)(2)).
Once critical habitat is designated, section 7(a)(2) of the ESA requires Federal agencies to ensure that actions they authorize, fund, or carry out are not likely to destroy or adversely modify that habitat (16 U.S.C. 1536(a)(2)). This requirement is additional to the section 7(a)(2) requirement that Federal agencies ensure that their actions are not likely to jeopardize the continued existence of ESA-listed species. Specifying the geographic location of critical habitat also facilitates implementation of section 7(a)(1) of the ESA by identifying areas where Federal agencies can focus their conservation programs and use their authorities to further the purposes of the ESA.
This proposed rule describes our proposed designation of critical habitat for the Beringia distinct population segment (DPS) of the Pacific bearded seal subspecies
On December 28, 2012, we published a final rule to list the Beringia DPS of the Pacific bearded seal subspecies as threatened under the ESA (77 FR 76740). Section 4(b)(6)(C) of the ESA requires the Secretary to designate critical habitat concurrently with making a determination to list a species as threatened or endangered unless it is not determinable at that time, in which case the Secretary may extend the deadline for this designation by one year. At the time of listing, we announced our intention to designate critical habitat for the Beringia DPS in a separate rulemaking, as it was not then determinable. Concurrently, we solicited information to assist us in (1) identifying the physical or biological features essential to the conservation of the Beringia DPS, and (2) assessing the economic consequences of designating critical habitat for this species.
Subsequently, on July 25, 2014, the listing of the Beringia DPS as a threatened species was vacated by the U.S. District Court for the District of Alaska (
The bearded seal is the largest of the northern ice-associated seals. Adults average 2.1 to 2.4 meters (m) in length and weigh up to 360 kilograms (Chapskii 1938, McLaren 1958, Johnson
Bearded seals of the Beringia DPS inhabit seasonally ice-covered waters of the Bering, Chukchi, Beaufort, and East Siberian seas. They primarily feed on organisms on or near the seafloor (benthic) that are more numerous in shallow water where light can reach the sea bottom. Thus, their effective habitat is generally restricted to areas where seasonal ice occurs over relatively shallow waters, typically less than 200 meters (m), where they can reach the ocean floor to forage (Burns and Frost 1979, Burns 1981, Nelson
Sea ice provides bearded seals some protection from predators and serves as a platform out of the water for whelping and nursing of pups, pup maturation, and molting (shedding and regrowing hair and outer skin layers), as well as for resting (Cameron
Adult bearded seals have rarely been seen hauled out on land in Alaska (Burns 1981, Nelson 1981, Smith 1981). However, juvenile bearded seals have been observed hauled out on land along lagoons and rivers in some areas of Alaska, including at Nunivak Island (Huntington
The region that includes the Bering and Chukchi seas is the largest area of continuous habitat for bearded seals (Burns 1981, Nelson
Of the bearded seals tagged in Alaska to date, few have been adults, and the majority were tagged in Norton Sound and Kotzebue Sound. Tracking data for most tagged seals have shown an overall pattern of movement northward in summer with receding sea ice and southward in fall as sea ice advances (Frost
During the winter and spring, pregnant female bearded seals find broken pack ice over shallow areas on which to whelp, nurse pups, and molt (Fay 1974, Heptner
Bearded seals vocalize intensively during the breeding season, which Cameron
Surveys indicate that in the Bering Sea during spring, bearded seals use nearly the entire extent of pack ice over the continental shelf. The highest densities of bearded seals in early spring have typically been observed between St. Lawrence and St. Matthew Islands, with lower densities reported southeast of St. Matthew Island and in the southern Gulf of Anadyr (Krylov
Adult and juvenile bearded seals molt annually, a process that for adults typically begins shortly after mating, as it does with other mature phocid or “true” seals (Chapskii 1938, Ling 1970, Ling 1972, King 1983, Yochem and Stewart 2002). Juvenile bearded seals have been reported to molt earlier than adults (Krylov
Bearded seals feed primarily on benthic organisms, including a variety of invertebrates dwelling on the surface of the seabed (epifauna) and in the seabed substrate (infauna), and some fishes found on or near the sea bottom (demersal). They are also able to switch their diet to include schooling pelagic (non-demersal) fishes when advantageous (Finley and Evans 1983, Antonelis
Specific bearded seal prey species differ somewhat between geographic locations. This variability is likely a result of differences in prey assemblages in each region (Burns and Frost 1979, Lowry
In the following sections, we describe the relevant definitions and requirements in the ESA and implementing regulations at 50 CFR part 424, and the key information and criteria used to prepare this proposed critical habitat designation. In accordance with section 4(b)(2) of the ESA, this proposed critical habitat designation is based on the best scientific data available. Our primary sources of information include the status review report for the bearded seal (Cameron
To identify specific areas that may qualify as critical habitat for bearded seals of the Beringia DPS, in accordance with 50 CFR 424.12(b), we followed a five-step process: (1) Identify the geographical area occupied by the species at the time of listing; (2) identify physical or biological habitat features essential to the conservation of the species; (3) determine the specific areas within the geographical area occupied by the species that contain one or more of the physical or biological features essential to the conservation of the species; (4) determine which of these essential features may require special management considerations or protection; and (5) determine whether a critical habitat designation limited to geographical areas occupied would be inadequate to ensure the conservation of the species. Our evaluation and conclusions are described in detail in the following sections.
The phrase “geographical areas occupied by the species,” which appears in the statutory definition of critical habitat, is defined by regulation
Based on existing literature, including available information on sightings and movements of bearded seals of the Beringia DPS, the range of the Beringia DPS was identified in the final ESA listing rule (77 FR 76740; December 28, 2012) as the Arctic Ocean and adjacent seas in the Pacific Ocean between 145° E long. and 130° W long., except west of 157° E long., or west of the Kamchatka Peninsula, where the Okhotsk DPS of the bearded seal is found. As noted previously, we cannot designate areas outside U.S. jurisdiction as critical habitat. Thus, the geographical area under consideration for this designation is limited to areas under the jurisdiction of the United States that the Beringia DPS occupied at the time of listing. This area extends to the outer boundary of the U.S. Exclusive Economic Zone (EEZ) in the Chukchi and Beaufort seas and south over the continental shelf in the Bering Sea (Cameron
The statutory definition of occupied critical habitat refers to “physical or biological features essential to the conservation of the species,” but the ESA does not specifically define or further describe these features. Implementing regulations at 50 CFR 424.02, however, define such features as those that occur in specific areas and that are essential to support the life-history needs of the species. The regulations provide additional details and examples of such features.
Based on the best scientific information available regarding the natural history of bearded seals and the habitat features that are essential to support the species' life-history needs, we have identified the following physical or biological features that are essential to the conservation of the Beringia DPS of the bearded seal within U.S. waters occupied by the species.
(1)
Sea ice habitat suitable for bearded seal whelping and nursing is essential to the conservation of the Beringia DPS because the seals rely on sea ice as a dry platform for whelping, nursing, and rearing pups in proximity to benthic foraging habitats. Further, hauling out on the ice reduces thermoregulatory demands, and is thus especially important for growing pups, which have a disproportionately large skin surface and rate of heat loss in the water (Harding
To identify ice concentrations (percentage of ocean surface covered by sea ice) that we consider essential for bearded seal whelping and nursing, we relied upon three studies in the Bering Sea that estimated ice concentrations selected by bearded seals in the spring, based on aerial survey observations of bearded seals hauled out on ice. Simpkins
Cameron
(2)
Sea ice habitat suitable for molting is essential to the conservation of the Beringia DPS because molting is a biologically important, energy-intensive process that could incur increased energetic costs if it occurs in water or could involve increased risk of predation (due to the absence of readily accessible escape routes to avoid predators,
(3)
Primary prey resources are essential to the conservation of the Beringia DPS because bearded seals likely rely on these resources the most to meet their annual energy budgets. As discussed above, bearded seals have a diverse diet with a large variety of prey items throughout their range, and are considered benthic specialists. Quakenbush
(4)
Acoustic conditions that allow for effective bearded seal communications for breeding purposes are essential to the conservation of the Beringia DPS because underwater acoustic communication plays an important role in bearded seal reproductive behavior. Male bearded seals vocalize intensively during the breeding season to advertise breeding condition and/or proclaim a territory (Ray
To determine which areas qualify as critical habitat within the geographical area occupied by the species, we are required to identify “specific areas” that contain one or more of the physical or biological features essential to the conservation of the species (and that may require special management considerations or protection, as described below) (50 CFR 424.12(b)(1)(iii)). Delineation of the specific areas is done at a scale determined by the Secretary to be appropriate (50 CFR 424.12(b)(1)). Regulations at 50 CFR 424.12(c) also require that each critical habitat area be shown on a map.
In determining the scale and boundaries for the specific areas, we considered, among other things, the scales at which biological data are available and the availability of standardized geographical data necessary to map boundaries. Because the ESA implementing regulations allow for discretion in determining the appropriate scale at which specific areas are drawn (50 CFR 424.12(b)(1)), we are not required, nor was it possible, to determine that each square inch, acre, or even square mile independently meets the definition of “critical habitat.” A main goal in determining and mapping the boundaries of the specific areas is to provide a clear description and documentation of the areas containing the identified essential features. This is ultimately fundamental to ensuring that Federal action agencies are able to determine whether their particular actions may affect the critical habitat.
As we explain below, the essential features of bearded seal critical habitat, in particular the sea ice essential features, are dynamic and variable on both spatial and temporal scales. As climatic conditions change there may be increased variability in sea ice characteristics and spatial/temporal coverage, including with respect to the southern extent of sea ice in the spring and the timing and rate of the retreat of sea ice during spring and early summer. Bearded seal movements and habitat use
We first focused on identifying where the essential features that support the species' life history functions of whelping, nursing, and molting (
The dynamic nature of sea ice and the spatial and temporal variations in sea ice cover constrain our ability to map with precision the specific geographic locations where the sea ice essential features will occur. The specific geographic locations of essential sea ice habitat used by bearded seals vary from year to year, or even day to day, depending on many factors, including time of year, local weather, and oceanographic conditions (
Bearded seals of the Beringia DPS can range widely, which, combined with the dynamic variations in sea ice conditions, results in individuals distributing broadly and using sea ice habitats within a range of suitable conditions. We integrated these physical and biological factors into our identification of specific areas where one or both sea ice essential features occur based on the information currently available on the seasonal distribution and movements of bearded seals during the annual period of reproduction and molting, the maximum depth where the sea ice essential features occur, and satellite-derived estimates of the position of the sea ice edge over time. Although this approach allowed us to identify specific areas that contain one or both of the sea ice essential features at certain times, the available data supported delineation of specific areas only at a coarse scale. Consequently, we delineated a single specific area that contains the sea ice features essential to the conservation of the Beringia DPS, as follows.
We first identified the southern boundary of this specific area. The information discussed above regarding the seasonal distribution and movements of bearded seals in the Bering Sea suggests that sea ice essential for whelping and nursing (and potentially for molting) extends south of St. Matthew and Nunivak Islands. But a more precise southern boundary for this habitat is unavailable because existing information is limited on the spatial distribution and whelping locations of bearded seals in the Bering Sea during spring, and the temporal and spatial distribution of sea ice cover, which influences bearded seal distributions, is variable between years.
We therefore turned to Sea Ice Index data maintained by the National Snow and Ice Data Center (NSIDC) for information on the estimated median position of the ice edge in the Bering Sea during April (Fetterer
The April median ice edge for the 1981 to 2010 reference period from the Sea Ice Index is located approximately 170 kilometers (km) southwest of St. Matthew Island and 175 km south of Nunivak Island, and it extends eastward across lower Kuskokwim Bay to near Cape Newenham, a headland between Kuskokwim Bay and Bristol Bay. Because bearded seals use nearly the entire extent of pack ice over the Bering Sea shelf in spring, depending upon ice conditions in a given year, some bearded seals may use sea ice for whelping south of this median ice edge. But we concluded that the variability in the annual extent and timing of sea ice in this southernmost portion of the bearded seal's range in the Bering Sea (
As such, we delineated the southern boundary to reflect the estimated position of the April median ice edge west of Kuskokwim Bay. To simplify the southern boundary for purposes of delineation on maps, we modified the ice edge contour line for the 1990 to 2019 period as follows: (1) Intermediate points along the contour line between its intersection point with the seaward limit of the U.S. EEZ (60°32′26″ N/179°9′53″ W) and the point where the contour line turns eastward (57°58′ N/170°25′ W) were removed to form the segment of the southern boundary that extends from the seaward limit of the U.S. EEZ southeastward approximately 575 km; (2) intermediate points along the contour line between the point where the contour line turns eastward and the approximate point on the west side of Kuskokwim Bay where the contour line turns northeastward (58°29′ N/164°46′ W) were removed to form a second segment of the southern boundary that extends eastward approximately 335 km; and (3) these two line segments were connected to the mainland by an approximately 200-km line segment that follows 164°46′ W longitude to near the west side of the mouth of the Kolovinerak River, about 50 km east of Nunivak Island. This editing produced a simplified southern boundary that retains the general shape
We then identified the northern boundary of the specific area that contains one or both of the sea ice essential features. As discussed above (see Description and Natural History section), limited spring aerial survey information, satellite tracking data for tagged bearded seals, and year-round passive acoustic recordings of bearded seal vocalizations suggest that some portion of the Beringia DPS overwinters in the Chukchi and Beaufort seas. In addition, many of the bearded seals that overwinter in the Bering Sea migrate northward with the receding ice edge in the spring and early summer into the Chukchi and Beaufort seas, coincident with the timing of molting. Therefore, consistent with the maximum depth identified for the sea ice essential features, we defined the northern boundary of the specific area containing the sea ice essential features as the 200-m isobath over the continental shelf break in the Chukchi and Beaufort seas (
The shallow seasonally ice-covered waters of the Bering, Chukchi, and Beaufort seas support a high abundance of bearded seal benthic prey resources (
Satellite tracking information suggests that juvenile bearded seals may forage in the Bering Sea near the shelf break south of the southern boundary of the specific area identified above. In addition, Breed
Finally, we considered the shoreward extent of the essential features. Satellite tracking data indicate that some tagged juvenile bearded seals used shallow nearshore waters during the open-water period (Quakenbush
Data to determine the boundaries of the specific area containing the essential features are limited. We specifically seek additional data and comments on our proposed delineation of these boundaries (see Public Comments Solicited section).
A specific area within the geographic area occupied by a species may only be designated as critical habitat if the area contains one or more essential physical or biological feature that may require special management considerations or protection (16 U.S.C. 1532(5)(A)(ii); 50 CFR 424.12(b)(iv)). “Special management considerations or protection” is defined as methods or procedures useful in protecting the physical or biological features essential to the conservation of listed species (50 CFR 424.02). Courts have indicated that the “may require” standard requires that NMFS determine that special management considerations or protection of the essential features might be required either now or in the future (
We have identified four primary sources of potential threats to each of the habitat features identified above as essential to the conservation of the Beringia DPS of the bearded seal: Climate change; oil and gas exploration, development, and production; marine shipping and transportation; and commercial fisheries. As further detailed below, both sea ice essential features, the primary prey essential feature, and the essential feature of acoustic conditions that allow for effective communications by bearded seals for breeding purposes may require special management considerations or protection as a result of impacts (either independently or in combination) from these sources. We note that our evaluation does not consider an exhaustive list of threats that could have impacts on the essential features, but rather considers the primary potential threats that we are aware of at this time that support our conclusion that special management considerations or protection of each of the essential features may be required. Further, we highlight particular threats associated with each source of impacts while recognizing that certain threats are associated with more than one source (
The principal threat to the persistence of the Beringia DPS of the bearded seal is the ongoing and anticipated decreases in the extent and timing of sea ice stemming from climate change. Climate-change-related threats to the Beringia DPS's habitat are discussed in detail in the bearded seal status review report (Cameron
Oil and gas exploration, development, and production activities in the U.S. Arctic may include: Seismic surveys; exploratory, delineation, and production drilling operations; construction of artificial islands, causeways, shore-based facilities, and pipelines; and vessel and aircraft operations. These activities have the potential to affect the essential features of Beringia DPS critical habitat, primarily through pollution (particularly in the event of a large oil spill), noise, and physical alteration of the species' habitat.
Large oil spills (considered in this section to be spills of relatively great size, consistent with common usage of the term) are generally considered to be the greatest threat associated with oil and gas activities in the Arctic marine environment (Arctic Monitoring and Assessment Programme (AMAP) 2007). In contrast to spills on land, large spills at sea, especially when ice is present, are difficult to contain or clean up, and may spread over hundreds or thousands of square kilometers. Responding to a sizeable spill in the Arctic environment would be particularly challenging. Reaching a spill site and responding effectively would be especially difficult, if not impossible, in winter when weather can be severe and daylight extremely limited. Oil spills under ice or in ice-covered waters are the most challenging to deal with due to, among other factors, limitations on the effectiveness of current containment and recovery technologies when sea ice is present. The extreme depth and the pressure that oil was under during the 2010 oil blowout at the Deepwater Horizon well in the Gulf of Mexico may not exist in the shallow continental shelf waters of the Beaufort and Chukchi seas. Nevertheless, the difficulties experienced in stopping and containing the Deepwater Horizon blowout, where environmental conditions, available infrastructure, and response preparedness were comparatively good, point toward even greater challenges in containing and cleaning a large spill in a much more environmentally severe and geographically remote Arctic location.
Although planning, management, and use of best practices can help reduce risks and impacts, the history of oil and gas activities indicates that accidents cannot be eliminated (AMAP 2007). Data on large spills (
Icebreaking vessels, which may be used for in-ice seismic surveys or to manage ice near exploratory drilling ships, also have the potential to affect the sea ice essential features of bearded seal habitat through physical alteration of the sea ice (also see
In summary, a large oil spill could render areas containing the identified essential features unsuitable for use by bearded seals of the Beringia DPS. In such an event, sea ice habitat suitable for whelping, nursing, and/or for basking and molting could be oiled. The primary prey resources could also become contaminated, experience mortality, or be otherwise adversely affected by spilled oil. In addition, disturbance effects (both physical disturbance and acoustic effects) could alter the quality of the essential features of bearded seal critical habitat, or render habitat unsuitable. We conclude that the essential features of the habitat of the Beringia DPS may require special management considerations or protection in the future to minimize the risks posed to these features by oil and gas exploration, development, and production.
The reduction in Arctic sea ice that has occurred in recent years has renewed interest in using the Arctic Ocean as a potential waterway for coastal, regional, and trans-Arctic marine operations and in extension of the navigation season in surrounding seas (Brigham and Ellis 2004, Arctic Council 2009). Marine traffic along the western and northern coasts of Alaska includes tug, towing, and cargo vessels, tankers, research and government vessels, vessels associated with oil and gas exploration and development, fishing vessels, and cruise ships (Adams and Silber 2017, U.S. Committee on the Marine Transportation System 2019). Automatic Identification System data indicate that the number of unique vessels operating annually in U.S. waters north of the Bering Sea in 2015 to 2017 increased 128 percent over the number recorded in 2008 (U.S. Committee on the Marine Transportation System 2019). Climate models predict that the warming trend in the Arctic will accelerate, causing the ice to begin melting earlier in the spring and resume freezing later in the fall, resulting in an expansion of potential transit routes and a lengthening of the potential navigation season, and a continuing increase in vessel traffic (Khon
The fact that nearly all vessel traffic in the Arctic, with the exception of icebreakers, purposefully avoids areas of ice, and primarily occurs during the ice-free or low-ice seasons, helps to mitigate the risks of shipping to the essential habitat features identified for bearded seals of the Beringia DPS. However, icebreakers pose greater risks to these features since they are capable of operating year-round in all but the heaviest ice conditions and are often used to escort other types of vessels (
In addition to the potential effects of icebreaking on the essential features, the maritime shipping industry transports various types of petroleum products, both as fuel and cargo. In particular, if increased shipping involves the tanker transport of crude oil or oil products, there would be an increased risk of spills (Arctic Climate Impact Assessment 2005, U.S. Arctic Research Commission 2012). Similar to oil and gas activities, the most significant threat posed by shipping activities is considered to be the accidental or illegal discharge of oil or other toxic substances carried by ships (Arctic Council 2009).
Vessel discharges associated with normal operations, including sewage, grey water, and oily wastes are expected to increase as a result of increasing marine shipping and transportation in Arctic waters (Arctic Council 2009, Parks
We conclude that the essential features of the habitat of the Beringia DPS may require special management considerations or protection in the future to minimize the risks posed by potential shipping and transportation activities because: (1) Physical alteration of sea ice by icebreaking activities could reduce the quantity and/or quality of the sea ice essential features; (2) in the
The specific area identified in this proposed rule as meeting the definition of critical habitat for the Beringia DPS overlaps with the Arctic Management Area and the Bering Sea and Aleutian Islands Management Area identified by the North Pacific Fishery Management Council. No commercial fishing is permitted within the Arctic Management Area due to insufficient data to support the sustainable management of a commercial fishery there. However, as additional information becomes available, commercial fishing may be allowed in this management area. For example, two bearded seal prey species—Arctic cod and saffron cod—have been identified as likely initial target species for commercial fishing in the Arctic Management Area in the future (North Pacific Fishery Management Council 2009).
In the northern portion of the Bering Sea and Aleutian Islands Management Area, commercial fisheries overlap with the southernmost portion of the proposed critical habitat. Portions of the proposed critical habitat also overlap with certain state commercial fisheries management areas. Commercial catches from waters in the proposed critical habitat area primarily include: Pacific halibut (
Commercial fisheries may affect the primary prey resources identified as essential to the conservation of the Beringia DPS, through removal of prey biomass and potentially through modification of benthic habitat by fishing gear that contacts the seafloor. Given the potential changes in commercial fishing that may occur with the expected increasing length of the open-water season and range expansion of some economically valuable species responding to climate change (
Section 3(5)(A)(ii) of the ESA authorizes the designation of specific areas outside the geographical area occupied by the species, if those areas are determined to be essential for the conservation of the species. Our regulations at 50 CFR 424.12(b)(2) require that we first evaluate areas occupied by the species, and only consider unoccupied areas to be essential where a critical habitat designation limited to geographical areas occupied would be inadequate to ensure the conservation of the species. Because bearded seals of the Beringia DPS are considered to occupy their entire historical range that falls within U.S. jurisdiction, we find that there are no unoccupied areas within U.S. jurisdiction that are essential to their conservation.
Section 4(a)(3)(B)(i) of the ESA precludes designating as critical habitat any lands or other geographical areas owned or controlled by the Department of Defense (DOD), or designated for its use, that are subject to an Integrated Natural Resources Management Plan (INRMP) prepared under section 101 of the Sikes Act (16 U.S.C. 670a) if the Secretary determines in writing that such plan provides a benefit to the species for which critical habitat is proposed for designation.
Before publication of this proposed rule, we contacted DOD (Air Force and Navy) and requested information on any facilities or managed areas that are subject to an INRMP and are located within areas that could potentially be designated as critical habitat for the Beringia DPS. In response to our request, the Air Force provided information regarding twelve radar sites with an INRMP in place, 10 of which (7 active and 3 inactive) are located adjacent to the area under consideration for designation as critical habitat: Barter Island Long Range Radar Site (LRRS), Cape Lisburne LRRS, Cape Romanzof LRRS, Kotzebue LRRS, Oliktok LRRS, Point Barrow LRRS, Tin City LRRS, Bullen Point Short Range Radar Site (SRRS), Point Lay LRRS, and Point Lonely LRRS. The Air Force requested exemption of these radar sites pursuant to section 4(a)(3)(B)(i) of the ESA. Based on our review of the INRMP (draft 2020 update), the area being considered for designation as critical habitat, all of which occurs seaward of the MLLW line, does not overlap with DOD lands. Therefore, we conclude that there are no properties owned, controlled, or designated for use by DOD that are subject to ESA section 4(a)(3)(B)(i) for this proposed critical habitat designation, and thus the exemptions requested by the Air Force are not necessary because no critical habitat would be designated in those radar sites.
Section 4(b)(2) of the ESA requires the Secretary to designate critical habitat for threatened and endangered species on the basis of the best scientific data available after taking into consideration the economic impact, the impact on national security, and any other relevant impact, of specifying any particular area as critical habitat. Regulations at 50 CFR 424.19(b) also specify that the Secretary will consider the probable impacts of the designation at a scale that the Secretary determines to be appropriate, and that such impacts may be qualitatively or quantitatively described. The Secretary is also required to compare impacts with and without the designation (50 CFR 424.19(b)). In other words, we are required to assess the incremental impacts attributable to the critical habitat designation relative to a baseline that reflects existing regulatory impacts in the absence of the critical habitat.
Section 4(b)(2) also describes an optional process by which the Secretary may go beyond the mandatory consideration of impacts and weigh the benefits of excluding any particular area (that is, avoiding the economic, national security, or other relevant impacts) against the benefits of designating it
While section 3(5) of the ESA defines critical habitat as “specific areas,” section 4(b)(2) requires the agency to consider the impacts of designating any “particular area.” Depending on the biology of the species, the characteristics of its habitat, and the nature of the impacts of designation, “particular” areas may be—but need not necessarily be—delineated so that they are the same as the already identified “specific” areas of potential critical habitat. For the reasons set forth below, we are not proposing to exercise the discretion delegated to us by the Secretary to exclude any particular areas from the proposed critical habitat designation.
The primary impacts of a critical habitat designation arise from the ESA section 7(a)(2) requirement that Federal agencies ensure that their actions are not likely to result in the destruction or adverse modification of critical habitat (
In determining the impacts of designation, we focused on the incremental change in Federal agency actions as a result of critical habitat designation and the adverse modification standard (see
Our analysis for this proposed rule is described in detail in the associated Draft Impact Analysis Report that is available for public review and comment (see Public Comments Solicited). This analysis assesses the incremental costs and benefits that may arise due to the critical habitat designation, with economic costs estimated over the next 10 years. We chose the 10-year timeframe because it is lengthy enough to reflect the planning horizon for reasonably predicting future human activities, yet it is short enough to allow reasonable projections of changes in use patterns in an area, as well as of exogenous factors (
Below, we summarize our analysis of the impacts of designating the specific area identified in this proposed rule as meeting the definition of critical habitat for the Beringia DPS. Additional detail is provided in the Draft Impact Analysis Report prepared for this proposed rule.
We expect that the Beringia DPS will increasingly experience the ongoing loss of sea ice and changes in ocean conditions associated with climate change, and the significance of other habitat threats will likely increase as a result. As noted above, the primary benefit of a critical habitat designation—and the only regulatory consequence—stems from the ESA section 7(a)(2) requirement that all Federal agencies ensure that their actions are not likely to destroy or adversely modify the designated habitat. This benefit is in addition to the section 7(a)(2) requirement that all Federal agencies ensure that their actions are not likely to jeopardize listed species' continued existence. Another benefit of critical habitat designation is that it provides specific notice of the areas and features essential to the conservation of the Beringia DPS. This information will focus future ESA section 7 consultations on key habitat attributes. By identifying the specific areas where the features essential to the conservation of the Beringia DPS occur, there may also be enhanced awareness by Federal agencies and the general public of activities that might affect those essential features. The designation of critical habitat can also inform Federal agencies regarding the habitat needs of the Beringia DPS, which may facilitate using their authorities to support the conservation of this species pursuant to ESA section 7(a)(1), including to design proposed projects in ways that minimize adverse effects to critical habitat.
In addition, the critical habitat designation may result in indirect benefits, as discussed in detail in the Draft Impact Analysis Report, including education and enhanced public awareness, which may help focus and contribute to conservation efforts for bearded seals of the Beringia DPS and their habitat. For example, by identifying areas and features essential to the conservation of the Beringia DPS, complementary protections may be developed under state or local regulations or voluntary conservation plans. These other forms of benefits may be economic in nature (whether market or non-market, consumptive, non-consumptive, or passive), educational, cultural, or sociological, or they may be expressed through beneficial changes in the ecological functioning of the species' habitat, which itself yields
It is not presently feasible to monetize, or even quantify, each component part of the benefits accruing from the designation of critical habitat for the Beringia DPS. Therefore, we augmented the quantitative measurements that are summarized here and discussed in detail in the Draft Impact Analysis Report with qualitative and descriptive assessments, as provided for under 50 CFR 424.19(b) and in guidance set out in OMB Circular A-4. Although we cannot monetize or quantify all of the incremental benefits of the critical habitat designation, we conclude that they are not inconsequential.
Direct economic costs of the critical habitat designation accrue primarily through implementation of section 7(a)(2) of the ESA in consultations with Federal agencies to ensure that their proposed actions are not likely to destroy or adversely modify critical habitat. Those economic impacts may include both administrative costs and costs associated with project modifications. At this time, on the basis of how protections are currently implemented for bearded seals of the Beringia DPS under the Marine Mammal Protection Act (MMPA) and as a threatened species under the ESA, we do not anticipate that additional requests for project modifications will result specifically from this designation of critical habitat. In other words, the critical habitat designation is not likely to result in more requested project modifications because our section 7 consultations on potential effects to bearded seals and our incidental take authorizations for Arctic activities under section 101(a) of the MMPA both typically address habitat-associated effects to the seals even in the absence of a critical habitat designation. As a result, the direct incremental costs of this critical habitat designation are expected to be limited to the additional administrative costs of considering Beringia DPS critical habitat in future section 7 consultations.
To identify the types of Federal activities that may affect critical habitat for the Beringia DPS, and therefore would be subject to the ESA section 7 adverse modification standard, we examined the record of section 7 consultations for 2013 to 2019 to identify Federal activities that occur within the specific area being considered as critical habitat for the Beringia DPS and that may affect the essential features of the critical habitat. These activities include oil and gas related activities, dredge mining, navigation dredging, in-water construction, commercial fishing, oil spill response, and certain military activities. We projected the occurrence of these activities over the timeframe of the analysis (the next 10 years) using the best available information on planned activities and the frequency of recent consultations for particular activity types. Notably, all of the projected future Federal actions that may trigger an ESA section 7 consultation due to the potential to affect one or more of the essential habitat features also have the potential to affect bearded seals of the Beringia DPS. In other words, none of the activities we identified would trigger a consultation solely on the basis of the critical habitat designation. We recognize there is inherent uncertainty involved in predicting future Federal actions that may affect the essential features of critical habitat for the Beringia DPS. We specifically seek comments and information regarding the types of activities that are likely be subject to section 7 consultation as a result of the proposed designation, and we will consider any relevant information received during the comment period in developing the economic analysis supporting the final rule (see Public Comment Solicited section).
We expect that the majority of future ESA section 7 consultations analyzing potential effects on the proposed essential habitat features will involve NMFS and BOEM authorizations and permitting of oil and gas related activities. In assessing costs associated with these consultations, we took a conservative approach by estimating that future formal and informal consultations addressing these activities would be more complex than for other activities, and would therefore incur higher third party (
As detailed in the Draft Impact Analysis Report, the total incremental costs associated with this critical habitat designation over the next 10 years, in discounted present value terms, are estimated to be $786,000 (discounted at 7 percent). In annual terms, the estimated range of discounted incremental costs is $57,000 to $105,000. About 80 percent of the incremental costs attributed to the critical habitat designation are expected to accrue from ESA section 7 consultations associated with oil and gas related activities in the Chukchi and Beaufort seas and adjacent onshore areas. Although not quantifiable at this time, the Draft Impact Analysis Report acknowledges that the oil and gas industry may also incur indirect costs associated with the critical habitat designation if future third-party litigation over specific consultations creates delays or other sources of regulatory uncertainty.
We have preliminarily concluded that the potential economic impacts associated with the critical habitat designation are modest both in absolute terms and relative to the level of economic activity expected to occur in the affected area, which is primarily associated with oil and gas activities that may occur in the Beaufort and Chukchi seas. As a result, and in light of the benefits of critical habitat designation discussed above and in the Draft Impact Analysis Report, we are not proposing to exercise our discretion to
Section 4(b)(2) of the ESA also requires consideration of national security impacts. As noted in the Application of ESA Section 4(a)(3)(B)(i) section above, before publication of this proposed rule, we contacted the DOD regarding any potential impacts of the designation of designating critical habitat for the Beringia DPS on military operations. In a letter dated June 3, 2013, the DOD Regional Environmental Coordinator indicated that no impacts on national security were foreseen from such a designation. More recently, by letter dated March 17, 2020, the Navy submitted a request for exclusion of a particular area north of the Beaufort Sea shelf from the designation of critical habitat based on national security impacts. This area does not overlap with the specific area identified in this proposed rule as meeting the definition of critical habitat for the Beringia DPS. In this letter, the Navy also provided information regarding its training and testing activities that currently occur or are planned to occur in U.S. waters inhabited by bearded seals. The Navy commented that based on the current and expected training and testing activities occurring in the Arctic region, it has determined that training and testing activities do not pose any substantial threat to the essential features of the habitat of the Beringia DPS.
In addition, by letter dated April 30, 2020, the Air Force provided information concerning its activities at radar sites located adjacent to the area under consideration for designation as critical habitat (relevant sites identified above in the Application of ESA Section 4(a)(3)(B)(i) section). The Air Force requested that we consider excluding critical habitat near these sites under section 4(b)(2) of the ESA due to impacts on national security. Although we are not proposing to exempt the radar sites pursuant to section 4(a)(3)(B)(i) of the ESA, as discussed above, here we consider whether to propose excluding critical habitat located adjacent to these sites under section 4(b)(2).
The Air Force noted that annual fuel and cargo resupply activities occur at these radar sites primarily in the summer, and installation beaches are used for offload. The Air Force indicated that coastal operations at these installations are limited, and when barge operations occur, protective measures are implemented per the Polar Bear and Pacific Walrus Avoidance Plan (preliminary final 2020) associated with the INRMP in place for these sites. The Air Force discussed that it also conducts sampling and monitoring at these sites as part of the department's Installation Restoration Program, and conducts larger scale contaminant or debris removal in some years that can require active disturbance of the shoreline. Coastal barge operations are a feature of both monitoring and removal actions.
Federal agencies have an existing obligation to consult with NMFS under section 7(a)(2) of the ESA to ensure the activities they fund or carry out are not likely to jeopardize the continued existence of the Beringia DPS of bearded seals, regardless of whether or where critical habitat is designated for the species. The information provided by the Navy does not point to any tangible consequences or restrictions that would impinge upon the Navy's training and testing activities, and suggests that the Navy would need to expend very minimal added time and effort to complete section 7 consultations to evaluate effects on critical habitat in addition to effects on the species. The activities described in the Air Force's exclusion request are localized and small in scale, and it is unlikely that modifications to these activities would be needed to address impacts to critical habitat beyond any modifications that may be necessary to address impacts to Beringia DPS bearded seals. We therefore anticipate that the time and costs associated with consideration of the effects of future Air Force actions on critical habitat of the Beringia DPS under section 7(a)(2) of the ESA would be limited if any, and the consequences for the Air Force's activities, even if we do not exempt or exclude the requested areas from critical habitat designation, would be negligible.
As a result, and in light of the benefits of critical habitat designation discussed above and in the Draft Impact Analysis Report, we have preliminarily concluded that the benefits of exclusion do not outweigh the benefits of designation and are therefore not proposing to exercise our discretionary authority to exclude these particular areas pursuant to section 4(b)(2) of the ESA based on national security impacts. We will continue to coordinate with DOD regarding the identification of potential national security impacts that could result from the critical habitat designation to further inform our determinations regarding exclusions from the designation under section 4(b)(2) based on national security impacts.
Finally, under ESA section 4(b)(2) we consider any other relevant impacts of critical habitat designation to inform our decision as to whether to exclude any areas. For example, we may consider potential adverse effects on existing management or conservation plans that benefit listed species, and we may consider potential adverse effects on tribal lands or trust resources. In preparing this proposed designation, we have not identified any such management or conservation plans, tribal lands or resources, or anything else that would be adversely affected by the critical habitat designation. Some Alaska Native organizations and tribes have expressed concern that the critical habitat designation might restrict subsistence hunting of bearded seals or other marine mammals, such that important hunting areas should be considered for exclusion, but no restrictions on subsistence hunting are associated with this designation. Accordingly, we are not exercising our discretion to conduct an exclusion analysis pursuant to section 4(b)(2) of the ESA based on other relevant impacts.
We propose to designate as critical habitat a specific area of marine habitat in Alaska and offshore Federal waters of the Bering, Chukchi, and Beaufort seas within the geographical area presently occupied by the Beringia DPS of the bearded seal. This critical habitat area contains physical or biological features essential to the conservation of bearded seals of the Beringia DPS that may require special management considerations or protection. We are not proposing to exclude any areas based on economic impacts, impacts to national security, or other relevant impacts of this proposed designation. We have not identified any unoccupied areas that are essential to the conservation of the Beringia DPS of the bearded seal, and thus we are not proposing any such areas for designation as critical habitat. In accordance with our regulations regarding critical habitat designation (50 CFR 424.12(c)), the map included in the proposed regulation, as clarified by the accompanying regulatory text, would constitute the official boundary of the proposed designation.
Section 7(a)(2) of the ESA requires Federal agencies, including NMFS, to ensure that any action authorized,
Reasonable and prudent alternatives are defined in 50 CFR 402.02 as alternative actions identified during formal consultation that can be implemented in a manner consistent with the intended purpose of the action, that are consistent with the scope of the Federal agency's legal authority and jurisdiction, that are economically and technologically feasible, and that would avoid the destruction or adverse modification of critical habitat. NMFS may also provide with the biological opinion a statement containing discretionary conservation recommendations. Conservation recommendations are advisory and are not intended to carry any binding legal force.
Regulations at 50 CFR 402.16 require Federal agencies that have retained discretionary involvement or control over an action, or where such discretionary involvement or control is authorized by law, to reinitiate consultation on previously reviewed actions in instances where: (1) Critical habitat is subsequently designated; or (2) new information or changes to the action may result in effects to critical habitat not previously considered (among other reasons for reinitiation). Consequently, some Federal agencies may request reinitiation of consultation or conference with us on actions for which consultation has been completed, if those actions may affect designated critical habitat for the Beringia DPS. Activities subject to the ESA section 7 consultation process include activities on Federal lands as well as activities requiring a permit or other authorization from a Federal agency (
Section 4(b)(8) of the ESA requires, to the maximum extent practicable, in any proposed regulation to designate critical habitat, an evaluation and brief description of those activities that may adversely modify such habitat or that may be affected by such designation. A variety of activities may affect critical habitat designated for the Beringia DPS of the bearded seals and, if carried out, funded, or authorized by a Federal agency, may be subject to ESA section 7 consultation. Such activities include: In-water and coastal construction; activities that generate water pollution; dredging; commercial fishing; oil and gas exploration, development, and production; oil spill response; and certain military readiness activities. As explained above, at this time, on the basis of how protections are currently implemented for bearded seals of the Beringia DPS under the MMPA and as a threatened species under the ESA, we do not anticipate that additional requests for project modifications will result specifically from this proposed designation of critical habitat.
Private or non-Federal entities may also be affected by the proposed critical habitat designation if a Federal permit is required, Federal funding is received, or the entity is involved in or receives benefits from a Federal project. These activities would need to be evaluated with respect to their potential to destroy or adversely modify Beringia DPS critical habitat. As noted in the Public Comments Solicited section below, NMFS also requests information on the types of non-Federal activities that may be affected by this rulemaking.
To ensure the final action resulting from this proposal will be as accurate and effective as possible, we solicit comments and information from the public, other concerned government agencies, Alaska Native tribes and organizations, the scientific community, industry, non-governmental organizations, and any other interested parties concerning the proposed designation of critical habitat for the Beringia DPS of the bearded seal. In particular, we are interested in data and information regarding the following: (1) Habitat use of the Beringia DPS, including bearded seal use of rivers and streams near their confluence with the ocean; (2) the identification, location, and quality of physical or biological features essential to the conservation of the Beringia DPS, including in particular, the inclusion of “Acoustic conditions that allow for effective communication by bearded seals for breeding purposes within waters used by breeding bearded seals” as a feature essential to the conservation of the Beringia DPS, as well characteristics of noise that result in adverse effects on this essential feature, such as interference with bearded seal detection of acoustic communications for breeding purposes (
You may submit your comments and information concerning this proposed rule by any one of the methods described under
A complete list of all references cited in this proposed rule can be found on the Federal eRulemaking Portal and is available upon request from the NMFS office in Juneau, Alaska (see
We have determined that an environmental analysis as provided for under the National Environmental Policy Act of 1969 for critical habitat designations made pursuant to the ESA is not required.
Under the Regulatory Flexibility Act (RFA) (5 U.S.C. 601
A description of the action (
This proposed critical habitat rule does not directly apply to any particular entity, small or large. The regulatory mechanism through which critical habitat protections are enforced is section 7 of the ESA, which directly regulates only those activities carried out, funded, or permitted by a Federal agency. By definition, Federal agencies are not considered small entities, although the activities they fund or permit may be proposed or carried out by small entities. In some cases, small entities may participate as third parties (
Based on the best information currently available, the Federal actions projected to occur within the time frame of the analysis (
As detailed in the Draft Impact Analysis Report, the oil and gas exploration, development, and production industries participate in activities that are likely to require consideration of critical habitat in ESA section 7 consultations. The Small Business Administration size standards used to define small businesses in these cases are: (1) An average of no more than 1,250 employees (crude petroleum and natural gas extraction industry); or (2) average annual receipts of no more than $41.5 million (support activities for oil and gas operations industry). Only two of the parties identified in the oil and gas category appear to qualify as small businesses based on these criteria. Based on past ESA section 7 consultations, the additional third party administrative costs in future consultations involving Beringia DPS critical habitat over the next 10 years are expected to be borne principally by large oil and gas operations. The estimated range of annual third party costs over this 10 year period is $32,000 to $59,000 (discounted at 7 percent), virtually all of which is expected to be associated with oil and gas activities. It is possible that a limited portion of these administrative costs may be borne by small entities (based on past consultations, an estimated maximum of two entities). Two government jurisdictions with ports appear to qualify as small government jurisdictions (serving populations of fewer than 50,000). The total third party costs that may be borne by these small government jurisdictions over 10 years are less than $1,000 (discounted at 7 percent) for the additional administrative effort to consider Beringia DPS critical habitat as part of a future ESA section 7 consultation involving one port.
As required by the RFA (as amended by the SBREFA), we considered alternatives to the proposed critical habitat designation for the Beringia DPS. We considered and rejected the alternative of not designating critical habitat for the Beringia DPS, because such an alternative does not meet our statutory requirements under the ESA. Under section 4(b)(2) of the ESA, NMFS must consider the economic impacts, impacts to national security, and other relevant impacts of designating any particular area as critical habitat. NMFS
The purpose of the Paperwork Reduction Act is to minimize the paperwork burden for individuals, small businesses, educational and nonprofit institutions, and other persons resulting from the collection of information by or for the Federal government. This proposed rule does not contain any new or revised collection of information. This rule, if adopted, would not impose recordkeeping or reporting requirements on State or local governments, individuals, businesses, or organizations.
In accordance with the Unfunded Mandates Reform Act, we make the following findings:
(1) This proposed rule will not produce a Federal mandate. In general, a Federal mandate is a provision in legislation, statute or regulation that would impose an enforceable duty upon State, local, tribal governments, or the private sector and includes both “Federal intergovernmental mandates” and “Federal private sector mandates.” The designation of critical habitat does not impose an enforceable duty on non-Federal government entities or private parties. Under the ESA, the only regulatory effect of this critical habitat designation is that Federal agencies must ensure that their actions are not likely to destroy or adversely modify critical habitat under section 7. Non-Federal entities that receive Federal funding, assistance, permits, or otherwise require approval or authorization from a Federal agency for an action, may be indirectly affected by the designation of critical habitat, but the legally binding duty to avoid destruction or adverse modification of critical habitat rests squarely on the Federal agency. Furthermore, to the extent that non-Federal entities are indirectly affected because they receive Federal assistance or participate in a voluntary Federal aid program, the Unfunded Mandate Reform Act would not apply, nor would critical habitat shift to state governments the costs of the large entitlement programs listed above.
(2) This proposed rule will not significantly or uniquely affect small governments because it is not likely to produce a Federal mandate of $100 million or greater in any year; that is, it is not a “significant regulatory action” under the Unfunded Mandates Reform Act. In addition, the designation of critical habitat imposes no obligations on local, state, or tribal governments. Therefore, a Small Government Agency Plan is not required.
The data and analyses supporting this proposed action have undergone a pre-dissemination review and have been determined to be in compliance with applicable information quality guidelines implementing the Information Quality Act (Section 515 of Pub. L. 106-554).
On December 16, 2004, the OMB issued its Final Information Quality Bulletin for Peer Review (Bulletin) establishing minimum peer review standards, a transparent process for public disclosure of peer review planning, and opportunities for public participation. The Bulletin was published in the
The longstanding and distinctive relationship between the Federal and tribal governments is defined by treaties, statutes, executive orders, judicial decisions, and co-management agreements, which differentiate tribal governments from the other entities that deal with, or are affected by, the Federal Government. This relationship has given rise to a special Federal trust responsibility involving the legal responsibilities and obligations of the United States toward Indian tribes and the application of fiduciary standards of due care with respect to Indian lands, tribal trust resources, and the exercise of tribal rights. Executive Order 13175 on Consultation and Coordination with Indian Tribal Governments outlines the responsibilities of the Federal Government in matters affecting tribal interests. Section 161 of Public Law 108-199 (188 Stat. 452), as amended by section 518 of Public Law 108-447 (118 Stat. 3267), directs all Federal agencies to consult with Alaska Native corporations on the same basis as Indian tribes under E.O. 13175.
As the entire proposed critical habitat area is located seaward of the line of MLLW and does not extend into tidally-influenced channels of tributary waters, no tribal-owned lands overlap with the proposed designation. However, we seek comments and information concerning tribal and Alaska Native corporation activities that are likely to be affected by the proposed designation (see Public Comments Solicited section). Although this proposed designation overlaps with areas used by
Under E.O. 12630, Federal agencies must consider the effects of their actions on constitutionally protected private property rights and avoid unnecessary takings of property. A taking of property includes actions that result in physical invasion or occupancy of private property, and regulations imposed on private property that substantially affect its value or use. In accordance with E.O. 12630, the proposed rule does not have significant takings implications. The designation of critical habitat directly affects only Federal agency actions (
OMB has determined that this proposed rule is significant for purposes of E.O. 12866 review. A Draft Impact Analysis Report has been prepared that considers the economic costs and benefits of the proposed critical habitat designation and alternatives to this rulemaking as required under E.O. 12866. To review this report, see the
Based on the Draft Impact Analysis Report, the total estimated present value of the incremental impacts of the proposed critical habitat designation is approximately $786,000 over the next 10 years (discounted at 7 percent). Assuming a 7 percent discount rate, the range of annual impacts is estimated to be $57,000 to $105,000. Overall, economic impacts are expected to be small and Federal agencies are anticipated to bear at least 45 percent of these costs. While there are expected beneficial economic impacts of designating critical habitat for the Beringia DPS, there are insufficient data available to monetize those impacts (see
This proposed rulemaking is expected to be regulatory under E.O. 13771.
Executive Order 13132 requires agencies to take into account any federalism impacts of regulations under development. It includes specific consultation directives for situations in which a regulation may preempt state law or impose substantial direct compliance costs on state and local governments (unless required by statute). Pursuant to E.O. 13132, we determined that this proposed rule does not have significant federalism effects and that a federalism assessment is not required. The designation of critical habitat directly affects only the responsibilities of Federal agencies. As a result, the proposed rule does not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in the Order. State or local governments may be indirectly affected by the proposed designation if they require Federal funds or formal approval or authorization from a Federal agency as a prerequisite to conducting an action. In these cases, the State or local government agency may participate in the ESA section 7 consultation as a third party. However, in keeping with Department of Commerce policies and consistent with ESA regulations at 50 CFR 424.16(c)(1)(ii), we will request information for this proposed rule from the appropriate state resource agencies in Alaska.
Executive Order 13211 requires agencies to prepare Statements of Energy Effects when undertaking any significant energy action. Under E.O. 13211, a significant energy action means any action by an agency that is expected to lead to the promulgation of a final rule or regulation that is a significant regulatory action under E.O. 12866 and is likely to have a significant adverse effect on the supply, distribution, or use of energy. We have considered the potential impacts of this proposed critical habitat designation on the supply, distribution, or use of energy (see Draft Impact Analysis Report for this proposed rule). This proposed critical habitat designation overlaps with five BOEM planning areas for Outer Continental Shelf oil and gas leasing; however, the Beaufort and Chukchi Sea planning areas are the only areas with existing or planned leases.
Currently, the majority of oil and gas production occurs on land adjacent to the Beaufort Sea and the proposed critical habitat area. Any proposed offshore oil and gas projects would likely undergo an ESA section 7 consultation to ensure that the project would not likely destroy or adversely modify designated critical habitat. However, as discussed in the Draft Impact Analysis Report for this proposed rule, such consultations will not result in any new and significant effects on energy supply, distribution, or use. ESA section 7 consultations have occurred for numerous oil and gas projects within the area of the critical habitat designation (
Endangered and threatened species.
Endangered and threatened species.
For the reasons set out in the preamble, 50 CFR parts 223 and 226 are proposed to be amended as follows:
16 U.S.C. 1531-1543; subpart B, § 223.201-202 also issued under 16 U.S.C. 1361
(e) * * *
16 U.S.C. 1533.
Critical habitat is designated for the Beringia distinct population segment of the bearded seal subspecies
(a)
(b)
(1) Sea ice habitat suitable for whelping and nursing, which is defined as areas with waters 200 m or less in depth containing pack ice of at least 25 percent concentration and providing bearded seals access to those waters from the ice.
(2) Sea ice habitat suitable as a platform for molting, which is defined as areas with waters 200 m or less in depth containing pack ice of at least 15 percent concentration and providing bearded seals access to those waters from the ice.
(3) Primary prey resources to support bearded seals in waters 200 m or less in depth: Benthic organisms, including epifaunal and infaunal invertebrates, and demersal and schooling pelagic fishes.
(4) Acoustic conditions that allow for effective communication by bearded seals for breeding purposes within waters used by breeding bearded seals.
(c)
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Revised proposed rule; reopening of comment period.
We, the National Marine Fisheries Service (NMFS), announce revisions to our December 9, 2014, proposed designation of critical habitat for the Arctic subspecies of the ringed seal (
Comments must be received by March 9, 2021. Public hearings on the revised proposed rule will be held in Alaska. The dates and times of these hearings will be provided in a subsequent
You may submit data, information, or comments on this document, identified by NOAA-NMFS-2013-0114, and on the associated Draft Impact Analysis Report (
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Electronic copies of the Draft Impact Analysis Report for this revised proposed rule and a complete list of references cited in this revised proposed rule are available on the Federal eRulemaking Portal at
Tammy Olson, NMFS Alaska Region, (907) 271-5006; Jon Kurland, NMFS Alaska Region, (907) 586-7638; or Heather Austin, NMFS Office of Protected Resources, (301) 427-8422.
Section 3(5)(A) of the ESA defines critical habitat as (1) the specific areas within the geographical area occupied by the species, at the time it is listed, on which are found those physical or biological features essential to the conservation of the species and which may require special management considerations or protection; and (2) specific areas outside the geographical area occupied by the species at the time it is listed, upon a determination by the Secretary of Commerce (Secretary) that such areas are essential for the conservation of the species (16 U.S.C. 1532(5)(A)). Conservation is defined in section 3(3) of the ESA as the use of all methods and procedures which are necessary to bring any endangered species or threatened species to the point at which the measures provided pursuant to this Act are no longer necessary (16 U.S.C. 1532(3)). Section 3(5)(C) of the ESA provides that, except in those circumstances determined by the Secretary, critical habitat shall not include the entire geographical area which can be occupied by the threatened or endangered species. Also, by regulation, critical habitat shall not be designated within foreign countries or in other areas outside U.S. jurisdiction (50 CFR 424.12(g)).
Section 4(b)(2) of the ESA requires the Secretary to designate critical habitat for threatened and endangered species on the basis of the best scientific data available and after taking into consideration the economic impact, the impact on national security, and any other relevant impact of specifying any particular area as critical habitat. This section also grants the Secretary discretion to exclude any area from critical habitat if he determines the benefits of such exclusion outweigh the benefits of specifying such area as part of the critical habitat. However, the Secretary may not exclude areas if such exclusion will result in the extinction of the species (16 U.S.C. 1533(b)(2)).
Once critical habitat is designated, section 7(a)(2) of the ESA requires Federal agencies to ensure that actions they authorize, fund, or carry out are not likely to destroy or adversely modify that habitat (16 U.S.C. 1536(a)(2)). This requirement is additional to the section 7(a)(2) requirement that Federal agencies ensure that their actions are not likely to jeopardize the continued existence of ESA-listed species. Specifying the geographic location of critical habitat also facilitates implementation of section 7(a)(1) of the ESA by identifying areas where Federal agencies can focus their conservation programs and use their authorities to further the purposes of the ESA.
This revised proposed rule describes our revised proposed designation of critical habitat for the Arctic ringed seal, including supporting information on Arctic ringed seal distribution and habitat use, and the methods used to develop the revised proposed designation. The Arctic ringed seal is listed with the scientific name
On December 28, 2012, we published a final rule to list the Arctic ringed seal as threatened under the ESA (77 FR 76706). Section 4(b)(6)(C) of the ESA requires the Secretary to designate critical habitat concurrently with making a determination to list a species as threatened or endangered unless it is not determinable at that time, in which case the Secretary may extend the deadline for this designation by one year. At the time of listing, we announced our intention to designate critical habitat for the Arctic ringed seal in a separate rulemaking, as its critical habitat was not then determinable. Concurrently, we solicited information to assist us in (1) identifying the physical or biological features essential to the conservation of Arctic ringed seals, and (2) assessing the economic consequences of designating critical habitat for this species. Subsequently we researched, reviewed, and compiled the best scientific data available to develop a critical habitat proposal for the Arctic ringed seal.
On December 3, 2014, we published a proposed rule to designate critical habitat for the Arctic ringed seal under the ESA (79 FR 71714). Due to a clerical error, that document contained mistakes, and we therefore published a corrected proposed rule on December 9, 2014 (79 FR 73010). We requested public comment on this proposed designation through March 9, 2015. In response to comments, we extended the public comment period through March 31, 2015 (80 FR 5498, February 2, 2015). We held five public hearings in Alaska on the proposed rule (80 FR 1618, January 13, 2015; 80 FR 5498, February 2, 2015).
Subsequently, on March 17, 2016, the listing of Arctic ringed seals as a threatened species was vacated by the U.S. District Court for the District of Alaska (
On June 13, 2019, the Center for Biological Diversity filed a complaint in the U.S. District Court for the District of Alaska alleging that NMFS had failed to timely designate critical habitat for the Arctic ringed seal. Under a court-approved stipulated settlement agreement between the parties (which was subsequently amended to extend the dates specified in the original order), NMFS agreed to submit a proposed determination concerning the designation of critical habitat for Arctic ringed seals to the
In this revised proposed critical habitat designation, we incorporate additional relevant information that became available since the publication of our 2014 proposed rule. Based on the best scientific data currently available, our understanding of the physical and biological features essential to the conservation of the Arctic ringed seal and the specific areas where those features occur has not changed markedly since 2014. However, in the preamble of this revised proposed rule we provide updated information in the Description and Natural History section about the Arctic ringed seal's distribution and habitat use, and we include more details in the Specific Areas Containing the Essential Features section regarding the information considered in determining the areas that meet the definition of critical habitat for this species. After updating and evaluating the best scientific information available, we have also made the following changes from the December 9, 2014, proposed rule (79 FR 73010):
(1) We refined our descriptions of the essential features associated with sea ice, including the essential feature of sea ice suitable for the formation and maintenance of birth lairs. We now refer to “snow-covered sea ice” to underscore that this essential feature consists of a combination of sea ice and the on-ice snow layer within which subnivean birth lairs (snow caves) are constructed. In recognition of the limits of the data available on snow drift depths sufficient for these subnivean lairs, we clarify that such snow drifts are “typically” at least 54 centimeters (cm) deep.
(2) We modified the southern boundary of the proposed critical habitat designation to more accurately reflect where one or more of the essential features occur. Consistent with our 2014 proposed rule, in this revised proposed rule we primarily determined this boundary by identifying the southern extent of snow-covered sea ice essential for birth lairs. Birth lairs are used to shelter pups during whelping and nursing. We propose to define this essential feature as areas of seasonal landfast (shorefast) ice and dense, stable pack ice, excluding any bottom-fast ice extending seaward from the coastline (typically in waters less than 2 meters (m) deep), that have undergone deformation (
As discussed in detail below, because existing information is limited on whelping locations and the distribution of Arctic ringed seals in the Bering Sea during spring, a precise southern boundary for the critical habitat cannot be determined based on such information. Available estimates of snow-depth on Arctic sea ice derived from satellite remote-sensing data are spatially and temporally limited and are subject to a variety of sources of uncertainty (Spreen and Kern 2017, Sturm and Massom 2017, Webster
In our 2014 proposed rule, we based the southern boundary of proposed critical habitat on the estimated median ice edge position in April, which is the peak month for Arctic ringed seal whelping (Kelly
However, while developing this revised proposed rule, we recognized that suitable snow-covered sea ice would need to persist for several weeks for pups to be sheltered and nursed in birth lairs. We therefore considered whether the position of the ice edge during May (rather than April) would more accurately represent the southern extent of where snow-covered sea ice persists sufficiently to provide suitable conditions for pup development within birth lairs (and as noted above, potentially for basking and molting). We examined the estimated position of the May median ice edge for both the 30-year 1981 to 2010 reference period currently used by NSIDC for the Sea Ice Index (Fetterer
After our 2014 proposed rule was issued, additional data also became
Taken as a whole, we concluded that the data currently available on whelping locations and the spring distribution of ringed seals in the Bering Sea suggest that information on the estimated position of the ice edge for May provides the best estimate of the southern extent of snow-covered sea ice that persists sufficiently to provide suitable conditions for pup development within birth lairs. As we explained above, we also concluded that this southern boundary most accurately defines the southern extent of sea ice essential for basking and molting. Therefore, in this revised proposed rule we use information on the position of the ice edge for May, rather than for April, to delineate the southern boundary of Arctic ringed seal critical habitat. Specifically, given the reduction in sea ice east of St. Matthew Island between the reference period used for the Sea Ice Index and the more recent 30-year period described above, we elected to delineate the southern boundary to reflect the estimated position of the May median ice edge for the more recent 1990 to 2019 period. This revised proposed southern boundary is located roughly 125 km (western portion) to 325 km (eastern portion) north of the southern boundary we proposed in 2014.
In our 2014 proposed rule, we referred to the estimated position of the April median ice edge for the 22-year 1979 to 2000 reference period previously used (from 2002 through June 2013) for the Sea Ice Index. At that time, we reasoned that several of the more recent years included in the 1981 to 2010 reference period had above-average ice extent in the Bering Sea (
(3) We modified the textual description of the shoreward boundary of the proposed critical habitat designation. In our 2014 proposed rule, we described the shoreward boundary as the “coast line” of Alaska as that term has been defined in the Submerged Lands Act (“the line of ordinary low water along that portion of the coast which is in direct contact with the open sea and the line marking the seaward limit of inland waters”) (43 U.S.C. 1301(c)). Upon further review, we concluded that delineating the shoreward boundary on this basis results in the omission of some smaller bays and shallow nearshore waters that contain the essential physical and biological features of habitat for Arctic ringed seals. Given the occurrence of Arctic ringed seal primary prey in shallow nearshore waters and evidence of ringed seal use of such waters during the open-water foraging period, in this revised proposed rule we delineate the shoreward boundary as the line that marks mean lower low water (MLLW). This proposed critical habitat does not extend into tidally-influenced channels of tributary waters of the Bering, Chukchi, or Beaufort seas.
(4) We revised our analysis of the impacts of designating the proposed critical habitat for the Arctic ringed seal to reflect the revisions summarized above, and to incorporate the best data currently available. This analysis is summarized in this revised proposed rule and described in detail in the associated Draft Impact Analysis Report.
(5) In response to information submitted by the U.S. Navy, we propose to exclude one particular area north of the Beaufort Sea shelf from the designation based on national security impacts because the benefits of exclusion outweigh the benefits of inclusion of this area.
The Arctic ringed seal is the smallest of the northern seals, with typical adult body size of 1.5 m in length and 70 kilograms in weight (Kelly
Arctic ringed seals are circumpolar and are found throughout ice-covered waters of the Arctic Ocean Basin and southward into adjacent seas, including the Bering, Chukchi, and Beaufort seas off Alaska's coast (Frost and Lowry 1981, Frost 1985, Kelly 1988, Rice 1998). Ringed seals are adapted to remaining in heavily ice-covered areas throughout the fall, winter, and spring by using the stout claws on their foreflippers to maintain breathing holes in the ice. Arctic ringed seals are highly associated with sea ice, and use the ice as a substrate for resting, whelping (birthing), nursing, and molting (shedding and regrowing hair and outer skin layers). The seasonality of ice cover strongly influences Arctic ringed seal movements, foraging, reproductive behavior, and vulnerability to predation. Kelly
During freeze-up, ringed seals surface to breathe in the remaining open water of cracks and leads, and as these openings in the ice freeze over, the seals open breathing holes that they maintain as the ice thickens by abrading the ice with the claws on their foreflippers (Smith and Stirling 1975). Ringed seals excavate lairs in snowdrifts over their breathing holes where snow depth is sufficient (
Females give birth to a single pup in their lairs generally from mid-March through April, and the pups are nursed in the lairs for an average of 39 days (Hammill and Smith 1991), with considerable variation (Kelly
Subnivean lairs provide protection from cold and predators throughout the winter months, but they are especially important for protecting newborn ringed seals. The lairs conceal ringed seals from predators, an advantage especially important to the small pups that start life with minimal tolerance for immersion in cold water (Smith
Subnivean lairs also provide refuge from air temperatures too low for survival of ringed seal pups. When forced to flee into the water to avoid predators, the ringed seal pups that survive depend on the subnivean lairs to subsequently warm themselves (Smith
During winter and spring, ringed seals are found throughout the Chukchi and Beaufort seas (Frost 1985, Kelly 1988). In the Bering Sea, surveys indicate that ringed seals use nearly the entire ice field over the Bering Sea shelf. During an exceptionally high ice year (1976), Braham
Most Arctic ringed seals that winter in the Bering and southern Chukchi seas are believed to migrate northward in spring as the ice edge recedes and spend the summer open-water foraging period in the pack ice of the northern Chukchi and Beaufort seas (Frost 1985). Existing information on the distribution and abundance of Arctic ringed seals in the U.S. Chukchi and Beaufort seas during the molting period comes largely from aerial surveys conducted for the most
Most Arctic ringed seals that winter in the Bering and southern Chukchi seas are believed to migrate northward in spring as the ice edge recedes and spend the summer open-water foraging period in the pack ice of the northern Chukchi and Beaufort seas (Frost 1985). Arctic ringed seals are also dispersed in ice-free areas of the Bering, Chukchi, and Beaufort seas during this period. Tracking data indicate that tagged ringed seals made extensive use of the continental shelf waters of the U.S. Chukchi and Beaufort seas during the open-water period (Crawford
High-quality abundant food is important to the annual energy budgets of Arctic ringed seals (Kelly
In the following sections, we describe the relevant definitions and requirements in the ESA and implementing regulations at 50 CFR part 424, and the key information and criteria used to prepare this revised proposed critical habitat designation. In accordance with section 4(b)(2) of the ESA, this revised proposed critical habitat designation is based on the best scientific data available. Our primary sources of information include the status review report for the ringed seal (Kelly
To identify specific areas that may qualify as critical habitat for Arctic ringed seals, in accordance with 50 CFR 424.12(b), we followed a five-step process: (1) Identify the geographical area occupied by the species at the time of listing; (2) identify physical or biological habitat features essential to the conservation of the species; (3) determine the specific areas within the geographical area occupied by the species that contain one or more of the physical or biological features essential to the conservation of the species; (4) determine which of these essential features may require special management considerations or protection; and (5) determine whether a critical habitat designation limited to geographical areas occupied would be inadequate to ensure the conservation of the species. Our evaluation and conclusions are described in detail in the following sections.
The phrase “geographical areas occupied by the species,” which appears in the statutory definition of critical habitat, is defined by regulation as an area that may generally be delineated around species' occurrences as determined by the Secretary (
Based on existing literature, including available information on Arctic ringed seal sightings and movements, the range of the Arctic ringed seal was identified in the final ESA listing rule (77 FR 76706; December 28, 2012) as the Arctic Ocean and adjacent seas, except west of 157°00′ E (the Kamchatka Peninsula), where the Okhotsk subspecies of the ringed seal occurs, or in the Baltic Sea where the Baltic subspecies of the ringed seal is found. As noted previously, we cannot designate areas outside U.S. jurisdiction as critical habitat. Thus, the geographical area under consideration for this designation is limited to areas under the jurisdiction of the United States that Arctic ringed seals occupied at the time of listing. This area extends to the outer boundary of the U.S. EEZ in the Chukchi and Beaufort seas, and as far south as Bristol Bay in the Bering Sea (Kelly
The statutory definition of occupied critical habitat refers to “physical or biological features essential to the conservation of the species,” but the ESA does not specifically define or further describe these features. Implementing regulations at 50 CFR 424.02, however, define such features as those that occur in specific areas and that are essential to support the life-history needs of the species. The regulations provide additional details and examples of such features.
Based on the best scientific information available regarding the natural history of the Arctic ringed seal and the habitat features that are essential to support the species' life-history needs, we have identified the following physical or biological features that are essential to the conservation of the Arctic ringed seal within U.S. waters occupied by the species.
(1)
Snow-covered sea ice habitat suitable for the formation and maintenance of subnivean birth lairs used for sheltering pups during whelping and nursing is essential to conservation of the Arctic ringed seal because without the protection of lairs, ringed seal pups are more vulnerable to freezing and predation (Lukin and Potelov 1978, Smith 1987, Hammill and Smith 1991, Smith
Snowdrifts of sufficient depth for birth lair formation and maintenance typically occur in deformed ice where drifting has taken place along pressure ridges or ice hummocks (Smith and Stirling 1975, Lydersen and Gjertz 1986, Smith 1987, Kelly 1988, Furgal
Arctic ringed seals favor landfast ice as whelping habitat (
(2)
Sea ice habitat suitable as a platform for basking and molting is essential to conservation of the Arctic ringed seal
During their annual molt, Arctic ringed seals transition from lair use to basking on the surface of the ice for long periods of time near breathing holes, lairs, or cracks in the ice (Kelly
Limited data are available on ice concentrations (percentage of ocean surface covered by sea ice) favored by Arctic ringed seals during the basking period, in particular for the period following ice breakup. Although a number of studies have reported an apparent preference for consolidated stable ice (
(3)
Primary prey resources are essential to conservation of the Arctic ringed seal because the seals likely rely on these prey resources the most to meet their annual energy budgets. Although Arctic ringed seals feed on a wide variety of vertebrate and invertebrate prey species, certain prey species appear to occupy a prominent role in their diets in waters along the Alaskan coast. Quakenbush
In summary, Arctic cod, saffron cod, shrimps, and amphipods were identified as prominent prey species for the studies conducted in both the Bering Sea and the Chukchi Sea, and Arctic cod and amphipods were also identified as prominent prey species for ringed seals sampled in the central Beaufort Sea. Therefore, based on these studies, we conclude that Arctic cod, saffron cod, shrimps, and amphipods are the primary prey resources of Arctic ringed seals in U.S. waters. Because Arctic ringed seals feed on a variety of prey items and regional and seasonal differences in diet have been reported, we conclude that areas in which the primary prey essential feature occurs are those that contain one or more of these particular prey resources.
To determine which areas qualify as critical habitat within the geographical area occupied by the species, we are required to identify “specific areas” that contain one or more of the physical or biological features essential to the conservation of the species (and that may require special management considerations or protection, as described below) (50 CFR 424.12(b)(1)(iii)). Delineation of the specific areas is done at a scale determined by the Secretary to be appropriate (50 CFR 424.12(b)(1)). Regulations at 50 CFR 424.12(c) also require that each critical habitat area be shown on a map.
In determining the scale and boundaries for the specific areas, we considered, among other things, the scales at which biological data are available and the availability of standardized geographical data necessary to map boundaries. Because the ESA implementing regulations allow for discretion in determining the appropriate scale at which specific areas are drawn (50 CFR 424.12(b)(1)), we are not required, nor was it possible, to
As we explain below, the essential features of Arctic ringed seal critical habitat, in particular the sea ice essential features, are dynamic and variable on both spatial and temporal scales. As climatic conditions change there may be increased variability in sea ice characteristics and spatial/temporal coverage, including with respect to the southern extent of sea ice in the spring and the timing and rate of the retreat of sea ice during spring and early summer. Arctic ringed seal movements and habitat use are strongly influenced by the seasonality of sea ice and the seals can range widely in response to the specific locations of the most suitable habitat conditions. We have therefore identified one specific area to propose as critical habitat in the Bering, Chukchi, and Beaufort seas based on the expected occurrence of the identified essential features.
We first focused on identifying where sea ice essential features that support the species' life history functions of whelping and nursing (when birth lairs are constructed and maintained), and molting occur. As discussed above, Arctic ringed seals are highly associated with sea ice, and the seals tend to migrate seasonally to maintain access to the ice. Arctic ringed seal whelping, nursing, and molting takes place in the Bering, Chukchi, and Beaufort seas. Therefore, we considered where the sea ice essential features occur in all of these waters.
The dynamic nature of sea ice and the spatial and temporal variations in sea ice and on-ice snow cover conditions constrain our ability to map with precision the specific geographic locations where the sea ice essential features will occur. Sea ice characteristics such as ice extent, ice concentration, and ice surface topography vary spatiotemporally (
Arctic ringed seals can range widely, which, combined with the dynamic variations in sea ice and on-ice snow depths, results in individuals distributing broadly and using sea ice habitats within a range of suitable conditions. We integrated these physical and biological factors into our identification of specific areas where one or both sea ice essential features occur by considering the information currently available on the seasonal distribution and movements of Arctic ringed seals during the annual period of reproduction and molting, along with satellite-derived estimates of the position of the sea ice edge over time. Although this approach allowed us to identify specific areas that contain one or both of the sea ice essential features at certain times, the available data supported delineation of specific areas only at a coarse scale. Consequently, we delineated a single specific area that contains the sea ice features essential to the conservation of Arctic ringed seals, as follows.
We first identified the southern boundary of this specific area. As explained in detail previously in the Summary of Revisions to Proposed Critical Habitat section, we delineated the southern boundary of where one or both of the sea ice essential features occur to reflect the estimated position of the May median ice edge for the 1990 to 2019 period. To simplify the southern boundary for purposes of delineation on maps, we modified this ice edge contour line as follows: (1) Intermediate points along the contour line between its intersection point with the seaward limit of the U.S. EEZ (61°18′15″ N/177°45′56″ W) and the point southwest of St. Matthew Island where the contour line turns northeastward (60°7′ N/172°1′ W) were removed to form the segment of the southern boundary that extends from the seaward limit of the U.S. EEZ southeastward approximately 340 km; and (2) intermediate points along the contour line between the point southwest of St. Matthew Island and the point where the contour line reaches the coast near Cape Romanzof were removed and connected to the coast to form the second segment of the southern boundary that extends northeastward approximately 370 km (at 61°48′42″ N/166°6′5″ W). This editing produced a simplified southern boundary that retains the general shape of the original ice edge contour line.
Because Arctic ringed seals use nearly the entire ice field over the Bering Sea shelf in the spring, depending upon ice conditions in a given year, some ringed seals may use sea ice for whelping south of the southern boundary described above. But we concluded that the variability in the annual extent and timing of sea ice in this southernmost portion of the Arctic ringed seal's range in the Bering Sea (
We then identified the northern boundary of the specific area that contains one or both of the sea ice essential features. As discussed above, Arctic ringed seals have a widespread distribution, including in offshore pack ice. The period during which ringed seals bask and molt overlaps with when many ringed seals also migrate north with the receding ice edge, sea ice and on-ice snow depths are dynamic and variable on both spatial and temporal scales, and sea ice suitable for basking and molting, and potentially for birth lairs, occurs over waters extending up to and beyond the seaward limit of the U.S. EEZ (see,
The primary prey species essential to Arctic ringed seals are found in a range of habitats in U.S. waters occupied by these seals. Amphipods documented in the diet of Arctic ringed seals in U.S. waters include the pelagic hyperiid amphipod
Crawford
Finally, we considered the shoreward extent of where one or more of the essential features occur. Essential fish habitat (EFH) has been described and identified for certain life stages of both Arctic cod and saffron cod, which are two of the essential Arctic primary prey species (North Pacific Fishery Management Council 2009; 83 FR 31340, July 5, 2018). EFH for late juvenile and adult Arctic cod includes shallow nearshore areas of the continental shelf in the Chukchi and Beaufort seas, and EFH for late juvenile and adult saffron cod also includes a substantial portion of the shallow nearshore shelf habitat in the Chukchi Sea. Studies conducted in very shallow nearshore waters have documented the presence of one or both species at sampling sites in the Alaskan Beaufort Sea (Craig
Data to determine the boundaries of the specific area containing the essential features are limited. We specifically seek additional data and comments on our proposed delineation of these boundaries (see Public Comments Solicited section).
A specific area within the geographic area occupied by a species may only be designated as critical habitat if the area contains one or more essential physical or biological feature that may require special management considerations or protection (16 U.S.C. 1532(5)(A)(ii); 50 CFR 424.12(b)(iv)). “Special management considerations or protection” is defined as methods or procedures useful in protecting the physical or biological features essential to the conservation of listed species (50 CFR 424.02). Courts have indicated that the “may require” standard requires that NMFS determine that special management considerations or protection of the essential features might be required either now or in the future (
We have identified four primary sources of potential threats to each of the habitat features identified above as essential to the conservation of Arctic ringed seals: Climate change; oil and gas
The principal threat to the persistence of the Arctic ringed seal is anticipated loss of sea ice and reduced on-ice snow depths stemming from climate change. Climate-change-related threats to the Arctic ringed seal's habitat are discussed in detail in the ringed seal status review report (Kelly
Oil and gas exploration, development, and production activities in the U.S. Arctic may include: Seismic surveys; exploratory, delineation, and production drilling operations; construction of artificial islands, causeways, ice roads, shore-based facilities, and pipelines; and vessel and aircraft operations. These activities have the potential to affect the essential features of Arctic ringed seal critical habitat, primarily through pollution (particularly in the event of a large oil spill), noise, and physical alteration of the species' habitat.
Large oil spills (considered in this section to be spills of relatively great size, consistent with common usage of the term) are generally considered to be the greatest threat associated with oil and gas activities in the Arctic marine environment (Arctic Monitoring and Assessment Programme (AMAP) 2007). In contrast to spills on land, large spills at sea, especially when ice is present, are difficult to contain or clean up (National Research Council 2014, Wilkinson
Although planning, management, and use of best practices can help reduce risks and impacts, the history of oil and gas activities indicates that accidents cannot be eliminated (AMAP 2007). Data on large spills (
Icebreaking vessels, which may be used for in-ice seismic surveys or to manage ice near exploratory drilling ships, also have the potential to affect the sea ice essential features of Arctic ringed seal critical habitat through physical alteration of the sea ice (also see
In summary, a large oil spill could render areas containing the identified essential features unsuitable for use by Arctic ringed seals. In such an event, sea ice habitat suitable for whelping, nursing, and/or for basking and molting could be oiled. The primary prey resources could also become contaminated, experience mortality, or be otherwise adversely affected by spilled oil. In addition, disturbance effects (both physical alteration of habitat and acoustic effects) could alter the quality of the essential features of Arctic ringed seal critical habitat, or render habitat unsuitable. We conclude that the essential features of the habitat of the Arctic ringed seal may require special management considerations or protection in the future to minimize the risks posed to these features by oil and gas exploration, development, and production.
The reduction in Arctic sea ice that has occurred in recent years has renewed interest in using the Arctic Ocean as a potential waterway for coastal, regional, and trans-Arctic marine operations and in extension of the navigation season in surrounding seas (Brigham and Ellis 2004, Arctic Council 2009). Marine traffic along the western and northern coasts of Alaska includes tug, towing, and cargo vessels, tankers, research and government vessels, vessels associated with oil and gas exploration and development, fishing vessels, and cruise ships (Adams and Silber 2017, U.S. Committee on the Marine Transportation System 2019). Automatic Identification System data indicate that the number of unique vessels operating annually in U.S. waters north of the Bering Sea in 2015 to 2017 increased 128 percent over the number recorded in 2008 (U.S. Committee on the Marine Transportation System 2019). Climate models predict that the warming trend in the Arctic will accelerate, causing the ice to begin melting earlier in the spring and resume freezing later in the fall, resulting in an expansion of potential transit routes and a lengthening of the potential navigation season, and a continuing increase in vessel traffic (Khon
The fact that nearly all vessel traffic in the Arctic, with the exception of icebreakers, purposefully avoids areas of ice, and primarily occurs during the ice-free or low-ice seasons, helps to mitigate the risks of shipping to the essential habitat features identified for Arctic ringed seals. However, icebreakers pose greater risks to these features since they are capable of operating year-round in all but the heaviest ice conditions and are often used to escort other types of vessels (
In addition to the potential effects of icebreaking on the essential features, the maritime shipping industry transports various types of petroleum products, both as fuel and cargo. In particular, if increased shipping involves the tanker transport of crude oil or oil products, there would be an increased risk of spills (Arctic Climate Impact Assessment 2005, U.S. Arctic Research Commission 2012). Similar to oil and gas activities, the most significant threat posed by shipping activities is considered to be the accidental or illegal discharge of oil or other toxic substances carried by ships (Arctic Council 2009).
Vessel discharges associated with normal operations, including sewage, grey water, and oily wastes are expected to increase as a result of increasing marine shipping and transportation in Arctic waters (Arctic Council 2009, Parks
We conclude that the essential features of the habitat of the Arctic ringed seal may require special management considerations or protection in the future to minimize the risks posed by potential shipping and transportation activities because: (1) Physical alteration of sea ice by icebreaking activities could reduce the quantity and/or quality of the sea ice essential features; (2) in the event of an oil spill, sea ice essential for birth lairs and/or for basking and molting could become oiled; and (3) the quantity and/or quality of the primary prey resources could be diminished as a result of spills, vessel discharges, and noise associated with shipping, transportation, and ice-breaking activities.
The specific area identified in this revised proposed rule as meeting the definition of critical habitat for the Arctic ringed seal overlaps with the Arctic Management Area and the Bering Sea and Aleutian Islands Management Area identified by the North Pacific Fishery Management Council. No commercial fishing is permitted within the Arctic Management Area due to insufficient data to support the sustainable management of a commercial fishery there. However, as additional information becomes available, commercial fishing may be allowed in this management area. Two of the primary Arctic ringed seal prey species identified as essential to the species' conservation—Arctic cod and saffron cod—have been identified as likely initial target species for commercial fishing in the Arctic
In the northern portion of the Bering Sea and Aleutian Islands Management Area, commercial fisheries overlap with the southernmost portion of the proposed critical habitat. Portions of the proposed critical habitat also overlap with certain state commercial fisheries management areas. Commercial catches from waters of the specific area identified as containing the features essential to the conservation of the Arctic ringed seal primarily include: Pacific halibut (
Commercial fisheries may affect the primary prey resources identified as essential to the conservation of the Arctic ringed seal, through removal of prey biomass and potentially through modification of benthic habitat by fishing gear that contacts the seafloor. Given the potential changes in commercial fishing that may occur with the expected increasing length of the open-water season and distribution shifts of some economically valuable species responding to climate change (
Section 3(5)(A)(ii) of the ESA authorizes the designation of specific areas outside the geographical area occupied by the species, if those areas are determined to be essential for the conservation of the species. Our regulations at 50 CFR 424.12(b)(2) require that we first evaluate areas occupied by the species, and only consider unoccupied areas to be essential where a critical habitat designation limited to geographical areas occupied would be inadequate to ensure the conservation of the species. Because Arctic ringed seals are considered to occupy their entire historical range that falls within U.S. jurisdiction, we find that there are no unoccupied areas within U.S. jurisdiction that are essential to their conservation.
Section 4(a)(3)(B)(i) of the ESA precludes designating as critical habitat any lands or other geographical areas owned or controlled by the Department of Defense (DOD), or designated for its use, that are subject to an Integrated Natural Resources Management Plan (INRMP) prepared under section 101 of the Sikes Act (16 U.S.C. 670a), if the Secretary determines in writing that such plan provides a benefit to the species for which critical habitat is proposed for designation.
Before publication of this revised proposed rule, we contacted DOD (Air Force and Navy) and requested information on any facilities or managed areas that are subject to an INRMP and are located within areas that could potentially be designated as critical habitat for the Arctic ringed seal. In response to our request, the Air Force provided information regarding twelve radar sites with an INRMP in place, 10 of which (7 active and 3 inactive) are located adjacent to the area under consideration for designation as critical habitat: Barter Island Long Range Radar Site (LRRS), Cape Lisburne LRRS, Cape Romanzof, LRRS, Kotzebue LRRS, Oliktok LRRS, Point Barrow LRRS, Tin City LRRS, Bullen Point Short Range Radar Site (SRRS), Point Lay LRRS, and Point Lonely SRRS. The Air Force requested exemption of these radar sites pursuant to section 4(a)(3)(B)(i) of the ESA. Based on our review of the INRMP (draft 2020 update), the area being considered for designation as critical habitat, all of which occurs seaward of the MLLW line, does not overlap with DOD lands. Therefore, we conclude that there are no properties owned, controlled, or designated for use by DOD that are subject to ESA section 4(a)(3)(B)(i) for this revised proposed critical habitat designation, and thus the exemptions requested by the Air Force are not necessary because no critical habitat would be designated in those radar sites.
Section 4(b)(2) of the ESA requires the Secretary to designate critical habitat for threatened and endangered species on the basis of the best scientific data available after taking into consideration the economic impact, the impact on national security, and any other relevant impact, of specifying any particular area as critical habitat. Regulations at 50 CFR 424.19(b) also specify that the Secretary will consider the probable impacts of the designation at a scale that the Secretary determines to be appropriate, and that such impacts may be qualitatively or quantitatively described. The Secretary is also required to compare impacts with and without the designation (50 CFR 424.19(b)). In other words, we are required to assess the incremental impacts attributable to the critical habitat designation relative to a baseline that reflects existing regulatory impacts in the absence of the critical habitat.
Section 4(b)(2) also describes an optional process by which the Secretary may go beyond the mandatory consideration of impacts and weigh the benefits of excluding any particular area (that is, avoiding the economic, national security, or other relevant impacts) against the benefits of designating it (primarily, the conservation value of the area). If the Secretary concludes that the benefits of excluding particular areas outweigh the benefits of designation, the Secretary may exclude the particular area(s) so long as the Secretary concludes on the basis of the best available scientific and commercial information that the exclusion will not result in extinction of the species (16 U.S.C. 1533(b)(2)). NMFS and the U.S. Fish and Wildlife Service have adopted a joint policy setting out non-binding guidance explaining generally how we exercise our discretion under 4(b)(2).
While section 3(5) of the ESA defines critical habitat as “specific areas,” section 4(b)(2) requires the agency to consider the impacts of designating any “particular area.” Depending on the biology of the species, the characteristics of its habitat, and the nature of the impacts of designation, “particular” areas may be—but need not necessarily be—delineated so that they
The primary impacts of a critical habitat designation arise from the ESA section 7(a)(2) requirement that Federal agencies ensure that their actions are not likely to result in the destruction or adverse modification of critical habitat (
In determining the impacts of designation, we focused on the incremental change in Federal agency actions as a result of critical habitat designation and the adverse modification standard (see
Our analysis for this revised proposed rule is described in detail in the associated Draft Impact Analysis Report that is available for public review and comment (see Public Comments Solicited). This analysis assesses the incremental costs and benefits that may arise due to the critical habitat designation, with economic costs estimated over the next 10 years. We chose the 10-year timeframe because it is lengthy enough to reflect the planning horizon for reasonably predicting future human activities, yet it is short enough to allow reasonable projections of changes in use patterns in an area, as well as of exogenous factors (
Below, we summarize our analysis of the impacts of designating the specific area identified in this revised proposed rule as meeting the definition of critical habitat for the Arctic ringed seal. Additional detail is provided in the Draft Impact Analysis Report prepared for this revised proposed rule.
We expect that Arctic ringed seals will increasingly experience the ongoing loss of sea ice and changes in ocean conditions associated with climate change, and the significance of other habitat threats will likely increase as a result. As noted above, the primary benefit of a critical habitat designation—and the only regulatory consequence—stems from the ESA section 7(a)(2) requirement that all Federal agencies ensure that their actions are not likely to destroy or adversely modify the designated habitat. This benefit is in addition to the section 7(a)(2) requirement that all Federal agencies ensure that their actions are not likely to jeopardize listed species' continued existence. Another benefit of critical habitat designation is that it provides specific notice of the areas and features essential to the conservation of the Arctic ringed seal. This information will focus future ESA section 7 consultations on key habitat attributes. By identifying the specific areas where the features essential to the conservation of the Arctic ringed seal occur, there may also be enhanced awareness by Federal agencies and the general public of activities that might affect those essential features. The designation of critical habitat can also inform Federal agencies regarding the habitat needs of Arctic ringed seals, which may facilitate using their authorities to support the conservation of this species pursuant to ESA section 7(a)(1), including to design proposed projects in ways that minimize adverse effects to critical habitat.
In addition, the critical habitat designation may result in indirect benefits, as discussed in detail in the Draft Impact Analysis Report, including education and enhanced public awareness, which may help focus and contribute to conservation efforts for the Arctic ringed seal and its habitat. For example, by identifying areas and features essential to the conservation of the Arctic ringed seal, complementary protections may be developed under state or local regulations or voluntary conservation plans. These other forms of benefits may be economic in nature (whether market or non-market, consumptive, non-consumptive, or passive), educational, cultural, or sociological, or they may be expressed through beneficial changes in the ecological functioning of the species' habitat, which itself yields ancillary welfare benefits (
It is not presently feasible to monetize, or even quantify, each component part of the benefits accruing from the designation of critical habitat for the Arctic ringed seal. Therefore, we augmented the quantitative measurements that are summarized here and discussed in detail in the Draft Impact Analysis Report with qualitative and descriptive assessments, as provided for under 50 CFR 424.19(b) and in guidance set out in OMB Circular A-4. Although we cannot monetize or quantify all of the incremental benefits of the critical habitat designation, we conclude that they are not inconsequential.
Direct economic costs of the critical habitat designation accrue primarily through implementation of section 7(a)(2) of the ESA in consultations with Federal agencies to ensure that their proposed actions are not likely to destroy or adversely modify critical habitat. Those economic impacts may include both administrative costs and costs associated with project modifications. At this time, on the basis of how protections are currently implemented for Arctic ringed seals under the Marine Mammal Protection Act (MMPA) and as a threatened species under the ESA, we do not anticipate that additional requests for project modifications will result specifically from this designation of critical habitat. In other words, the critical habitat designation is not likely to result in more requested project modifications because our section 7 consultations on potential effects to Arctic ringed seals and our incidental take authorizations for Arctic activities under section 101(a) of the MMPA both typically address habitat-associated effects to the seals even in the absence of a critical habitat designation. As a result, the direct incremental costs of this critical habitat designation are expected to be limited to the additional administrative costs of considering Arctic ringed seal critical habitat in future section 7 consultations.
To identify the types of Federal activities that may affect critical habitat for the Arctic ringed seal, and therefore would be subject to the ESA section 7 adverse modification standard, we examined the record of section 7 consultations for 2013 to 2019 to identify Federal activities that occur within the specific area being considered as critical habitat for the Arctic ringed seal and that may affect the essential features of the critical habitat. These activities include oil and gas related activities, dredge mining, navigation dredging, in-water construction, commercial fishing, oil spill response, and certain military activities. We projected the occurrence of these activities over the timeframe of the analysis (the next 10 years) using the best available information on planned activities and the frequency of recent consultations for particular activity types. Notably, all of the projected future Federal actions that may trigger an ESA section 7 consultation due to the potential to affect one or more of the essential habitat features also have the potential to affect Arctic ringed seals. In other words, none of the activities we identified would trigger a consultation solely on the basis of the critical habitat designation. We recognize there is inherent uncertainty involved in predicting future Federal actions that may affect the essential features of Arctic ringed seal critical habitat. We specifically seek comments and information regarding the types of activities that are likely be subject to section 7 consultation as a result of the proposed designation, and we will consider any relevant information received during the comment period in developing the economic analysis supporting the final rule (see Public Comment Solicited section).
We expect that the majority of future ESA section 7 consultations analyzing potential effects on the proposed essential habitat features will involve NMFS and BOEM authorizations and permitting of oil and gas related activities. In assessing costs associated with these consultations, we took a conservative approach by estimating that future formal and informal consultations addressing these activities would be more complex than for other activities, and would therefore incur higher third party (
As detailed in the Draft Impact Analysis Report, the total incremental costs associated with designating the entire area identified in this revised proposed rule as meeting the definition of critical habitat for the Arctic ringed seal over the next 10 years, in discounted present value terms, are estimated to be $800,000 (discounted at 7 percent). In annual terms, the estimated range of discounted incremental costs is $58,000 to $106,000. About 80 percent of these incremental costs are expected to accrue from ESA section 7 consultations associated with oil and gas related activities in the Chukchi and Beaufort seas and adjacent onshore areas. Although not quantifiable at this time, the Draft Impact Analysis Report acknowledges that the oil and gas industry may also incur indirect costs associated with the critical habitat designation if future third-party litigation over specific section 7 consultations creates delays or other sources of regulatory uncertainty.
We have preliminarily concluded that the potential economic impacts associated with the critical habitat designation are modest both in absolute terms and relative to the level of economic activity expected to occur in the affected area, which is primarily associated with oil and gas activities that may occur in the Beaufort and Chukchi seas. As a result, and in light of the benefits of critical habitat designation discussed above and in the Draft Impact Analysis Report, we are not proposing to exercise our discretion to exclude any particular area from the critical habitat designation by evaluating whether the benefits of excluding such area based on economic impacts outweighs the benefits of including such area.
Section 4(b)(2) of the ESA also requires consideration of national security impacts. As noted in the Application of ESA Section 4(a)(3)(B)(i) section above, before publication of our 2014 proposed rule, we contacted DOD regarding any potential impacts of designating critical habitat for the Arctic ringed seal on military operations. In a letter dated June 3, 2013, the DOD Regional Environmental Coordinator indicated that no impacts on national
Following publication of our 2014 proposed rule, by a letter dated April 17, 2015, DOD indicated that upon further review, it had identified national security concerns with the designation due to overlap of the proposed critical habitat with the area north of Prudhoe Bay to the Canadian border extending seaward from approximately 125 to 200 nm that is used by the U.S. Navy for training and testing activities. DOD requested that NMFS exclude this area from the critical habitat designation due to national security impacts, expressing the view that designation of this area will impact national security if training and testing activities are prohibited or severely degraded, as detailed in a comment letter from the Navy dated March 30, 2015. More recently, by letter dated March 17, 2020, the Navy reiterated its request for this exclusion due to national security impacts, but modified the description of the particular area to extend seaward from approximately 100 to 200 nm (noting that ice conditions have required a shift closer to shore).
The Navy indicated in its written communications that it conducts Arctic training and testing exercises, referred to by the Navy as Ice Exercises (ICEXs), on and below the sea ice within the particular area requested for exclusion. ICEXs and the accompanying base camps are established anywhere from 100 to 200 nm north of Prudhoe Bay, Alaska. These exercises are planned to occur every 2 years and typically last 25 to 45 days. ICEX camps include approximately 15 to 20 temporary shelters which support 30 to 65 personnel. Training and testing activities include: Submarine activities; submarine surfacing, in which submarines avoid pressure ridges and conduct surfacings in first year ice or in polynyas; aircraft operations; building of runways; and other on-ice activities. The Navy noted that ICEX activities alter the ice by creating holes to deploy training and testing equipment and surfacing submarines. The Navy explained that due to the need for stable ice, flights are conducted immediately prior to buildup of the ICEX camp to determine the final location.
The Navy also noted that the Office of Naval Research conducts research testing activities in the deep waters of the Beaufort Sea with acoustic sources and the use of icebreaking ships to deploy and retrieve these sources, which it plans to continue in the future, and expressed concern that the designation of critical habitat could impact these activities. The Navy indicated that it also conducts other training and testing activities in the Arctic region in support of gaining and maintaining military readiness in this region, and expects additional training and testing activities to occur in this region. The activities may be similar to those identified for ICEXs, and likely also would include vessel movements, icebreaking, and support transport by air and sea. Testing activities may include air platform/vehicle tests, missile testing, gunnery testing, and anti-submarine warfare tracking testing.
The Navy expressed the concern that the critical habitat may impact national security if training and testing activities are prohibited or are required to be mitigated (for the protection of critical habitat) to the point where training and testing value is severely degraded, or if the Navy is unable to access certain locations within the Arctic region. The Navy indicated that if the critical habitat designation maintains the same boundaries identified in our 2014 proposed designation, it does not foresee a way that its training and testing activities will be able to be conducted without significant impacts on those activities. In support of this assertion the Navy noted that through consultation with NMFS under section 7 of the ESA for training on the east coast of the United States, the Navy agreed to restrict certain training activities in North Atlantic right whale critical habitat during the calving season, noting that those training activities can be conducted in nearby areas that are not designated as critical habitat during the calving season. The Navy indicated that due to the size of the area proposed in 2014 as critical habitat for the Arctic ringed seal and the uniqueness of Arctic conditions, the Navy would not be able to shift its training activities to other areas or to different times of the year.
In addition to the information provided by the Navy, by letter dated April 30, 2020, the Air Force provided information concerning its activities at radar sites located adjacent to the area under consideration for designation as critical habitat (relevant sites identified above in the Application of ESA Section 4(a)(3)(B)(i) section). The Air Force requested that we consider excluding critical habitat near these sites under section 4(b)(2) of the ESA due to impacts on national security. Although we are not proposing to exempt the radar sites pursuant to section 4(a)(3)(B)(i) of the ESA, as discussed above, here we consider whether to propose excluding critical habitat located adjacent to these sites under section 4(b)(2).
The Air Force noted that annual fuel and cargo resupply activities occur at these radar sites primarily in the summer and installation beaches are used for offload. The Air Force indicated that coastal operations at these installations are limited, and when barge operations occur, protective measures are implemented per the Polar Bear and Pacific Walrus Avoidance Plan (preliminary final 2020) associated with the INRMP in place for these sites. The Air Force discussed that it also conducts sampling and monitoring at these sites as part of the department's Installation Restoration Program, and conducts larger scale contaminant or debris removal in some years that can require active disturbance of the shoreline. Coastal barge operations are a feature of both monitoring and removal actions.
Federal agencies have an existing obligation to consult with NMFS under section 7(a)(2) of the ESA to ensure the activities they fund or carry out are not likely to jeopardize the continued existence of the Arctic ringed seal, regardless of whether or where critical habitat is designated for the species. The activities described in the Air Force's exclusion request are localized and small in scale, and it is unlikely that modifications to these activities would be needed to address impacts to critical habitat beyond any modifications that may be necessary to address impacts to Arctic ringed seals. We therefore anticipate that the time and costs associated with consideration of the effects of future Air Force actions on Arctic ringed seal critical habitat under section 7(a)(2) of the ESA would be limited if any, and the consequences for the Air Force's activities, even if we do not exempt or exclude the requested areas from critical habitat designation, would be negligible.
As a result, and in light of the benefits of critical habitat designation discussed above and in the Draft Impact Analysis Report, we have preliminarily concluded that the benefits of exclusion do not outweigh the benefits of designation and are therefore not proposing to exercise our discretionary authority to exclude these particular areas pursuant to section 4(b)(2) of the ESA with respect to the Air Force's request based on national security impacts. However, given the specific national security concerns identified by the Navy, below we provide an analysis of our decision to exercise our discretionary authority under section 4(b)(2) of the ESA to propose excluding
Finally, under ESA section 4(b)(2) we consider any other relevant impacts of critical habitat designation to inform our decision as to whether to exclude any areas. For example, we may consider potential adverse effects on existing management or conservation plans that benefit listed species, and we may consider potential adverse effects on tribal lands or trust resources. In preparing this revised proposed designation, we have not identified any such management or conservation plans, tribal lands or resources, or anything else that would be adversely affected by the critical habitat designation. Some Alaska Native organizations and tribes have expressed concern that the critical habitat designation might restrict subsistence hunting of ringed seals or other marine mammals, such that important hunting areas should be considered for exclusion, but no restrictions on subsistence hunting are associated with this designation. Accordingly, we are not exercising our discretion to conduct an exclusion analysis pursuant to section 4(b)(2) of the ESA based on other relevant impacts.
Based on the written information provided by the Navy (summarized in the
The area requested for exclusion comprises approximately 12 percent of the marine habitat that meets the definition of critical habitat for the Arctic ringed seal, and approximately 41 percent of the portion of this marine habitat north of the Beaufort Sea shelf (north of the 200-m isobath). As noted by the Navy in its exclusion request, and as discussed above in the
The testing and training activities described in the Navy's exclusion request are temporally limited, localized, and small in scale, and it is very unlikely that modifications to these activities would be needed to address impacts to critical habitat beyond any modifications that may be necessary to address impacts to Arctic ringed seals. Moreover, the Navy has an existing obligation to consult with NMFS under section 7(a)(2) of the ESA to ensure the activities it funds or carries out are not likely to jeopardize the continued existence of the Arctic ringed seal, regardless of whether or where critical habitat is designated for the species. Aside from the Navy's training and testing activities, we are aware of few other Federal actions that would be expected to affect the particular area requested for exclusion.
We recognize that there are limited data currently available to inform our evaluation of the conservation value to the Arctic ringed seal of the particular area requested for exclusion. Therefore, given the Navy's specific justification regarding potential impacts on national security stemming from the potential designation of critical habitat for the Arctic ringed seal in the particular area requested for exclusion, and the fact that few other Federal actions are
As explained in the Draft Impact Analysis Report, the total incremental costs associated with the particular area we are proposing to exclude, which stem from administrative costs of adding critical habitat analyses to consultations on the Navy's ICEX activities over the next 10 years, are estimated to be $13,300 (discounted at 7 percent). Thus, the total incremental costs associated with the revised proposed critical habitat designation over the next 10 years, if this area is excluded, are estimated to be $786,000 (discounted at 7 percent). In annual terms, the estimated range of discounted incremental costs is $57,000 to $105,000.
We propose to designate as critical habitat a specific area of marine habitat in Alaska and offshore Federal waters of the Bering, Chukchi, and Beaufort seas, within the geographical area presently occupied by the Arctic ringed seal. This critical habitat area contains physical or biological features essential to the conservation of Arctic ringed seals that may require special management considerations or protection. Based on national security impacts, we propose to exclude a particular area of marine habitat north of the Beaufort Sea shelf that is used by the Navy for training and testing activities because we determined that the benefits to national security of exclusion outweigh the benefits of designation. We have not identified any unoccupied areas that are essential to the conservation of the Arctic ringed seal, and thus we are not proposing any such areas for designation as critical habitat. In accordance with our regulations regarding critical habitat designation (50 CFR 424.12(c)), the map included in the proposed regulation, as clarified by the accompanying regulatory text, would constitute the official boundary of the proposed designation.
Section 7(a)(2) of the ESA requires Federal agencies, including NMFS, to ensure that any action authorized, funded, or carried out by the agency is not likely to jeopardize the continued existence of any threatened or endangered species or destroy or adversely modify designated critical habitat. Federal agencies must consult with us on any agency action that may affect listed species or critical habitat. During interagency consultation, we evaluate the agency action to determine whether the action is likely to adversely affect listed species or critical habitat. The potential effects of a proposed action may depend on, among other factors, the specific timing and location of the action relative to the seasonal presence of essential features or seasonal use of critical habitat by listed species for essential life history functions. Although the requirement to consult on an action that may affect critical habitat applies regardless of the season, NMFS addresses spatial-temporal considerations when evaluating the potential impacts of a proposed action during the ESA section 7 consultation process. For example, if an action with short-term effects is proposed during a time of year that sea ice is not present, we may advise that consequences to critical habitat are unlikely. If we conclude in a biological opinion pursuant to section 7(a)(2) of the ESA that the agency action would likely result in the destruction or adverse modification of critical habitat, we would recommend reasonable and prudent alternatives to the action that avoid that result.
Reasonable and prudent alternatives are defined in 50 CFR 402.02 as alternative actions identified during formal consultation that can be implemented in a manner consistent with the intended purpose of the action, that are consistent with the scope of the Federal agency's legal authority and jurisdiction, that are economically and technologically feasible, and that would avoid the destruction or adverse modification of critical habitat. NMFS may also provide with the biological opinion a statement containing discretionary conservation recommendations. Conservation recommendations are advisory and are not intended to carry any binding legal force.
Regulations at 50 CFR 402.16 require Federal agencies that have retained discretionary involvement or control over an action, or where such discretionary involvement or control is authorized by law, to reinitiate consultation on previously reviewed actions in instances where: (1) Critical habitat is subsequently designated; or (2) new information or changes to the action may result in effects to critical habitat not previously considered (among other reasons for reinitiation). Consequently, some Federal agencies may request reinitiation of consultation or conference with us on actions for which consultation has been completed, if those actions may affect designated critical habitat for the Arctic ringed seal. Activities subject to the ESA section 7 consultation process include activities on Federal lands as well as activities requiring a permit or other authorization from a Federal agency (
Section 4(b)(8) of the ESA requires, to the maximum extent practicable, in any proposed regulation to designate critical habitat, an evaluation and brief description of those activities that may adversely modify such habitat or that may be affected by such designation. A variety of activities may affect Arctic ringed seal critical habitat and, if carried out, funded, or authorized by a Federal agency, may be subject to ESA section 7 consultation. Such activities include: In-water and coastal construction; activities that generate water pollution; dredging; commercial fishing; oil and gas exploration, development, and production; oil spill response; and
Private or non-Federal entities may also be affected by the proposed critical habitat designation if a Federal permit is required, Federal funding is received, or the entity is involved in or receives benefits from a Federal project. These activities would need to be evaluated with respect to their potential to destroy or adversely modify Arctic ringed seal critical habitat. As noted in the Public Comments Solicited section below, NMFS also requests information on the types of non-Federal activities that may be affected by this rulemaking.
To ensure the final action resulting from this revised proposal will be as accurate and effective as possible, we solicit comments and information from the public, other concerned government agencies, Alaska Native tribes and organizations, the scientific community, industry, non-governmental organizations, and any other interested parties concerning our revised proposed designation of critical habitat for the Arctic ringed seal. In particular, we are interested in data and information regarding the following: (1) The distribution and habitat use of Arctic ringed seals; (2) the identification, location, and quality of physical or biological features essential to the conservation of the Arctic ringed seal, including in particular, the delineation of the northern, southern, and shoreward boundaries of where one or more of these features occur; (3) the potential impacts of designating the proposed critical habitat, including information on the types of Federal activities that may trigger an ESA section 7 consultation; (4) current or planned activities in the area proposed for designation and their possible impacts on the proposed critical habitat; (5) the potential effects of the designation on Alaska Native cultural practices and villages; (6) any foreseeable economic, national security, Tribal, or other relevant impacts resulting from the revised proposed designation; (7) whether any data used in the economic analysis needs to be updated; (8) foreseeable additional costs arising specifically from the designation of critical habitat for the Arctic ringed seal that have not been identified in the Draft Impact Analysis Report; (9) additional information regarding impacts on small businesses and federally recognized tribes not identified in the Draft Impact Analysis Report; and (10) whether any particular areas that we are proposing for critical habitat designation should be considered for exclusion under section 4(b)(2) of the ESA and why. For these described impacts or benefits, we request that the following specific information (if relevant) be provided to inform our ESA section 4(b)(2) analysis: (1) A map and description of the affected area; (2) a description of the activities that may be affected within the area; (3) a description of past, ongoing, or future conservation measures conducted within the area that may protect Arctic ringed seal habitat; and (4) a point of contact.
You may submit your comments and information concerning this revised proposed rule by any one of the methods described under
A complete list of all references cited in this revised proposed rule can be found on the Federal eRulemaking Portal and is available upon request from the NMFS office in Juneau, Alaska (see
We have determined that an environmental analysis as provided for under the National Environmental Policy Act of 1969 for critical habitat designations made pursuant to the ESA is not required.
Under the Regulatory Flexibility Act (RFA) (5 U.S.C. 601
A description of the action (
This revised proposed critical habitat rule does not directly apply to any particular entity, small or large. The regulatory mechanism through which critical habitat protections are enforced is section 7 of the ESA, which directly regulates only those activities carried out, funded, or permitted by a Federal agency. By definition, Federal agencies are not considered small entities, although the activities they fund or permit may be proposed or carried out by small entities. In some cases, small entities may participate as third parties (
Based on the best information currently available, the Federal actions projected to occur within the time frame of the analysis (
As detailed in the Draft Impact Analysis Report, the oil and gas exploration, development, and production industries participate in activities that are likely to require consideration of critical habitat in ESA section 7 consultations. The Small Business Administration size standards used to define small businesses in these cases are: (1) An average of no more than 1,250 employees (crude petroleum and natural gas extraction industry); or (2) average annual receipts of no more than $41.5 million (support activities for oil and gas operations industry). Only two of the parties identified in the oil and gas category appear to qualify as small businesses based on these criteria. Based on past ESA section 7 consultations, the additional third party administrative costs in future consultations involving Arctic ringed seal critical habitat over the next 10 years are expected to be borne principally by large oil and gas operations. The estimated range of annual third party costs over this 10 year period is $32,000 to $59,000 (discounted at 7 percent), virtually all of which is expected to be associated with oil and gas activities. It is possible that a limited portion of these administrative costs may be borne by small entities (based on past consultations, an estimated maximum of two entities). Two government jurisdictions with ports appear to qualify as small government jurisdictions (serving populations of fewer than 50,000). The total third party costs that may be borne by these small government jurisdictions over 10 years are less than $1,000 (discounted at 7 percent) for the additional administrative effort to consider Arctic ringed seal critical habitat as part of a future ESA section 7 consultation involving one port.
As required by the RFA (as amended by the SBREFA), we considered alternatives to the proposed critical habitat designation for the Arctic ringed seal. We considered and rejected the alternative of not designating critical habitat for the Arctic ringed seal, because such an alternative does not meet our statutory requirements under the ESA. We also considered and rejected the alternative of designating as critical habitat the entire specific area that contains at least one identified essential feature (
The purpose of the Paperwork Reduction Act is to minimize the paperwork burden for individuals, small businesses, educational and nonprofit institutions, and other persons resulting from the collection of information by or for the Federal government. This revised proposed rule does not contain any new or revised collection of information. This rule, if adopted, would not impose recordkeeping or reporting requirements on State or local governments, individuals, businesses, or organizations.
In accordance with the Unfunded Mandates Reform Act, we make the following findings:
(1) This revised proposed rule will not produce a Federal mandate. In general, a Federal mandate is a provision in legislation, statute or regulation that would impose an enforceable duty upon State, local, tribal governments, or the private sector and includes both “Federal intergovernmental mandates” and “Federal private sector mandates.” The designation of critical habitat does not impose an enforceable duty on non-Federal government entities or private parties. Under the ESA, the only regulatory effect of a critical habitat designation is that Federal agencies must ensure that their actions are not likely to destroy or adversely modify critical habitat under section 7. Non-Federal entities that receive Federal funding, assistance, permits, or otherwise require approval or authorization from a Federal agency for an action, may be indirectly affected by the designation of critical habitat, but the legally binding duty to avoid destruction or adverse modification of critical habitat rests squarely on the Federal agency. Furthermore, to the extent that non-Federal entities are indirectly affected because they receive Federal assistance or participate in a voluntary Federal aid program, the Unfunded Mandate Reform Act would not apply, nor would critical habitat shift to state governments the costs of the large entitlement programs listed above.
(2) This revised proposed rule will not significantly or uniquely affect small governments because it is not likely to produce a Federal mandate of $100 million or greater in any year; that is, it is not a “significant regulatory action” under the Unfunded Mandates Reform Act. In addition, the designation of critical habitat imposes no obligations on local, state, or tribal governments. Therefore, a Small Government Agency Plan is not required.
The data and analyses supporting this proposed action have undergone a pre-dissemination review and have been determined to be in compliance with applicable information quality guidelines implementing the Information Quality Act (Section 515 of Pub. L. 106-554).
On December 16, 2004, the OMB issued its Final Information Quality Bulletin for Peer Review (Bulletin) establishing minimum peer review standards, a transparent process for public disclosure of peer review planning, and opportunities for public participation. The Bulletin was published in the
The evaluation of critical habitat presented in this revised proposed rule and the information presented in the supporting Draft Impact Analysis Report are considered influential scientific information subject to peer review. To satisfy our requirements under the OMB Bulletin, we obtained independent peer review of the critical habitat analysis contained in our 2014 proposed rule from five reviewers, and of the information used to prepare the associated impact analysis report from three reviewers. We reviewed the comments received from these reviewers for substantive issues and new information regarding critical habitat for the Arctic ringed seal, and we used this information as applicable in the development of this revised proposed rule and the associated Draft Impact Analysis Report. The peer review comments are compiled in two reports that are available on the Federal eRulemaking Portal or upon request (see
The longstanding and distinctive relationship between the Federal and tribal governments is defined by treaties, statutes, executive orders, judicial decisions, and co-management agreements, which differentiate tribal governments from the other entities that deal with, or are affected by, the Federal Government. This relationship has given rise to a special Federal trust responsibility involving the legal responsibilities and obligations of the United States toward Indian tribes and the application of fiduciary standards of due care with respect to Indian lands, tribal trust resources, and the exercise of tribal rights. Executive Order 13175 on Consultation and Coordination with Indian Tribal Governments outlines the responsibilities of the Federal Government in matters affecting tribal interests. Section 161 of Public Law 108-199 (188 Stat. 452), as amended by section 518 of Public Law 108-447 (118 Stat. 3267), directs all Federal agencies to consult with Alaska Native corporations on the same basis as Indian tribes under E.O. 13175.
As the entire proposed critical habitat area is located seaward of the line of MLLW and does not extend into tidally-influenced channels of tributary waters, no tribal-owned lands overlap with the revised proposed designation. However, we seek comments and information concerning tribal and Alaska Native corporation activities that are likely to be affected by the proposed designation (see Public Comments Solicited section). Although this revised proposed designation overlaps with areas used by Alaska Natives for subsistence, cultural, and other purposes, no restrictions on subsistence hunting are associated with the critical habitat designation. We coordinate with Alaska Native hunters regarding management issues related to Arctic ringed seals through the Ice Seal Committee (ISC), a co-management organization under section 119 of the MMPA. We discussed the designation of critical habitat for Arctic ringed seals with the ISC and provided updates regarding the timeline for publication of this revised proposed rule. We will also contact potentially affected tribes and Alaska Native corporations by mail and offer them the opportunity to consult on the revised designation of critical habitat for the Arctic ringed seal and discuss any concerns they may have. If we receive any such requests in response to this revised proposed rule, we will respond to each request before issuing a final rule.
Under E.O. 12630, Federal agencies must consider the effects of their actions on constitutionally protected private property rights and avoid unnecessary takings of property. A taking of property includes actions that result in physical invasion or occupancy of private property, and regulations imposed on private property that substantially affect its value or use. In accordance with E.O. 12630, the revised proposed rule does not have significant takings implications. The designation of critical habitat directly affects only Federal agency actions (
OMB has determined that this revised proposed rule is significant for purposes of E.O. 12866 review. A Draft Impact Analysis Report has been prepared that considers the economic costs and benefits of the revised proposed critical habitat designation and alternatives to this rulemaking as required under E.O. 12866. To review this report, see the
Based on the Draft Impact Analysis Report, the total estimated present value of the incremental impacts of the revised proposed critical habitat designation is approximately $786,000 over the next 10 years (discounted at 7 percent). Assuming a 7 percent discount rate, the range of annual impacts is estimated to be $57,000 to $105,000. Overall, economic impacts are expected to be small and Federal agencies are anticipated to bear at least 45 percent of these costs. While there are expected beneficial economic impacts of designating critical habitat for the Arctic ringed seal, there are insufficient data available to monetize those impacts (see
This proposed rulemaking is expected to be regulatory under E.O. 13771.
Executive Order 13132 requires agencies to take into account any federalism impacts of regulations under development. It includes specific consultation directives for situations in which a regulation may preempt state law or impose substantial direct compliance costs on state and local governments (unless required by statute). Pursuant to E.O. 13132, we determined that this revised proposed rule does not have significant federalism effects and that a federalism assessment is not required. The designation of critical habitat directly affects only the responsibilities of Federal agencies. As a result, the revised proposed rule does not have substantial direct effects on the States, on the relationship between the national government and the States, or
Executive Order 13211 requires agencies to prepare Statements of Energy Effects when undertaking a significant energy action. Under E.O. 13211, a significant energy action means any action by an agency that is expected to lead to the promulgation of a final rule or regulation that is a significant regulatory action under E.O. 12866 and is likely to have a significant adverse effect on the supply, distribution, or use of energy. We have considered the potential impacts of this revised proposed critical habitat designation on the supply, distribution, or use of energy (see Draft Impact Analysis Report for this revised proposed rule). This proposed critical habitat designation overlaps with five BOEM planning areas for Outer Continental Shelf oil and gas leasing; however, the Beaufort and Chukchi Sea planning areas are the only areas with existing or planned leases.
Currently, the majority of oil and gas production occurs on land adjacent to the Beaufort Sea and the proposed critical habitat area. Any proposed offshore oil and gas projects would likely undergo an ESA section 7 consultation to ensure that the project would not likely destroy or adversely modify designated critical habitat. However, as discussed in the Draft Impact Analysis Report for this revised proposed rule, such consultations will not result in any new and significant effects on energy supply, distribution, or use. ESA section 7 consultations have occurred for numerous oil and gas projects within the area of the critical habitat designation (
Endangered and threatened species.
Endangered and threatened species.
For the reasons set out in the preamble, 50 CFR parts 223 and 226 are proposed to be amended as follows:
16 U.S.C. 1531-1543; subpart B, § 223.201-202 also issued under 16 U.S.C. 1361
(e) * * *
16 U.S.C. 1533.
Critical habitat is designated for the Arctic subspecies of the ringed seal as depicted in this section. The map, clarified by the textual descriptions in this section, is the definitive source for determining the critical habitat boundaries.
(a)
(b)
(1) Snow-covered sea ice habitat suitable for the formation and maintenance of subnivean birth lairs used for sheltering pups during whelping and nursing, which is defined as areas of seasonal landfast (shorefast) ice and dense, stable pack ice, excluding any bottom-fast ice extending seaward from the coastline (typically in waters less than 2 m deep), that have undergone deformation and contain snowdrifts of sufficient depth, typically at least 54 cm deep.
(2) Sea ice habitat suitable as a platform for basking and molting, which is defined as areas containing sea ice of 15 percent or more concentration, excluding any bottom-fast ice extending seaward from the coastline (typically in waters less than 2 m deep).
(3) Primary prey resources to support Arctic ringed seals, which are defined to be Arctic cod (
(c)
Agricultural Marketing Service, USDA.
Notice.
The Agricultural Marketing Service (AMS) is announcing the 2021 fee schedule for official inspection and weighing services performed under the USGSA, as amended, in order to comply with Federal Grain Inspection Service regulations and the Agriculture Reauthorizations Act of 2015. This action publishes the annual review of Schedule A fees calculation and the resulting fees.
The new fee schedule went into effect on January 1, 2021.
Prospective customers can find the fee scheduled posted on the Agency's public website.
Denise Ruggles, FGIS Executive Program Analyst, USDA AMS; Telephone: (816) 659-8406; Email:
The USGSA provides the Secretary of Agriculture with the authority to charge and collect reasonable fees to cover the costs of performing official services and the costs associated with managing the program. The regulations require that the Federal Grain Inspection Service (FGIS) annually review the national tonnage fees, local tonnage fees, and fees for service. After calculating the tonnage fees according to the regulatory formula in 7 CFR 800.71(b)(1), FGIS then reviews the amount of funds in the operating reserve at the end of the fiscal year (FY2020 in this case) to ensure that it has 4
Tonnage fees for the 5-year rolling average tonnage were calculated on the previous 5 fiscal years—2016, 2017, 2018, 2019, and 2020. Tonnage fees consist of the national tonnage fee and local tonnage fee and are calculated and rounded to the nearest $0.001 per metric ton. The tonnage fees are calculated as follows:
The national program administrative costs for fiscal year 2020 were $5,704,963. The fiscal year 2021 national tonnage fee, prior to the operating reserve review, is calculated to be at $0.047 per metric ton.
The field office fiscal year tons for the previous 5 fiscal years and calculated 5-year rolling averages are as follows:
The local field office administrative costs for fiscal year 2020 and the fiscal year 2021 calculated local field office tonnage fees, prior to the operating reserve review, are as follows:
The program operating reserve at the end of fiscal year 2020 was $10,007,544, with a monthly operating expense of $2,983,133. The target of 4.5 months of operating reserve is $13,424,097. Therefore, the operating reserve is less than 4.5 times the monthly operating expenses by $3,416,553. For each $1,000,000, rounded down, below the target level, all Schedule A fees must be increased by 2 percent. The operating reserve is $3.4 million below the target level, resulting in a calculated 5 percent increase, as required by § 800.71(b)(2)(ii). Therefore, for 2021, FGIS is increasing all the 2020 Schedule A fees for service in Schedule A in paragraph (a)(1) by 5 percent. All Schedule A fees for service are rounded to the nearest $0.10, except for fees based on tonnage or hundredweight. The fee Schedule A has been published on the agency's public website.
Animal and Plant Health Inspection Service, USDA.
Revision to and extension of approval of an information collection; comment request.
In accordance with the Paperwork Reduction Act of 1995, this notice announces the Animal and Plant Health Inspection Service's intention to request a revision to and extension of approval of an information collection associated with its efforts to certify certain laboratories that conduct aquatic animal testing for export activities.
We will consider all comments that we receive on or before March 9, 2021.
You may submit comments by either of the following methods:
•
•
Supporting documents and any comments we receive on this docket may be viewed at
For information on conducting aquatic animal tests for export health certificates, contact Ms. Janet Warg, Microbiologist, Diagnostic Virology Laboratory, National Veterinary Services Laboratories, 1920 Dayton Avenue, P.O. Box 844, Ames, IA 50010; (515) 337-7551. For more information on the information collection process, contact Mr. Joseph Moxey, APHIS' Information Collection Coordinator, at (301) 851-2483.
Disease prevention is the most effective method for maintaining a healthy animal population and enhancing the ability of U.S. producers to compete in the global market of
While APHIS does not currently require the approval or certification of laboratories that conduct disease tests for the export of aquaculture animals, some countries that import these animals from the United States require them to be tested for certain diseases and the test results recorded on the export certificates. In addition, the test results must originate from a laboratory approved by the competent authority of the exporting country, which is APHIS in this case. State, university, and private laboratories can voluntarily seek APHIS approval of individual diagnostic methods. Though APHIS does not have regulations for the approval or certification of laboratories that conduct tests for the export of aquaculture animals, APHIS provides this approval as a service to U.S. exporters who export aquaculture animals to countries that require this certification.
APHIS evaluates diagnostic methods for detecting aquatic animal pathogens listed by the World Organization for Animal Health (OIE) in the OIE diagnostic manual and other supporting scientific literature. APHIS lists the laboratories approved to conduct diagnostic testing in support of export health certification of aquatic species at
The approval of laboratories to conduct tests for the export of aquaculture animals requires the use of certain information collection activities including notification of intent to request approval, application for APHIS approval, protocol statement, submission and recordkeeping of sample copies of diagnostic reports, quality assurance/control plans and their recordkeeping, notification of proposed changes to assay protocols, recordkeeping of supporting assay documentation, and request for removal of approved status.
We are asking the Office of Management and Budget (OMB) to approve our use of these information collection activities, as described, for an additional 3 years.
The purpose of this notice is to solicit comments from the public (as well as affected agencies) concerning our information collection. These comments will help us:
(1) Evaluate whether the collection of information is necessary for the proper performance of the functions of the Agency, including whether the information will have practical utility;
(2) Evaluate the accuracy of our estimate of the burden of the collection of information, including the validity of the methodology and assumptions used;
(3) Enhance the quality, utility, and clarity of the information to be collected; and
(4) Minimize the burden of the collection of information on those who are to respond, through use, as appropriate, of automated, electronic, mechanical, and other collection technologies;
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.
Animal and Plant Health Inspection Service, USDA.
Notice of availability.
We are advising the public that the Animal and Plant Health Inspection Service has prepared an environmental assessment (EA) relative to permitting the release of an insect,
We will consider all comments that we receive on or before February 8, 2021.
You may submit comments by either of the following methods:
•
•
Supporting documents and any comments we receive on this docket may be viewed at
Dr. Colin D. Stewart, Assistant Director, Pests, Pathogens, and Biocontrol Permits, Permitting and Compliance Coordination, PPQ, APHIS, 4700 River Road, Unit 133, Riverdale, MD 20737-1237; (301) 851-2327;
The Animal and Plant Health Inspection Service (APHIS) is proposing to issue permits for the release of an insect,
Air potato is an herbaceous, twining vine that can grow 65 feet long or more, capable of climbing and out-competing native vegetation. Since its introduction to Florida in 1905, air potato has aggressively spread throughout the State; this species is reportedly naturalized in Georgia, Alabama, Mississippi, Louisiana, Texas, and Hawaii. In 1999, the Florida Department of Agricultural and Consumer Services added air potato to its list of noxious weeds in an attempt to protect the State's native plant species from being displaced or hybridized. Presently, the air potato is well established in Florida and probably throughout the Gulf States where it has the potential to severely disrupt entire ecosystems.
Existing air potato management options, which include chemical and mechanical control methods, are ineffective, expensive, temporary, or have non-target impacts. Thus, a permit application has been submitted to APHIS for the purpose of releasing an insect,
APHIS' review and analysis of the proposed action are documented in detail in an environmental assessment (EA) titled “Field Release of the Beetle
The EA may be viewed on the
The EA has been prepared in accordance with: (1) The National Environmental Policy Act of 1969 (NEPA), as amended (42 U.S.C. 4321
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
International Trade Administration (ITA), Department of Commerce (DOC).
Solicitation of applications.
In March 2007, the Governments of the United States and Brazil established the U.S.-Brazil CEO Forum. This notice announces the opportunity for up to three individuals for appointment to the U.S. Section of the Forum for a term ending on February 24, 2022. The current three-year term of the U.S. Section began on February 25, 2019 and will expire February 24, 2022. Nominations received in response to this notice will also be considered for on-going appointments to fill any future vacancies that may arise before November 30, 2021.
Applications for immediate consideration should be received no later than close of business January 22, 2021. After that date, applications will continue to be accepted through November 30, 2021 to fill any new vacancies that may arise.
Please send requests for consideration to Raquel Silva, Office of Latin America and the Caribbean, U.S. Department of Commerce, by email at
Raquel Silva, 202-482-4157, Office of Latin America and the Caribbean, U.S. Department of Commerce.
The Secretary of Commerce and the Director of the National Economic Council, together with the Planalto Casa Civil Minister (Presidential Chief of Staff) and the Brazilian Minister of Industry, Foreign Trade & Services, co-chair the U.S.-Brazil CEO Forum (Forum), pursuant to the Terms of Reference signed in March 2007 by the U.S. and Brazilian governments, as amended, which set forth the objectives and structure of the Forum. The Terms of Reference may be viewed at:
This notice seeks candidates to fill up to three positions on the U.S. Section of the Forum as well as any future vacancies that may arise before November 30, 2021. Each candidate must be the Chief Executive Officer or President (or have a comparable level of responsibility) of a U.S.-owned or -controlled company that is incorporated or otherwise organized in and has its main headquarters in the United States and that is currently doing business in both Brazil and the United States. Each candidate also must be a U.S. citizen or otherwise legally authorized to work in the United States and able to travel to Brazil and locations in the United States to attend official Forum meetings as well as independent U.S. Section and Committee meetings. In addition, the candidate may not be a registered foreign agent under the Foreign Agents Registration Act of 1938, as amended. Evaluation of applications for membership in the U.S. Section by eligible individuals will be based on the following criteria:
—A demonstrated commitment by the individual's company to the Brazilian market either through exports or investment.
—A demonstrated strong interest in Brazil and its economic development.
—The ability to offer a broad perspective and business experience to the discussions.
—The ability to address cross-cutting issues that affect the entire business community.
—The ability to initiate and be responsible for activities in which the Forum will be active.
—A demonstrated commitment and ability to attend the majority of Forum meetings.
In addition to the above criteria, members will be selected on the basis of who will best carry out the objectives of the Forum as stated in the Terms of Reference establishing the U.S.-Brazil CEO Forum. The U.S. Section of the Forum should also include members that represent a diversity of business sectors and geographic locations. To the extent possible, U.S. Section members also should represent a cross-section of small, medium, and large firms.
U.S. members will receive no compensation for their participation in Forum-related activities. Individual members will be responsible for all travel and related expenses associated with their participation in the Forum, including attendance at Committee and Section meetings. Only appointed members may participate in official Forum meetings; substitutes and alternates will not be designated. According to the current Terms of Reference, members are normally to serve three-year terms, but may be reappointed. Consistent failure to actively participate in Forum meetings and activity may result in early termination of a CEO's membership on the Forum.
As delineated in 83 FR 65627 (December 21, 2018), to be considered for membership, please submit the following information as instructed in the
15 U.S.C. 1512.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of SEDAR 73 Assessment Webinar II for South Atlantic Red Snapper.
The SEDAR 73 assessment of the South Atlantic stock of red snapper will consist of a data scoping webinar, a workshop, and a series of assessment webinars.
The SEDAR 73 Assessment Webinar II will be held via webinar January 27, 2021, from 1 p.m. until 4 p.m. EST. The established times may be adjusted as necessary to accommodate the timely completion of discussion relevant to the assessment process. Such adjustments may result in the meeting being extended from or completed prior to the time established by this notice. Additional SEDAR 73 workshops and webinar dates and times will publish in a subsequent issue in the
Kathleen Howington, SEDAR Coordinator, 4055 Faber Place Drive, Suite 201, North Charleston, SC 29405; phone: (843) 571-4373; email:
The Gulf of Mexico, South Atlantic, and Caribbean Fishery Management Councils, in conjunction with NOAA Fisheries and the Atlantic and Gulf States Marine Fisheries Commissions, have implemented the Southeast Data, Assessment and Review (SEDAR) process, a multi-step method for determining the status of fish stocks in the Southeast Region. SEDAR is a three-step process including: (1) Data Workshop; (2) Assessment Process utilizing webinars; and (3) Review Workshop. The product of the Data Workshop is a data report which compiles and evaluates potential datasets and recommends which datasets are appropriate for assessment analyses. The product of the Assessment Process is a stock assessment report which describes the fisheries, evaluates the status of the stock, estimates biological benchmarks, projects future population conditions, and recommends research and monitoring needs. The assessment is independently peer reviewed at the Review Workshop. The product of the Review Workshop is a Summary documenting panel opinions regarding the strengths and weaknesses of the stock assessment and input data. Participants for SEDAR Workshops are appointed by the Gulf of Mexico, South Atlantic, and Caribbean Fishery Management Councils and NOAA Fisheries Southeast Regional Office, Highly Migratory Species Management Division, and Southeast Fisheries Science Center. Participants include: data collectors and database managers; stock assessment scientists, biologists, and researchers; constituency representatives including fishermen, environmentalists, and non-governmental organizations (NGOs); international experts; and staff of Councils, Commissions, and state and federal agencies.
The items of discussion at the Assessment Webinar II:
• Finalize any data decisions remaining.
• Continue discussion on modelling issues and decisions.
Although non-emergency issues not contained in this agenda may come before this group for discussion, those issues may not be the subject of formal action during this meeting. Action will be restricted to those issues specifically identified in this notice and any issues arising after publication of this notice that require emergency action under section 305(c) of the Magnuson-Stevens Fishery Conservation and Management Act, provided the public has been notified of the intent to take final action to address the emergency.
This meeting is accessible to people with disabilities. Requests for auxiliary aids should be directed to the SAFMC office (see
Note: The times and sequence specified in this agenda are subject to change.
(Authority: 16 U.S.C. 1801
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of SEDAR 66 Assessment Webinar II for South Atlantic Tilefish.
The SEDAR 66 stock assessment of the South Atlantic stock of Tilefish will consist of a data scoping webinar, a workshop, and a series of assessment webinars. See
The SEDAR 66 South Atlantic Tilefish Assessment Webinar II will be held via webinar on January 27, 2021, from 9 a.m. until 12 p.m. EST. The established times may be adjusted as necessary to accommodate the timely completion of discussion relevant to the assessment process. Such adjustments may result in the meeting being extended from or completed prior to the time established by this notice. Additional SEDAR 66 webinar dates and times will publish in a subsequent issue in the
Kathleen Howington, SEDAR Coordinator, 4055 Faber Place Drive,
The Gulf of Mexico, South Atlantic, and Caribbean Fishery Management Councils, in conjunction with NOAA Fisheries and the Atlantic and Gulf States Marine Fisheries Commissions, have implemented the Southeast Data, Assessment and Review (SEDAR) process, a multi-step method for determining the status of fish stocks in the Southeast Region. SEDAR is a three-step process including: (1) Data Workshop; (2) Assessment Process utilizing webinars; and (3) Review Workshop. The product of the Data Workshop is a data report which compiles and evaluates potential datasets and recommends which datasets are appropriate for assessment analyses. The product of the Assessment Process is a stock assessment report which describes the fisheries, evaluates the status of the stock, estimates biological benchmarks, projects future population conditions, and recommends research and monitoring needs. The assessment is independently peer reviewed at the Review Workshop. The product of the Review Workshop is a Summary documenting panel opinions regarding the strengths and weaknesses of the stock assessment and input data. Participants for SEDAR Workshops are appointed by the Gulf of Mexico, South Atlantic, and Caribbean Fishery Management Councils and NOAA Fisheries Southeast Regional Office, Highly Migratory Species Management Division, and Southeast Fisheries Science Center. Participants include: data collectors and database managers; stock assessment scientists, biologists, and researchers; constituency representatives including fishermen, environmentalists, and non-governmental organizations (NGOs); international experts; and staff of Councils, Commissions, and state and federal agencies.
The items of discussion at the SEDAR 66 South Atlantic Tilefish Assessment Webinar II are as follows:
Although non-emergency issues not contained in this agenda may come before this group for discussion, those issues may not be the subject of formal action during this meeting. Action will be restricted to those issues specifically identified in this notice and any issues arising after publication of this notice that require emergency action under section 305(c) of the Magnuson-Stevens Fishery Conservation and Management Act, provided the public has been notified of the intent to take final action to address the emergency.
This meeting is accessible to people with disabilities. Requests for auxiliary aids should be directed to the SAFMC office (see
The times and sequence specified in this agenda are subject to change.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; receipt of application.
Notice is hereby given that Ed Charles, Silverback Films, 1 St. Augustine's Yard, Gaunts Lane, Bristol, BS1 5DE, United Kingdom, has applied in due form for a permit to conduct commercial or educational photography on marine mammals.
Written, telefaxed, or email comments must be received on or before February 8, 2021.
These documents are available upon written request via email to
Written comments on this application should be submitted via email to
Those individuals requesting a public hearing should submit a written request via email to
Jordan Rutland or Shasta McClenahan, (301) 427-8401.
The subject permit is requested under the authority of the Marine Mammal Protection Act of 1972, as amended (MMPA; 16 U.S.C. 1361
The applicant proposes to film marine mammals in California to obtain footage for a Netflix documentary series on the migration of gray whales (
In compliance with the National Environmental Policy Act of 1969 (42 U.S.C. 4321
Concurrent with the publication of this notice in the
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of public meeting.
The New England Fishery Management Council (Council, NEFMC) will hold a three-day meeting to consider actions affecting New England fisheries in the exclusive economic zone (EEZ). Due to federal and state travel restrictions and updated guidance from the Centers for Disease Control and Prevention related to COVID-19, this meeting will be conducted entirely by webinar.
The webinar meeting will be held on Tuesday, Wednesday, and Thursday, January 26, January 27, and January 28, 2021, beginning at 9 a.m. each day. The first day will start off with a meeting of the Council's Groundfish Committee. When the committee concludes its business and adjourns, the full Council will convene its January 2021 meeting.
All meeting participants and interested parties can register to join the webinar at
Thomas A. Nies, Executive Director, New England Fishery Management Council; telephone: (978) 465-0492, ext. 113.
The day will begin with a meeting of the Council's Groundfish Committee, which will: (1) Receive the Groundfish Advisory Panel's latest report; (2) discuss and vote on the last component of Framework Adjustment 61—a proposed universal sector exemption to allow fishing for redfish; (3) receive the Recreational Advisory Panel's latest report; (4) discuss and develop recommendations on fishing year 2021 recreational measures for Gulf of Maine cod and Gulf of Maine haddock; (5) receive a summary of public feedback on developing a strawman proposal for a potential limited entry program for party/charter vessels in the recreational groundfish fishery plus discuss the proposal and next steps; (6) receive an update on work to revise acceptable biological catch (ABC) control rules for groundfish stocks; (7) receive an update on Cod Stock Structure Working Groups; and (8) discuss other business as needed.
Following the lunch break, the Groundfish Committee will continue to work through its agenda. Immediately after the committee adjourns, the full Council will convene to discuss the Groundfish Committee Report and: (1) Take final action on a universal sector exemption to allow fishing for redfish, which is part of Framework Adjustment 61 to the Northeast Multispecies Fishery Management Plan (FMP), and vote to submit the framework to NMFS; and (2) take action on any other issues resulting from Groundfish Committee recommendations. After this discussion, the Council will adjourn for the day.
After introductions and brief announcements, the Council will receive reports on recent activities from its Chairman and Executive Director, NMFS's Greater Atlantic Regional Fisheries Office (GARFO) Regional Administrator, the Northeast Fisheries Science Center (NEFSC) Director, the Mid-Atlantic Fishery Management Council liaison, staff from the Atlantic States Marine Fisheries Commission (ASMFC), and representatives from NOAA General Counsel, NOAA's Office of Law Enforcement, the U.S. Coast Guard, and NMFS's Highly Migratory Species Advisory Panel. Next, the Council will hear from the Scallop Committee and receive a brief overview of 2020 Gulf of Maine scallop survey results. Then, the Council will take final action on Framework Adjustment 33 to the Atlantic Sea Scallop FMP, which contains 2021 fishery specifications, 2020 default specifications, measures to mitigate impacts on Georges Bank yellowtail flounder and northern windowpane flounder, plus other measures. Finally, the Council may discuss adding listening or scoping sessions for a limited access leasing program to its list of 2021 scallop priorities. If it does so, the Council also may consider deleting a previously approved scallop priority in exchange.
Following the lunch break, the Council will receive a brief Ecosystem-Based Fishery Management (EBFM) progress report on steps needed to conduct informational workshops about EBFM using public outreach materials, focusing on potential application to a Georges Bank example Fishery Ecosystem Plan (eFEP). The Council then will hear from NEFSC's Northeast Fishery Monitoring and Research Division, which will provide an overview of (1) current division organization; (2) the status of ongoing responsibilities; (3) at-sea monitoring and observer program activities, funding status, and impacts due to COVID-19; and (4) a cooperative research update. Next, the Council will receive a presentation on the Science Center's cost survey for commercial fishing businesses, including: (1) An overview of survey methods and data collected to date; (2) a discussion on challenges and opportunities; and (3) efforts to solicit industry feedback while planning for next cost survey. The Council will close out the day with a report on the Northeast Trawl Advisory Panel's January 14, 2021 meeting.
The Council will begin the third day of its meeting with a NEFSC presentation on the peer reviewed results of the Index-Based Methods and Control Rules 2020 Research Track Assessment. Next, the Council will discuss small-mesh Northeast multispecies (whiting). First, the Council will take final action on small-mesh multispecies specifications for the 2021-23 fishing years. Second, the Council may discuss adding a 2021 whiting priority to (1) analyze factors for why the northern whiting fishery is not achieving optimum yield (OY), and (2) recommend measures to allow greater resource utilization. The Council also may consider deleting a previously approved whiting priority in exchange for adding a new one if it takes action. Following this discussion, members of the public will have the opportunity to speak during an open comment period on issues that relate to Council business but are not included on the published agenda for this meeting. The Council asks the public to limit remarks to 3-5 minutes. These comments will be received through the webinar. A guide for how to publicly comment through the webinar is available on the Council website at
Although non-emergency issues not contained on this agenda may come before the Council for discussion, those issues may not be the subject of formal action during this meeting. Council action will be restricted to those issues specifically listed in this notice and any issues arising after publication of this notice that require emergency action under section 305(c) of the Magnuson-Stevens Fishery Conservation and Management Act, provided the public has been notified of the Council's intent to take final action to address the emergency. The public also should be aware that the meeting will be recorded. Consistent with 16 U.S.C. 1852, a copy of the recording is available upon request.
This meeting is being conducted entirely by webinar. Requests for auxiliary aids should be directed to Thomas A. Nies (see
16 U.S.C. 1801
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; receipt of application for a Letter of Authorization; request for comments and information.
NMFS has received a request from the U.S. Navy (Navy) for authorization to take marine mammals incidental to training activities in the Gulf of Alaska (GOA) Temporary Maritime Activities Area (TMAA) Study Area for a period of seven years, from April 2022 through April 2029. Pursuant to regulations implementing the Marine Mammal Protection Act (MMPA), NMFS is announcing receipt of the Navy's request for the development and implementation of regulations governing the incidental taking of marine mammals. NMFS invites the public to provide information, suggestions, and comments on the Navy's application and request.
Comments and information must be received no later than January 29, 2021.
Comments on the applications should be addressed to Jolie Harrison, Chief, Permits and Conservation Division, Office of Protected Resources, National Marine Fisheries Service. Comments should be sent to
Leah Davis, Office of Protected Resources, NMFS, (301) 427-8401. An electronic copy of the Navy's application may be obtained online at:
Sections 101(a)(5)(A) and (D) of the 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).
The National Defense Authorization Act (NDAA) for Fiscal Year 2004 (Pub. L. 108-136) removed the “small numbers” and “specified geographical region” limitations and amended the definition of “harassment” as it applies to a “military readiness activity” to read as follows (Section 3(18)(B) of the MMPA): (i) Any act that injures or has the significant potential to injure a marine mammal or marine mammal stock in the wild (Level A Harassment); or (ii) Any act that disturbs or is likely to disturb a marine mammal or marine mammal stock in the wild by causing disruption of natural behavioral patterns, including, but not limited to, migration, surfacing, nursing, breeding, feeding, or sheltering, to a point where such behavioral patterns are abandoned or significantly altered (Level B Harassment). On August 13, 2018, the
On October 9, 2020, NMFS received an adequate and complete application from the Navy requesting authorization for take of marine mammals, by Level A and Level B harassment incidental to training (categorized as military readiness activities) from the use of active sonar and other transducers and explosives (occurring at or near the surface of the water) in the TMAA Study Area. The requested regulations would be valid for seven years, from 2022 through 2029.
This will be the third time NMFS has promulgated incidental take regulations pursuant to the MMPA relating to similar military readiness activities in the GOA TMAA, following those effective from May 4, 2011 to May 4, 2016 (76 FR 25479; May 4, 2011) and from April 26, 2017 to April 26, 2022 (82 FR 19530; April 27, 2017).
The TMAA Study Area is a temporary area established in conjunction with the Federal Aviation Administration that is a surface, undersea space, and airspace maneuver area within the GOA for ships, submarines, and aircraft to conduct required training activities. As depicted in Figure 1-1 of the Navy's application, the TMAA is a polygon roughly resembling a rectangle oriented from northwest to southeast, approximately 300 nautical miles (nmi) (556 kilometers [km]) in length by 150 nmi (278 km) in width, located south of Montague Island and east of Kodiak Island.
The following types of training activities and exercises, which are classified as military readiness activities pursuant to section 315(f) of Public Law 101-314 (16 U.S.C. 703), are included in the specified activity described in the Navy's application: Air warfare, surface warfare, anti-submarine warfare (ASW), electronic warfare, Naval Special Warfare, strike warfare, and support operations.
The Navy's application includes proposed mitigation measures for marine mammals that would be implemented during training activities in the TMAA Study Area (see Section 11 of the Navy's application). Proposed procedural mitigation measures and geographic mitigation areas generally include: (1) The use of Lookouts to observe for biological resources and communicate the need for mitigation implementation; (2) powerdowns, shutdowns, and delay of starts to avoid exposure of marine mammals to high levels of sound or explosive blasts more likely to result in injury or more serious behavioral disruption; and (3) limiting the use of active sonar or explosives in certain biologically important areas to reduce the probability or severity of impacts when they are more likely to contribute to fitness impacts (see Figure 11-1 of the Navy's application).
The Navy also proposes to undertake monitoring and reporting efforts to track compliance with incidental take authorizations and to help investigate the effectiveness of implemented mitigation measures in the TMAA Study Area. This includes Adaptive Management, the Integrated Comprehensive Monitoring Program, the Strategic Planning Process, and Annual Monitoring and Activity Reports. As an example, under the Integrated Comprehensive Monitoring Program, the monitoring relating to the effects of Navy training activities on protected marine species are designed to increase the understanding of the likely occurrence of marine mammals in the vicinity of the action (
Interested persons may submit information, suggestions, and comments concerning the Navy's request (see ADDRESSES). NMFS will consider all information, suggestions, and comments related to the request during the development of proposed regulations governing the incidental taking of marine mammals by the Navy, if appropriate.
Committee for Purchase From People Who Are Blind or Severely Disabled.
Proposed deletions from the Procurement List.
The Committee is proposing to delete product(s) from the Procurement List that were furnished by nonprofit agencies employing persons who are blind or have other severe disabilities.
Comments must be received on or before: February 07, 2021.
Committee for Purchase From People Who Are Blind or Severely Disabled, 1401 S Clark Street, Suite 715, Arlington, Virginia, 22202-4149.
For further information or to submit comments contact: Michael R. Jurkowski, Telephone: (703) 603-2117, Fax: (703) 603-0655, or email
This notice is published pursuant to 41 U.S.C. 8503 (a)(2) and 41 CFR 51-2.3. Its purpose is to provide interested persons an opportunity to submit comments on the proposed actions.
The following product(s) are proposed for deletion from the Procurement List:
Council on Environmental Quality.
Notice of online portal for agency guidance documents.
In accordance with Executive Order (E.O.) 13891, “Promoting the Rule of Law Through Improved Agency Guidance Documents,” dated October 9, 2019, and Office of Management and Budget (OMB) Memorandum M-20-02, dated October 31, 2019, the Council on Environmental Quality (CEQ) is providing notice of where the public may access CEQ guidance documents.
The portal may be found at
Amy B. Coyle, Deputy General Counsel, Council on Environmental Quality, 730 Jackson Place NW, Washington, DC 20503, 202-395-5750,
E.O. 13891, “Promoting the Rule of Law Through Improved Agency Guidance Documents,”
CEQ will also include on its website portal a link to its final rule establishing CEQ's internal agency procedures for issuing guidance documents, required by section 4 of E.O. 13891. The final rule relating to CEQ's guidance document procedures is published elsewhere in this issue of the
42 U.S.C. 4321-4347; 42 U.S.C. 4371-4375; and E.O. 13891, 84 FR 55235.
Federal Student Aid (FSA), Department of Education (ED).
Notice.
In accordance with the Paperwork Reduction Act of 1995, ED is proposing a revision of a currently approved collection.
Interested persons are invited to submit comments on or before February 8, 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 Beth Grebeldinger, (202) 377-4018.
The Department of Education (ED), in accordance with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3506(c)(2)(A)), provides the general public and Federal agencies with an opportunity to comment on proposed, revised, and continuing collections of information. This helps the Department assess the impact of its information collection requirements and minimize the public's reporting burden. It also helps the public understand the Department's information collection requirements and provide the requested data in the desired format. ED is soliciting comments on the proposed information collection request (ICR) that is described below. The Department of Education is especially interested in public comment addressing the following issues: (1) Is this collection necessary to the proper functions of the Department; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the Department enhance the quality, utility, and clarity of the information to be collected; and (5) how might the Department minimize the burden of this collection on the respondents, including through the use of information technology. Please note
Office of Elementary and Secondary Education, Department of Education (ED).
Notice.
In accordance with the Paperwork Reduction Act of 1995, ED is proposing an extension without change of a currently approved collection.
Interested persons are invited to submit comments on or before March 9, 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 Benjamin Starr, 202-245-8116.
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.
U.S. Election Assistance Commission.
Sunshine Act notice; notice of public roundtable agenda.
Roundtable discussion: 2020 Elections lessons learned.
Wednesday, January 27, 2021, 1:30 p.m.-3:30 p.m. Eastern.
The roundtable discussion is open to the public and will be livestreamed on the U.S. Election Assistance Commission YouTube Channel:
Kristen Muthig, Telephone: (202) 897-9285, Email:
The full agenda will be posted in advance on the EAC website:
U.S. Election Assistance Commission.
Notice of public quarterly conference call for EAC Board of Advisors.
Board of Advisors quarterly meeting (virtual).
Wednesday, January 13, 2021, 2:00 p.m.-3:00 p.m. EDT.
Virtual via Zoom link.
The Board of Advisors quarterly meeting is open to the public and will be livestreamed on the U.S. Election Assistance Commission YouTube Channel:
Phillip Olaya, Telephone: (202) 336-3980, Email:
For assistance joining the event: Contact the host, Steve Uyak at
The full agenda will be posted in advance on the EAC website:
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), Idaho Cleanup Project (ICP). The Federal Advisory Committee Act requires that public notice of this online virtual meeting be announced in the
Thursday, January 28, 2021; 8:00 a.m.-2:30 p.m.
The opportunities for public comment are at 10:00 a.m. and 1:15 p.m. MT.
This time is subject to change; please contact the Federal Coordinator (below) for confirmation of times prior to the meeting.
This meeting will be held virtually via Zoom. To attend, please contact Jordan Davies, ICP Citizens Advisory Board (CAB) support staff, by email
Danielle Miller, Federal Coordinator, U.S. Department of Energy, Idaho Operations Office, 1955 Fremont Avenue, MS-1203, Idaho Falls, Idaho 83415. Phone (208) 526-5709; or email:
Office of Electricity, Department of Energy.
Notice of open meeting.
This notice announces an open meeting of the Electricity Advisory Committee. The Federal Advisory Committee Act requires that public notice of these meetings be announced in the
Wednesday, February 3, 2021; 11:45 a.m.-5:10 p.m. EST; Thursday, February 4, 2021; 11:45 a.m.-5:10 p.m. EST.
Due to ongoing precautionary measures surrounding the spread of COVID-19, the February meeting of the EAC will be held via WebEx video and teleconference. In order to track all participants, the Department is requiring that those wishing to attend register for the meeting here:
Christopher Lawrence, Designated Federal Officer, Office of Electricity, U.S. Department of Energy, Washington, DC 20585; Telephone: (202) 586-5260 or Email:
The meeting agenda may change to accommodate EAC business. For EAC agenda updates, see the EAC website at:
National Nuclear Security Administration, U.S. Department of Energy.
Submission for Office of Management and Budget (OMB) review; comment request.
The Department of Energy (DOE) has submitted a request to the OMB for the extension of information collection authorities under the provisions of the Paperwork Reduction Act of 1995. DOE requests a three-year extension of its authority to collection information for its American Assured Fuel Supply Program, OMB Control Number 1910-5173. The proposed collection is necessary for DOE to determine the eligibility of the applicants to access low enriched uranium (LEU) in the American Assured Fuel Supply (AAFS).
Comments regarding this collection must be received on or before February 8, 2021. If you anticipate difficulty in submitting comments, but find it difficult to do so within the period of time allowed by this notice, please advise the OMB Desk Officer of your intention to make a submission as soon as possible. The Desk Officer may be telephoned at (202) 395-4718.
Written comments and recommendations for the proposed information collection should be sent
For other questions, contact Jessica Norles, Foreign Affairs Specialist, Office of Nonproliferation and Arms Control, National Nuclear Security Administration, U.S. Department of Energy, 1000 Independence Ave. SW, Washington, DC 20585,
DOE published in the
This document of the Department of Energy was signed on December 16, 2020, by Brent K. Park, Deputy Administrator for Defense Nuclear Nonproliferation, National Nuclear Security Administration, pursuant to delegated authority from the Secretary of Energy. That document with the original signature and date is maintained by DOE. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DOE
Take notice that the Commission received the following electric corporate filings:
Take notice that the Commission received the following electric rate filings:
The filings are accessible in the Commission's eLibrary system (
Any person desiring to intervene or protest in any of the above proceedings 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:
On December 30, 2020, the Commission issued an order in Docket No. EL21-23-000, pursuant to section 206 of the Federal Power Act (FPA), 16 U.S.C. 824e, instituting an investigation into whether Startrans IO, L.L.C.'s proposed rate reduction to its transmission revenue requirement and proposed revisions to its transmission owner tariff are unjust, unreasonable, unduly discriminatory, or preferential, or otherwise unlawful.
The refund effective date in Docket No. Docket No. EL21-23-000, established pursuant to section 206(b) of the FPA, will be the date of publication of this notice in the
Any interested person desiring to be heard in Docket No. EL21-23-000 must file a notice of intervention or motion to intervene, as appropriate, with the Federal Energy Regulatory Commission, in accordance with Rule 214 of the Commission's Rules of Practice and Procedure, 18 CFR 385.214 (2020), within 21 days of the date of issuance of the order.
In addition to publishing the full text of this document in the
The Commission strongly encourages electronic filings of comments, protests and interventions in lieu of paper using the “eFile” link at
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:
This is a supplemental notice in the above-referenced proceeding of Wallingford Renewable Energy 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 25, 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
The staff of the Federal Energy Regulatory Commission (FERC or Commission) will prepare an environmental document that will discuss the environmental impacts of the Delta Lateral Project involving construction and operation of facilities by Kern River Gas Transmission Company (Kern River) in Millard County, Utah. The Commission will use this environmental document in its decision-making process to determine whether the project is in the public convenience and necessity.
This notice announces the opening of the scoping process the Commission will use to gather input from the public and interested agencies regarding the project. As part of the National Environmental Policy Act (NEPA) review process, the Commission takes into account concerns the public may have about proposals and the environmental impacts that could result from its action whenever it considers the issuance of a Certificate of Public Convenience and Necessity. This gathering of public input is referred to as “scoping.” The main goal of the scoping process is to focus the analysis in the environmental document on the important environmental issues. Additional information about the Commission's NEPA process is described below in the
By this notice, the Commission requests public comments on the scope of issues to address in the environmental document. To ensure that your comments are timely and properly recorded, please submit your comments so that the Commission receives them in Washington, DC on or before 5:00 p.m. Eastern Time on February 3, 2021. Comments may be submitted in written form. Further details on how to submit comments are provided in the
Your comments should focus on the potential environmental effects, reasonable alternatives, and measures to avoid or lessen environmental impacts. Your input will help the Commission staff determine what issues they need to evaluate in the environmental document. Commission staff will consider all written comments during the preparation of the environmental document.
If you submitted comments on this project to the Commission before the opening of this docket on July 1, 2020, you will need to file those comments in Docket No. PF20-4-000 to ensure they are considered.
This notice is being sent to the Commission's current environmental mailing list for this project. State and local government representatives should notify their constituents of this planned project and encourage them to comment on their areas of concern.
If you are a landowner receiving this notice, a pipeline company representative may contact you about the acquisition of an easement to construct, operate, and maintain the planned facilities. The company would seek to negotiate a mutually acceptable easement agreement. You are not required to enter into an agreement. However, if the Commission approves the project, the Natural Gas Act conveys the right of eminent domain to the company. Therefore, if you and the company do not reach an easement agreement, the pipeline company could initiate condemnation proceedings in court. In such instances, compensation would be determined by a judge in accordance with state law. The Commission does not subsequently grant, exercise, or oversee the exercise of that eminent domain authority. The courts have exclusive authority to handle eminent domain cases; the Commission has no jurisdiction over these matters.
A fact sheet prepared by the FERC entitled “An Interstate Natural Gas
There are three methods you can use to submit your written comments to the Commission. Please carefully follow these instructions so that your comments are properly recorded. The Commission encourages electronic filing of comments and has staff available to assist you at (866) 208-3676 or
(1) You can file your comments electronically using the
(2) You can 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 Commission. Be sure to reference the project docket number (PF20-4-000) on your letter. Submissions sent via the U.S. Postal Service must be addressed to: Kimberly D. Bose, Secretary, Federal Energy Regulatory Commission, 888 First Street NE, Room 1A, Washington, DC 20426. Submissions sent via any other carrier must be addressed to: Kimberly D. Bose, Secretary, Federal Energy Regulatory Commission, 12225 Wilkins Avenue, Rockville, MD 20852.
Additionally, the Commission offers a free service called eSubscription, which makes it easy to stay informed of all issuances and submittals regarding the dockets/projects to which you subscribe. These instant email notifications are the fastest way to receive notification and provide a link to the document files which can reduce the amount of time you spend researching proceedings. Go to
Kern River plans to construct and operate an approximately 35.84-mile-long, 24-inch-diameter pipeline; a delivery meter station located near Delta, Utah; and appurtenant facilities including a block valve, taps, and a launcher and receiver in Millard County, Utah. The planned Delta Lateral Project would provide about 140 million standard cubic feet of natural gas per day to the Intermountain Power Agency's Intermountain Power Project.
The Delta Lateral Project would consist of the following facilities:
• A 35.84-mile-long, 24-inch-diameter natural gas pipeline;
• a delivery meter station;
• two mainline taps with automated lateral inlet valve assemblies;
• an in-line inspection device (
• an automated lateral block valve assembly; and
• ancillary facilities.
The general location of the project facilities is shown in appendix 1.
Construction of the planned facilities would disturb about 538 acres of land for the pipeline and aboveground facilities. Following construction, Kern River would maintain about 218 acres for permanent operation of the project's facilities; the remaining acreage would be restored and revert to former uses. About 50 percent of the planned pipeline route parallels existing pipeline, utility, or road rights-of-way.
Any environmental document issued by Commission staff will discuss impacts that could occur as a result of the construction and operation of the planned project under the relevant general resource areas:
• Geology and soils;
• water resources and wetlands;
• vegetation and wildlife;
• threatened and endangered species;
• cultural resources;
• land use;
• air quality and noise; and
• reliability and safety.
Commission staff will also evaluate reasonable alternatives to the planned project or portions of the project and make recommendations on how to lessen or avoid impacts on the various resource areas. Your comments will help Commission staff identify and focus on the issues that might have an effect on the human environment and potentially eliminate others from further study and discussion in the environmental document.
Although no formal application has been filed, Commission staff have already initiated a NEPA review under the Commission's pre-filing process. The purpose of the pre-filing process is to encourage early involvement of interested stakeholders and to identify and resolve issues before the Commission receives an application. As part of the pre-filing review, Commission staff will contact federal and state agencies to discuss their involvement in the scoping process and the preparation of the environmental document.
If a formal application is filed, Commission staff will then determine whether to prepare an Environmental Assessment (EA) or an Environmental Impact Statement (EIS). The EA or the EIS will present Commission staff's independent analysis of the environmental issues. If Commission staff prepares an EA, a
With this notice, the Commission is asking agencies with jurisdiction by law and/or special expertise with respect to the environmental issues related to this project to formally cooperate in the preparation of the environmental document.
In accordance with the Advisory Council on Historic Preservation's implementing regulations for section 106 of the National Historic Preservation Act, the Commission is using this notice to initiate consultation with the applicable State Historic Preservation Office(s), and to solicit their views and those of other government agencies, interested Indian tribes, and the public on the project's potential effects on historic properties.
The environmental mailing list includes federal, state, and local government representatives and agencies; elected officials; environmental and public interest groups; Native American Tribes; other interested parties; and local libraries and newspapers. This list also includes all affected landowners (as defined in the Commission's regulations) who are potential right-of-way grantors, whose property may be used temporarily for project purposes, or who own homes within certain distances of aboveground facilities, and anyone who submits comments on the project and includes a mailing address with their comments. Commission staff will update the environmental mailing list as the analysis proceeds to ensure that Commission notices related to this environmental review are sent to all individuals, organizations, and government entities interested in and/or potentially affected by the planned project.
If you need to make changes to your name/address, or if you would like to remove your name from the mailing list, please return the attached “Mailing List Update Form” (appendix 2).
Once Kern River files its application with the Commission, you may want to become an “intervenor” which is an official party to the Commission's proceeding. Only intervenors have the right to seek rehearing of the Commission's decision and be heard by the courts if they choose to appeal the Commission's final ruling. An intervenor formally participates in the proceeding by filing a request to intervene pursuant to Rule 214 of the Commission's Rules of Practice and Procedures (18 CFR 385.214). Motions to intervene are more fully described at
Additional information about the project is available from the Commission's Office of External Affairs, at (866) 208-FERC, or on the FERC website (
Public sessions or site visits will be posted on the Commission's calendar located at
This is a supplemental notice in the above-referenced proceeding of Resi Station, 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 24, 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
Environmental Protection Agency (EPA).
Notice.
The Environmental Protection Agency (EPA) is announcing the availability of the final Toxic Substances Control Act (TSCA) risk evaluation of 1, 4-dioxane. The purpose of conducting risk evaluations under TSCA is to determine whether a chemical substance presents an unreasonable risk of injury to health or the environment under the conditions of use, including an unreasonable risk to a relevant potentially exposed or susceptible subpopulation, without consideration of costs or other nonrisk factors. EPA has determined that specific conditions of use of 1, 4-dioxane present an unreasonable risk of injury to health or the environment. For those conditions of use for which EPA has found an unreasonable risk, EPA must take regulatory action to address that unreasonable risk through risk management measures enumerated in TSCA. EPA has also determined that specific conditions of use do not present an unreasonable risk of injury to health or the environment. For those conditions of use for which EPA has found no unreasonable risk of injury to health or the environment, the Agency's determination is a final Agency action and is issued via order in the risk evaluation.
The docket for this action, identified by docket identification (ID) number EPA-HQ-OPPT-2019-0238, is available online at
Due to the public health concerns related to COVID-19, the EPA Docket Center (EPA/DC) and Public Reading Room are closed to visitors with limited exceptions. The EPA/DC staff continue to provide remote customer service via email, phone, and webform. For the latest status information on EPA/DC services and docket access, visit
This action is directed to the public in general. This action may be of interest to persons who are or may be interested in risk evaluations of chemical substances under TSCA, 15 U.S.C. 2601
TSCA section 6, 15 U.S.C. 2605, requires EPA to conduct risk evaluations to “determine whether a chemical substance presents an unreasonable risk of injury to health or the environment, without consideration of costs or other nonrisk factors, including an unreasonable risk to a potentially exposed or susceptible subpopulation identified as relevant to the risk evaluation by the Administrator, under the conditions of use.” 15 U.S.C. 2605(b)(4)(A). TSCA sections 6(b)(4)(A) through (H) enumerate the deadlines and minimum requirements applicable to this process, including provisions that provide instruction on chemical substances that must undergo evaluation, the minimum components of a TSCA risk evaluation, and the timelines for public comment and completion of the risk evaluation. TSCA also requires that EPA operate in a manner that is consistent with the best available science, make decisions based on the weight of the scientific evidence and consider the reasonably available information. 15 U.S.C. 2625(h), (i), and (k). TSCA section 6(i) directs that a determination of “no unreasonable risk” shall be issued by order and considered to be a final Agency action, while a determination of “unreasonable risk” is not considered to be a final Agency action. 15 U.S.C. 2605(i).
The statute identifies the minimum components for all chemical substance risk evaluations. For each risk evaluation, EPA must publish a document that outlines the scope of the risk evaluation to be conducted, which includes the hazards, exposures, conditions of use, and the potentially exposed or susceptible subpopulations that EPA expects to consider. 15 U.S.C. 2605(b)(4)(D). The statute further provides that each risk evaluation must also: (1) Integrate and assess available information on hazards and exposures for the conditions of use of the chemical substance, including information that is relevant to specific risks of injury to health or the environment and information on relevant potentially exposed or susceptible subpopulations; (2) describe whether aggregate or sentinel exposures were considered and the basis for that consideration; (3) take into account, where relevant, the likely duration, intensity, frequency, and number of exposures under the conditions of use; and (4) describe the weight of the scientific evidence for the identified hazards and exposures. 15 U.S.C. 2605(b)(4)(F)(i) through (ii) and (iv) through (v). Each risk evaluation
The statute requires that the risk evaluation process be completed within a specified timeframe and provide an opportunity for public comment on a draft risk evaluation prior to publishing a final risk evaluation. 15 U.S.C. 2605(b)(4).
Subsection 5.4.1 of the final risk evaluation for 1, 4-dioxane constitutes the order required under TSCA section 6(i)(1), and the “no unreasonable risk” determinations in that subsection are considered to be a final Agency action effective on the date of issuance of the order. In conducting risk evaluations, “EPA will determine whether the chemical substance presents an unreasonable risk of injury to health or the environment under each condition of use within the scope of the risk evaluation . . . .” 40 CFR 702.47. Under EPA's implementing regulations, “[a] determination by EPA that the chemical substance, under one or more of the conditions of use within the scope of the risk evaluation, does not present an unreasonable risk of injury to health or the environment will be issued by order and considered to be a final Agency action, effective on the date of issuance of the order.” 40 CFR 702.49(d). For purposes of TSCA section 19(a)(1)(A), the date of issuance of the TSCA section 6(i)(1) order for 1, 4-dioxane shall be at 1:00 p.m. Eastern time (standard or daylight, as appropriate) on the date that is two weeks after the date when this notice is published in the
EPA is announcing the availability of the risk evaluation of the chemical substance identified in Unit II. In this risk evaluation, EPA has made unreasonable risk determinations on some of the conditions of use within the scope of the risk evaluation for this chemical. For those conditions of use for which EPA has found an unreasonable risk of injury to health or the environment, EPA must initiate regulatory action to address those risks through risk management measures enumerated in 15 U.S.C. 2605(a).
EPA also is announcing the availability of the information required to be provided publicly with each risk evaluation, which is available online at
• The scope document and problem formulation (in Docket ID No. EPA-HQ-OPPT-2016-0723);
• Draft risk evaluation, supplemental analysis to the draft risk evaluation, and final risk evaluation (in Docket ID No. EPA-HQ-OPPT-2019-0238);
• All notices, determinations, findings, consent agreements, and orders (in Docket ID No. EPA-HQ-OPPT-2019-0238);
• Any information required to be provided to the Agency under 15 U.S.C. 2603 (in Docket ID No. EPA-HQ-OPPT-2016-0723 and Docket ID No. EPA-HQ-OPPT-2019-0238);
• A nontechnical summary of the risk evaluation (in Docket ID No. EPA-HQ-OPPT-2019-0238);
• A list of the studies, with the results of the studies, considered in carrying out each risk evaluation (Risk Evaluation for 1, 4-dioxane) in Docket ID No. EPA-HQ-OPPT-2019-0238);
• The final peer review report, including the response to peer review and public comments received during peer review (in Docket ID No. EPA-HQ-OPPT-2019-0238); and
• Response to public comments received on the draft scope, the draft risk evaluation and the supplemental analysis to the draft risk evaluation (in Docket ID No. EPA-HQ-OPPT-2019-0238).
The risk evaluation process is the second step in EPA's existing chemical review process under TSCA, following prioritization and before risk management. As this chemical is one of the first ten chemical substances undergoing risk evaluation, the chemical substance was not required to go through prioritization (81 FR 91927, December 19, 2016) (FRL-9956-47). The purpose of conducting risk evaluations is to determine whether a chemical substance presents an unreasonable risk of injury to health or the environment under the conditions of use, including an unreasonable risk to a relevant potentially exposed or susceptible subpopulation. As part of this process, EPA must evaluate both hazard and exposure, not consider costs or other nonrisk factors, use reasonably available information and approaches in a manner that is consistent with the requirements in TSCA for the use of the best available science, and ensure decisions are based on the weight of the scientific evidence.
The specific risk evaluation process that EPA has established by rule to implement the statutory process is set out in 40 CFR part 702 and summarized on EPA's website at
Prior to the publication of this final risk evaluation, a draft risk evaluation was subject to peer review and public comment and a supplemental analysis to the draft risk evaluation was subject to public comment. EPA reviewed the report from the peer review committee and public comments and has amended the risk evaluation in response to these comments as appropriate. The public comments, peer review report, and EPA's response to comments is in Docket ID No. EPA-HQ-OPPT-2019-0238. Prior to the publication of the draft risk evaluation, EPA made available the scope and problem formulation, and solicited public input on uses and exposure. EPA's documents and the public comments are in Docket ID No. EPA-HQ-OPPT-2016-0723. Additionally, information about the scope, problem formulation, and draft risk evaluation phases of the TSCA risk evaluation for this chemical is available at EPA's website at
1,4-dioxane is used primarily as a solvent in a variety of commercial and industrial applications like in the manufacture of other chemicals, as a processing aid, a laboratory chemical, and in adhesives and sealants. 2016 CDR data shows that there were two manufacturers producing or importing 1,059,980 pounds of 1,4-dioxane in the U.S. in 2015.
15 U.S.C. 2601
Section 309(a) of the Clean Air Act requires that EPA make public its comments on EISs issued by other Federal agencies. EPA's comment letters on EISs are available at:
The companies listed in this notice have given notice under section 4 of the Bank Holding Company Act (12 U.S.C. 1843) (BHC Act) and Regulation Y, (12 CFR part 225) to engage de novo, or to acquire or control voting securities or assets of a company, including the companies listed below, that engages either directly or through a subsidiary or other company, in a nonbanking activity that is listed in § 225.28 of Regulation Y (12 CFR 225.28) or that the Board has determined by Order to be closely related to banking and permissible for bank holding companies. Unless otherwise noted, these activities will be conducted throughout the United States.
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
Unless otherwise noted, comments regarding the 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 February 8, 2021.
A. Federal Reserve Bank of Atlanta (Kathryn Haney, Assistant Vice President) 1000 Peachtree Street, NE, Atlanta, Georgia 30309. Comments can also be sent electronically to
1.
The notificants listed below have applied under the Change in Bank Control Act (Act) (12 U.S.C. 1817(j)) and § 225.41 of the Board's Regulation Y (12 CFR 225.41) to acquire shares of a bank or bank holding company. The factors that are considered in acting on the applications are set forth in paragraph 7 of the Act (12 U.S.C. 1817(j)(7)).
The 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 25, 2021.
1.
In addition, the Rivlin Trusts, Thomas M. Fishback, as trustee of the Oliver V. Fishback Trust, Patricia S. Fishback, as trustee of the Robert E. Fishback GRAT 2C Trust, Paul V. Fishback, as trustee of the PVF FFC Holdings Trust, and Van D. Fishback, as trustee of the Van D. Fishback Revocable FFC Holdings Trust, all of Brookings, South Dakota; and James N. Fishback, as trustee of the JNF FFC Holdings Trust, both of Sioux Falls, South Dakota; to join the Fishback family shareholder group, a group acting in concert, to retain voting shares of Fishback Financial Corporation and thereby indirectly retain voting shares of First Bank & Trust.
Federal Trade Commission.
Proposed consent agreement; request for comment.
The consent agreement in this matter settles alleged violations of federal law prohibiting unfair or deceptive acts or practices. The attached Analysis to Aid Public Comment describes both the allegations in the complaint and the terms of the consent order—embodied in the consent agreement—that would settle these allegations.
Comments must be received on or before February 8, 2021.
Interested parties may file comments online or on paper by following the instructions in the Request for Comment part of the
Julia Solomon Ensor (202-326-2377), Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue NW, Washington, DC 20580.
Pursuant to Section 6(f) of the Federal Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34, notice is hereby given that the above-captioned consent agreement containing a consent order to cease and desist, having been filed with and accepted, subject to final approval, by the Commission, has been placed on the public record for a period of thirty (30) days. The following Analysis to Aid Public Comment describes the terms of the consent agreement and the allegations in the complaint. An electronic copy of the full text of the consent agreement package can be obtained from the FTC website, at this web address:
You can file a comment online or on paper. For the Commission to consider your comment, we must receive it on or before February 8, 2021. Write “Chemence, Inc.; File No. X160032” on your comment. Your comment—including your name and your state—will be placed on the public record of this proceeding, including, to the extent practicable, on the
Due to protective measures in response to the COVID-19 pandemic and the agency's heightened security screening, postal mail addressed to the Commission will be subject to delay. We strongly encourage you to submit your comments online through the
If you file your comment on paper, write “Chemence, Inc.; File No. X160032” on your comment and on the envelope, and mail your comment to the following address: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, Suite CC-5610 (Annex D), Washington, DC 20580; or deliver your comment to the following address: Federal Trade Commission, Office of the Secretary, Constitution Center, 400 7th Street SW, 5th Floor, Suite 5610 (Annex D), Washington, DC 20024. If possible, submit your paper comment to the Commission by courier or overnight service.
Because your comment will be placed on the publicly accessible website at
Comments containing material for which confidential treatment is requested must be filed in paper form, must be clearly labeled “Confidential,” and must comply with FTC Rule 4.9(c). In particular, the written request for confidential treatment that accompanies the comment must include the factual and legal basis for the request, and must identify the specific portions of the comment to be withheld from the public record.
Visit the FTC website at
The Federal Trade Commission (“FTC” or “Commission”) has accepted, subject to final approval, an agreement containing a consent order from Chemence, Inc. and James Cooke (“Respondents”).
The proposed consent order has been placed on the public record for thirty (30) days for receipt of comments from interested persons. Comments received during this period will become part of the public record. After thirty (30) days, the Commission will again review the agreement and the comments received, and will decide whether it should withdraw from the agreement or make final the agreement's proposed order.
This matter involves Respondents' advertising, labeling, sale, and distribution of cyanoacrylate “superglue” products as made in the United States. According to the FTC's complaint, Respondents represented that the cyanoacrylate “superglue” products they manufactured and supplied to trade customers were all or virtually all made in the United States. In fact, significant proportions of the chemical inputs, and overall costs, to manufacture Respondents' cyanoacrylate “superglues” are attributable to foreign materials. In numerous instances, foreign materials accounted for more than 80% of materials costs and more than 50% of overall manufacturing costs for these
The proposed consent order contains provisions designed to prevent Respondents from engaging in similar acts and practices in the future. Consistent with the FTC's Enforcement Policy Statement on U.S. Origin Claims, Part I prohibits Respondents from making U.S.-origin claims for their products unless either: (1) The final assembly or processing of the product occurs in the United States, all significant processing that goes into the product occurs in the United States, and all or virtually all ingredients or components of the product are made and sourced in the United States; (2) a clear and conspicuous qualification appears immediately adjacent to the representation that accurately conveys the extent to which the product contains foreign parts, ingredients or components, and/or processing; or (3) for a claim that a product is assembled in the United States, the product is last substantially transformed in the United States, the product's principal assembly takes place in the United States, and United States assembly operations are substantial.
Part II prohibits Respondents from making any country-of-origin claim about a product or service unless the claim is true, not misleading, and Respondents have a reasonable basis substantiating the representation.
Part III prohibits Respondents from providing third parties with the means and instrumentalities to make the claims prohibited in Parts I or II.
Parts IV through VI are monetary provisions. Part IV imposes a judgment of $1,200,000. Part V includes additional monetary provisions relating to collections. Part VI requires Respondents to provide sufficient customer information to enable the Commission to administer consumer redress, if appropriate.
Part VII is a notice provision requiring Respondents to identify and notify certain third-party trade customers of the FTC's action within 30 days after the issuance of the order, or within 30 days of the customer's identification, if identified later. Respondents are also required to submit reports regarding their notification program.
Parts VIII through XI are reporting and compliance provisions. Part VIII requires Respondents to acknowledge receipt of the order, to provide a copy of the order to certain current and future principals, officers, directors, and employees, and to obtain an acknowledgement from each such person that they have received a copy of the order. Part IX requires Respondents to file a compliance report within one year after the order becomes final and to notify the Commission within 14 days of certain changes that would affect compliance with the order. Part X requires Respondents to maintain certain records, including records necessary to demonstrate compliance with the order. Part XI requires Respondents to submit additional compliance reports when requested by the Commission and to permit the Commission or its representatives to interview Respondents' personnel.
Finally, Part XII is a “sunset” provision terminating the order after twenty (20) years, with certain exceptions.
The purpose of this analysis is to aid public comment on the proposed order. It is not intended to constitute an official interpretation of the proposed order or to modify its terms in any way.
By direction of the Commission.
• Made in USA fraud harms both consumers and honest competitors. Yet for decades, FTC Commissioners pursued a no-money, no-fault settlement strategy to tackle this problem, ignoring Congressional authority to penalize bad actors.
• Over the last two years, the Commission has begun to turn the page on its checkered record, obtaining significant judgments for Made in USA fraud and initiating a rulemaking to trigger damages and penalties.
• Today's action against Chemence and a top executive is another step forward in protecting the Made in USA brand and restoring the Commission's law enforcement credibility.
For markets to function fairly, the Federal Trade Commission must be a credible watchdog, ensuring that companies have an incentive to follow the law and adhere to the agency's rules and orders. Corporate defendants that blatantly lie about their products have been able to convince Commissioners that their conduct caused no harm, allowing them to extract settlements with virtually no consequences whatsoever. Robert Pitofsky, who served as a Commissioner and later as the agency's Chairman, described these no-money, no-fault orders as “scandalously weak.”
Longstanding FTC policies recognize that blatant deception harms consumers and diverts sales from honest competitors.
However, there are promising signs that this is changing. One of the best examples of our moving away from lax enforcement is our Made in USA fraud program. Today, the Commission is announcing another action against an established corporate actor, showing we are turning the page on our permissive policy of the past.
Consumers prefer goods that are produced domestically, and they are even willing to pay more for them.
However, for decades, there was bipartisan consensus at the Federal Trade Commission that Made in USA fraud should not be penalized. Even in egregious cases, most matters were resolved with no-money, no-fault settlements, and many violators received nothing more than closing letters. In 1994, Congress authorized the Commission to do more—granting the agency new authority to trigger penalties and damages for Made in USA fraud—but past Commissioners declined to even propose implementing
This lack of deterrence contributed to brazen Made in USA fraud, as seen in some of the Commission's recent cases. In 2018, the FTC sued Patriot Puck, which branded its product as “The Only American Made Hockey Puck.” In fact, according to the Commission's lawsuit, these pucks were made in China.
Even firms that the FTC warned were seemingly undeterred. In 2017, the FTC required iSpring Water Systems to stop mislabeling its products. Last year, iSpring violated this order.
Recently, we have seen how that strategy is changing. iSpring was ordered to pay a civil penalty, and the company admitted that it broke the law. Williams-Sonoma was required to pay $1 million to resolve the Commission's allegations—a small sum, perhaps, for Williams-Sonoma, but a record for the FTC's Made in USA enforcement program. And in July, the Commission
Today's action against Chemence and its top executive marks another turning point for the FTC's enforcement strategy. Chemence is an established player in the adhesives and sealants business. The order announced today imposes real consequences—a major difference from the Commission's past Made in USA settlements.
First, the proposed order requires Chemence to forfeit $1.2 million in revenue stemming from the company's failures. This is another record judgment for the FTC's Made in USA enforcement program, and it represents a sea change from the era of no-money settlements. It is encouraging to see the FTC reducing its reliance on no-money orders, both here and in other program areas.
Second, this order reminds businesses that FTC orders are not suggestions.
Third, the proposed order requires Chemence to notify consumers of this action. Notice confers benefits in cases like this. It helps to erase any competitive advantage a firm realized through deception, and it accords consumers the dignity of knowing what happened. I have long argued we should seek notice in Made in USA and other matters,
Our new approach is a critical step forward for protecting the Made in USA brand, and a model for other FTC enforcement areas. There is more work to do, including finalizing a Made in USA fraud rule, but we are clearly moving in the right direction.
While it is tempting for any government agency to think that the status quo is working well, we do our best work when we engage in self-critical analysis and strive for continuous improvement. I congratulate all of the agency's staff who fought for this outcome, as well as the many stakeholders who have worked with us to turn the page on the policy inherited from our predecessor Commissioners.
Office of Government-wide Policy (OGP), General Services Administration (GSA).
Notice.
GSA is updating the mileage reimbursement rate for privately owned automobiles (POA), airplanes, and motorcycles as required by statute. This information will be available in FTR Bulletin 21-03, which can be found on GSA's website at
For clarification of content, please contact Ms. Cheryl D. McClain-Barnes, Program Analyst, Office of Government-wide Policy, Office of Asset and Transportation Management, at 202-208-4334, or by email at
GSA is required by statute to set the mileage reimbursement rate for privately owned automobiles (POA) as the single standard mileage rate established by the Internal Revenue Service (IRS). The IRS mileage rate for medical or moving purposes is used to determine the POA rate when a Government-furnished automobile is authorized and also represents the privately owned vehicle (POV) standard mileage reimbursement rate for official relocation. Finally, GSA conducts independent reviews of the cost of travel and the operation of privately owned airplanes and motorcycles on an annual basis to determine their corresponding mileage reimbursement rates. These reviews evaluate various factors, such as the cost of fuel, depreciation of the original vehicle cost, maintenance and insurance, state and Federal taxes, and consumer price index data. FTR Bulletin 21-03 establishes and announces the new CY 2021 POV mileage reimbursement rates for official temporary duty and relocation travel. This notice is the only notification to agencies of revisions to the POV mileage rates for official travel and relocation, other than the changes posted on GSA's website at
5 U.S.C. 5707
Government Accountability Office (GAO).
Request for letters of nomination and resumes.
The Balanced Budget Act of 1997 established the Medicare Payment Advisory Commission (MedPAC) and gave the Comptroller General responsibility for appointing its members. GAO is now accepting nominations for MedPAC appointments that will be effective May 2021. Nominations should be sent to the email address listed below. Acknowledgement of submissions will be provided within a week of submission.
Letters of nomination and resumes should be submitted no later than February 12, 2021, to ensure adequate opportunity for review and consideration of nominees prior to appointment.
Submit letters of nomination and resumes to
Gregory Giusto at (202) 512-8268 or
42 U.S.C. 1395b-6.
Centers for Disease Control and Prevention (CDC), Department of Health and Human Services (HHS).
Notice of meeting.
The Centers for Disease Control and Prevention within the Department of Health and Human Services announces the next meeting of the Community Preventive Services Task Force (CPSTF) on February 10-11, 2021.
The meeting will be held on Wednesday, February 10, 2021, from 8:30 a.m. to 6:00 p.m. EDT, and Thursday, February 11, 2021, from 8:30 a.m. to 5:00 p.m. EDT.
The meeting will be held via web conference.
Onslow Smith, Office of the Associate Director for Policy and Strategy; Centers for Disease Control and Prevention, 1600 Clifton Road NE, MS-V-25-5, Atlanta, GA 30329, phone: (404)498-6778, email:
CDC will send web conference information to registrants upon receipt of their registration. All meeting attendees must register by February 3, 2021 to receive the web conference information for the February meeting. CDC will email web conference information from the
To register for the meeting, individuals should send an email to
The meeting agenda is subject to change without notice.
Centers for Disease Control and Prevention (CDC), Department of Health and Human Services (HHS).
Notice of meeting.
In accordance with the Federal Advisory Committee Act, the CDC announces the following meeting for the Board of Scientific Counselors, National Center for Injury Prevention and Control, (BSC, NCIPC). This is a virtual meeting and open to the public, limited only by the number of network conference access available, which is 500. Pre-registration is required by accessing the link at
The meeting will be held on February 16, 2021, from 10:00 a.m. to 4:15 p.m., EST.
Zoom Virtual Meeting. If you would like to attend the virtual meeting, please pre-register by accessing the link at
Individuals registered to provide public comment will be called upon first to speak based on the order of registration, followed by others from the public. All public comments will be limited to two (2) minutes per speaker.
Gwendolyn H. Cattledge, Ph.D., M.S.E.H., Deputy Associate Director for Science, NCIPC, CDC, 4770 Buford Highway NE, Mailstop F-63, Atlanta, Georgia 30341, Telephone: (770) 488-1430, Email:
The Director, Strategic Business Initiatives Unit, Office of the Chief Operating Officer, Centers for Disease Control and Prevention, has been delegated the authority to sign
Centers for Medicare & Medicaid Services, Health and Human Services (HHS).
Notice.
The Centers for Medicare & Medicaid Services (CMS) is announcing an opportunity for the public to comment on CMS' intention to collect information from the public. Under the Paperwork Reduction Act of 1995 (PRA), federal agencies are required to publish notice in the
Comments on the collection(s) of information must be received by the OMB desk officer by
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
To obtain copies of a supporting statement and any related forms for the proposed collection(s) summarized in this notice, you may make your request using one of following:
1. Access CMS' website address at website address at
2. Call the Reports Clearance Office at (410) 786-1326.
William Parham at (410) 786-4669.
Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501-3520), federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. The term “collection of information” is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) and includes agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. Section 3506(c)(2)(A) of the PRA (44 U.S.C. 3506(c)(2)(A)) requires federal agencies to publish a 30-day notice in the
1.
Section 10332 of the Patient Protection and Affordable Care Act (ACA) requires the Secretary to make standardized extracts of Medicare claims data under Parts A, B, and D available to “qualified entities” for the evaluation of the performance of providers of services and suppliers. The statute provides the Secretary with discretion to establish criteria to determine whether an entity is qualified to use claims data to evaluate the performance of providers of services and suppliers.
Section 105 of the Medicare Access and Reauthorization Act of 2015 (MACRA) expands how qualified entities will be allowed to use and disclose data under the qualified entity program consistent with other applicable laws, including information, privacy, security, and disclosure laws.
The information from the collection will be used by CMS to determine whether a qualified entity continues to meet the qualified entity certification requirements under section 10332 of the Affordable Care Act and Section 105 of MACRA. In addition, it will ensure that certain privacy and security requirements are met when qualified entities provide or sell data or sell non-public analyses that contains individually identifiable beneficiary information to authorized users.
Centers for Medicare & Medicaid Services, Health and Human Services (HHS).
Notice.
The Centers for Medicare & Medicaid Services (CMS) is announcing an opportunity for the public to comment on CMS' intention to collect information from the public. Under the Paperwork Reduction Act of 1995 (the PRA), federal agencies are required to publish notice in the
Comments must be received by March 9, 2021.
When commenting, please reference the document identifier or OMB control number. To be assured consideration, comments and recommendations must be submitted in any one of the following ways:
1.
2.
To obtain copies of a supporting statement and any related forms for the proposed collection(s) summarized in this notice, you may make your request using one of following:
1. Access CMS' website address at website address at
2. Call the Reports Clearance Office at (410) 786-1326.
William N. Parham at (410) 786-4669.
This notice sets out a summary of the use and burden associated with the following information collections. More detailed information can be found in each collection's supporting statement and associated materials (see
Under the PRA (44 U.S.C. 3501-3520), federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. The term “collection of information” is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) and includes agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. Section 3506(c)(2)(A) of the PRA requires federal agencies to publish a 60-day notice in the
1.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or Agency) is announcing an opportunity for public comment on the proposed collection of certain information by the Agency. Under the Paperwork Reduction Act of 1995 (PRA), Federal Agencies are required to publish notice in the
Submit either electronic or written comments on the collection of information by March 9, 2021.
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. Electronic comments must be submitted on or before March 9, 2021. The
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
• Mail/Hand Delivery/Courier (for written/paper submissions): Dockets Management Staff (HFA-305), Food and Drug Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Amber Sanford, Office of Operations, Food and Drug Administration, Three White Flint North, 10A-12M, 11601 Landsdown St., North Bethesda, MD 20852, 301-796-8867,
Under the PRA (44 U.S.C. 3501-3521), Federal Agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. “Collection of information” is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) and includes Agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. Section 3506(c)(2)(A) of the PRA (44 U.S.C. 3506(c)(2)(A)) requires Federal Agencies to provide a 60-day notice in the
With respect to the following collection of information, FDA invites comments on these topics: (1) Whether the proposed collection of information is necessary for the proper performance of FDA's functions, including whether the information will have practical utility; (2) the accuracy of FDA's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques, when appropriate, and other forms of information technology.
In compliance with 44 U.S.C. 3507, FDA will submit to OMB a request to review and approve a new collection of information: “Collection of Information for Participation in FDA Non-Employee Fellowship and Traineeship Programs.” Section 746(b) of the Federal Food, Drug and Cosmetic Act (21 U.S.C. 379
1. To begin the program, the non-employee must submit the following information: (A) New non-employee data form; (B) proof of health insurance; (C) emergency contact information; (D) unified financial management system (UFMS) supplier and site information for stipend payments, financial information; and (E) CONCUR GOV New Traveler Profile Form.
(A) New non-employee data form to begin onboarding process—The New Non-Employee Data form collects information that includes: (1) Name; (2) gender; (3) birthplace; (4) date of birth; (5) email; (6) home address; (7) FDA center/organization/supervisor; (8) citizenship; (9) Social Security number (SSN); (10) start date; (11) end date; (12) contract information; (13) location; and (14) question regarding current or previous Federal work experience.
(B) Proof of health insurance—Participants in FDA fellowship and traineeship programs will be asked for certain information to demonstrate proof of health insurance: (1) Name of health insurance plan provider; (2) name/contact information of primary member; (3) member identification number/group number; (4) begin date/policy expiration date; and (5) signature. The purpose of the health insurance information is for FDA to substantiate that participants of the program are covered by health insurance.
(C) Emergency contact information—Participants in FDA fellowship and traineeship programs will be asked for certain information about emergency contact demographics: (1) Name of fellow/trainee; (2) center; (3) name of emergency contact; (4) telephone number of emergency contact; and (5) relationship to contact. The purpose of emergency contact information of fellows/trainees is to ensure there is a primary contact should emergencies arise.
(D) UFMS supplier and site information for stipend payments, financial information—Participants in FDA fellowship and traineeship programs will be asked for their financial institution routing number and
(E) CONCUR GOV new traveler profile form—Participants in FDA's non-employee scientist programs may be asked to travel and will need to complete an online profile for the Concur Government Edition (CGE) System, which requires the following information: (1) Personal information (name, Agency, office/operating division, residence city, residence state, signatures); (2) Agency information (ID #, title, center accounting number); (3) business contact information; (4) email addresses; emergency contact; (5) travel preferences (preferred airline, hotel, airline seats, frequent flyer number); (6) credit card number; (7) banking account for reimbursement; and (8) approving signatures. The CGE profile provides assistance to travel preparers who are booking travel for FDA program participants.
2. To administer the program, non-employee scientists must submit information for: (A) Absence recording form; (B) personal custody property record; (C) FDA health summary; and (D) discovery and invention.
(A) Absence recording form—Participants in FDA fellowship and traineeship programs will be asked for certain information about tracking attendance and absences: (1) Name of fellow/trainee; (2) office/division of placement; (3) mentor/sponsor name; (4) type of absence; (5) dates of absence; (6) reason for absence; and (7) mentor/sponsor approval. The purpose of tracking attendance and absences for fellows/trainees is to determine the monthly stipend payment and potential modifications to purchase orders for extended absences.
(B) Personal custody property record—Participants in FDA fellowship and traineeship programs will be required to sign the property request, acknowledging personal responsibility for government property. The plan collects the following information: (1) Fellow/trainee name; (2) operative division/division; (3) location; (4) telephone; (5) description of items; (6) items to be returned; (7) return date; (8) fellow/trainee signature; (9) custodial officer signature; and (10) issuing office. The purpose of this record is to acknowledge that an individual has received government property and accepts personal responsibility for items issued to perform their roles.
(C) FDA health summary—Participants in FDA fellowship and traineeship programs will be asked for information about health for laboratory activities. The FDA Occupational Health Services Health Summary form collects information that includes: (1) Name; (2) program; (3) email; (4) work phone; (5) FDA mentor; (6) center/office division; (7) location; (8) date; (9) primary care physician and contact information; (10) immunizations; (11) social history; (12) relationship history; (13) allergies; and (14) medical history.
(D) Discovery and invention—Participants in FDA fellowship and traineeship programs will be asked for information about discoveries and inventions at FDA. The discovery and invention report collects information that includes: (1) Title of discovery; (2) description of discovery; (3) identification of collaborators, cooperative research and development agreement, and human materials or subjects; (4) publications; (5) technology stage; (6) commercial potential; and (7) competition, potential users, and manufacturers.
3. For the coordination of training, non-employee scientists must complete information for the: (A) Training development plan; (B) final project report; (C) training request; (D) travel request; (E) Learning Management System (LMS) request; (F) standard operating procedures (SOP) verification; and (G) program evaluation.
(A) Training development plan—Participants in FDA fellowship and traineeship programs will be required to develop the individual plan in partnership with their mentor. The plan collects the following information: (1) Fellow/trainee name; (2) mentor(s)/preceptor(s) name; (3) sign-on date; (4) year 1 goals, courses/training, regulatory activities, and completion date; (5) year 2 goals, courses/trainings, regulatory activities, and completion date; (6) fellow/trainee signature; and (7) mentor(s)/preceptor(s) signature. The purpose of this individual development/training plan is to have a record of mandatory training and specific goals and tasks for the contributions and/or completion of a project.
(B) Final project report—Participants in FDA fellowship and traineeship programs will be required to complete the final report in partnership with their mentor. The plan collects the following information: (1) Fellow/trainee name; (2) mentor/preceptor name; (3) goals; (4) objectives; (5) alignment with center or FDA goals; (6) project summary/abstract; (7) accomplishments; and (8) impact on public health. The purpose of this report is to acknowledge the contributions to the overall project and identify performance successes or challenges. The collection of information is mandatory to participate in FDA's fellowship and traineeship programs.
(C) Training request—Participants in FDA fellowship and traineeship programs will be asked to identify the following for external training requests: (1) Name of fellow/trainee; (2) operating office/staff division; (3) title and topic of training; (4) name of hosting Agency/organization; (5) purpose/justification for external training; (6) dates; (7) location; and (8) approving signatures. The purpose of the external training request is to provide justification substantiating the benefits to the operating office/staff division and/or benefits to the fellow's/trainee's professional development and training. The collection of information is mandatory to participate in FDA's fellowship and traineeship programs.
(D) Travel request—Participants in FDA fellowship and traineeship programs will be asked for certain information about travel requests and authorizations/approvals: (1) Office/division; (2) research project title; (3) mentor/sponsor name; (4) mentor/sponsor email and telephone; (5) fellow/trainee name; (6) appointment period; (7) funding source and fiscal year; (8) brief description of travel; (9) anticipated travel dates; and (10) travel justification and relation to project. The purpose of authorization for travel of fellows/trainees is to determine if the travel has been approved by the sponsor/mentor and if the travel is a mission-related activity to the fellow/trainee training plan or appointment/assignment. The collection of information is mandatory to participate in FDA's fellowship and traineeship programs.
(E) LMS access—Participants in FDA fellowship and traineeship programs will be asked for information to obtain access to the LMS: (1) Name; (2) location; (3) organizational unit; and (4) email address. The purpose of LMS access request is to obtain information of non-employee scientists to ensure they have access to receive training and educational opportunities offered in the Health and Human Services LMS System.
(F) SOP verification—Participants in FDA fellowship and traineeship programs will be asked for certain information to verify that they have read and received instructional training on
(G) Program evaluation—Participants in FDA fellowship and traineeship programs will be asked to complete an evaluation providing program data that will be synthesized into program reports on the overall effectiveness of the program. The evaluation collects the following information: (1) Demographic data; (2) expectations of fellowship or training program; (3) administration processes and support to fellow or trainee; (4) FDA retention and plans of fellow or trainee; (5) training and education completed; and (6) professional/research goals. The purpose of this evaluation is to assess the effectiveness of the program and feedback from participants to improve the quality of the experience.
4. To end the program, a non-employee must submit the exit checklist—Participants in FDA fellowship and traineeship programs may be asked to complete the exit checklist to manage the exit process and return of FDA property. The exit checklist guides the exit process for the following operational components: (1) Access key/pass; (2) accountable property; (3) system applications inactive; (4) library materials; (5) government-issued documents (
All exit information will be entered to terminate access to any FDA information.
FDA estimates the burden of this collection of information as follows:
FDA published a 60-day notice for this information collection on November 22, 2019 (84 FR 64536). FDA is reopening the 60-day comment period in order to satisfy PRA requirements. No changes have been made to the information collection.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is requesting that any industry organizations interested in participating in the selection of nonvoting industry representatives to serve on the National Mammography Quality Assurance Advisory Committee in the Center for Devices and Radiological Health notify FDA in writing. FDA is also requesting nominations for nonvoting industry representatives to serve on the National Mammography Quality Assurance Advisory Committee. A nominee may either be self-nominated or nominated by an organization to serve as a nonvoting industry representative. Nominations will be accepted for current vacancies effective with this notice.
Any industry organization interested in participating in the selection of appropriate nonvoting members to represent industry interests must send a letter stating that interest to FDA by February 8, 2021 (see sections I and II of this document for further details). Concurrently, nomination materials for prospective candidates should be sent to FDA by February 8, 2021.
All statements of interest from industry organizations interested in participating in the selection process of nonvoting industry representative nominations should be sent to Margaret Ames (see
Margaret Ames, Division of Management Services, Center for Devices and Radiological Health, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 66, Rm. 5213, Silver Spring, MD 20993, 301-796-5960, email:
The Agency is requesting nominations for nonvoting industry representative on the National Mammography Quality Assurance Advisory Committee:
The Committee shall advise FDA on: (1) Developing appropriate quality standards and regulations for mammography facilities; (2) developing appropriate standards and regulations for bodies accrediting mammography facilities under this program; (3) developing regulations with respect to sanctions; (4) developing procedures for monitoring compliance with standards; (5) establishing a mechanism to investigate consumer complaints; (6) reporting new developments concerning breast imaging that should be considered in the oversight of mammography facilities; (7) determining whether there exists a shortage of mammography facilities in rural and health professional shortage areas and determining the effects of personnel on access to the services of such facilities in these areas; (8) determining whether there will exist a sufficient number of medical physicists after October 1, 1999; and (9) determining the costs and benefits of compliance with these requirements.
Any industry organization interested in participating in the selection of an appropriate nonvoting member to represent industry interests should send a letter stating that interest to the FDA contact (see
Individuals may self-nominate and/or an organization may nominate one or more individuals to serve as a nonvoting industry representative. Nominations must include a current, complete résumé or curriculum vitae for each nominee including current business address and telephone number, email address if available, and a signed copy of the Acknowledgement and Consent form available at the FDA Advisory Nomination Portal (see
FDA seeks to include the views of women and men, members of all racial and ethnic groups, and individuals with and without disabilities on its advisory committees and therefore encourages nominations of appropriately qualified candidates from these groups. Specifically, in this document, nominations for a nonvoting representative of industry interests are encouraged from the mammography manufacturing industry.
This notice is issued under the Federal Advisory Committee Act (5 U.S.C. app. 2) and 21 CFR part 14, relating to advisory committees.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or Agency) is announcing an opportunity for public comment on the proposed collection of certain information by the Agency. Under the Paperwork Reduction Act of 1995 (PRA), Federal Agencies are required to publish notice in the
Submit either electronic or written comments on the collection of information by March 9, 2021.
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. Electronic comments must be submitted on or before March 9, 2021. The
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Domini Bean, Office of Operations, Food and Drug Administration, Three White Flint North, 10A-12M, 11601 Landsdown St., North Bethesda, MD 20852, 301-796-5733,
Under the PRA (44 U.S.C. 3501-3521), Federal Agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. “Collection of information” is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) and includes Agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. Section 3506(c)(2)(A) of the PRA (44 U.S.C. 3506(c)(2)(A)) requires Federal Agencies to provide a 60-day notice in the
With respect to the following collection of information, FDA invites comments on these topics: (1) Whether the proposed collection of information is necessary for the proper performance of FDA's functions, including whether the information will have practical utility; (2) the accuracy of FDA's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques, when appropriate, and other forms of information technology.
This information collection helps support implementation of section 701 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 371) pertaining to product recalls, and regulations in part 7 (21 CFR part 7), subpart C promulgated to clarify and explain associated practices and procedures. Regulations in part 7, subpart C §§ 7.49, 7.50, and 7.59 (21 CFR 7.49, 7.50, and 7.59) apply specifically to product recalls, which may be undertaken voluntarily and at any time by manufacturers and distributors, or at the request of the Agency. Recalls are terminated when all reasonable efforts have been made to remove or correct the product in accordance with the recall strategy. The regulations also provide for corrective actions to be taken regarding violative products and establish specific requirements that enable us to monitor and assess the adequacy of a firm's efforts in this regard. The provisions include reporting to FDA on the initiation and termination of a recall, as well as submitting recall status reports and making required communication disclosures. Specific guidance regarding recalls is set forth in § 7.59, although product-specific guidance documents may also be developed to assist respondents to the information collection. Agency guidance documents are issued in accordance with our good guidance regulations in 21 CFR 10.115, which provide for public comment at any time.
Consistent with § 7.50, all recalls monitored by FDA are included in an “Enforcement Report” once they are classified and may be listed prior to classification when FDA determines the firm's removal or correction of a marketed product(s) meets the definition of a recall. Recall data in the Enforcement Report can be accessed through the weekly report publication, the quick and advanced search functionalities, and an Application
We estimate the burden of the collection of information as follows:
A review of Agency data shows that 8,337 recalls were conducted during fiscal years 2017 through 2019, for an average of 2,779 recalls annually. We assume an average of 25 hours is needed to submit the requisite notification to FDA, for a total annual burden of 69,475 hours. Similarly, during the same period, 6,287 recalls were terminated, for an average of 2,095 recall terminations annually, and we assume an average of 10 hours is needed for the corresponding information collection activity. To determine burden associated with recall status reports we divided the average number of annual submissions (36,127) by the average number of annual respondents (2,779) and assume 10 hours is necessary for the corresponding information collection, resulting in 361,270 hours annually.
To determine burden associated with recall communication disclosures described in § 7.49, we calculated an average of 445 disclosures per recall and attribute 3 minutes for each disclosure, resulting in 61,832.75 burden hours annually.
These estimates reflect an overall decrease in the average number of annual responses by 245,846 and a decrease in the average number of annual burden hours by 70,949.25 since our last submission for OMB review and approval of the information collection.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is requesting that any consumer organizations interested in participating in the selection of voting and/or nonvoting consumer representatives to serve on its advisory committees or panels notify FDA in writing. FDA is also requesting nominations for voting and/or nonvoting consumer representatives to serve on advisory committees and/or panels for which vacancies currently exist or are expected to occur in the near future. Nominees recommended to serve as a voting or nonvoting consumer representative may be self-nominated or may be nominated by a consumer organization. FDA seeks to include the views of women and men, members of all racial and ethnic groups, and individuals with and without disabilities on its advisory committees and, therefore, encourages nominations of appropriately qualified candidates from these groups.
Any consumer organization interested in participating in the selection of an appropriate voting or nonvoting member to represent consumer interests on an FDA advisory committee or panel may send a letter or email stating that interest to FDA (see
All statements of interest from consumer organizations interested in participating in the selection process should be submitted electronically to
Consumer representative nominations should be submitted electronically by logging into the FDA Advisory Committee Membership Nomination Portal:
For questions relating to participation in the selection process: Kimberly Hamilton, Advisory Committee Oversight and Management Staff, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 32, Rm. 5122, Silver Spring, MD 20993-0002, 301-796-8220, email:
For questions relating to specific advisory committees or panels, contact the appropriate Contact Person listed in table 1.
FDA is requesting nominations for voting and/or nonvoting consumer representatives for the vacancies listed in table 2:
The Science Board shall provide advice to the Commissioner and other appropriate officials on specific complex scientific and technical issues important to FDA and its mission, including emerging issues within the scientific community. Additionally, the Science Board will provide advice that supports the Agency in keeping pace with technical and scientific developments, including in regulatory science; and input into the Agency's research agenda; and on upgrading its scientific and research facilities and training opportunities. It will also provide, where requested, expert review of Agency sponsored intramural and extramural scientific research programs.
Reviews and evaluates available data concerning the safety, effectiveness, and appropriate use of blood products derived from blood and serum or biotechnology which are intended for use in the diagnosis, prevention, or treatment of human diseases as well as the safety, effectiveness, and labeling of the products, on clinical and laboratory studies involving such products, on the affirmation or revocation of biological product licenses, and on the quality and relevance of FDA's research program which provides the scientific support for regulating these products.
Reviews and evaluates available data relating to the safety, effectiveness, and appropriate use of human cells, human tissues, gene transfer therapies and xenotransplantation products which are intended for transplantation, implantation, infusion and transfer in the prevention and treatment of a broad spectrum of human diseases and in the reconstruction, repair or replacement of tissues for various conditions, as well as considers the quality and relevance of FDA's research program which provides scientific support for the regulation of these products.
Reviews and evaluates data concerning the safety, effectiveness, and appropriate use of vaccines and related biological products which are intended for use in the prevention, treatment, or diagnosis of human diseases, as well as considers the quality and relevance of FDA's research program which provides scientific support for the regulation of these products.
Reviews and evaluates available data concerning the safety and effectiveness of marketed and investigational human drug products for use in the treatment of dermatologic and ophthalmic disorders.
Reviews and evaluates available data concerning the safety and effectiveness of marketed and investigational human drug products for use in the treatment of gastrointestinal diseases.
Provides advice on scientific and technical issues concerning the safety, and effectiveness of human generic drug products for use in the treatment of a broad spectrum of human diseases, and as required, any other product for which the FDA has regulatory responsibility. The committee may also review Agency sponsored intramural and extramural biomedical research programs in support of FDA's generic drug regulatory responsibilities.
Reviews and evaluates data concerning the safety and effectiveness of marketed and investigational human products for use in the practice of psychiatry and related fields.
Reviews and evaluates data on the safety and effectiveness of marketed and investigational devices and makes recommendations for their regulation. With the exception of the Medical Devices Dispute Resolution Panel, each panel, according to its specialty area, advises on the classification or reclassification of devices into one of three regulatory categories; advises on
The Dental Products Panel also functions at times as a dental drug panel. The functions of the dental drug panel are to evaluate and recommend whether various prescription drug products should be changed to over-the-counter status and to evaluate data and make recommendations concerning the approval of new dental drug products for human use.
The Medical Devices Dispute Resolution Panel provides advice to the Commissioner on complex or contested scientific issues between FDA and medical device sponsors, applicants, or manufacturers relating to specific products, marketing applications, regulatory decisions and actions by FDA, and Agency guidance and policies. The Panel makes recommendations on issues that are lacking resolution, are highly complex in nature, or result from challenges to regular advisory panel proceedings or Agency decisions or actions.
Advises the Agency on the following development of appropriate quality standards and regulations for mammography facilities; standards and regulations for bodies accrediting mammography facilities under this program; regulations with respect to sanctions; procedures for monitoring compliance with standards; establishing a mechanism to investigate consumer complaints; reporting new developments concerning breast imaging which should be considered in the oversight of mammography facilities. As well as determining whether there exists a shortage of mammography facilities in rural and health professional shortage areas and determining the effects of personnel on access to the services of such facilities in such areas; determining whether there will exist a sufficient number of medical physicists after October 1, 1999; and determining the costs and benefits of compliance with these requirements.
Advises the Agency, on complex issues relating to medical devices, the regulation of devices, and their use by patients. The Committee may consider topics such as: Agency guidance and policies, clinical trial or registry design, patient preference study design, benefit-risk determinations, device labeling, unmet clinical needs, available alternatives, patient reported outcomes and device-related quality of life or health status issues, and other patient-related topics. The Committee will provide relevant skills and perspectives, in order to improve communication of benefits, risks, clinical outcomes, and increase integration of patient perspectives into the regulatory process for medical devices. It will perform its duties by discussing and providing advice and recommendation in ways such as: Identifying new approaches, promoting innovation, recognizing unforeseen risks or barriers, and identifying unintended consequences that could result from FDA policy.
Persons nominated for membership as consumer representatives on committees or panels should meet the following criteria: (1) Demonstrate an affiliation with and/or active participation in consumer or community-based organizations, (2) be able to analyze technical data, (3) understand research design, (4) discuss benefits and risks, and (5) evaluate the safety and efficacy of products under review. The consumer representative should be able to represent the consumer perspective on issues and actions before the advisory committee; serve as a liaison between the committee and interested consumers, associations, coalitions, and consumer organizations; and facilitate dialogue with the advisory committees on scientific issues that affect consumers.
Selection of members representing consumer interests is conducted through procedures that include the use of organizations representing the public interest and public advocacy groups. These organizations recommend nominees for the Agency's selection. Representatives from the consumer health branches of Federal, State, and local governments also may participate in the selection process. Any consumer organization interested in participating in the selection of an appropriate voting or nonvoting member to represent consumer interests should send a letter stating that interest to FDA (see
Within the subsequent 30 days, FDA will compile a list of consumer organizations that will participate in the selection process and will forward to each such organization a ballot listing at least two qualified nominees selected by the Agency based on the nominations received, together with each nominee's current curriculum vitae or résumé. Ballots are to be filled out and returned to FDA within 30 days. The nominee receiving the highest number of votes ordinarily will be selected to serve as the member representing consumer interests for that particular advisory committee or panel.
Any interested person or organization may nominate one or more qualified persons to represent consumer interests on the Agency's advisory committees or panels. Self-nominations are also accepted. Nominations must include a current, complete résumé or curriculum vitae for each nominee and a signed copy of the
Nominations must also specify the advisory committee(s) or panel(s) for which the nominee is recommended. In addition, nominations must also acknowledge that the nominee is aware of the nomination unless self-nominated. FDA will ask potential candidates to provide detailed information concerning such matters as financial holdings, employment, and research grants and/or contracts to permit evaluation of possible sources of conflicts of interest. Members will be invited to serve for terms up to 4 years.
FDA will review all nominations received within the specified timeframes and prepare a ballot containing the names of qualified nominees. Names not selected will remain on a list of eligible nominees and be reviewed periodically by FDA to determine continued interest. Upon selecting qualified nominees for the ballot, FDA will provide those
This notice is issued under the Federal Advisory Committee Act (5 U.S.C. app. 2) and 21 CFR part 14, relating to advisory committees.
Food and Drug Administration, HHS.
Notice; reopening of the comment period.
The Food and Drug Administration (FDA or the Agency) is reopening the comment period for a notice that appeared in the
FDA is reopening the comment period on the notice published on July 31, 2020 (85 FR 46126). Submit either electronic or written comments by February 8, 2021.
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. Electronic comments must be submitted on or before February 8, 2021. The
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Dominic Markwordt, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, Rm. 5104, Silver Spring, MD 20993, 301-796-9349.
In the
During the comment period for the July 31, 2020, notice, FDA received a request to allow interested persons additional time to comment. The requester asserted that the time period of 60 days was insufficient to respond fully to FDA's specific requests for comments and noted the commenter's obligations to respond to the exigencies of COVID-19 pandemic.
FDA has considered the request and other relevant factors, and accordingly is reopening the comment period for the July 31, 2020, notice for 30 days, until February 8, 2021. The Agency believes that an additional 30 days will allow adequate time for interested persons to submit comments.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or Agency) has determined that the drug products listed in this document were not withdrawn from sale for reasons of safety or effectiveness. This determination means that FDA will not begin procedures to withdraw approval of abbreviated new drug applications (ANDAs) that refer to these drug products, and it will allow FDA to continue to approve ANDAs that refer to the products as long as they meet relevant legal and regulatory requirements.
Stacy Kane, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, Rm. 6236, Silver Spring, MD 20993-0002, 301-796-8363,
In 1984, Congress enacted the Drug Price Competition and Patent Term Restoration Act of 1984 (Pub. L. 98-417) (the 1984 amendments), which authorized the approval of duplicate versions of drug products approved under an ANDA procedure. ANDA applicants must, with certain exceptions, show that the drug for which they are seeking approval contains the same active ingredient in the same strength and dosage form as the “listed drug,” which is a version of the drug that was previously approved. ANDA applicants do not have to repeat the extensive clinical testing otherwise necessary to gain approval of a new drug application (NDA).
The 1984 amendments include what is now section 505(j)(7) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(j)(7)), which requires FDA to publish a list of all approved drugs. FDA publishes this list as part of the “Approved Drug Products With Therapeutic Equivalence Evaluations,” which is known generally as the “Orange Book.” Under FDA regulations, a drug is removed from the list if the Agency withdraws or suspends approval of the drug's NDA or ANDA for reasons of safety or effectiveness, or if FDA determines that the listed drug was withdrawn from sale for reasons of safety or effectiveness (21 CFR 314.162).
Under § 314.161(a) (21 CFR 314.161(a)), the Agency must determine whether a listed drug was withdrawn from sale for reasons of safety or effectiveness: (1) Before an ANDA that refers to that listed drug may be approved, (2) whenever a listed drug is voluntarily withdrawn from sale and ANDAs that refer to the listed drug have been approved, and (3) when a person petitions for such a determination under 21 CFR 10.25(a) and 10.30. Section 314.161(d) provides that if FDA determines that a listed drug was withdrawn from sale for safety or effectiveness reasons, the Agency will initiate proceedings that could result in the withdrawal of approval of the ANDAs that refer to the listed drug.
FDA has become aware that the drug products listed in the table are no longer being marketed.
FDA has reviewed its records and, under § 314.161, has determined that the drug products listed were not withdrawn from sale for reasons of safety or effectiveness. Accordingly, the Agency will continue to list the drug products in the “Discontinued Drug Product List” section of the Orange Book. The “Discontinued Drug Product List” identifies, among other items, drug products that have been discontinued from marketing for reasons other than safety or effectiveness.
Approved ANDAs that refer to the NDAs and ANDAs listed are unaffected by the discontinued marketing of the products subject to those NDAs and ANDAs. Additional ANDAs that refer to these products may also be approved by the Agency if they comply with relevant legal and regulatory requirements. If FDA determines that labeling for these drug products should be revised to meet current standards, the Agency will advise ANDA applicants to submit such labeling.
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 National Advisory Committee on the National Health Service Corps (NACNHSC) will hold public meetings for the 2021 calendar year (CY). Information about NACNHSC, agendas, and materials for these meetings can be found on the NACNHSC website at
NACNHSC meetings will be held on
• March 16, 2021, 9:00 a.m.-5:00 p.m. Eastern Time (ET) and March 17, 2021, 9:00 a.m.-2:00 p.m. ET;
• June 22, 2021, 9:00 a.m.-5:00 p.m. ET and June 23, 2021, 9:00 a.m.-2:00 p.m. ET;
• November 9, 2021, 9:00 a.m.-5: 00 p.m. ET and November 10, 2021, 9:00 a.m.-2:00 p.m. ET.
Meetings may be held in-person, by teleconference, and/or Adobe Connect webinar. For updates on how the meeting will be held, visit the NACNHSC website 30 business days before the date of the meeting, where instructions for joining meetings either in-person or remotely will also be posted. In-person NACNHSC meetings will be held at 5600 Fishers Lane, Rockville, Maryland 20857. For meeting information updates, go to the NACNHSC website meeting page at
Diane Fabiyi-King (DFO), Division of National Health Service Corps, Bureau of Health Workforce, HRSA, 5600 Fishers Lane, Rockville, Maryland 20857; 301-443-3609; or
NACNHSC provides advice and recommendations to the Secretary of HHS (Secretary) on policy, program development, and other matters of significance concerning the activities under Subpart II, Part D of Title III of the Public Health Service Act (42 U.S.C. 254d-254k). NACNHSC designates areas of the United States with health professional shortages and assigns National Health Service Corps clinicians to improve the delivery of health services in health professional shortage areas. Since priorities dictate meeting times and agenda items, be advised that start times, end times, and agenda items are subject to change. For CY 2021 meetings, agenda items may include, but are not limited to, the identification of NACNHSC priorities for future
Refer to the NACNHSC website listed above for all current and updated information concerning the CY 2021 NACNHSC meetings, including draft agendas and meeting materials that will be posted 30 calendar days before the meeting.
Members of the public will have the opportunity to provide comments. Public participants may submit written statements in advance of the scheduled meeting(s). Oral comments will be honored in the order they are requested and may be limited as time allows. Requests to submit a written statement or make oral comments to the NACNHSC should be sent to Diane Fabiyi-King using the contact information above at least 5 business days before the meeting date(s).
Individuals who need special assistance or another reasonable accommodation should notify Diane Fabiyi-King using the contact information listed above at least 10 business days before the meeting(s) they wish to attend.
If a meeting is held in-person, it will occur in a federal government building and attendees must go through a security check to enter. Non-U.S. Citizen attendees must notify HRSA of their planned attendance at an in-person meeting at least 20 business days prior to the meeting in order to facilitate their entry into the building. All attendees are required to present government-issued identification prior to entry.
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 Council on Graduate Medical Education (COGME or Council) will hold public meetings for the 2021 calendar year (CY). Information about COGME, agendas, and materials for these meetings can be found on the COGME website at
COGME meetings will be held on
• April 14, 2021, 8:30 a.m.-5:00 p.m. Eastern Time (ET) and April 15, 2021, 8:30 a.m.-2:00 p.m. ET;
• August 19, 2021, 10:00 a.m.-5:00 p.m. ET.
Meetings may be held in-person, by teleconference, and/or Adobe Connect webinar. For updates on how the meeting will be held, visit the COGME website 30 business days before the date of the meeting where instructions for joining meetings either in-person or remotely will also be posted. In-person meetings will be held at 5600 Fishers Lane, Rockville, Maryland 20857. For meeting information updates, go to the COGME website meeting page at
Shane Rogers, Designated Federal Official, Division of Medicine and Dentistry, Bureau of Health Workforce, HRSA, 5600 Fishers Lane, Room 15N142, Rockville, Maryland 20857; 301-443-5260; or
COGME makes recommendations to the Secretary of HHS (Secretary) and Congress on policy, program development, and other matters of significance as specified by section 762 of Title VII of the Public Health Service (PHS) Act. Issues addressed by COGME include the supply and distribution of the physician workforce in the United States, including any projected shortages or excesses; foreign medical school graduates; the nature and financing of undergraduate and graduate medical education; appropriation levels for certain programs under Title VII of the PHS Act; and deficiencies in databases of the supply and distribution of the physician workforce and postgraduate programs for training physicians. COGME submits reports to the Secretary of HHS; the Senate Committee on Health, Education, Labor and Pensions; and the House of Representatives Committee on Energy and Commerce. Additionally, COGME encourages entities providing graduate medical education to conduct activities to voluntarily achieve the recommendations of the Council. Since priorities dictate meeting times, be advised that start times, end times, and agenda items are subject to change. For CY 2021 meetings, agenda items may include, but are not limited to, discussion on topics surrounding rural health workforce and training. Refer to the COGME website listed above for all current and updated information concerning the CY 2021 COGME meetings, including draft agendas and meeting materials that will be posted 30 calendar days before the meeting.
Members of the public will have the opportunity to provide comments. Public participants may submit written statements in advance of the scheduled meeting(s). Oral comments will be honored in the order they are requested and may be limited as time allows. Requests to submit a written statement or make oral comments to COGME should be sent to Shane Rogers using the contact information above at least 5 business days before the meeting date(s).
Individuals who need special assistance or another reasonable accommodation should notify Shane Rogers using the contact information listed above at least 10 business days before the meeting(s) they wish to attend.
If a meeting is held in-person, it will occur in a federal government building and attendees must go through a security check to enter. Non-U.S. citizen attendees must notify HRSA of their planned attendance at an in-person meeting at least 20 business days prior to the meeting in order to facilitate their entry into the building. All attendees are required to present government-issued identification prior to entry.
Health Resources and Services Administration (HRSA), Department of Health and Human Services (HHS).
Notice.
In accordance with section 1111(g) of the Public Health Service (PHS) Act, and the Federal Advisory Committee Act, this notice announces that the Advisory Committee on Heritable Disorders in Newborns and Children (ACHDNC or Committee) has scheduled a public meeting to be held on Thursday, February 11, 2021, and Friday, February 12, 2021. Information about the ACHDNC and the agenda for this meeting can be found on the ACHDNC website at
Thursday, February 11, 2021, 10:00 a.m.-3:00 p.m. Eastern Time (ET), and Friday, February 12, 2021, 10:00 a.m.-2:00 p.m. ET.
This meeting will be held via webinar. While this meeting is open to the public, advance registration is required. Please visit the ACHDNC website for information on registration:
Alaina Harris, Maternal and Child Health Bureau, HRSA, 5600 Fishers Lane, Room 18W66, Rockville, Maryland 20857; 301-443-0721; or
ACHDNC provides advice and recommendations to the Secretary of HHS (Secretary) on the development of newborn screening activities, technologies, policies, guidelines, and programs for effectively reducing morbidity and mortality in newborns and children having, or at risk for, heritable disorders. The ACHDNC reviews and reports regularly on newborn and childhood screening practices, recommends improvements in the national newborn and childhood screening programs, and fulfills requirements stated in the authorizing legislation. In addition, ACHDNC's recommendations regarding inclusion of additional conditions for screening, following adoption by the Secretary, are evidence-informed preventive health services provided for in the comprehensive guidelines supported by HRSA through the Recommended Uniform Screening Panel (RUSP) pursuant to section 2713 of the PHS Act (42 U.S.C. 300gg-13). Under this provision, non-grandfathered group health plans and health insurance issuers offering group or individual health insurance are required to provide insurance coverage without cost-sharing (a co-payment, co-insurance, or deductible) for preventive services for plan years (
During the February 11-12, 2021, meeting, ACHDNC will hear from experts in the fields of public health, medicine, heritable disorders, rare disorders, and newborn screening. Agenda items include the following:
(1) A presentation on potential processes for reviewing conditions on the RUSP;
(2) Potential revisions to the condition nomination form;
(3) Continuity of operations planning (within the context of COVID-19);
(4) Innovations in long-term follow-up for conditions identified through newborn screening; and,
(5) Workgroup updates.
The agenda for this meeting does not include any plans for recommending a condition for inclusion in the RUSP. Agenda items are subject to change as priorities dictate. Information about the ACHDNC, including a roster of members and past meeting summaries, are also available on the ACHDNC website.
Members of the public also will have the opportunity to provide comments. Public participants may submit written statements in advance of the scheduled meeting. Oral comments will be taken in the order they are requested and may be limited as time allows. Requests to provide a written statement or make oral comments to the ACHDNC must be submitted via the registration website by Friday, February 5, 2021, at 12:00 p.m. ET.
Individuals who need special assistance or another reasonable accommodation should notify Alaina Harris at the address and phone number 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 the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Bureau of Ocean Energy Management, Interior.
Notice of availability of a Draft Environmental Impact Statement and public meetings.
In accordance with regulations issued under the National Environmental Policy Act, the Bureau of Ocean Energy Management (BOEM) is announcing the availability of the South Fork Wind Farm (SFWF) and South Fork Export Cable (SFEC) Project Draft Environmental Impact Statement (DEIS) prepared for a construction and operations plan (COP) submitted by Deepwater South Fork LLC (South Fork). The DEIS analyzes reasonably foreseeable effects from the construction, operation and maintenance, and eventual decommissioning of up to 15 wind turbine generators, an offshore substation, inter-array cables in lease area OCS-A 0517, and the installation of an export cable from the lease area to Suffolk County, Long Island (collectively, the “Project”). This notice of availability (NOA) announces the start of the public review and comment period, as well as the times and dates for virtual public meetings, on the DEIS. After BOEM holds the public meetings and addresses comments provided, BOEM will publish a final environmental impact statement.
Comments should be submitted no later than February 22, 2021. BOEM's virtual public meetings will be held at the following dates and times (Eastern):
Registration for the virtual public meetings may be completed here:
The DEIS and detailed information about the proposed wind energy facility, including the COP, can be found on BOEM's website at:
• In written form by mail, enclosed in an envelope labeled “South Fork COP DEIS” and addressed to Program Manager, Office of Renewable Energy, Bureau of Ocean Energy Management, 45600 Woodland Road, Sterling, Virginia 20166. Comments must be received or postmarked no later than February 22, 2021; or
• Through the regulations.gov web portal: Navigate to htttp://
For information on the DEIS or BOEM's policies associated with this notice, please contact: Michelle Morin, Chief, Environment Branch for Renewable Energy, BOEM Office of Renewable Energy Programs, 45600 Woodland Road, Sterling, Virginia 20166, (703) 787-1722 or
The DEIS analyzes reasonably foreseeable effects from the Project. The analysis includes a review of resource-specific baseline conditions and future offshore wind activities, and, using the methodology and assumptions outlined in the document, assesses cumulative impacts that could result from the incremental impact of the proposed action and action alternatives as defined in the DEIS when combined with past, present, or reasonably foreseeable activities, including other potential future offshore wind activities.
BOEM does not consider anonymous comments. Please include your name and address as part of your submittal. BOEM makes all comments, including the names and addresses of respondents, available for public review during regular business hours. Individual respondents may request that BOEM withhold their names or addresses from the public record; however, BOEM cannot guarantee that it will be able to do so. If you wish your name or address to be withheld, you
This NOA was prepared under Council on Environmental Quality NEPA regulations, 40 CFR 1500-1508 (as in place before July 16, 2020) and published in accordance with 40 CFR 1506.6 and 43 CFR 46.435.
Bureau of Safety and Environmental Enforcement (BSEE), Interior.
Notice of public comment period.
The U.S. Department of the Interior (DOI), Bureau of Safety and Environmental Enforcement (BSEE) is conducting an independent external peer review of a recent study titled,
Interested persons are invited to submit comments on or before February 8, 2021.
Send your comments on this notice by either of the following methods listed below:
• Electronically go to
Written comments should be submitted on or before February 8, 2021. Relevant public comments within the BSEE Charge for the scope of this peer review (outline below) and directly addressing the scientific and technical issues in BSEE's 13 Charge Questions (outlined below) will be provided to the peer reviewers. BSEE may not be able to fully consider comments submitted after February 8, 2021.
Submit your comments, identified by name, contact (phone, and/or email) by one of the following methods:
•
To provide public involvement in this peer-review process, BSEE is announcing and inviting written public comments on the scientific and technical merit of the interim OSRR 1063 report. The interim OSRR 1063 report is available on BSEE's OSRR website located at:
Karen N. Stone, Program Manager, U.S. Department of the Interior, Bureau of Safety and Environmental Enforcement, Oil Spill Preparedness Division, Response Research Branch, 45600 Woodland Road, VAE-OSPD, Sterling, VA 20166.
In order to focus the peer-review process effectively on the 13 Charge Questions, BSEE has carefully defined the scope of this peer review for the Interim report of the BSEE Study titled,
The scope of this peer review focuses only on the scientific and technical merit of the assumptions, inputs, methodologies, modeling with experimental validation, and results for the BSEE study titled,
The following are considered Out-of-Scope for this peer review and will not be considered during this peer-review process:
• General comments related to intentional wellhead ignition as a primary response method, because this peer review is focused only on the methods and approach for predicting wellhead burn efficiency at the bench and intermediate scales.
• Comments on, or suggestions for, alternate modeling methods to predict wellhead burn efficiencies except for comments on any omissions or errors identified in the specific methods used for modeling and experimental validations of the model in the OSRR 1063 study referenced above because this peer review focuses on the research already completed for this OSRR 1063 study.
• Comments related to BSEE policies, decisions, or current or proposed BSEE regulations.
Public comments should focus on the scientific and technical merit of the OSRR 1063 study and be organized under BSEE's 13 Charge Questions.
1. Were the objectives of the study clearly defined? If not, what are your recommendations for improving the description of this study's objectives?
2. Were the assumptions regarding wellhead conditions and two-phase wellbore flow (including film thickness and instability, liquid entrainment, and
3. Was the physical model for multi-phase flow adequately developed to capture the liquid droplet phase and the gas-phase flow field? Were the soot and radiation models adequately characterized? Were Lagrangian droplet dynamics and thermophysics adequately incorporated into the model? Were there any apparent strengths, weaknesses, omissions, or errors? Provide an explanation for your answers.
4. Does the droplet injection model adequately simulate realistic diameters and velocities of two-phase, high-speed flows that would occur during a wellhead blowout event? Were there any apparent strengths, weaknesses, omissions, or errors? Provide an explanation for your answers.
5. Does the validation process capture the controlling physical properties to a sufficient level of accuracy, including transport and boundary conditions at the bench- and intermediate-scales for both gas-phase and two-phase turbulent spray? Were there any apparent strengths, weaknesses, omissions, or errors? Provide an explanation for your answers.
6. Were the phase doppler anemometry and diffuse back-light illumination imaging diagnostic methods (6.1.1 and 6.1.2 below) for the droplet behavior measurements appropriately designed, clearly described, and adequate to capture droplet behavior for the Gas Phase and Two-Phase Spray Flame? Were there any apparent strengths, weaknesses, omissions, or errors? Provide an explanation for your answers.
7. Were the diagnostic methods (7.1.1 and 7.1.2 below) for the temperature measurements appropriately designed, clearly described, and adequate to capture temperature for the Gas Phase and Two-Phase Spray Flame? Were there any apparent strengths, weaknesses, omissions, or errors? Provide an explanation for your answers.
8. Do the results adequately characterize evidence of the droplet characteristics, including droplet breakup, the droplet size (diameter), droplet speed, and the duration of a droplet in fire (bench- and intermediate-scales)? Does the research product accurately expand predictions of droplet diameters beyond current limited validated ranges? Were there any apparent strengths, weaknesses, omissions, or errors? Provide an explanation for your answers.
9. Does the research product accurately characterize the impact of two-phase flow regimes (bubble, slug, and churn) on the effluent plume (bench- and intermediate-scales)? Were there any apparent strengths, weaknesses, omissions, or errors? Provide an explanation for your answers.
10. Does the research product adequately address how the wellbore flow would influence the ejected spray plume behavior, which directly influences how the oil and gas burns and how much will either fall back to the surface or remain vapor? Were there any apparent strengths, weaknesses, omissions, or errors? Explain your answers.
11. Does the research product accurately predict the length of fire plume, location of flame anchoring, height of flame, width/angle, expansion, etc.? Were there any apparent strengths, weaknesses, omissions, or errors? Explain your answers.
12. Does the research product determine the primary mechanism driving burn efficiency?
13. Were the conclusions based on the OSRR 1063 study findings in the report logical and appropriate based on the results? What other conclusions related to the study were made and are appropriate? Are there any additional study findings or conclusions that could be drawn from the study? Provide an explanation for your answers.
BSEE oversees oil spill planning and preparedness for oil and gas exploration, development, and production facilities in both state and Federal offshore waters of the United States. BSEE's Oil Spill Preparedness Division (OSPD) is responsible for promulgating regulations pursuant to BSEE's delegated authority under the Clean Water Act, as amended by the Oil Pollution Act of 1990 (33 U.S.C. 1321), and implementing those regulations (30 CFR part 254).
To receive the necessary approvals under 30 CFR part 254, operators of oil and gas facilities operating seaward of the coastline must demonstrate that they are prepared to respond to a loss of well control event and a “worst case” discharge release (30 CFR 254.26; 254.51-.53). For decades, intentional wellhead ignition has been viewed as a possible source control method for well-head blowouts in ice-bound environments. BSEE is researching this response method to better understand its efficiencies and limitations in the North Slope area of Alaska. As part of this review process, BSEE contracted the U.S. Naval Research Laboratory (NRL) to first conduct a review of an interested party's report and related scientific literature and provide preliminary technical guidance on the feasibility of wellhead burning as a mitigation method. The review suggests scientific evidence is lacking to fully support claims that wellhead burning would be highly efficient and would result in little to no unburned oil fallout for the proposed project. BSEE then contracted NRL to conduct a scientific research project. The research project's primary objective was to develop a CFD model of wellhead burning validated with experimental data at multiple scales. BSEE is seeking an independent peer review of the interim final NRL report for this research program titled
BSEE considers this study to be a highly influential scientific assessment.
United States International Trade Commission.
Notice.
On January 4, 2021, the Department of Commerce published notice in the
January 4, 2021.
Keysha Martinez (202-205-2136), Office of Investigations, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436. Hearing-impaired individuals are advised that information on this matter can be obtained 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 (
By order of the Commission.
U.S. International Trade Commission.
Notice.
Notice is hereby given that the U.S. International Trade Commission has determined to review-in-part an initial determination (“ID”) (Order No. 20) issued by the presiding administrative law judge (“ALJ”) granting a motion for summary determination of violation of section 337. The Commission requests written submissions from the parties, interested government agencies, and interested persons on the issues of remedy, the public interest, and bonding, under the schedule set forth below.
Benjamin S. Richards, Office of the General Counsel, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436, telephone (202) 708-5453. Copies of non-confidential documents filed in connection with this investigation may be viewed on the Commission's electronic docket (EDIS) at
The Commission instituted this investigation on November 21, 2019, based on a complaint, as amended, filed by M-I L.L.C. of Houston, Texas (“M-I”). 84 FR 64339 (Nov. 21, 2019). The amended complaint alleged violations of section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. 1337, in the importation into the United States, the sale for importation, and the sale within the United States after importation of certain shaker screens for drilling fluids, components thereof, and related marketing materials by reason of infringement of: (1) Certain claims of U.S. Patent Nos. 7,210,582 (“the '582 patent”), 7,810,649 (“the '649 patent”), and (“the '735 patent”);; and (2) U.S. Trademark Registration Nos. 2,151,736 and 2,744,891.
On February 5, 2020, the Commission found SJ Screen and Hengying Wire Cloth in default. Order No. 10,
On August 27, 2020, M-I filed a motion for summary determination that the Defaulting Respondents violated section 337 and that M-I satisfies the domestic industry requirement of section 337. The motion sought issuance of a general exclusion order (“GEO”) and imposition of a one hundred percent (100%) bond on accused products imported during the Presidential review period. On September 16, 2020, OUII filed a response supporting M-I's motion, including the remedial relief requested therein.
On November 19, 2020, the ALJ issued the subject ID granting M-I's motion and recommending issuance of a GEO and imposition of a bond in the amount of 100 percent of the entered value of infringing products. Specifically, the ID found that (1) the Commission has jurisdiction over the products, the parties, and the investigation; (2) the importation requirement is satisfied; (3) M-I has standing to bring this investigation; (4) all of the remaining asserted claims are infringed by one or more of the Defaulting Respondents' products; and (5) M-I has satisfied the domestic industry requirement of section 337. Additionally, the ALJ recommended that the Commission issue a GEO and impose a bond in the amount of one hundred percent (100%) of the entered value of infringing articles imported during the period of Presidential review.
The Commission has determined to review the ID's finding that M-I's investments in plant and equipment and M-I's employment of labor and capital are significant under section 337(a)(3)(A) and (B). The Commission has determined not to review the remainder of the ID.
In connection with the final disposition of this investigation, the statute authorizes issuance of,
The statute requires the Commission to consider the effects of that remedy upon the public interest. The public interest factors the Commission will consider include the effect that an exclusion order would have on: (1) The public health and welfare, (2) competitive conditions in the U.S. economy, (3) U.S. production of articles that are like or directly competitive with those that are subject to investigation, and (4) U.S. consumers. The Commission is therefore interested in receiving written submissions that address the aforementioned public interest factors in the context of this investigation.
If the Commission orders some form of remedy, the U.S. Trade Representative, as delegated by the President, has 60 days to approve, disapprove, or take no action on the Commission's determination.
In its initial submission, Complainant is also requested to identify the remedy sought and Complainant and OUII are requested to submit proposed remedial orders for the Commission's consideration. Complainant is further requested to state the dates that the Asserted Patents expire, the HTSUS subheadings under which the accused products are imported, and to supply the identification information for all known importers of the products at issue in this investigation. The initial written submissions and proposed remedial orders must be filed no later than close of business on January 19, 2021. Reply submissions must be filed no later than the close of business on January 26, 2021. No further submissions on these issues will be permitted unless otherwise ordered by the Commission.
Persons filing written submissions must file the original document electronically on or before the deadlines stated above. The Commission's paper filing requirements in 19 CFR 210.4(f) are currently waived. 85 FR 15798 (March 19, 2020). Submissions should refer to the investigation number (Inv. No. 337-TA-1184) in a prominent place on the cover page and/or the first page. (
Any person desiring to submit a document to the Commission in confidence must request confidential treatment. All such requests should be directed to the Secretary to the Commission and must include a full statement of the reasons why the Commission should grant such treatment.
The Commission vote for this determination took place on January 4, 2021.
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.
U.S. International Trade Commission.
Notice.
Notice is hereby given that the U.S. International Trade Commission has received a complaint entitled
Lisa R. Barton, Secretary to the Commission, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436, telephone (202) 205-2000. The public version of the complaint can be accessed on the Commission's Electronic Document Information System (EDIS) at
General information concerning the Commission may also be obtained by accessing its internet server at United States International Trade Commission (USITC) at
The Commission has received a complaint and a submission pursuant to § 210.8(b) of the Commission's Rules of Practice and Procedure filed on behalf of Ericsson Inc., Telefonaktiebolaget LM Ericsson, and Ericsson AB on January 4, 2021. The complaint alleges violations of section 337 of the Tariff Act of 1930 (19 U.S.C. 1337) in the importation into the United States, the sale for importation, and the sale within the United States after importation of certain electronic devices with wireless
Proposed respondents, other interested parties, and members of the public are invited to file comments on any public interest issues raised by the complaint or § 210.8(b) filing. Comments should address whether issuance of the relief specifically requested by the complainant in this investigation would affect the public health and welfare in the United States, competitive conditions in the United States economy, the production of like or directly competitive articles in the United States, or United States consumers.
In particular, the Commission is interested in comments that:
(i) Explain how the articles potentially subject to the requested remedial orders are used in the United States;
(ii) identify any public health, safety, or welfare concerns in the United States relating to the requested remedial orders;
(iii) identify like or directly competitive articles that complainant, its licensees, or third parties make in the United States which could replace the subject articles if they were to be excluded;
(iv) indicate whether complainant, complainant's licensees, and/or third party suppliers have the capacity to replace the volume of articles potentially subject to the requested exclusion order and/or a cease and desist order within a commercially reasonable time; and
(v) explain how the requested remedial orders would impact United States consumers.
Written submissions on the public interest must be filed no later than by close of business, eight calendar days after the date of publication of this notice in the
Persons filing written submissions must file the original document electronically on or before the deadlines stated above. Submissions should refer to the docket number (“Docket No. 3520”) in a prominent place on the cover page and/or the first page. (
Any person desiring to submit a document to the Commission in confidence must request confidential treatment. All such requests should be directed to the Secretary to the Commission and must include a full statement of the reasons why the Commission should grant such treatment.
This action is taken under the authority of section 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337), and of §§ 201.10 and 210.8(c) of the Commission's Rules of Practice and Procedure (19 CFR 201.10, 210.8(c)).
By order of the Commission.
Judicial Conference of the United States, Advisory Committee on the Federal Rules of Bankruptcy Procedure.
Notice of cancellation of open hearing.
The following remote public hearing on proposed amendments to the Federal Rules of Bankruptcy Procedure has been canceled: Bankruptcy Rules Hearing on January 29, 2021.
Rebecca A. Womeldorf, Secretary, Committee on Rules of Practice and Procedure of the Judicial Conference of the United States, Thurgood Marshall Federal Judiciary Building, One Columbus Circle NE, Suite 7-300, Washington, DC 20544, Telephone (202) 502-1820,
Announcements for this hearing were previously published in 85 FR 48562.
28 U.S.C. 2073.
Judicial Conference of the United States, Advisory Committee on
Notice of cancellation of open hearing.
The following remote public hearing on proposed amendments to the Federal Rules of Criminal Procedure has been canceled: Criminal Rules Hearing on January 25, 2021.
Rebecca A. Womeldorf, Secretary, Committee on Rules of Practice and Procedure of the Judicial Conference of the United States, Thurgood Marshall Federal Judiciary Building, One Columbus Circle NE, Suite 7-300, Washington, DC 20544, Telephone (202) 502-1820,
Announcements for this hearing were previously published in 85 FR 48562.
28 U.S.C. 2073.
Notice is hereby given that on December 14, 2020 pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301
On September 15, 2004, ASTM filed its original notification pursuant to Section 6(a) of the Act. The Department of Justice published a notice in the
The last notification with the Department was filed on September 24, 2020. A notice was filed in the
Notice is hereby given that, on December 18, 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 DMDII intends to file additional written notifications disclosing all changes in membership.
On January 5, 2016, DMDII 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 30, 2020. A notice was published in the
Notice is hereby given that, on December 29, 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 RIC-Americas intends to file additional written notifications disclosing all changes in membership.
On April 30, 2014, RIC-Americas 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.
The Department of Labor's (DOL) Employment and Training Administration (ETA) is soliciting comments concerning a proposed extension for the authority to conduct the information collection request (ICR) titled, “Workforce Flexibility (Workflex) Plan Submission and Reporting Requirements.” This comment request is part of continuing Departmental efforts to reduce paperwork and respondent burden in accordance with the Paperwork Reduction Act of 1995 (PRA).
Consideration will be given to all written comments received by March 9, 2021.
A copy of this ICR with applicable supporting documentation, including a description of the likely respondents, proposed frequency of response, and estimated total burden, may be obtained free by contacting Heather Fleck by telephone at 202-693-2956 (this is not a toll-free number), TTY 1-877-889-5627 (this is not a toll-free number), or by email at
Submit written comments about, or requests for a copy of, this ICR by mail or courier to the U.S. Department of Labor, Employment and Training Administration, Division of Adult Services and Governance, U.S. Department of Labor, 200 Constitution Avenue NW, Room S4209, Washington, DC 20210; by email:
Contact Heather Fleck by telephone at 202-693-2956 (this is not a toll-free number) or by email at
44 U.S.C. 3506(c)(2)(A).
DOL, as part of continuing efforts to reduce paperwork and respondent burden, conducts a pre-clearance consultation program to provide the general public and Federal agencies an opportunity to comment on proposed and/or continuing collections of information before submitting them to the Office of Management and Budget (OMB) for final approval. This program helps to ensure requested data can be provided in the desired format, reporting burden (time and financial resources) is minimized, collection instruments are clearly understood, and the impact of collection requirements can be properly assessed.
Section 190 of the Workforce Innovation and Opportunity Act (WIOA) (Public Law 113-128, July 22, 2014) permits states to apply for Workflex waiver authority. The Act and 20 CFR 679.630 provide that the Secretary may grant Workflex waiver authority for up to five years pursuant to a Workflex plan submitted by a state. Under Workflex, governors are granted the authority to approve requests submitted by their local areas to waive certain statutory and regulatory provisions of WIOA Title I programs. States may request waivers from the Secretary of certain requirements of the Wagner-Peyser Act (Sections 8-10) as well as certain provisions of the Older American Act of 1965 (OAA) (42 U.S.C. 305d(b)) for state agencies on aging with respect to activities carried out using funds allotted under OAA section 506(b). One of the underlying principles for granting Workflex waivers is that the waivers will result in improved performance outcomes for persons served and that the waiver authority will be granted in consideration of improved performance.
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 it is approved by OMB under the PRA 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 Control Number. See 5 CFR 1320.5(a) and 1320.6.
Interested parties are encouraged to provide comments to the contact shown in the
Submitted comments will also be a matter of public record for this ICR and posted on the internet, without redaction. DOL encourages commenters not to include personally identifiable information, confidential business data, or other sensitive statements/information in any comments.
DOL is particularly interested in comments that:
• Evaluate 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;
• Evaluate 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;
• Enhance the quality, utility, and clarity of the information to be collected; and
• 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, (
Office of the Assistant Secretary for Policy, Chief Evaluation Office, Department of Labor.
Notice of information collection; request for comment.
The Department of Labor (DOL), as part of its continuing effort to reduce paperwork and respondent burden, conducts a preclearance consultation program to provide the general public and federal agencies with an opportunity to comment on proposed and/or continuing collections of information in accordance with the Paperwork Reduction Act of 1995 (PRA95). This program helps to ensure that requested data can be provided in the desired format, reporting burden (time and financial resources) is minimized, collection instruments are clearly understood, and the impact of collection requirements on respondents is properly assessed. Currently, the Department of Labor is soliciting comments concerning the collection of data about the Job Corps Evidence Building Portfolio. A copy of the proposed Information Collection Request (ICR) can be obtained by contacting the office listed below in the addressee section of this notice.
Written comments must be submitted to the office listed in the addressee section below on or before March 9, 2021.
You may submit comments by either one of the following methods:
Jessica Lohmann by email at
The Chief Evaluation Office (CEO) of the U.S. Department of Labor (DOL) intends to design and conduct an evaluation to assess the implementation and outcomes of three Job Corps demonstration pilots. The goals of the implementation and outcomes evaluation are to understand who the pilots enroll, what services they provide, how these services are implemented, and how the pilots compare with traditional Job Corps. The evaluation will also assess outcomes of participants in the demonstration pilots, as well as identify any best practices. The project also includes impact feasibility assessments of each of the demonstration pilots to assess the potential for conducting an impact evaluation of the pilot's effectiveness or similar future pilots. This
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Currently, the Department of Labor is soliciting comments concerning the above data collection for the Job Corps Evidence Building Project. DOL is particularly interested in comments that do the following:
• Evaluate whether the proposed collection of information is necessary for the proper performance functions of the agency, including whether the information will have practical utility;
• evaluate the accuracy of the agency's burden estimate of the proposed information collection, including the validity of the methodology and assumptions;
• enhance the quality, utility, and clarity of the information to be collected; and
• minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology—for example, permitting electronic submissions of responses.
At this time, the Department of Labor is requesting clearance for the semi-structured program and partner staff topic guide, participant interview and focus group topic guide, grantee program survey, and impact feasibility study topic guide.
Comments submitted in response to this request will be summarized and-or included in the request for Office of
Office of Workers' Compensation Programs, Labor. ACTION: Notice of availability; request for comments.
The Office of Workers' Compensation Programs (OWCP) is announcing publication of a preliminary program bulletin titled “DCMWC Self-Insurance Process Guidelines” describing the agency's updated process for evaluating self-insurance applications under the Black Lung Benefits Act (BLBA). The BLBA requires coal mine operators to secure the payment of benefits by either purchasing commercial insurance or obtaining the Department's authorization to self-insure those liabilities. Authorization to self-insure may be granted or denied at the Department's discretion. OWCP is making the programmatic changes and preliminary bulletin available for public comment pursuant to the Department of Labor's PRO Good Guidance Rule.
The Department invites written comments on the self-insurance program and the bulletin from interested parties. Written comments must be received by February 8, 2021.
You may submit written comments electronically by the following method:
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Michael Chance, Director, Division of Coal Mine Workers' Compensation, Office of Workers' Compensation Programs, U.S. Department of Labor, 200 Constitution Avenue NW, Room N-3464, Washington, DC 20210. Telephone: 1-800-347-2502. This is a toll-free number. TTY/TDD callers may dial toll-free 1-800-877-8339 for further information.
The BLBA provides benefits to coal miners who are totally disabled by pneumoconiosis (commonly known as black lung disease) and to certain of their survivors. The BLBA requires coal mine operators to secure the payment of benefits by either purchasing commercial insurance or obtaining the Department's authorization to self-insure those liabilities. 30 U.S.C. 933(a). Authorization to self-insure may be granted or denied at the Department's discretion. 20 CFR 726.101(a). When a self-insurer is unable (or unwilling) to meet its payment obligations, the Black Lung Disability Trust Fund (Trust Fund) makes those payments. Although the Trust Fund acts as a backstop, Congress intended “to ensure that individual coal operators rather than the trust fund bear the liability for [black lung] claims arising out of such operators' mines to the maximum extent feasible.”
Out of an abundance of caution, OWCP is requesting comments on the bulletin and its underlying programmatic changes, in line with the requirements of the Department's PRO Good Guidance Rule,
Persons with internet access may view the preliminary bulletin at
Copyright Royalty Board, Library of Congress.
Public notice.
The Copyright Royalty Judges (Judges) announce receipt from SoundExchange, Inc., (SoundExchange) of a notice of intent to audit Music Choice to verify royalties paid by Commercial Webcasters, Preexisting Subscription Services, and Business Establishment Services in 2017, 2018, and 2019 pursuant to two statutory licenses.
Anita Blaine, Program Specialist, by telephone at (202) 707-7658 or by email at
The Copyright Act, title 17 of the United States Code, grants to sound recordings copyright owners the exclusive right to publicly perform sound recordings by means of certain digital audio transmissions, subject to limitations. Specifically, the right is limited by the statutory license in section 114, which allows nonexempt noninteractive digital subscription services, eligible nonsubscription services, and preexisting satellite digital audio radio services to perform publicly sound recordings by means of digital audio transmissions. 17 U.S.C. 114(f). In addition, a statutory license in section 112 allows a service to make necessary ephemeral reproductions to facilitate the digital transmission of the sound recording, including for transmissions to business establishments. 17 U.S.C. 112(e).
Licensees may operate under these licenses provided they pay the royalty fees and comply with the terms set by the Judges. The rates and terms for the section 112 and 114 licenses are set forth in 37 CFR parts 380, 382, and 384.
As part of the terms set for these licenses, the Judges designated SoundExchange as the Collective,
As the Collective, SoundExchange may, only once a year, conduct an audit of a licensee for any or all of the prior three calendar years in order to verify royalty payments. SoundExchange must first file with the Judges a notice of intent to audit a licensee and deliver the notice to the licensee.
On December 18, 2020, SoundExchange filed with the Judges a notice of intent to audit Music Choice for royalties paid by Commercial Webcasters, Preexisting Subscription Services, and Business Establishment Services for the years 2017, 2018, and 2019. The Judges must publish notice in the
Copyright Royalty Board, Library of Congress.
Public Notice.
The Copyright Royalty Judges announce receipt from SoundExchange, Inc., (SoundExchange) of notices of intent to audit the 2017, 2018, and 2019 statements of account submitted by commercial webcasters Cumulus Media, Emmis Communications, IMVU, Inc., Pandora Media, LLC, and Urban One, Inc. concerning the royalty payments they made pursuant to two statutory licenses.
Anita Blaine, Program Specialist, by telephone at (202) 707-7658 or by email at
The Copyright Act, title 17 of the United States Code, grants to sound recordings copyright owners the exclusive right to publicly perform sound recordings by means of certain digital audio transmissions, subject to limitations. Specifically, the right is limited by the statutory license in section 114, which allows nonexempt noninteractive digital subscription services, eligible nonsubscription services, and pre-existing satellite digital audio radio services to perform publicly sound recordings by means of digital audio transmissions. 17 U.S.C. 114(f). In addition, a statutory license in section 112 allows a service to make necessary ephemeral reproductions to facilitate the digital transmission of the sound recording. 17 U.S.C. 112(e).
Licensees may operate under these licenses provided they pay the royalty fees and comply with the terms set by the Copyright Royalty Judges. The rates and terms for the section 112 and 114 licenses are set forth in 37 CFR parts 380 and 382-84.
As part of the terms set for these licenses, the Judges designated SoundExchange, as the Collective,
As the Collective, SoundExchange may, only once a year, conduct an audit of a licensee for any or all of the prior three calendar years in order to verify royalty payments. SoundExchange must first file with the Judges a notice of intent to audit a licensee and deliver the notice to the licensee.
On December 18, 2020, SoundExchange filed with the Judges notices of intent to audit Cumulus Media, Emmis Communications, IMVU, Inc., Pandora Media, LLC, and Urban One, Inc. for the years 2017—2019. The Judges must publish notice in the
Copyright Royalty Board, Library of Congress.
Public notice.
The Copyright Royalty Judges announce receipt from SoundExchange, Inc., (SoundExchange) of a notice of intent to audit the 2017, 2018, and 2019 statements of account submitted by Rockbot, Inc.'s Business Establishment Service concerning royalty payments they made pursuant to statutory license.
Anita Blaine, Program Specialist, by telephone at (202) 707-7658 or by email at
The Copyright Act, title 17 of the United States Code, grants to sound recordings copyright owners the exclusive right to publicly perform sound recordings by means of certain digital audio transmissions, subject to limitations. Specifically, the right is limited by the statutory license in section 112, which allows a service to make necessary ephemeral reproductions to facilitate the digital transmission of the sound recording, including for transmissions to business establishments. 17 U.S.C. 112(e).
Licensees may operate under this license provided they pay the royalty fees and comply with the terms set by the Copyright Royalty Judges. The rates and terms for the section 112(e) license applicable to business establishment services is set forth in 37 CFR 384.
As part of the terms set for this license, the Judges designated SoundExchange as the Collective,
As the Collective, SoundExchange may, only once a year, conduct an audit of a licensee for any or all of the prior three calendar years in order to verify royalty payments. SoundExchange must first file with the Judges a notice of intent to audit a licensee and deliver the notice to the licensee.
On December 18, 2020, SoundExchange filed with the Judges a notice of intent to audit Rockbot, Inc.'s Business Establishment Service for the years 2017, 2018, and 2019. The Judges must publish notice in the
National Security Commission on Artificial Intelligence.
Notice of Federal Advisory Committee virtual public meeting.
The National Security Commission on Artificial Intelligence (the “Commission”) is publishing this notice to announce that the following Federal Advisory Committee virtual public meeting—held over two days—will take place.
Monday, January 25, 2021, 12:00 p.m. to 3:00 p.m. Eastern Standard Time (EST), Tuesday, January 26, 2021, 12:00 p.m. to 3:00 p.m. EST.
Ms. Angela Ponmakha, 703-614-6379 (Voice),
This two-day meeting is being held under the provisions of the Federal Advisory Committee Act (FACA) (5 U.S.C., Appendix), the Government in the Sunshine Act (5 U.S.C. 552b), and 41 CFR 102-3.140 and 102-3.150.
The Commission will deliberate on the draft Final Report chapters and recommendations and consider them for inclusion in the Commission's final report to Congress and the
National Credit Union Administration (NCUA).
Notice; request for information (RFI).
The NCUA is seeking comments and information from interested parties on the NCUA's communication methods and related initiatives to promote efficiency and increase transparency.
Comments must be received on or before March 9, 2021.
Comments may be submitted using
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All comments received must include the agency name for this rulemaking. All comments received will be posted without change to the NCUA's websites (
Ben Hardaway, National Credit Union Administration, Office of External Affairs and Communications, 1775 Duke Street, Alexandria, VA 22314, telephone (703) 518-6333, and email
The NCUA's examination and supervision of federally insured credit unions and enforcement of applicable rules and regulations is designed to protect the safety and soundness of the credit union system and ensure consumer financial protection. To accomplish this mission, the NCUA must be able to communicate efficiently and effectively with financial institutions.
Stakeholders learn about the agency's mission, values, policies, initiatives, and strategic goals primarily through
The NCUA is seeking public input on how to make its communications with federally insured credit unions more effective, consistent, and clear to minimize unnecessary regulatory and operation burdens as much as possible and promote compliance with all applicable laws and regulations. While the NCUA's communications are essential to fulfill its statutory mandate, the agency recognizes the amount of information it provides to credit unions can create challenges and may impose unintended burdens for institutions. The agency intends to remove outdated, duplicative and superseded regulatory and supervisory guidance from its website.
Additionally, the NCUA is asking its stakeholders to suggest initiatives that would maximize efficiency and minimize burdens associated with obtaining information on federal laws, regulations, policies, guidance, and other materials relevant to federally insured credit unions.
The NCUA uses many forms of communication to inform credit unions about regulations, policies and guidance, industry data and educational materials, and other news and updates. The agency's primary communications channel is its website,
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National Supervision Policy Manual
Chartering and Field of Membership Manual
Fair Lending Guide
Federal Consumer Financial Protection Guide
• Frequently Asked Questions (FAQs) or Questions and Answers (Q&As)
• NCUA Open Board Meetings and Associated Documents.
To reduce the burden for institutions and others seeking information, both in terms of expending fewer resources to find relevant information and decreasing the amount of information that requires review, the NCUA is seeking input on how best to streamline and improve communication with its stakeholders. The NCUA encourages comments from all interested members of the public, including but not limited to, federally insured credit unions, other financial institutions or companies, credit union service organizations, vendors, individual credit union members and consumers, consumer groups, and other members of the financial services industry. Please be as specific as possible to allow the NCUA to evaluate comments more effectively.
In addition to general feedback on the NCUA's communication practices and related initiatives, the agency requests input on the following specific topics and questions related to its communications and transparency:
The NCUA issues, or has issued, regulatory and supervisory guidance under a variety of different letterheads, including Letters to Credit Unions, Letters to Federal Credit Unions, Corporate Credit Union Guidance Letters, Accounting Bulletins, Risk Alerts, Regulatory Alerts, Consumer Financial Protection Updates, and Supervisory Letters. Is this practice effective? Should the agency consider consolidating its supervisory guidance into fewer letterheads?
How effective are the NCUA's current forms of communication, such as press releases, social media content, and email distributions? Which of these are the most or the least effective? Are there other methods of communication the NCUA should consider?
Which communications vehicles are best suited for informing federally insured credit unions about new policy initiatives, laws and regulations, guidance, background or educational materials, news and other updates?
How appropriate is the timing and frequency of the NCUA's communication?
Is it clear to federally insured credit unions which of the agency's communication is supervisory in nature and which is purely informational?
How can the NCUA improve the
How often do you access the financial performance, chartering and merger data available on NCUA.gov? Is the current format useful to you? How can we improve the presentation of data online?
What other financial, business, or economic data websites do you use? What do you like about how they present their financial or economic data? What features should the NCUA consider when improving its presentation of financial performance and other data to stakeholders online?
Commenters are also encouraged to discuss any other relevant issues they believe the NCUA should consider with respect to the agency's communications and websites.
67 FR 63452 (October 11, 2002).
Institute of Museum and Library Services, National Foundation for the Arts and the Humanities.
Notice, request for comments, collection of information.
The Institute of Museum and Library Services (IMLS), as part of its continuing effort to reduce paperwork and respondent burden, conducts a pre-clearance consultation program to provide the general public and Federal agencies with an opportunity to comment on proposed and/or continuing collections of information in accordance with the Paperwork Reduction Act. This pre-clearance consultation program helps to ensure that requested data can be provided in the desired format, reporting burden (time and financial resources) is minimized, collection instruments are clearly understood, and the impact of collection requirements on respondents can be properly assessed. By this Notice, IMLS is soliciting comments concerning a plan to offer two grant programs targeting the needs of museums nationwide: IMLS National Leadership Grants for Museums and IMLS Museums for America Program. A copy of the proposed information collection request can be obtained by contacting the individual listed below in the
Written comments must be submitted to the office listed in the addressee section below on or before March 8, 2021.
Send comments to Connie Bodner, Ph.D., Director of Grants Policy and Management, Office of Grants Policy and Management, Institute of Museum and Library Services, 955 L'Enfant Plaza North SW, Suite 4000, Washington, DC 20024-2135. Dr. Bodner can be reached by telephone at 202-653-4636, or by email at
Helen Wechsler, Supervisory Grants Management Specialist, Office of Museum Services, Institute of Museum and Library Services, 955 L'Enfant Plaza North SW, Suite 4000, Washington, DC 20024-2135. Ms. Wechsler can be reached by telephone at 202-653-4779, or by email at
IMLS is particularly interested in public comments that help the agency to:
• Evaluate 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;
• Evaluate 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;
• Enhance the quality, utility, and clarity of the information to be collected; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated electronic, mechanical, or other technological collection techniques, or other forms of information technology,
The Institute of Museum and Library Services is the primary source of Federal support for the Nation's libraries and museums. We advance, support, and empower America's museums, libraries, and related organizations through grant making, research, and policy development. Our vision is a nation where museums and libraries work together to transform the lives of individuals and communities. To learn more, visit
The goal of IMLS National Leadership Grants for Museums is to support projects that address critical needs of the museum field and that have the potential to advance practice in the profession so that museums can improve services for the American public.
The goal of IMLS Museums for America is to support projects that strengthen the ability of an individual museum to serve its public. It has three project categories: Lifelong Learning, Community Engagement, and Collections Stewardship and Access.
This action is to renew the content, forms, and instructions for each of the two Notices of Funding Opportunity for the next three years.
Institute of Museum and Library Services, National Foundation for the Arts and the Humanities.
Notice, request for comments, collection of information.
The Institute of Museum and Library Services (IMLS), as part of its continuing effort to reduce paperwork and respondent burden, conducts a pre-clearance consultation program to provide the general public and Federal agencies with an opportunity to comment on proposed and/or continuing collections of information in accordance with the Paperwork Reduction Act. This pre-clearance consultation program helps to ensure that requested data can be provided in the desired format, reporting burden (time and financial resources) is minimized, collection instruments are clearly understood, and the impact of collection requirements on respondents can be properly assessed. The purpose of this Notice is to solicit comments concerning the three-year approval of the forms necessary to report on grant and cooperative agreement activities on interim and final bases for all IMLS grant programs.
A copy of the proposed information collection request can be obtained by contacting the individual listed below in the
Written comments must be submitted to the office listed in the addressee section below on or before March 8, 2021.
Send comments to Connie Bodner, Ph.D., Director of Grants Policy and Management, Office of Grants Policy and Management, Institute of Museum and Library Services, 955 L'Enfant Plaza North SW, Suite 4000, Washington, DC 20024-2135. Dr. Bodner can be reached by telephone at 202-653-4636, or by email at
Connie Bodner, Ph.D., Director of Grants Policy and Management, Office of Grants Policy and Management, Institute of Museum and Library Services, 955 L'Enfant Plaza North SW, Suite 4000, Washington, DC 20024-2135. Dr. Bodner can be reached by telephone at 202-653-4636, or by email at
IMLS is particularly interested in public comments that help the agency to:
• Evaluate 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;
• Evaluate 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;
• Enhance the quality, utility, and clarity of the information to be collected; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated electronic, mechanical, or other technological collection techniques, or other forms of information technology,
The Institute of Museum and Library Services is the primary source of Federal support for the Nation's libraries and museums. We advance, support, and empower America's museums, libraries, and related organizations through grant making, research, and policy development. Our vision is a nation where museums and libraries work together to transform the lives of individuals and communities. To learn more, visit
To administer the IMLS processes associated with grants and cooperative agreements, IMLS uses standardized application forms, guidelines, and reporting forms for eligible libraries, museums, and other organizations to apply for its funding and to report on performance of funded projects. The forms submitted for public review in this Notice are the Interim Performance Report and the Final Performance Report, with the instructions associated with each one. The collection of information using these forms is core to IMLS grant performance reporting requirements and monitoring processes.
This action is to renew the content, forms, and instructions for the next three years.
Institute of Museum and Library Services, National Foundation for the Arts and the Humanities.
Notice, request for comments, collection of information.
The Institute of Museum and Library Services (IMLS), as part of its continuing effort to reduce paperwork and respondent burden, conducts a pre-clearance consultation program to provide the general public and Federal agencies with an opportunity to comment on proposed and/or continuing collections of information in accordance with the Paperwork Reduction Act. This pre-clearance consultation program helps to ensure that requested data can be provided in the desired format, reporting burden (time and financial resources) is minimized, collection instruments are clearly understood, and the impact of collection requirements on respondents can be properly assessed. By this Notice, IMLS is soliciting comments concerning a plan to offer two grant programs targeting the needs of libraries and their communities nationwide: IMLS National Leadership Grants for Libraries and the IMLS Laura Bush 21st Century Librarian Program.
A copy of the proposed information collection request can be obtained by contacting the individual listed below in the
Written comments must be submitted to the office listed in the addressee section below on or before March 8, 2021.
Send comments to Connie Bodner, Ph.D., Director of Grants Policy and Management, Office of Grants Policy and Management, Institute of Museum and Library Services, 955 L'Enfant Plaza North SW, Suite 4000, Washington, DC 20024-2135. Dr. Bodner can be reached by telephone at 202-653-4636, or by email at
Anthony D. Smith, Associate Deputy Director, Office of Library Services Discretionary Programs, Institute of Museum and Library Services, 955 L'Enfant Plaza North SW, Suite 4000, Washington, DC 20024-2135. Mr. Smith can be reached by telephone at 202-653-4716, or by email at
IMLS is particularly interested in public comments that help the agency to:
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including
• Evaluate 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;
• Enhance the quality, utility, and clarity of the information to be collected; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated electronic, mechanical, or other technological collection techniques, or other forms of information technology,
The Institute of Museum and Library Services is the primary source of Federal support for the Nation's libraries and museums. We advance, support, and empower America's museums, libraries, and related organizations through grant making, research, and policy development. Our vision is a nation where museums and libraries work together to transform the lives of individuals and communities. To learn more, visit
IMLS National Leadership Grants for Libraries support projects that enhance the quality of library and archive services nationwide by advancing theory and practice and by generating results such as new tools, research findings, models, services, practices, or collaborative approaches that can be widely used, adapted, scaled, or replicated to extend the benefits of federal investment.
The IMLS Laura Bush 21st Century Librarian Program supports developing a diverse workforce of librarians to better meet the changing learning and information needs of the American public by enhancing the training and professional development of library and archives professionals; developing faculty and library leaders; and recruiting educating, and retaining the next generation of library and archives professionals.
This action is to renew the content, forms, and instructions for each of the two Notices of Funding Opportunity for the next three years.
Institute of Museum and Library Services, National Foundation for the Arts and the Humanities.
Notice, request for comments, collection of information.
The Institute of Museum and Library Services (IMLS), as part of its continuing effort to reduce paperwork and respondent burden, conducts a pre-clearance consultation program to provide the general public and Federal agencies with an opportunity to comment on proposed and/or continuing collections of information in accordance with the Paperwork Reduction Act. This pre-clearance consultation program helps to ensure that requested data can be provided in the desired format, reporting burden (time and financial resources) is minimized, collection instruments are clearly understood, and the impact of collection requirements on respondents can be properly assessed. The purpose of this Notice is to solicit comments concerning the nomination form for the annual IMLS National Medal for Museum and Library Service Program designed to recognize outstanding libraries and museums that have made significant contributions in service to improve the wellbeing of their communities.
A copy of the proposed information collection request can be obtained by contacting the individual listed below in the
Written comments must be submitted to the office listed in the addressee section below on or before March 8, 2021.
Send comments to Connie Bodner, Ph.D., Director of Grants Policy and Management, Office of Grants Policy and Management, Institute of Museum and Library Services, 955 L'Enfant Plaza North SW, Suite 4000, Washington, DC 20024-2135. Dr. Bodner can be reached by telephone at 202-653-4636, or by email at
Katherine Maas, Project Specialist, Institute of Museum and Library Services, 955 L'Enfant Plaza North SW, Suite 4000, Washington, DC 20024-2135. Ms. Maas can be reached by telephone at 202-653-4798, or by email at
IMLS is particularly interested in public comments that help the agency to:
• Evaluate 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;
• Evaluate 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;
• Enhance the quality, utility, and clarity of the information to be collected; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated electronic, mechanical, or other technological collection techniques, or other forms of information technology,
The Institute of Museum and Library Services is the primary source of Federal support for the Nation's libraries and museums. We advance, support, and empower America's museums, libraries, and related organizations through grant making, research, and policy development. Our vision is a nation where museums and libraries work together to transform the lives of individuals and communities. To learn more, visit
The National Medal for Museum and Library Service is the nation's highest honor for institutions that make significant and exceptional contributions to their communities. Since 1994, IMLS has presented the award to institutions that demonstrate extraordinary and innovative approaches to community service. Recipient institutions are honored at an awards ceremony that is held in Washington, DC.
To administer the IMLS processes associated with the National Medal for Museum and Library Service, IMLS uses a standardized nomination form to collect administrative information about nominated organizations, their communities, and their programs.
This action is to renew the content, form, and instructions for the next three years.
Institute of Museum and Library Services, National Foundation for the Arts and the Humanities.
Notice, request for comments, collection of information.
The Institute of Museum and Library Services (IMLS), as part of its continuing effort to reduce paperwork and respondent burden, conducts a pre-clearance consultation program to provide the general public and Federal agencies with an opportunity to comment on proposed and/or continuing collections of information in accordance with the Paperwork Reduction Act. This pre-clearance consultation program helps to ensure that requested data can be provided in the desired format, reporting burden (time and financial resources) is minimized, collection instruments are clearly understood, and the impact of collection requirements on respondents can be properly assessed. By this Notice, IMLS is soliciting comments concerning the initiative targeting the needs of small museums and their communities nationwide: IMLS Inspire! Grants for Small Museums Program.
A copy of the proposed information collection request can be obtained by contacting the individual listed below in the
Written comments must be submitted to the office listed in the addressee section below on or before March 8, 2021.
Send comments to Connie Bodner, Ph.D., Director of Grants Policy and Management, Office of Grants Policy and Management, Institute of Museum and Library Services, 955 L'Enfant Plaza North SW, Suite 4000, Washington, DC 20024-2135. Dr. Bodner can be reached by telephone at 202-653-4636, by email at
Reagan Moore, Senior Program Officer, Office of Museum Services, Institute of Museum and Library Services, 955 L'Enfant Plaza North SW, Suite 4000, Washington, DC 20024-2135. Ms. Moore can be reached by telephone at 202-653-4637, or by email at
IMLS is particularly interested in public comments that help the agency to:
• Evaluate 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;
• Evaluate 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;
• Enhance the quality, utility, and clarity of the information to be collected; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated electronic, mechanical, or other technological collection techniques, or other forms of information technology,
The Institute of Museum and Library Services is the primary source of Federal support for the Nation's libraries and museums. We advance, support, and empower America's museums, libraries, and related organizations through grant making, research, and policy development. Our vision is a nation where museums and libraries work together to transform the lives of individuals and communities. To learn more, visit
The goal of IMLS Inspire! Grants for Small Museums is to help small museums implement projects that address priorities identified in their strategic plans. It has three project categories: Lifelong Learning, Institutional Capacity, and Collections Stewardship and Access.
This action is to renew the content, forms, and instructions for the Notice of Funding Opportunity for the next three years.
Institute of Museum and Library Services, National Foundation for the Arts and the Humanities.
Notice, request for comments, collection of information.
The Institute of Museum and Library Services (IMLS), as part of its continuing effort to reduce paperwork and respondent burden, conducts a pre-clearance consultation program to provide the general public and Federal agencies with an opportunity to comment on proposed and/or continuing collections of information in accordance with the Paperwork Reduction Act. This pre-clearance consultation program helps to ensure that requested data can be provided in the desired format, reporting burden (time and financial resources) is minimized, collection instruments are clearly understood, and the impact of collection requirements on respondents can be properly assessed. By this Notice, IMLS is soliciting comments concerning a plan to offer a special initiative of the Museums for America grant program that will target professional development needs for museums: Museums Empowered.
A copy of the proposed information collection request can be obtained by contacting the individual listed below in the
Written comments must be submitted to the office listed in the addressee section below on or before March 8, 2021.
Send comments to Connie Bodner, Ph.D., Director of Grants Policy and Management, Office of Grants Policy and Management, Institute of Museum and Library Services, 955 L'Enfant Plaza North SW, Suite 4000, Washington, DC 20024-2135. Dr. Bodner can be reached by telephone at 202-653-4636, or by email at
Mark Isaksen, Supervisory Grants Management Specialist, Office of Museum Services, Institute of Museum and Library Services, 955 L'Enfant Plaza North SW, Suite 4000, Washington DC 20024-2135. Mr. Isaksen can be reached by telephone at 202-653-4667, or by email at
IMLS is particularly interested in public comments that help the agency to:
• Evaluate 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;
• Evaluate 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;
• Enhance the quality, utility, and clarity of the information to be collected; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated electronic, mechanical, or other technological collection techniques, or other forms of information technology,
The Institute of Museum and Library Services is the primary source of Federal support for the Nation's libraries and museums. We advance, support, and empower America's museums, libraries, and related organizations through grant making, research, and policy development. Our vision is a nation where museums and libraries work together to transform the lives of individuals and communities. To learn more, visit
The goal of Museums Empowered is to strengthen the ability of an individual museum to serve its public through professional development activities that cross-cut various departments to generate systemic change within the museum. It has four project categories: Diversity and Inclusion, Digital Technology, Evaluation, and Organizational Management.
This action is to renew the content, forms, and instructions for the Notice of Funding Opportunity for the next three years.
Institute of Museum and Library Services, National Foundation for the Arts and the Humanities.
Notice, request for comments, collection of information.
The Institute of Museum and Library Services (IMLS), as part of its continuing effort to reduce paperwork and respondent burden, conducts a pre-clearance consultation program to provide the general public and Federal agencies with an opportunity to comment on proposed and/or continuing collections of information in accordance with the Paperwork Reduction Act. This pre-clearance consultation program helps to ensure that requested data can be provided in the desired format, reporting burden (time and financial resources) is minimized, collection instruments are clearly understood, and the impact of collection requirements on respondents can be properly assessed. The purpose of this Notice is to solicit comments concerning the annual IMLS Library and Museum Reviewer Forms which are used by library and museum professionals to submit their interest and expertise to be considered for selection as an IMLS peer reviewer.
A copy of the proposed information collection request can be obtained by contacting the individual listed below in the
Written comments must be submitted to the office listed in the addressee section below on or before March 8, 2021.
Send comments to Connie Bodner, Ph.D., Director of Grants Policy and Management, Office of Grants Policy and Management, Institute of Museum and Library Services, 955 L'Enfant Plaza North, SW, Suite 4000, Washington, DC 20024-2135. Dr. Bodner can be reached by telephone at 202-653-4636, or by email at
Connie Bodner, Ph.D., Director of Grants Policy and Management, Office of Grants Policy and Management, Institute of Museum and Library Services, 955 L'Enfant Plaza North, SW, Suite 4000, Washington, DC 20024-2135. Dr. Bodner can be reached by telephone at 202-653-4636, or by email at
IMLS is particularly interested in public comments that help the agency to:
• Evaluate 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;
• Evaluate 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;
• Enhance the quality, utility, and clarity of the information to be collected; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated electronic, mechanical, or other technological collection techniques, or other forms of information technology,
The Institute of Museum and Library Services is the primary source of Federal support for the Nation's libraries and museums. We advance, support, and empower America's museums, libraries, and related organizations through grant making, research, and policy development. Our vision is a nation where museums and libraries work together to transform the lives of individuals and communities. To learn more, visit
All proposals submitted for IMLS competitive awards are reviewed by library and museum professionals who know the needs of communities, can share promising practices, and are well versed in the issues and concerns of museums and libraries today. Peer reviewers dedicate their time and expertise to advance the highest professional practices in the field. The IMLS review process is well respected, and the success of our grant programs is largely due to the expertise of our reviewers. These peer reviewer forms, accessed through the IMLS website, allow library and museum professionals to indicate their interest and expertise to be considered for selection as an IMLS peer reviewer.
This action is to renew the content, forms, and instructions for the next three years.
Institute of Museum and Library Services, National Foundation for the Arts and the Humanities.
Notice, request for comments, collection of information.
The Institute of Museum and Library Services (IMLS), as part of its continuing effort to reduce paperwork and respondent burden, conducts a pre-clearance consultation program to provide the general public and Federal agencies with an opportunity to comment on proposed and/or continuing collections of information in accordance with the Paperwork Reduction Act. This pre-clearance consultation program helps to ensure that requested data can be provided in the desired format, reporting burden (time and financial resources) is minimized, collection instruments are clearly understood, and the impact of collection requirements on respondents can be properly assessed. The purpose of this Notice is to solicit comments concerning the three year approval of the IMLS Native American Basic Library Grant Program Final Performance Report Form. A copy of the proposed information collection request can be obtained by contacting the individual listed below in the
Written comments must be submitted to the office listed in the addressee section below on or before March 8, 2021.
Send comments to Connie Bodner, Ph.D., Director of Grants Policy and Management, Office of Grants Policy and Management, Institute of Museum and Library Services, 955 L'Enfant Plaza North SW, Suite 4000, Washington, DC 20024-2135. Dr. Bodner can be reached by telephone at 202-653-4636, or by email at
Connie Bodner, Ph.D., Director of Grants Policy and Management, Office of Grants Policy and Management, Institute of Museum and Library Services, 955 L'Enfant Plaza North SW, Suite 4000, Washington, DC 20024-2135. Dr. Bodner can be reached by telephone at 202-653-4636, or by email at
IMLS is particularly interested in public comments that help the agency to:
• Evaluate 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;
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information
• Enhance the quality, utility, and clarity of the information to be collected; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated electronic, mechanical, or other technological collection techniques, or other forms of information technology,
The Institute of Museum and Library Services is the primary source of Federal support for the Nation's libraries and museums. We advance, support, and empower America's museums, libraries, and related organizations through grant making, research, and policy development. Our vision is a nation where museums and libraries work together to transform the lives of individuals and communities. To learn more, visit
To administer the IMLS processes associated with Native American Library Services Basic Grants, IMLS uses standardized application forms, guidelines, and reporting forms for eligible Native American tribes. The form submitted for public review in this Notice is the Final Performance Report Form with instructions. The collection of information using this form is core to IMLS grant performance reporting requirements and monitoring processes.
This action is to renew the content, form, and instructions for the next three years.
Institute of Museum and Library Services, National Foundation on the Arts and the Humanities.
Submission for OMB Review, comment request.
The Institute of Museum and Library Services announces the following information collection has been submitted to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act. This program helps to ensure that requested data can be provided in the desired format, reporting burden (time and financial resources) is minimized, collection instruments are clearly understood, and the impact of collection requirements on respondents can be properly assessed. This notice proposes the clearance of the 2023-2027 IMLS Grants to States Program Five-Year State Plan Guidelines for State Library Administrative Agencies.
A copy of the proposed information collection request can be obtained by contacting the individual listed below in the
Written comments must be submitted to the office listed in the
OMB is particularly interested in comments that help the agency to:
• Evaluate 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;
• Evaluate 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;
• Enhance the quality, utility, and clarity of the information to be collected; and
• 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 (
Written comments and recommendations for proposed information collection requests should be sent within 30 days of publication of this Notice to
Teresa DeVoe, Associate Deputy Director of State Programs, Office of Library Services, Institute of Museum and Library Services, 955 L'Enfant Plaza North SW, Suite 4000, Washington, DC 20024-2135. Ms. DeVoe can be reached by telephone at 202-653-4778, or by email at
The Institute of Museum and Library Services is the primary source of federal support for the nation's libraries and museums. We advance, support, and empower America's museums, libraries, and related organizations through grant making, research, and policy development. Our vision is a nation where museums and libraries work together to work together to transform the lives of individuals and communities. To learn more, visit
The Grants to States program is the largest source of Federal funding
• Each of the 50 States of the United States, and the District of Columbia;
• The Territories (the Commonwealth of Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands); and
• The Freely Associated States (the Republic of the Marshall Islands, the Federated States of Micronesia, and the Republic of Palau).
Each year, more than 1,500 Grants to States projects support the purposes and priorities outlined in the Library Services and Technology Act (LSTA). (See 20 U.S.C. 9121
Institute of Museum and Library Services, National Foundation for the Arts and the Humanities.
Notice, request for comments, collection of information.
The Institute of Museum and Library Services (IMLS), as part of its continuing effort to reduce paperwork and respondent burden, conducts a pre-clearance consultation program to provide the general public and Federal agencies with an opportunity to comment on proposed and/or continuing collections of information in accordance with the Paperwork Reduction Act. This pre-clearance consultation program helps to ensure that requested data can be provided in the desired format, reporting burden (time and financial resources) is minimized, collection instruments are clearly understood, and the impact of collection requirements on respondents can be properly assessed. By this Notice, IMLS is soliciting comments concerning a plan to offer two grant programs targeting the needs of specific museums and their communities nationwide: IMLS Museum Grants for African American History and Culture Program and IMLS Native American/Native Hawaiian Museum Services Program.
A copy of the proposed information collection request can be obtained by contacting the individual listed below in the
Written comments must be submitted to the office listed in the addressee section below on or before March 8, 2021.
Send comments to Connie Bodner, Ph.D., Director of Grants Policy and Management, Office of Grants Policy and Management, Institute of Museum and Library Services, 955 L'Enfant Plaza North SW, Suite 4000, Washington, DC 20024-2135. Dr. Bodner can be reached by telephone at 202-653-4636, or by email at
For IMLS Museum Grants for African American History and Culture Program, contact Mark Isaksen, Supervisory Grants Management Specialist, Office of Museum Services, Institute of Museum and Library Services, 955 L'Enfant Plaza North SW, Suite 4000, Washington DC 20024-2135. Mr. Isaksen can be reached by telephone at 202-653-4667, or by email at
IMLS is particularly interested in public comments that help the agency to:
• Evaluate 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;
• Evaluate 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;
• Enhance the quality, utility, and clarity of the information to be collected; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated electronic, mechanical, or other technological collection techniques, or other forms of information technology,
The Institute of Museum and Library Services is the primary source of Federal support for the Nation's libraries and museums. We advance, support, and empower America's museums, libraries, and related organizations through grant making, research, and policy development. Our vision is a nation where museums and libraries work together to transform the lives of individuals and communities. To learn more, visit
The goals of Museums Grants for African American History and Culture (AAHC) are to build the capacity of African American museums and to support the growth and development of museum professionals at African American museums.
The goal of Native American/Native Hawaiian Museum Services (NANH) grants is to support Indian tribes and organizations that primarily serve and represent Native Hawaiians in sustaining heritage, culture, and knowledge through exhibitions, educational services and programing, professional development, and collections stewardship.
This action is to renew the content, forms, and instructions for each of the two Notices of Funding Opportunity for the next three years.
National Science Foundation.
Notice of permit issued.
The National Science Foundation (NSF) is required to publish notice of permits issued under the Antarctic Conservation Act of 1978. This is the required notice.
Nature McGinn, ACA Permit Officer, Office of Polar Programs, National Science Foundation, 2415 Eisenhower Avenue, Alexandria, VA 22314; 703-292-8030; email:
On November 24, 2020, the National Science Foundation published a notice in the
National Science Foundation.
Notice of permit modification request received and permit issued.
The National Science Foundation (NSF) is required to publish a notice of requests to modify permits issued to conduct activities regulated and permits issued under the Antarctic Conservation Act of 1978. NSF has published regulations under the Antarctic Conservation Act in the Code of Federal Regulations. This is the required notice of a requested permit modification and permit issued.
Nature McGinn, ACA Permit Officer, Office of Polar Programs, National Science Foundation, 2415 Eisenhower Avenue, Alexandria, VA 22314; 703-292-8224; email:
The National Science Foundation (NSF), as directed by the Antarctic Conservation Act of 1978 (Pub. L. 95-541, 45 CFR 671), as amended by the Antarctic Science, Tourism and Conservation Act of 1996, has developed regulations for the establishment of a permit system for various activities in Antarctica and designation of certain animals and certain geographic areas a requiring special protection.
NSF issued a permit (ACA 2017-013) to George Watters on October 21, 2016. The issued permit allows the applicant to conduct waste management associated with ship- and shore-based research and logistic activities conducted by the National Oceanic and Atmospheric Administration's (NOAA) Antarctic Marine Living Resources (AMLR) Program. The permit covers the deployment of a variety of oceanographic instruments.
On March 30, 2018, a permit modification was issued providing further details about two types of oceanographic instruments that would be deployed during future research cruises. Up to six moorings would be deployed, as described in the original permit, and up to three Slocum gliders would be deployed and retrieved.
Now, the permit holder has requested to a further modification to deploy up to seven (7) subsurface moorings of the type previously described.
The Environmental Officer has reviewed the modification request and has determined that the amendment is not a material change to the permit, and it will have a less than a minor or transitory impact.
The permit modification was issued on December 29, 2020.
Nuclear Regulatory Commission.
Renewal of existing information collection; request for comment.
The U.S. Nuclear Regulatory Commission (NRC) invites public comment on the renewal of Office of Management and Budget (OMB) approval for an existing collection of information. The information collection is entitled, “Public Records.” NRC updated one form integral to the agency's Freedom of Information Act (FOIA) process, NRC Form 507, “Freedom of Information—Privacy Act Record Request Form.”
Submit comments by March 9, 2021. Comments received after this date will be considered if it is practical to do so, but the Commission is able to ensure consideration only for comments received on or before this date.
You may submit comments by any of the following methods; however, the NRC encourages electronic comment submission through the Federal Rulemaking website:
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For additional direction on obtaining information and submitting comments, see “Obtaining Information and Submitting Comments” in the
David Cullison, Office of the Chief Information Officer, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; telephone: 301-415-2084; email:
Please refer to Docket ID NRC-2019-0102 when contacting the NRC about the availability of information for this action. You may obtain publicly available information related to this action by any of the following methods:
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The NRC encourages electronic comment submission through the Federal Rulemaking Website (
The NRC cautions you not to include identifying or contact information in comment submissions that you do not want to be publicly disclosed in your comment submission. The NRC will post all comment submissions at
If you are requesting or aggregating comments from other persons for submission to the NRC, then you should inform those persons not to include identifying or contact information that they do not want to be publicly disclosed in their comment submission. Your request should state that the NRC does not routinely edit comment submissions to remove such information before making the comment submissions available to the public or entering the comment into ADAMS.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the NRC is requesting public comment on its intention to request the OMB's approval for the information collection summarized below.
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The revised information collection removes the need for requesters to provide the information they are requesting under FOIA, since it would be duplicative. NRC Form 507 will accompany acknowledgement letters, at which point we are requesting additional information, if necessary, for FOIA requesters to submit proof of identification or third-party release authorizations.
The NRC is seeking comments that address the following questions:
1. Is the proposed collection of information necessary for the NRC to properly perform its functions? Does the information have practical utility?
2. Is the estimate of the burden of the information collection accurate?
3. Is there a way to enhance the quality, utility, and clarity of the information to be collected?
4. How can the burden of the information collection on respondents be minimized, including the use of automated collection techniques or other forms of information technology?
For the Nuclear Regulatory Commission.
Nuclear Regulatory Commission.
Renewal of existing information collection; request for comment.
The U.S. Nuclear Regulatory Commission (NRC) invites public comment on the renewal of Office of Management and Budget (OMB) approval for an existing collection of information. The information collection is entitled, “Voluntary Reporting of Performance Indicators.”
Submit comments by March 9, 2021. Comments received after this date will be considered if it is practical to do so, but the Commission is able to ensure consideration only for comments received on or before this date.
You may submit comments by any of the following methods; however, the NRC encourages electronic comment submission through the Federal Rulemaking website:
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For additional direction on obtaining information and submitting comments, see “Obtaining Information and Submitting Comments” in the
David Cullison, Office of the Chief Information Officer, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; telephone: 301-415-2084; email:
Please refer to Docket ID NRC-2020-0185 when contacting the NRC about the availability of information for this action. You may obtain publicly available information related to this action by any of the following methods:
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The NRC encourages electronic comment submission through the Federal Rulemaking website (
The NRC cautions you not to include identifying or contact information that you do not want to be publicly disclosed in your comment submission. The NRC will post all comment submissions at
If you are requesting or aggregating comments from other persons for submission to the NRC, then you should inform those persons not to include identifying or contact information that they do not want to be publicly disclosed in their comment submission. Your request should state that the NRC does not routinely edit comment submissions to remove such information before making the comment submissions available to the public or entering the comment into ADAMS.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the NRC is requesting public comment on its intention to request the OMB's approval for the information collection summarized below.
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The NRC is seeking comments that address the following questions:
1. Is the proposed collection of information necessary for the NRC to properly perform its functions? Does the information have practical utility?
2. Is the estimate of the burden of the information collection accurate?
3. Is there a way to enhance the quality, utility, and clarity of the information to be collected?
4. How can the burden of the information collection on respondents be minimized, including the use of automated collection techniques or other forms of information technology?
For the Nuclear Regulatory Commission.
Nuclear Regulatory Commission.
License amendment request; opportunity to provide comment, request a hearing, and petition for leave to intervene; order imposing procedures.
The U.S. Nuclear Regulatory Commission (NRC) is considering issuance of an amendment to Facility Operating License No. NPF-96, issued to Tennessee Valley Authority (TVA), for operation of the Watts Bar Nuclear Plant (Watts Bar or WBN), Unit 2. The proposed amendment would revise the Watts Bar Updated Final Safety Analysis Report (UFSAR) to apply alternate eddy current probabilities of detection (POD) to indications of axial outer diameter stress corrosion cracking (ODSCC) at tube support plates (TSPs) in the Watts Bar, Unit 2, steam generators for the beginning-of-cycle (BOC) voltage distribution in support of the Watts Bar, Unit 2, operational assessment. The proposed POD values will only be used until the Watts Bar, Unit 2, steam generators are replaced. For this amendment request, the NRC proposes to determine that it involves no significant hazards consideration. Because this amendment request contains sensitive unclassified non-safeguards information (SUNSI), an order imposes procedures to obtain access to SUNSI for contention preparation.
Submit comments by February 8, 2021. Requests for a hearing or petition for leave to intervene must be filed by March 9, 2021. Any potential party as defined in § 2.4 of title 10 of the
You may submit comments by any of the following methods; however, the NRC encourages electronic comment submission through the Federal Rulemaking website:
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For additional direction on obtaining information and submitting comments, see “Obtaining Information and Submitting Comments” in the
Kimberly Green, Office of Nuclear Reactor Regulation, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; telephone: 301-415-1627, email:
Please refer to Docket ID NRC-2020-0281 when contacting the NRC about the availability of information for this action. You may obtain publicly available information related to this action by any of the following methods:
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The NRC encourages electronic comment submission through the Federal Rulemaking website (
The NRC cautions you not to include identifying or contact information that you do not want to be publicly disclosed in your comment submission. The NRC will post all comment submissions at
If you are requesting or aggregating comments from other persons for submission to the NRC, then you should inform those persons not to include identifying or contact information that they do not want to be publicly disclosed in their comment submission. Your request should state that the NRC does not routinely edit comment submissions to remove such information before making the comment submissions available to the public or entering the comment into ADAMS.
The NRC is considering issuance of an amendment to Facility Operating License No. NPF-96, issued to TVA, for operation of the Watts Bar Nuclear Plant, Unit 2, located in Rhea County, Tennessee.
The proposed amendment would revise the Watts Bar UFSAR to apply alternate POD values to indications of axial ODSCC at TSPs in the Watts Bar, Unit 2, steam generators for the BOC voltage distribution in support of the Watts Bar, Unit 2, operational assessment until the steam generators are replaced.
Before any issuance of the proposed license amendment, the NRC will need to make the findings required by the
The NRC has made a proposed determination that the license amendment request involves no significant hazards consideration. Under the NRC's regulations in 10 CFR 50.92, this means that operation of the facility in accordance with the proposed amendment would not (1) involve a significant increase in the probability or consequences of an accident previously evaluated; or (2) create the possibility of a new or different kind of accident from any accident previously evaluated; or (3) involve a significant reduction in a margin of safety. As required by 10 CFR 50.91(a), the licensee has provided its analysis of the issue of no significant hazards consideration, which is presented below:
1. Does the proposed amendment involve a significant increase in the probability or consequence of an accident previously evaluated?
The use of the alternate POD values for the bobbin indications measuring ≥3.2 volts for the BOC voltage distribution for the WBN, Unit 2 OA [operational assessment] does not pose a significant increase in the probability of a steam generator tube rupture (SGTR) event. Based on industry and plant specific bobbin detection data for ODSCC within the SG [steam generator] TSP region, large voltage bobbin indications can be detected with a POD greater than 0.6. Because large voltage ODSCC bobbin indications within the SG TSP can be detected, they will not be left in service; therefore, these indications should not be included in the voltage distribution for the purpose of OA [operational assessment]. An eddy current POD of 0.9 to indications of axial ODSCC at TSP with bobbin voltage amplitudes of ≥3.2 volts, but <6.0 volts and a POD of 0.95 to indications of ≥6.0 volts in the WBN, Unit 2 SG for the BOC voltage distribution is justified. The use of the proposed step change POD methodology offers no significant increase in steam line break (SLB) tube burst probability because it will be utilized in conjunction with the GL [Generic Letter] 95-05 methodology that predicts a conservative operational cycle in terms of effective full power days in compliance with the acceptance criteria for tube burst in the faulted SG.
Therefore, TVA concludes that this proposed change does not involve a significant increase in the probability or consequences of an accident previously evaluated.
2. Does the proposed amendment create the possibility of a new or different kind of accident from any accident previously evaluated?
The use of the alternate POD values for the limited number of bobbin indications for WBN, Unit 2 for the BOC voltage distribution for the WBN, Unit 2 OA [operational assessment] concerns the SG tubes and can only affect the SGTR accident. Because the SGTR accident is already considered in the UFSAR, there in [is] no possibility to create a design basis accident, which has not, been previously evaluated.
Therefore, TVA concludes that this proposed change does not create the possibility of a new or different kind of accident from any previously evaluated.
3. Does the proposed amendment involve a significant reduction in a margin of safety?
The use of the alternate POD values for the limited number of bobbin indications for WBN, Unit 2 for the BOC voltage distribution for the WBN, Unit 2 OA does not involve a significant reduction in a margin of safety. The applicable margin of safety potentially impacted is the WBN, Unit 2 TS [Technical Specification] 5.9.9 projected end-of-cycle leakage for a main steam line break (MSLB) accident and the projected end-of-cycle probability of burst. Based on industry and plant specific bobbin detection data for ODSCC within the SG TSP region, large voltage bobbin indications can be detected and will not be left in service. Therefore, these indications should not be included in the voltage distribution for the purpose of operational assessments. This results in a reduction in numbers of larger indications potentially left in service at the BOC and will not result in a significant increase in the actual end-of-cycle leakage for an MSLB accident or the actual end-of-cycle probability of burst.
Therefore, TVA concludes that this proposed change does not involve a significant reduction in a margin of safety.
The NRC staff has reviewed the licensee's analysis and, based on this review, it appears that the three standards of 10 CFR 50.92(c) are satisfied. Therefore, the NRC staff proposes to determine that the license amendment request involves a no significant hazards consideration.
The NRC is seeking public comments on this proposed determination that the license amendment request involves no significant hazards consideration. Any comments received within 30 days after the date of publication of this notice will be considered in making any final determination.
Normally, the Commission will not issue the amendment until the expiration of 60 days after the date of publication of this notice. The Commission may issue the license amendment before expiration of the 60-day notice period if the Commission concludes the amendment involves no significant hazards consideration. In addition, the Commission may issue the amendment prior to the expiration of the 30-day comment period if circumstances change during the 30-day comment period such that failure to act in a timely way would result, for example, in derating or shutdown of the facility. If the Commission takes action prior to the expiration of either the comment period or the notice period, it will publish in the
Within 60 days after the date of publication of this notice, any persons (petitioner) whose interest may be affected by this action may file a request for a hearing and petition for leave to intervene (petition) with respect to the action. Petitions shall be filed in accordance with the Commission's “Agency Rules of Practice and Procedure” in 10 CFR part 2. Interested persons should consult a current copy of 10 CFR 2.309. The NRC's regulations are accessible electronically from the NRC Library on the NRC's website at
As required by 10 CFR 2.309(d), the petition should specifically explain the reasons why intervention should be permitted with particular reference to the following general requirements for standing: (1) The name, address, and telephone number of the petitioner; (2) the nature of the petitioner's right to be made a party to the proceeding; (3) the nature and extent of the petitioner's property, financial, or other interest in the proceeding; and (4) the possible effect of any decision or order which may be entered in the proceeding on the petitioner's interest.
In accordance with 10 CFR 2.309(f), the petition must also set forth the specific contentions that the petitioner seeks to have litigated in the proceeding. Each contention must consist of a specific statement of the issue of law or fact to be raised or controverted. In addition, the petitioner must provide a brief explanation of the bases for the contention and a concise statement of the alleged facts or expert opinion that support the contention and on which the petitioner intends to rely in proving the contention at the hearing. The petitioner must also provide references to the specific sources and documents on which the petitioner intends to rely to support its position on the issue. The petition must include sufficient information to show that a genuine dispute exists with the applicant or licensee on a material issue of law or fact. Contentions must be
Those permitted to intervene become parties to the proceeding, subject to any limitations in the order granting leave to intervene. Parties have the opportunity to participate fully in the conduct of the hearing with respect to resolution of that party's admitted contentions, including the opportunity to present evidence, consistent with the NRC's regulations, policies, and procedures.
Petitions must be filed no later than 60 days from the date of publication of this notice. Petitions and motions for leave to file new or amended contentions that are filed after the deadline will not be entertained absent a determination by the presiding officer that the filing demonstrates good cause by satisfying the three factors in 10 CFR 2.309(c)(1)(i) through (iii). The petition must be filed in accordance with the filing instructions in the “Electronic Submissions (E-Filing)” section of this document.
If a hearing is requested, and the Commission has not made a final determination on the issue of no significant hazards consideration, the Commission will make a final determination on the issue of no significant hazards consideration. The final determination will serve to establish when the hearing is held. If the final determination is that the amendment request involves no significant hazards consideration, the Commission may issue the amendment and make it immediately effective, notwithstanding the request for a hearing. Any hearing would take place after issuance of the amendment. If the final determination is that the amendment request involves a significant hazards consideration, then any hearing held would take place before the issuance of the amendment unless the Commission finds an imminent danger to the health or safety of the public, in which case it will issue an appropriate order or rule under 10 CFR part 2.
A State, local governmental body, Federally recognized Indian Tribe, or agency thereof, may submit a petition to the Commission to participate as a party under 10 CFR 2.309(h)(1). The petition should state the nature and extent of the petitioner's interest in the proceeding. The petition should be submitted to the Commission no later than 60 days from the date of publication of this notice. The petition must be filed in accordance with the filing instructions in the “Electronic Submissions (E-Filing)” section of this document, and should meet the requirements for petitions set forth in this section, except that under 10 CFR 2.309(h)(2) a State, local governmental body, or Federally recognized Indian Tribe, or agency thereof does not need to address the standing requirements in 10 CFR 2.309(d) if the facility is located within its boundaries. Alternatively, a State, local governmental body, Federally recognized Indian Tribe, or agency thereof may participate as a non-party under 10 CFR 2.315(c).
If a petition is submitted, any person who is not a party to the proceeding and is not affiliated with or represented by a party may, at the discretion of the presiding officer, be permitted to make a limited appearance pursuant to the provisions of 10 CFR 2.315(a). A person making a limited appearance may make an oral or written statement of his or her position on the issues but may not otherwise participate in the proceeding. A limited appearance may be made at any session of the hearing or at any prehearing conference, subject to the limits and conditions as may be imposed by the presiding officer. Details regarding the opportunity to make a limited appearance will be provided by the presiding officer if such sessions are scheduled.
All documents filed in NRC adjudicatory proceedings, including a request for hearing and petition for leave to intervene (petition), any motion or other document filed in the proceeding prior to the submission of a request for hearing or petition to intervene, and documents filed by interested governmental entities that request to participate under 10 CFR 2.315(c), must be filed in accordance with the NRC's E-Filing rule (72 FR 49139; August 28, 2007, as amended at 77 FR 46562; August 3, 2012). The E-Filing process requires participants to submit and serve all adjudicatory documents over the internet, or in some cases to mail copies on electronic storage media. Detailed guidance on making electronic submissions may be found in the Guidance for Electronic Submissions to the NRC and on the NRC website at
To comply with the procedural requirements of E-Filing, at least 10 days prior to the filing deadline, the participant should contact the Office of the Secretary by email at
Information about applying for a digital ID certificate is available on the NRC's public website at
A person filing electronically using the NRC's adjudicatory E-Filing system may seek assistance by contacting the NRC's Electronic Filing Help Desk through the “Contact Us” link located on the NRC's public website at
Participants who believe that they have a good cause for not submitting documents electronically must file an exemption request, in accordance with 10 CFR 2.302(g), with their initial paper filing stating why there is good cause for not filing electronically and requesting authorization to continue to submit documents in paper format. Such filings must be submitted by: (1) First class mail addressed to the Office of the Secretary of the Commission, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, Attention: Rulemaking and Adjudications Staff; or (2) courier, express mail, or expedited delivery service to the Office of the Secretary, 11555 Rockville Pike, Rockville, Maryland 20852, Attention: Rulemaking and Adjudications Staff. Participants filing adjudicatory documents in this manner are responsible for serving the document on all other participants. Filing is considered complete by first-class mail as of the time of deposit in the mail, or by courier, express mail, or expedited delivery service upon depositing the document with the provider of the service. A presiding officer, having granted an exemption request from using E-Filing, may require a participant or party to use E-Filing if the presiding officer subsequently determines that the reason for granting the exemption from use of E-Filing no longer exists.
Documents submitted in adjudicatory proceedings will appear in the NRC's electronic hearing docket, which is available to the public at
A. This Order contains instructions regarding how potential parties to this proceeding may request access to documents containing SUNSI.
B. Within 10 days after publication of this notice of hearing and opportunity to petition for leave to intervene, any potential party who believes access to SUNSI is necessary to respond to this notice may request access to SUNSI. A “potential party” is any person who intends to participate as a party by demonstrating standing and filing an admissible contention under 10 CFR 2.309. Requests for access to SUNSI submitted later than 10 days after publication of this notice will not be considered absent a showing of good cause for the late filing, addressing why the request could not have been filed earlier.
C. The requestor shall submit a letter requesting permission to access SUNSI to the Office of the Secretary, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, Attention: Rulemakings and Adjudications Staff, and provide a copy to the Deputy General Counsel for Hearings and Administration, Office of the General Counsel, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001. The expedited delivery or courier mail address for both offices is: U.S. Nuclear Regulatory Commission, 11555 Rockville Pike, Rockville, Maryland 20852. The email address for the Office of the Secretary and the Office of the General Counsel are
(1) A description of the licensing action with a citation to this
(2) The name and address of the potential party and a description of the potential party's particularized interest that could be harmed by the action identified in C.(1); and
(3) The identity of the individual or entity requesting access to SUNSI and the requestor's basis for the need for the information in order to meaningfully participate in this adjudicatory proceeding. In particular, the request must explain why publicly available versions of the information requested would not be sufficient to provide the basis and specificity for a proffered contention.
D. Based on an evaluation of the information submitted under paragraph C.(3) the NRC staff will determine within 10 days of receipt of the request whether:
(1) There is a reasonable basis to believe the petitioner is likely to establish standing to participate in this NRC proceeding; and
(2) The requestor has established a legitimate need for access to SUNSI.
E. If the NRC staff determines that the requestor satisfies both D.(1) and D.(2) above, the NRC staff will notify the requestor in writing that access to SUNSI has been granted. The written notification will contain instructions on how the requestor may obtain copies of the requested documents, and any other conditions that may apply to access to those documents. These conditions may include, but are not limited to, the signing of a Non-Disclosure Agreement or Affidavit, or Protective Order
F. Filing of Contentions. Any contentions in these proceedings that are based upon the information received as a result of the request made for SUNSI must be filed by the requestor no later than 25 days after receipt of (or access to) that information. However, if more than 25 days remain between the petitioner's receipt of (or access to) the information and the deadline for filing all other contentions (as established in the notice of hearing or opportunity for hearing), the petitioner may file its
G. Review of Denials of Access.
(1) If the request for access to SUNSI is denied by the NRC staff after a determination on standing and requisite need, the NRC staff shall immediately notify the requestor in writing, briefly stating the reason or reasons for the denial.
(2) The requestor may challenge the NRC staff's adverse determination by filing a challenge within 5 days of receipt of that determination with: (a) The presiding officer designated in this proceeding; (b) if no presiding officer has been appointed, the Chief Administrative Judge, or if he or she is unavailable, another administrative judge, or an Administrative Law Judge with jurisdiction pursuant to 10 CFR 2.318(a); or (c) if another officer has been designated to rule on information access issues, with that officer.
(3) Further appeals of decisions under this paragraph must be made pursuant to 10 CFR 2.311.
H. Review of Grants of Access. A party other than the requestor may challenge an NRC staff determination granting access to SUNSI whose release would harm that party's interest independent of the proceeding. Such a challenge must be filed within 5 days of the notification by the NRC staff of its grant of access and must be filed with: (a) The presiding officer designated in this proceeding; (b) if no presiding officer has been appointed, the Chief Administrative Judge, or if he or she is unavailable, another administrative judge, or an Administrative Law Judge with jurisdiction pursuant to 10 CFR 2.318(a); or (c) if another officer has been designated to rule on information access issues, with that officer.
If challenges to the NRC staff determinations are filed, these procedures give way to the normal process for litigating disputes concerning access to information. The availability of interlocutory review by the Commission of orders ruling on such NRC staff determinations (whether granting or denying access) is governed by 10 CFR 2.311.
I. The Commission expects that the NRC staff and presiding officers (and any other reviewing officers) will consider and resolve requests for access to SUNSI, and motions for protective orders, in a timely fashion in order to minimize any unnecessary delays in identifying those petitioners who have standing and who have propounded contentions meeting the specificity and basis requirements in 10 CFR part 2. The attachment to this Order summarizes the general target schedule for processing and resolving requests under these procedures.
For the Nuclear Regulatory Commission.
Notice is hereby given that, pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 350l
The Investment Company Act of 1940 (the “Act”)
In one of its first releases, the Commission exercised its rulemaking authority pursuant to sections 38(a) and 40(b) of the Act by adopting rule 0-1 (17 CFR 270.0-1).
The Commission amended rule 0-1 to include the definition of the term “independent legal counsel” in 2001.
If the board's counsel has represented the fund's investment adviser, principal underwriter, administrator (collectively, “management organizations”) or their “control persons”
Any fund that relies on one of the exemptive rules must comply with the requirements in the definition of “independent legal counsel” under rule 0-1. We assume that approximately 3035 funds rely on at least one of the exemptive rules annually.
These burden hour estimates are based upon the Commission staff's experience and discussions with the fund industry. The estimates of average burden hours are made solely for the purposes of the Paperwork Reduction
Written comments are invited on: (a) Whether the collection of information is necessary for the proper performance of the functions of the Commission, including whether the information has practical utility; (b) the accuracy of the Commission's estimate of the burdens of the collection of information; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burdens of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. Consideration will be given to comments and suggestions submitted in writing within 60 days of this publication.
Please direct your written comments to David Bottom, Director/Chief Information Officer, Securities and Exchange Commission, C/O Cynthia Roscoe, 100 F Street, NE Washington, DC 20549; or send an email to:
85 FR 157, January 4, 2021.
Wednesday, January 6, 2021 at 2:00 p.m.
The closed meeting scheduled for Wednesday, January 6, 2021 at 2:00 p.m., has been cancelled.
For further information; please contact Vanessa A. Countryman from the Office of the Secretary at (202) 551-5400.
Notice is hereby given that, pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Rule 34b-1 under the Investment Company Act (17 CFR 270.34b-1) governs sales material that accompanies or follows the delivery of a statutory prospectus (“sales literature”). Rule 34b-1 deems to be materially misleading any investment company (“fund”) sales literature required to be filed with the Securities and Exchange Commission (“Commission”) by Section 24(b) of the Investment Company Act (15 U.S.C. 80a-24(b)) that includes performance data, unless the sales literature also includes the appropriate uniformly computed data and the legend disclosure required in investment company advertisements by rule 482 under the Securities Act of 1933 (17 CFR 230.482). Requiring the inclusion of such standardized performance data in sales literature is designed to prevent misleading performance claims by funds and to enable investors to make meaningful comparisons among funds.
The Commission estimates that on average approximately 351 respondents file 7,362
The collection of information under rule 34b-1 is mandatory. The information provided under rule 34b-1 is not kept confidential. The Commission 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.
Written comments are invited on: (a) Whether the proposed collection of information is necessary for the proposed performance of the functions of the agency, including whether information will have practical utility; (b) the accuracy of the agency's estimate of the burden of the collection of information; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. Consideration will be given to comments and suggestions submitted in writing within 60 days of this publication.
Please direct your written comments to David Bottom, Director/Chief Information Officer, Securities and Exchange Commission, C/O Cynthia Roscoe, 100 F Street NE, Washington, DC 20549; or send an email to:
Securities and Exchange Commission (“Commission”).
Notice.
Notice of an application under section 6(c) of the Investment Company Act of 1940 (“Act”) for an exemption from section 15(a) of the Act, as well as from certain disclosure requirements in rule 20a-1 under the Act, Item 19(a)(3) of Form N-1A, Items 22(c)(1)(ii), 22(c)(1)(iii), 22(c)(8) and 22(c)(9) of Schedule 14A under the Securities Exchange Act of 1934 (“1934 Act”), and sections 6-07(2)(a), (b), and (c) of
The Commission:
Christine Y. Greenlees, Senior Counsel, at (202) 551-6879, or Lisa Reid Ragen, Branch Chief at (202) 551-6825 (Division of Investment Management, Chief Counsel's Office).
The following is a summary of the application. The complete application may be obtained via the Commission's website by searching for the file number or an Applicant using the “Company” name box, at
1. Applicants request an order to permit the Adviser,
2. Applicants also request an order exempting the Subadvised Funds (as defined below) from the Disclosure Requirements, which require each Fund to disclose fees paid to a Subadviser. Applicants seek relief to permit each Subadvised Fund to disclose (as a dollar amount and a percentage of the Fund's net assets): (i) The aggregate fees paid to the Adviser and any Wholly-Owned Subadvisers; and (ii) the aggregate fees paid to Affiliated and Non-Affiliated Subadvisers (“Aggregate Fee Disclosure”).
3. Applicants request that the relief apply to Applicants, as well as to any future Fund and any other existing or future registered open-end management investment company or series thereof that intends to rely on the requested order in the future and that: (i) Is advised by the Adviser; (ii) uses the multi-manager structure described in the application; and (iii) complies with the terms and conditions of the application (each, a “Subadvised Fund”).
4. The Adviser serves or will serve as the investment adviser to each Subadvised Fund pursuant to an investment advisory agreement with the Fund (each an “Investment Advisory Agreement”). Each Investment Advisory Agreement has been or will be approved by the Board, including a majority of the Independent Trustees, and by the shareholders of the relevant Subadvised Fund in the manner required by sections 15(a) and 15(c) of the Act. The terms of these Investment Advisory Agreements comply or will comply with section 15(a) of the Act. Applicants are not seeking an exemption from the Act with respect to the Investment Advisory Agreements. Pursuant to the terms of each Investment Advisory Agreement, the Adviser, subject to the oversight of the Board, will provide continuous investment management for each Subadvised Fund. For its services to each Subadvised Fund, the Adviser receives or will receive an investment advisory fee from that Fund as specified in the applicable Investment Advisory Agreement.
5. Consistent with the terms of each Investment Advisory Agreement, the Adviser may, subject to the approval of the Board, including a majority of the Independent Trustees, and the shareholders of the applicable Subadvised Fund (if required by applicable law), delegate portfolio management responsibilities of all or a portion of the assets of a Subadvised Fund to a Subadviser. The Adviser will retain overall responsibility for the management and investment of the assets of each Subadvised Fund. This
6. The Subadvisory Agreements will be approved by the Board, including a majority of the Independent Trustees, in accordance with sections 15(a) and 15(c) of the Act. In addition, the terms of each Subadvisory Agreement will comply fully with the requirements of section 15(a) of the Act. The Adviser may compensate the Subadvisers or the Subadvised Funds may compensate the Subadvisers directly.
7. Subadvised Funds will inform shareholders of the hiring of a new Subadviser pursuant to the following procedures (“Modified Notice and Access Procedures”): (a) Within 90 days after a new Subadviser is hired for any Subadvised Fund, that Fund will send its shareholders either a Multi-manager Notice or a Multi-manager Notice and Multi-manager Information Statement;
8. Section 15(a) of the Act states, in part, that it is unlawful for any person to act as an investment adviser to a registered investment company “except pursuant to a written contract, which contract, whether with such registered company or with an investment adviser of such registered company, has been approved by the vote of a majority of the outstanding voting securities of such registered company.”
9. Form N-1A is the registration statement used by open-end investment companies. Item 19(a)(3) of Form N-1A requires a registered investment company to disclose in its statement of additional information the method of computing the “advisory fee payable” by the investment company with respect to each investment adviser, including the total dollar amounts that the investment company “paid to the adviser (aggregated with amounts paid to affiliated advisers, if any), and any advisers who are not affiliated persons of the adviser, under the investment advisory contract for the last three fiscal years.”
10. Rule 20a-1 under the Act requires proxies solicited with respect to a registered investment company to comply with Schedule 14A under the 1934 Act. Items 22(c)(1)(ii), 22(c)(1)(iii), 22(c)(8) and 22(c)(9) of Schedule 14A, taken together, require a proxy statement for a shareholder meeting at which the advisory contract will be voted upon to include the “rate of compensation of the investment adviser,” the “aggregate amount of the investment adviser's fee,” a description of the “terms of the contract to be acted upon,” and, if a change in the advisory fee is proposed, the existing and proposed fees and the difference between the two fees.
11. Regulation S-X sets forth the requirements for financial statements required to be included as part of a registered investment company's registration statement and shareholder reports filed with the Commission. Sections 6-07(2)(a), (b), and (c) of Regulation S-X require a registered investment company to include in its financial statements information about investment advisory fees.
12. Section 6(c) of the Act provides that the Commission may exempt any person, security, or transaction or any class or classes of persons, securities, or transactions from any provisions of the Act, or any rule thereunder, if such exemption is necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Act. Applicants state that the requested relief meets this standard for the reasons discussed below.
13. Applicants assert that, from the perspective of the shareholder, the role of the Subadvisers is substantially equivalent to the limited role of the individual portfolio managers employed by an investment adviser to a traditional investment company. Applicants also assert that the shareholders expect the Adviser, subject to review and approval of the Board, to select a Subadviser who is in the best position to achieve the Subadvised Fund's investment objective. Applicants believe that permitting the Adviser to perform the duties for which the shareholders of the Subadvised Fund are paying the Adviser—the selection, oversight and evaluation of the Subadviser—without incurring unnecessary delays or expenses of convening special meetings of shareholders is appropriate and in the interest of the Fund's shareholders, and will allow such Fund to operate more efficiently. Applicants state that each Investment Advisory Agreement will continue to be fully subject to section 15(a) of the Act and approved by the relevant Board, including a majority of the Independent Trustees, in the manner required by section 15(a) and 15(c) of the Act.
14. Applicants submit that the requested relief meets the standards for relief under section 6(c) of the Act.
15. Applicants contend that, in the circumstances described in the application, a proxy solicitation to approve the appointment of new Subadvisers provides no more meaningful information to shareholders than the proposed Multi-manager Information Statement. Applicants state that, accordingly, they believe the requested relief is necessary or appropriate in the public interest, and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Act.
16. With respect to the relief permitting Aggregate Fee Disclosure, Applicants assert that disclosure of the individual fees paid to the Subadvisers does not serve any meaningful purpose. Applicants contend that the primary reasons for requiring disclosure of individual fees paid to Subadvisers are to inform shareholders of expenses to be charged by a particular Subadvised Fund and to enable shareholders to compare the fees to those of other comparable investment companies. Applicants believe that the requested relief satisfies these objectives because the Subadvised Fund's overall advisory fee will be fully disclosed and, therefore, shareholders will know what the Subadvised Fund's fees and expenses are and will be able to compare the advisory fees a Subadvised Fund is charged to those of other investment companies. In addition, Applicants assert that the requested relief would benefit shareholders of the Subadvised Fund because it would improve the Adviser's ability to negotiate the fees paid to Subadvisers. In particular, Applicants state that if the Adviser is not required to disclose the Subadvisers' fees to the public, the Adviser may be able to negotiate rates that are below a Subadviser's “posted” amounts. Applicants assert that the relief will also encourage Subadvisers to negotiate lower subadvisory fees with the Adviser if the lower fees are not required to be made public.
17. The Commission has granted the requested relief with respect to Wholly-Owned and Non-Affiliated Subadvisers through numerous exemptive orders. The Commission also has extended the requested relief to Affiliated Subadvisers.
18. With respect to the relief permitting Aggregate Fee Disclosure, Applicants assert that it is appropriate to disclose only aggregate fees paid to Affiliated Subadvisers for the same reasons that similar relief has been granted previously with respect to Wholly-Owned and Non-Affiliated Subadvisers.
Applicants agree that any order granting the requested relief will be subject to the following conditions:
1. Before a Subadvised Fund may rely on the order requested in the Application, the operation of the Subadvised Fund in the manner described in the Application will be, or has been, approved by a majority of the Subadvised Fund's outstanding voting securities as defined in the Act, or, in the case of a Subadvised Fund whose public shareholders purchase shares on the basis of a prospectus containing the disclosure contemplated by condition 2 below, by the initial shareholder before such Subadvised Fund's shares are offered to the public.
2. The prospectus for each Subadvised Fund will disclose the existence, substance and effect of any order granted pursuant to the Application. In addition, each Subadvised Fund will hold itself out to the public as employing the multi-manager structure described in the Application. The prospectus will prominently disclose that the Adviser has the ultimate responsibility, subject to oversight by the Board, to oversee the Subadvisers and recommend their hiring, termination, and replacement.
3. The Adviser will provide general management services to each Subadvised Fund, including overall supervisory responsibility for the general management and investment of the Subadvised Fund's assets, and subject to review and oversight of the Board, will (i) set the Subadvised Fund's overall investment strategies, (ii) evaluate, select, and recommend Subadvisers for all or a portion of the Subadvised Fund's assets, (iii) allocate and, when appropriate, reallocate the Subadvised Fund's assets among Subadvisers, (iv) monitor and evaluate the Subadvisers' performance, and (v) implement procedures reasonably designed to ensure that Subadvisers comply with the Subadvised Fund's investment objective, policies and restrictions.
4. Subadvised Funds will inform shareholders of the hiring of a new Subadviser within 90 days after the hiring of the new Subadviser pursuant to the Modified Notice and Access Procedures.
5. At all times, at least a majority of the Board will be Independent Trustees, and the selection and nomination of new or additional Independent Trustees will be placed within the discretion of the then-existing Independent Trustees.
6. Independent Legal Counsel, as defined in Rule 0-1(a)(6) under the Act, will be engaged to represent the Independent Trustees. The selection of such counsel will be within the discretion of the then-existing Independent Trustees.
7. Whenever a Subadviser is hired or terminated, the Adviser will provide the Board with information showing the expected impact on the profitability of the Adviser.
8. The Board must evaluate any material conflicts that may be present in a subadvisory arrangement. Specifically, whenever a subadviser change is proposed for a Subadvised Fund (“Subadviser Change”) or the Board considers an existing Subadvisory Agreement as part of its annual review process (“Subadviser Review”):
(a) The Adviser will provide the Board, to the extent not already being provided pursuant to section 15(c) of the Act, with all relevant information concerning:
(i) Any material interest in the proposed new Subadviser, in the case of a Subadviser Change, or the Subadviser in the case of a Subadviser Review, held
(ii) any arrangement or understanding in which the Adviser or any parent or sister company of the Adviser is a participant that (A) may have had a material effect on the proposed Subadviser Change or Subadviser Review, or (B) may be materially affected by the proposed Subadviser Change or Subadviser Review;
(iii) any material interest in a Subadviser held directly or indirectly by an officer or Trustee of the Subadvised Fund, or an officer or board member of the Adviser (other than through a pooled investment vehicle not controlled by such person); and
(iv) any other information that may be relevant to the Board in evaluating any potential material conflicts of interest in the proposed Subadviser Change or Subadviser Review.
(b) the Board, including a majority of the Independent Trustees, will make a separate finding, reflected in the Board minutes, that the Subadviser Change or continuation after Subadviser Review is in the best interests of the Subadvised Fund and its shareholders and, based on the information provided to the Board, does not involve a conflict of interest from which the Adviser, a Subadviser, any officer or Trustee of the Subadvised Fund, or any officer or board member of the Adviser derives an inappropriate advantage.
9. Each Subadvised Fund will disclose in its registration statement the Aggregate Fee Disclosure.
10. In the event that the Commission adopts a rule under the Act providing substantially similar relief to that in the order requested in the Application, the requested order will expire on the effective date of that rule.
11. Any new Subadvisory Agreement or any amendment to an existing Investment Advisory Agreement or Subadvisory Agreement that directly or indirectly results in an increase in the aggregate advisory fee rate payable by the Subadvised Fund will be submitted to the Subadvised Fund's shareholders for approval.
For the Commission, by the Division of Investment Management, under delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
The principal purpose of the proposed rule change is to revise the ICC Clearing Participant (“CP”) Default Management Procedures (“Default Management Procedures”). These revisions do not require any changes to the ICC Clearing Rules (the “Rules”).
Rules.
In its filing with the Commission, ICC included statements concerning the purpose of and basis for the proposed rule change, security-based swap submission, or advance notice and discussed any comments it received on the proposed rule change, security-based swap submission, or advance notice. The text of these statements may be examined at the places specified in Item IV below. ICC has prepared summaries, set forth in sections (A), (B), and (C) below, of the most significant aspects of these statements.
ICC proposes to revise the Default Management Procedures, which set forth ICC's default management process, including the actions taken by ICC to determine that a CP is in default as well as the actions taken by ICC in connection with such default to close-out the defaulter's portfolio. These revisions do not require any changes to ICC's existing default management rules or any other procedures as they are limited to clarification changes that formalize the process for convening the CDS Default Committee remotely and minor updates regarding notifications sent as part of the default management process. ICC believes such revisions will facilitate the prompt and accurate clearance and settlement of securities transactions and derivative agreements, contracts, and transactions for which it is responsible. ICC proposes to make such changes effective following Commission approval of the proposed rule change. The proposed revisions are described in detail as follows.
ICC proposes revisions to Subsection 4.4 (Secure Trading Facility) related to convening the ICC CDS Default Committee, which consists of trading personnel seconded from CPs to assist with default management. The proposed changes specify that ICC may convene its CDS Default Committee in a private room at its offices (“Secure Trading Facility”) or remotely by teleconference (“Remote Trader Consultation”) in the event the committee is unable to meet in person. The decision of whether to convene in person or remotely would be made by the ICC Chief Risk Officer (“CRO”) and would depend on the circumstances at the time of the declaration of the default.
ICC also proposes updates to Section 6 (Default Declaration). The proposed changes to Subsection 6.1.5 (CCO Pre-Declaration Initiated Actions) allow the ICC Chief Compliance Officer (“CCO”) to inform the Commission and the Commodity Futures Trading Commission (“CFTC”) by telephone or email of a potential default and further direct the CCO to inform other regulators of the potential default as may be required. Amended Subsection 6.4 (Default Declaration Notification) similarly directs the CCO to notify other regulators (in addition to the Commission and the CFTC) of a default if applicable and includes a minor edit to replace “all” with “above” in the phrase “CCO confirming all notifications.” The proposed updates to Subsection 6.5.3 (CRO Post-Declaration Preparation) relate to the CRO's actions to convene the CDS Default Committee following a declaration of default, including the CRO's determination of whether this committee meets in person or remotely, and distinguish certain actions that would be taken for an in-person CDS Default Committee meeting.
ICC further proposes changes to Section 7 (CDS Default Committee Consultation). The proposed changes reference ICC's ability to convene the CDS Default Committee remotely. Amended Subsection 7.1 (Convening a CDS Default Committee Meeting) formalizes the process for convening a CDS Default Committee remotely by teleconference, including how notice is provided to CDS Default Committee members and what is included in the notice. The changes also distinguish what actions would be taken in connection with convening the CDS Default Committee at the Secure Trading Facility, by Remote Trader Consultation, or by either means. Amended Subsection 7.3 (Initial CDS Default Committee Meeting) specifies that certain actions are conducted where technologically practicable during the initial CDS Default Committee meeting and includes minor grammatical updates, including adding a parenthetical and updating the sentence structure for clarity.
ICC believes that the proposed rule change is consistent with the requirements of Section 17A of the Act
The amendments would also satisfy relevant requirements of Rule 17Ad-22.
Rule 17Ad-22(e)(4)(ii)
Rule 17Ad-22(e)(13)
ICC does not believe the proposed rule change would have any impact, or impose any burden, on competition. The proposed changes to the Default Management Procedures will apply uniformly across all market participants. Therefore, ICC does not believe the amendments would impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act.
Written comments relating to the proposed rule change have not been solicited or received. ICC will notify the Commission of any written comments received by ICC.
Within 45 days of the date of publication of this notice in the
(A) By order approve or disapprove such proposed rule change, or
(B) institute proceedings to determine whether the proposed rule change should be 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.
All comments received will be posted without change. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-ICC-2020-014 and should be submitted on or before January 29, 2021.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
2:00 p.m. on Wednesday, January 13, 2021.
The meeting will be held via remote means and/or at the Commission's headquarters, 100 F Street NE, Washington, DC 20549.
This meeting will be closed to the public.
Commissioners, Counsel to the Commissioners, the Secretary to the Commission, and recording secretaries will attend the closed meeting. Certain staff members who have an interest in the matters also may be present.
In the event that the time, date, or location of this meeting changes, an announcement of the change, along with the new time, date, and/or place of the meeting will be posted on the Commission's website at
The General Counsel of the Commission, or his designee, has certified that, in his opinion, one or more of the exemptions set forth in 5 U.S.C. 552b(c)(3), (5), (6), (7), (8), 9(B) and (10) and 17 CFR 200.402(a)(3), (a)(5), (a)(6), (a)(7), (a)(8), (a)(9)(ii) and (a)(10), permit consideration of the scheduled matters at the closed meeting.
The subject matter of the closed meeting will consist of the following topics:
Institution and settlement of injunctive actions;
Institution and settlement of administrative proceedings;
Resolution of litigation claims; and
Other matters relating to enforcement proceedings.
At times, changes in Commission priorities require alterations in the scheduling of meeting agenda items that may consist of adjudicatory, examination, litigation, or regulatory matters.
For further information; please contact Vanessa A. Countryman from the Office of the Secretary at (202) 551-5400.
U.S. Small Business Administration.
Notice.
This is a notice of an Administrative declaration of a disaster for the State of California dated 12/30/2020.
Issued on 12/30/2020.
Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street SW, Suite 6050, Washington, DC 20416, (202) 205-6734.
Notice is hereby given that as a result of the Administrator's disaster declaration, applications for disaster loans may be filed at the address listed above or other locally announced locations.
The following areas have been determined to be adversely affected by the disaster:
The number assigned to this disaster for physical damage is 16832 5 and for economic injury is 16833 0.
The States which received an EIDL Declaration # are California, Nevada.
U.S. Small Business Administration.
Amendment 1.
This is an amendment to the Economic Injury Disaster Loan (EIDL) declarations issued for each State and Territory of the U.S.
Issued 12/30/2020.
Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street, SW, Suite 6050, Washington, DC 20416, (202) 205-6734.
The notice of the Economic Injury declarations for each State and Territory of the U.S., dated between 03/16/2020 to 03/21/2020, is hereby amended to extend the deadline date for filing applications for economic injury as a result of this disaster to 12/31/2021. For additional information, please visit
All other information in the original declaration remains unchanged.
U.S. Small Business Administration.
Notice.
This is a Notice of the Presidential declaration of a major disaster for Public Assistance Only for the State of Utah (FEMA—4548—DR), dated 12/31/2020.
Issued on 12/31/2020.
Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street SW, Suite 6050, Washington, DC 20416, (202) 205-6734.
Notice is hereby given that as a result of the President's major disaster declaration on 12/31/2020, Private Non-Profit organizations that provide essential services of a governmental nature may file disaster loan applications at the address listed above or other locally announced locations. The following areas have been determined to be adversely affected by the disaster:
The number assigned to this disaster for physical damage is 168382 and for economic injury is 168390.
U.S. Small Business Administration.
Notice.
This is a Notice of the Presidential declaration of a major disaster for Public Assistance Only for the State of Mississippi (FEMA-4576—DR), dated 12/31/2020.
Issued on 12/31/2020.
Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street SW, Suite 6050, Washington, DC 20416, (202) 205-6734.
Notice is hereby given that as a result of the President's major disaster declaration on 12/31/2020, Private Non-Profit organizations that provide essential services of a governmental nature may file disaster loan applications at the address listed above or other locally announced locations.
The following areas have been determined to be adversely affected by the disaster:
The number assigned to this disaster for physical damage is 168368 and for economic injury is 168370.
U.S. Small Business Administration.
Amendment 2.
This is an amendment of an Economic Injury Disaster Loan (EIDL) declaration for the State of California, dated 07/07/2020.
Issued on 12/30/2020.
Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street SW, Suite 6050, Washington, DC 20416, (202) 205-6734.
The notice of an Economic Injury declaration for the State of California, dated 07/07/2020, is hereby amended to establish the incident period for this disaster as beginning 05/26/2020 and continuing through 12/28/2020.
All other information in the original declaration remains unchanged.
U.S. Small Business Administration.
Notice.
This is a Notice of the Presidential declaration of a major disaster for the State of Mississippi (FEMA—4576—DR), dated 12/31/2020.
Issued on 12/31/2020.
Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street SW, Suite 6050, Washington, DC 20416, (202) 205-6734.
Notice is hereby given that as a result of the President's major disaster declaration on 12/31/2020, applications for disaster loans may be filed at the address listed above or other locally announced locations.
The following areas have been determined to be adversely affected by the disaster:
The number assigned to this disaster for physical damage is 168348 and for economic injury is 168350.
U.S. Small Business Administration.
Amendment 2.
This is an amendment of the Administrative declaration of a disaster for the State of California dated 06/17/2020.
Issued on 12/30/2020.
Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street SW, Suite 6050, Washington, DC 20416, (202) 205-6734.
The notice of an Administrative declaration for the State of California, dated 06/17/2020, is hereby amended to establish the incident period for this disaster as beginning 05/26/2020 and continuing through 12/28/2020.
All other information in the original declaration remains unchanged.
Notice.
The Department of State is updating the list of Participants eligible for trade in rough diamonds under the Act, and their respective Importing and Exporting Authorities, revising the previously published list of July 5, 2019, to reflect the addition of the United Kingdom as an independent Participant, among other changes.
This notice is effective on January 8, 2021.
Pamela Fierst-Walsh, Senior Advisor, Bureau of Economic and Business Affairs, Department of State, (202) 647-6116.
Section 4 of the Clean Diamond Trade Act of 2003, Public Law 108-19 (the “Act”) requires the President to prohibit the importation into, or the exportation from, the United States of any rough diamond, from whatever source, that has not been controlled through the Kimberley Process Certification Scheme (KPCS). Under Section 3(2) of the Act, “controlled through the Kimberley Process Certification Scheme” means an importation from the territory of a Participant or exportation to the territory of a Participant of rough diamonds that is either (i) carried out in accordance with the KPCS, as set forth in regulations promulgated by the President, or (ii) controlled under a system determined by the President to meet substantially the standards, practices, and procedures of the KPCS. The referenced regulations are contained at 31 CFR part 592 (“Rough Diamond Control Regulations”) (68 FR 45777, August 4, 2003).
Section 6(b) of the Act requires the President to publish in the
Pursuant to Sections 3 and 6 of the Act, Section 2 of Executive Order 13312, Department of State Delegations of Authority No. 245-1 (February 13, 2009), and No. 376 (October 31, 2011), I hereby identify the following entities as Participants under section 6(b) of the Act. Included in this List are the Importing and Exporting Authorities for Participants, as required by Section 6(b) of the Act. This List is published solely for the purpose of implementing the mandates cited above and does not reflect or prejudice any other regulation or prohibition that may apply with respect to trading, doing business, or engaging in any other transaction with any of the listed countries or entities. This list revises the revising the previously published list of July 5, 2019 to reflect the addition of the United Kingdom as an independent Participant, among other changes.
The Department of State is publishing an update to its List of Restricted Entities and Subentities Associated With Cuba (Cuba Restricted List) with which direct financial transactions are generally prohibited under the Cuban Assets Control Regulations (CACR). The Department of Commerce's Bureau of Industry and Security (BIS) generally will deny applications to export or reexport items for use by entities or subentities on the Cuba Restricted List.
Effective on January 8, 2021.
Emily Belson, Office of Economic Sanctions Policy and Implementation, 202-647-6526; Robert Haas, Office of the Coordinator for Cuban Affairs, tel.: 202-453-8456, Department of State, Washington, DC 20520.
On June 16, 2017, the President signed National Security Presidential Memorandum-5 on Strengthening the Policy of the United States Toward Cuba (NSPM-5). As directed by NSPM-5, on November 9, 2017, the Department of the Treasury's Office of Foreign Assets Control (OFAC) published a final rule in the
This update includes one additional subentity. This is the eighth update to
The publication of the updated Cuba Restricted List further implements the directive in paragraph 3(a)(i) of NSPM-5 to the Secretary of State to identify the entities or subentities, as appropriate, that are under the control of, or act for or on behalf of, the Cuban military, intelligence, or security services or personnel, and publish a list of those identified entities and subentities with which direct financial transactions would disproportionately benefit such services or personnel at the expense of the Cuban people or private enterprise in Cuba.
This document and additional information concerning the Cuba Restricted List are available from the Department of State's website (
Below is the U.S. Department of State's list of entities and subentities under the control of, or acting for or on behalf of, the Cuban military, intelligence, or security services or personnel with which direct financial transactions would disproportionately benefit such services or personnel at the expense of the Cuban people or private enterprise in Cuba. For information regarding the prohibition on direct financial transactions with these entities, please see 31 CFR 515.209. All entities and subentities were listed effective November 9, 2017, unless otherwise indicated.
* * *
* * Activities in parentheticals are intended to aid in identification, but are only representative. All activities of listed entities and subentities are subject to the applicable prohibitions.* *
On May 29, 2020, the Seven County Infrastructure Coalition (Coalition) filed a petition for exemption under 49 U.S.C. 10502 from the prior approval requirements of 49 U.S.C. 10901 for authorization to construct and operate an approximately 85-mile rail line connecting two termini in the Uinta Basin near South Myton Bench, Utah, and Leland Bench, Utah, to the national rail network at Kyune, Utah. The Coalition asks that the Board issue a preliminary decision addressing the transportation aspects of the project while the environmental review is ongoing.
The Board received filings both supporting and opposing the petition. Several government officials have filed in support, as discussed below. The opponents include the Center for Biological Diversity (Center), the Argyle Wilderness Preservation Alliance (Argyle), and numerous individuals. These commenters argue, among other things, that the requested preliminary decision is not appropriate, that the transportation aspects of the petition do not satisfy the section 10502 standards, and that the Board should reject the petition and require an application under section 10901.
As discussed below, the Board concludes that an application is not necessary and that the requested approach of issuing a preliminary decision on the transportation merits is appropriate here. The Board preliminarily concludes, subject to completion of the ongoing environmental review, that the proposed transaction meets the statutory standards for exemption under section 10502. This decision only addresses the transportation merits, however, and does not grant the exemption or allow construction to begin. After the Board has considered the potential environmental impacts associated with this proposal, and weighed those potential impacts with the transportation merits, it will issue a final decision either granting the exemption, with conditions, if appropriate, or denying it.
The Coalition explains that it is an independent political subdivision of the State of Utah, whose member counties include Carbon, Daggett, Duchesne, Emery, San Juan, Sevier, and Uintah Counties. (Pet. 5.) It was formed to, among other things, identify and develop infrastructure projects that will promote resource utilization and development. (
The Coalition asserts that goods produced or consumed in the Uinta Basin today can be transported only by truck and that the proposed project would give shippers an additional freight transportation option, eliminating longstanding transportation constraints. (Pet. 13-15.) The Coalition claims that adding a rail transportation option would provide local industries the opportunity to access new markets and increase their competitiveness in the national marketplace, and the removal of transportation constraints would benefit oil producers, mining companies, ranchers, farmers, and other local industries. (
The Coalition argues that regulation of the construction and operation of the proposed line under section 10901 is not needed to carry out the rail transportation policy (RTP) at 49 U.S.C. 10101, that the project would promote several provisions of the RTP, and that an application under section 10901 is not required to protect shippers from an abuse of market power. (Pet. 21-22.) As noted above, the Coalition requests that, in considering the petition, the Board follow a two-step approach, addressing the transportation aspects of the project in advance of the environmental issues. (
On July 7, 2020, the Center filed a reply
On July 21, 2020, the Coalition filed a response to the various filings and filed a motion asking that the Board accept its reply.
The Board has also received several letters in support of the Coalition's proposal. On November 20, 2019, Governor Gary R. Herbert submitted a letter stating that the proposed rail line represents an important opportunity to enhance the rural economies in eastern Utah and improve the state's energy infrastructure and environmental stewardship. On December 1, 2020, a joint letter supporting the Coalition's project was filed by U.S. Senators Mitt Romney and Mike Lee and U.S. Representatives Rob Bishop, Chris Stewart, and John Curtis. On December 7, 2020, Utah State Senate President J. Stuart Adams and Utah State House of Representatives Speaker Brad Wilson separately filed letters in support of the project. Also on December 7, 2020, Governor Herbert, Lieutenant Governor Spencer J. Cox, Utah State Senate President Adams, and Utah State House of Representatives Speaker Wilson submitted a joint letter supporting the project.
On August 26, 2020, the Director of the Office of Proceedings instituted a proceeding under 49 U.S.C. 10502(b). That decision stated that the Coalition's July 21 motion for leave to file and other late-filed submissions would be addressed in a subsequent decision.
The Board will grant the Coalition's motion for leave to file and accept its July 21, 2020 filing. Although 49 CFR part 1121 does not provide for rebuttals and the Board struck such filings in the cases Argyle cites, the Board's action in those cases was primarily focused on the fact that the rebuttals there were filed shortly before a regulatory deadline, a factor that is not present here.
The construction of new railroad lines that are to be part of the interstate rail network requires prior Board authorization, either through issuance of a certificate under 49 U.S.C. 10901 or, as requested here, through an exemption under 49 U.S.C. 10502 from the formal application procedures of section 10901. Section 10901(c) directs the Board to grant rail construction proposals “unless the Board finds that such activities are inconsistent with the public convenience and necessity.”
Under 49 U.S.C. 10502(a), however, the Board, “to the maximum extent” consistent with 49 U.S.C. 10101-10908, “shall exempt” a transaction (including a construction proposal) from the prior approval requirements of section 10901 when it finds that: (1) Regulation is not necessary to carry out the RTP of 49 U.S.C. 10101; and (2) either (a) the transaction is of limited scope or (b) application of the statutory provision is not needed to protect shippers from the abuse of market power.
The Center argues that the Board should reject the petition and require the Coalition to seek its authority through an application under section 10901. Among other reasons, the Center claims greater scrutiny is required because the project would not be financially viable and could pose significant financial risk to public entities and taxpayers, the most likely source of funding through the issuance of municipal bonds.
The Center maintains that there are insufficient proven oil quantities in the Uinta Basin to justify the project's construction, and that there is a limited portfolio of potential industries and shipping commodities that the railway could service. (
The Center also notes that the 2018 pre-feasibility study, prepared for the Coalition by R.L. Banks & Associates, Inc. (R.L. Banks), provides an analysis of the proposed line, but the Center asserts
Finally, the Center states that the construction cost of a rail line similar to the Coalition's preferred route here was projected in 2015 to cost $4.5 billion, but the Coalition's projections for the current preferred route are now one-third of that 2015 estimate, raising questions as to the reliability of the Coalition's cost projections. (
Similarly, Argyle opposes the project proceeding by exemption. It claims that such an approach is not appropriate where, as here, the proposal is vigorously contested and highly controversial. (Argyle Reply 3-4, July 7, 2020.) Argyle also claims that there is neither evidence of financial ability to complete the proposed construction nor evidence of public need for the project. (
The Coalition responds that the opposition has raised no serious question showing that the project should not be decided under the exemption criteria at section 10502. (Coalition Reply 3-4, July 21, 2020.) The Coalition adds that controversy does not preclude use of the exemption process, (
The arguments presented by the opponents do not warrant rejecting the petition and requiring an application. There is nothing in the language of section 10502 to suggest that an exemption proceeding is inappropriate if the viability of the proposed rail line is questioned.
In addition, the Coalition recognizes that conditions beyond its control can affect the amount of rail traffic on the proposed line, (Pet. 15), and, prior to seeking authority from the Board for this project, the Coalition asked R.L. Banks to prepare a detailed 2018 feasibility study addressing the viability of the line. Moreover, the Utah Petroleum Association, Enefit Oil Company, Utah Royalty Owners Association, National Oil Shale Association, and Western Energy Alliance have expressed support for the project. (Coalition Reply 16, July 21, 2020.)
It is well settled that, because the Board's authority is permissive, the Board may grant authority to construct a line even if all outstanding issues related to the proposed construction, such as financing, have not yet been resolved or if factors beyond the Board's control might ultimately prevent consummation of authority for a proposed construction.
The opponents' filings also do not lead to a conclusion that an application is necessary here. To be clear, the agency has found the exemption process suitable in considering other projects that have drawn opposition.
The Board's decisions in
In short, it is appropriate to consider the Coalition's construction proposal under section 10502, and an application proceeding under section 10901 is not required here.
As noted above, the Coalition requests that the Board issue a preliminary decision addressing the transportation aspects of the project in advance of completing its review of the environmental issues. The Coalition explains that streamlining the regulatory process by issuing a preliminary decision on the transportation-related issues would help hasten its recovery from the economic downturn stemming from the pandemic. (Pet. 26-27.) Both Argyle and the Center oppose the Coalition's request. The Center argues that based on prior Board precedent a preliminary decision addressing the transportation merits requires a “showing of some unique or compelling circumstances” and that the Coalition has made no such showing here. (Ctr. Reply 5-6.) The Center claims that the Coalition has failed to explain how addressing the transportation merits before completing the environmental review process and determining whether to allow construction to begin would increase efficiencies in the process, mitigate the economic impacts of the pandemic, or benefit the proposed rail line. (
The Board has considered requests for preliminary decisions addressing the transportation merits of a project over the years.
As noted above, the Board must exempt a proposed rail line construction when it finds that application of the provisions of section 10901 is not necessary to carry out the RTP and there is no danger of market power abuse. Based on the record, the Board preliminarily concludes that the proposed construction qualifies for an exemption under section 10502 from the prior approval requirements of section 10901.
First, regulation under section 10901 is not necessary to carry out the RTP in this case. The record here shows that the proposed rail line would provide an alternative, more cost-effective method of transportation for shippers that are currently limited to shipping by truck. (Pet. 13-15.) The proposed line would provide shippers in the Basin the opportunity to enter markets they currently cannot access due to cost constraints and the ability to import materials into the Basin at a more economical cost. (Pet. 13-15; Coalition Reply 15-16, July 21, 2020.)
Argyle claims that the RTP goals at section 10101(8), concerning public safety, and section 10101(11), concerning safe working conditions, would be undermined by the project. (Argyle Reply 9, July 7, 2020.) Argyle asserts that there will be a substantial increase in local truck traffic if oil production were to increase to the extent claimed by the Coalition. (
Second, application of section 10901 is not necessary to protect shippers from an abuse of market power.
As discussed above, the Board has preliminarily concluded that the proposed construction meets the statutory standards for exemption on the transportation merits, subject to completion of the ongoing environmental review. The Board's Office of Environmental Analysis (OEA) issued a Final Scope of Study for the Environmental Impact Statement (EIS) on December 13, 2019, and a Draft EIS on October 30, 2020, for public review and comment. OEA also held six virtual public meetings to receive oral comments, the last of which took place on December 3, 2020. Following the conclusion of the comment period (January 28, 2021), OEA will issue a Final EIS addressing the public comments and environmental impacts and make its final recommendations to the Board.
Following the conclusion of the environmental review process, the Board will issue a further decision assessing the potential environmental impacts of the proposal, weighing the potential environmental impacts and the transportation merits, and determining whether to make the exemption effective at that time, and if so, whether to include appropriate mitigation conditions.
The decision issued today is a preliminary determination that does not prejudge the Board's final decision, nor diminish the agency's environmental review process concerning the proposed Line's construction.
1. The Coalition's July 21, 2020 response and the late-filed replies and letters are accepted into the record.
2. Under 49 U.S.C. 10502, the Board preliminarily exempts the construction and operation of the above-described line from the prior approval requirements of 49 U.S.C. 10901, subject to further consideration of the potential environmental impacts of the proposal.
3. On completion of the environmental review, the Board will issue a further, final decision addressing any potential environmental impacts, weighing any environmental impacts with the transportation merits, and determining whether the exemption should become effective (subject to any appropriate mitigation conditions). Construction may not begin unless and until the Board issues a final decision authorizing the exemption and any such decision has become effective.
4. Notice of this decision will be published in the
5. Petitions for reconsideration must be filed by January 25, 2021.
6. This decision is effective 30 days from the date of service.
Decided: January 4, 2021.
By the Board, Board Members Begeman, Fuchs, and Oberman. Board Member Oberman dissented with a separate expression.
The Board majority has reached a preliminary conclusion that the transportation merits of the proposal of the Seven County Infrastructure Coalition (the Coalition) to construct and operate the approximately 85-mile line at issue (the project) in the Uinta Basin meet the statutory exemption standard under 49 U.S.C. 10502. The majority has reached this conclusion in a so-called two-step process, in which it has preliminarily addressed the transportation merits prior to considering the environmental impacts and any necessary mitigation requirements.
I dissent from both aspects of this decision (
Given these uncertainties and the controversial nature of the project, the transportation merits cannot properly be determined without measuring them against whatever environmental degradation the project will cause. In this case, the Board should not deviate from precedent generally disfavoring such a two-step process.
In considering a construction application under 49 U.S.C. 10901, the Board “shall” grant such an application “unless the Board finds that such activities are inconsistent with the public convenience and necessity.” 49 U.S.C. 10901(c);
As detailed below, there are more than enough unanswered questions about the financial viability of, and public need for, this project to raise the serious potential that, after the development of a complete record, the Board may find that regulation here is necessary to carry out the RTP of section 10101, and that the presumption in favor of approving construction may well be overcome.
In the past, the Board has rejected an exemption and required an application in construction cases presenting significant controversy, particularly where concerns have been raised about the project's financial feasibility and its impact on the local area.
Here, the majority declines to follow these precedents,
The instant case is easily distinguished from
In 2018, the Coalition commissioned a consultant, R.L. Banks & Associates, Inc. (R.L. Banks) to conduct a pre-feasibility study for the project. However, in support of its petition, the Coalition failed to mention this study and never submitted it to the Board. I find this omission significant. Had the Banks study been persuasive in support of the project, one would have expected the Coalition to enthusiastically rely on it.
The Coalition ultimately mentioned the existence of the R.L. Banks study in its reply only
But the R.L. Banks study hardly is persuasive on the likelihood that a projected increase in oil production will be large enough to sustain the railroad. First, the only version of the study obtainable by the Center is woefully incomplete. While R.L. Banks states that it undertook to make detailed projections of the demand for Uinta Basin oil and the number of carloads such demand would generate for the proposed railroad, the Coalition has redacted every statistic and every table in the R.L. Banks study released to the Center. Therefore, it is impossible for the Board (or anyone) to evaluate the substance and reliability of the conclusions purportedly reached by R.L. Banks concerning the projected volume of shipments on the line. If those statistics were persuasive of the transportation merits of the project, again, one would have expected the Coalition to supply them to the Board (which, if confidentiality was a concern, could have been submitted under seal subject to a protective order). The Coalition's failure to do so supports an inference that the statistics compiled by R.L. Banks are either not persuasive or are no longer reliable.
Aside from this shortcoming, even the R.L. Banks study acknowledges that the demand for the type of oil extracted from the Uinta Basin is unknown. (Ctr Supp. 417 (“Unknown Demand—The demand for Uinta Basin's waxy crude, which is not well known outside of Utah, in large part due to lack of transportation infrastructure to ship product out of the Uinta Basin, may not be as readily accepted as initial indications would suggest.”).) More importantly, since the preparation of the R.L. Banks study in 2018, the global demand for oil has changed dramatically, both because of the pandemic and its long term ramifications, and because of the changing progress in the world's reliance on non-fossil fuel energy.
As a result, there are significant questions about the future global demand for oil, which would affect the financial viability of a rail line built primarily to move Uinta Basin oil, the demand for which was unknown even prior to the pandemic. Further, while the Coalition assumes the pandemic-related changes may be short-term (Pet. 10 n.28, 14 n.52), there are significant indications that this assumption may be unwarranted.
These questions of future global demand were recently summarized by former Vice President Al Gore:
As a former oil minister in Saudi Arabia put it 20 years ago, “the Stone Age came to an end, not because we had a lack of stones, and the oil age will come to an end not because we have a lack of oil.” Many global investors have reached the same conclusion and are beginning to shift capital away from climate-destroying businesses to sustainable solutions. . . . [S]ome of the world's largest investment firms are now joining this movement, too, having belatedly recognized that fossil fuels have been extremely poor investments for a long while. Thirty asset managers overseeing $9 trillion announced on [December 11, 2020] an agreement to align their portfolios with net-zero emissions by 2050.
Indeed, many of the world's major oil producers have written down the value of their oil reserves—including shale oil reserves—by multi-billions of dollars since the middle of 2020. These write-downs have been based on longer term projections, only partly resulting from pandemic fallout:
BP PLC, Hess Corp. and Occidental Petroleum Corp., have recently taken multibillion-dollar [asset] impairments as a coronavirus-induced economic slowdown adds pressure to an already struggling shale sector. Chevron Corp. took a $10 billion write-down in December, [2019] and Royal Dutch Shell PLC said Tuesday that it would write down the value of its assets by up to $22 billion because of lower energy prices. . . .
To be clear, owners of oil assets generally distinguish between the amount of their “proven reserves” and all other reserves. The term “proven reserves” refers to the quantity of oil which can be extracted profitably at the prevailing price for that oil. Thus, if the price of oil drops below the cost of extraction, then the amount of “proven reserves” must be reduced accordingly. Here, questions have been raised about the quantity of oil reserves in the Basin, the demand for the specific type of oil found there, and whether there are sufficient proven reserves to provide long term business for the proposed railroad. Estimates in the record of the amount of oil in the Basin vary, in part depending on whether unconventional resources such as oil produced from oil shale are included in the estimate.
Given the depression in the oil market since the R.L. Banks study in 2018, there is no basis in the present record for the Board to determine the amount of “proven reserves” in the Uinta Basin. But surely, if in 2020, the world's major oil producers have been forced to undertake major write-downs of the value of their oil reserves and lower their expectations for the future of oil prices, as discussed above, it is difficult to imagine that the Uinta Basin producers have not been required to do the same, especially in view of the R.L. Banks study's concession that the demand for Uinta Basin's waxy crude is “unknown” and “may not be as readily accepted as initial indications would suggest,” (Ctr. Supp. 417).
If, as the foregoing sources suggest, the global demand for oil is indeed depressed and does not bounce back to pre-pandemic levels as quickly as the Coalition assumes
The majority did not explore these significant changes in the global oil market and dismisses concerns raised by the Center and Argyle about the financial viability of the project, finding that, because the Board's authority is permissive, “the ultimate decision to go forward with an approved project is in the hands of the applicant and the financial marketplace,” and thus the Board need not consider such concerns.
Even if relying on the financial marketplace to determine whether this railroad should be built constituted a sufficient discharge of the Board's duties in determining whether a project should be granted an exemption from the full application process, here the record establishes that the financial marketplace cannot be relied on. The R.L. Banks feasibility study makes clear that
[R.L. Banks] assumed that construction of the railroad would be the responsibility of [the Coalition], another public entity, or a consortium of public entities. While private/public partnerships (“3Ps”) are not unprecedented in the freight rail industry,
Given the large capital investment required to construct the [project] . . . , [R.L. Banks] assumed that construction of the railroad would be financed through the issuing of bonds. Specifically, [R.L. Banks] assumed that the entire cost to construct the [project] would be financed with capital generated from issuing 30-year bonds.
While the record (as submitted, not by the Coalition, but by the objectors) refers to the possibility that the railroad construction will be financed by “municipal conduit bonds,”
Adding to the uncertainty at this time is the fact that the Coalition has decided to rely on a private investment partner to develop the financing. The Coalition is partnering with DHIP, (Pet. 6, 37-38), which it describes as “an established independent infrastructure investment company that is successfully developing and financing projects across the United States. . . , ” (Coalition Reply 12, July 21, 2020). Nevertheless, now known as DHIP Group, the company appears to be a small, young firm. Its website reflects that it consists of two managing partners, and the firm lists no prior experience in financing the construction of railroads. Home—DHIP Group,
In sum, the current record before the Board is woefully inadequate to permit the Board to evaluate and judge whether an exemption is warranted under the RTP or whether an application should be required so that the Board can determine whether the public convenience and necessity are met for the construction of the Uinta Basin railroad.
Both Argyle and the Center argue against the Board's reaching a preliminary conclusion on the Coalition's petition before the environmental review process is complete. The Center states that “development of the railway raises many significant environmental and socioeconomic issues, which must be weighed[,] along with the project's financial risks, against its highly speculative benefits.” (Ctr. Reply 33;
The Draft EIS clearly illustrates there are serious environmental impacts that must be mitigated if the project is to proceed. What remains to be determined is whether the mitigation measures identified through the environmental review process will be sufficient to address these impacts, or whether the overall environmental impact of the project will outweigh the project's transportation merits which, as discussed above, are at this time, at best, uncertain. The likely significant cost of any imposed mitigation measures may also affect the project's financial viability. The transportation merits and the environmental impacts of this project are inherently interrelated and should be considered in balance with each other, rather than even preliminarily dealing with the transportation merits now.
Rather than determining at this time that the Coalition's petition is ripe for decision, even preliminarily and piecemeal, the Board should require the Coalition to submit a complete and unredacted version of the R.L. Banks study, should insist that the Coalition elaborate on the projected demand for Uinta Basin oil in light of the global oil demand issues that have arisen since that study was completed, as discussed above, and should obtain more detail from the Coalition and DHIP Group on the reality of obtaining the necessary financing for the project, with or without obligating public funds, along with considering further input on these issues from the objectors.
I therefore find it premature for the Board to issue the decision the majority issues today. Though the
I respectfully dissent.
Federal Railroad Administration (FRA), Department of Transportation (DOT).
Notice of establishment of public docket.
This Notice announces the establishment of FRA's emergency relief docket (ERD) for calendar year 2021. The designated ERD for calendar year 2021 is docket number FRA-2021-0001.
See
On May 19, 2009, FRA published a direct final rule establishing ERDs and the procedures for handling petitions for emergency waivers of safety rules, regulations, or standards during an emergency situation or event. 74 FR 23329. That direct final rule became effective on July 20, 2009 and made minor modifications to 49 CFR 211.45 in FRA's Rules of Practice in 49 CFR part 211. Section 211.45(b) provides that each calendar year FRA will establish an ERD in the publicly accessible DOT docket system (available at
As detailed in § 211.45, if the FRA Administrator determines an emergency event as defined in 49 CFR 211.45(a) has occurred, or that an imminent threat of such an emergency occurring exists, and public safety would benefit from providing the railroad industry with operational relief, the emergency waiver procedures of 49 CFR 211.45 will go into effect.
Privacy
Anyone can search the electronic form of any written communications and comments received into any of our dockets by the name of the individual submitting the comment (or signing the document, if submitted on behalf of an association, business, labor union, etc.). Under 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its processes. DOT posts these comments, without edit, including any personal information the commenter provides, to
Issued in Washington, DC.
Federal Railroad Administration (FRA), Department of Transportation (DOT).
Notice of adjustment of Nationwide Significant Risk Threshold.
FRA is updating the Nationwide Significant Risk Threshold (NSRT) for purposes of FRA's regulation on the Use of Locomotive Horns at Public Highway-Rail Grade Crossings. This action is needed to ensure the
The applicable date of this notice is January 8, 2021.
James Payne, Staff Director, Highway-Rail Crossing and Trespasser Programs Division (telephone: 202-493-6005, email:
The NSRT is an average of the risk indexes for gated public crossings nationwide where train horns are routinely sounded. FRA developed this risk index to serve as one threshold of permissible risk for quiet zones established across the nation under 49 CFR part 222, Use of Locomotive Horns at Public Highway-Rail Grade Crossings. Thus, a community trying to establish and/or maintain its quiet zone, under 49 CFR part 222, can compare the Quiet Zone Risk Index calculated for its specific crossing corridor to the NSRT to determine whether sufficient measures have been taken to compensate for the excess risk that results from prohibiting routine sounding of the locomotive horn. In the alternative, a community can establish its quiet zone in comparison to the Risk Index With Horns, which is defined in 49 CFR 222.9 as a measure of risk to the motoring public when locomotive horns are routinely sounded at every public highway-rail grade crossing within a quiet zone.
FRA has periodically updated the NSRT since 2006. FRA last updated the NSRT in 2019 to be 13,811. 84 FR 22562, May 17, 2019.
Using collision data over a 5-year period from 2015 to 2019, FRA has recalculated the NSRT based on formulas identified in 49 CFR part 222, appendix D. In making this recalculation, FRA noted the total number of gated crossings nationwide where train horns are routinely sounded was 48,607.
Applying the fatality rate and injury rate to the probable number of fatalities and injuries predicted to occur at each of the 48,607 identified crossings, and the predicted cost of the associated injuries and fatalities, FRA calculates the NSRT to be 15,488. Accordingly, this updated NSRT value will serve as one threshold of permissible risk for quiet zones established across the nation pursuant to 49 CFR part 222.
Federal Railroad Administration (FRA), Department of Transportation (DOT).
Notice of information collection; request for comment.
Under the Paperwork Reduction Act of 1995 (PRA), this notice announces that FRA is forwarding the Information Collection Request (ICR) abstracted below to the Office of Management and Budget (OMB) for review and comment. The ICR describes the information collection and its expected burden. On October 5, 2020, FRA published a notice providing a 60-day period for public comment on the ICR.
Interested persons are invited to submit comments on or before February 8, 2021.
Written comments and recommendations for the proposed ICR should be sent within 30 days of publication of this notice to
Ms. Kim Toone, Information Collection Clearance Officer, Federal Railroad Administration, 1200 New Jersey Avenue SE, Washington, DC 20590 (telephone: (202) 493-06132) or
The PRA, 44 U.S.C. 3501-3520, and its implementing regulations, 5 CFR part 1320, require Federal agencies to issue two notices seeking public comment on information collection activities before OMB may approve paperwork packages.
Before OMB decides whether to approve the proposed collection of information, it must provide 30 days for public comment. Federal law requires OMB to approve or disapprove paperwork packages between 30 and 60 days after the 30-day notice is published. 44 U.S.C. 3507(b)-(c); 5 CFR 1320.10(b);
Comments are invited on the following ICR regarding: (1) Whether the information collection activities are necessary for FRA to properly execute its functions, including whether the information will have practical utility; (2) the accuracy of FRA's estimates of the burden of the information collection activities, including the validity of the
The summary below describes the ICR that FRA will submit for OMB clearance as the PRA requires:
Under 44 U.S.C. 3507(a) and 5 CFR 1320.5(b) and 1320.8(b)(3)(vi), FRA informs all interested parties that a respondent is not required to respond to, conduct or sponsor a collection of information unless it displays a currently valid OMB control number.
44 U.S.C. 3501-3520.
Under part 211 of title 49 Code of Federal Regulations (CFR), this document provides the public notice that on December 21, 2020, San Diego Trolley Incorporated (SDTI) petitioned the Federal Railroad Administration (FRA) to renew a waiver of compliance from certain provisions of the Federal railroad safety regulations contained at various parts of 49 CFR. FRA assigned the petition Docket Number FRA-2000-7137.
Specifically, SDTI seeks a five-year extension of its existing waiver of compliance with modifications. The waiver applies to certain portions of SDTI's rail fixed guideway urban transit operations which employ temporal separation to safely share track with the general railroad system's San Diego & Imperial Valley Railroad (SDIV). Contiguous to the shared trackage are portions with limited connections to the general railroad system, which include a small shared corridor with BNSF Railway and Coaster commuter train service, which also shares a storage yard with SDTI. FRA granted SDTI its initial waiver on January 19, 2001, and the most recent update to the waiver was FRA's May 1, 2020, approval of SDTI's new absolute block arrangement on its Blue Line.
In this petition, SDTI seeks an extension of its relief from the following parts and sections in 49 CFR: part 217, Railroad Operating Rules (except for 217.9(d)); 218.27(a),
A copy of the petition, as well as any written communications concerning the petition, is available for review online at
Interested parties are invited to participate in these proceedings by submitting written views, data, or comments. FRA does not anticipate scheduling a public hearing in connection with these proceedings since the facts do not appear to warrant a hearing. If any interested parties desire an opportunity for oral comment and a public hearing, they should notify FRA, in writing, before the end of the comment period and specify the basis for their request.
All communications concerning these proceedings should identify the appropriate docket number and may be submitted by any of the following methods:
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Communications received by February 22, 2021 will be considered by FRA before final action is taken. Comments received after that date will be considered if practicable.
Anyone can search the electronic form of any written communications and comments received into any of our dockets by the name of the individual submitting the comment (or signing the document, if submitted on behalf of an association, business, labor union, etc.). Under 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its processes. DOT posts these comments, without edit, including any personal information the commenter provides, to
Issued in Washington, DC.
Maritime Administration, Department of Transportation.
Notice of solicitation for membership.
Pursuant to authority delegated by the Secretary of Transportation (Secretary) to the Maritime Administrator (Administrator), the Maritime Administration (MARAD) requests nominations for membership on the U.S. Maritime Transportation System National Advisory Committee (MTSNAC).
Applications must be received on or before 5:00 p.m. ET on February 8, 2021. After that date, MARAD will continue to accept applications under this notice for a period of up to two years from the deadline to fill any vacancies that may arise. MARAD encourages nominations submitted any time before the deadline for consideration of upcoming vacancies.
Interested applicants may submit a completed application by sending an email to
Amanda Rutherford, Designated Federal Officer, at
The objective of the Maritime Transportation System National Advisory Committee (MTSNAC or Committee) is to identify and seek solutions to impediments hindering effective use of short sea transportation. The Committee will provide information, advice, and recommendations to the U.S. Secretary of Transportation (Secretary), through the Maritime Administrator (Administrator), on matters stated in the document
The Administrator will use the advice, information, and recommendations generated by MTSNAC for an array of policy deliberations and for interagency discussions on meeting the
During the term of the charter, MTSNAC shall undertake information gathering activities, develop technical advice, and present recommendations to the Administrator on short sea shipping matters including the following: (1) How to address impediments hindering effective use of short sea transportation, including the expansion of America's Marine Highways, as directed in 46 U.S.C. 55603; (2) How to strengthen U.S. Maritime capabilities essential to national security and economic prosperity; (3) Ways to ensure the availability of a U.S. maritime workforce that will support the sealift resource needs of the National Security Strategy; (4) Ways to support enhancement of U.S. port infrastructure and performance; and, (5) Ways to enable maritime industry innovation in information, automation, safety, environmental impact and other areas.
MARAD seeks nominations for immediate consideration to fill positions on the Committee for the upcoming charter term, and will continue to accept nominations under this notice on an on-going basis for two years for consideration to fill vacancies that may arise during the charter term. Member appointment terms run until September 17, 2022 and may be renewed, subject to charter renewal. Members will be selected in accordance with applicable Agency guidelines based upon their ability to advise the Administrator on marine transportation issues. Members will be selected to obtain membership balance of the marine transportation interests, including (1) active mariners; (2) vessel operators; (3) port authorities and terminal operators; (4) shippers or beneficial cargo owners; (5) the ship construction, repair and/or recycling industries; (6) relevant policy areas such as innovative financing, economic competitiveness, performance monitoring, safety, insurance, labor, and environment; (7) freight customers and providers; and (8) government bodies. All MTSNAC members serve at the pleasure of the Secretary of Transportation.
Registered lobbyists are not eligible to serve on Federal Advisory Committees in an individual capacity. See “
Committee members will receive no salary for participating in MTSNAC activities. While attending meetings or when otherwise engaged in Committee business, members may be reimbursed for travel and per diem expenses as permitted under applicable Federal
Individuals can self-apply or be nominated by any individual or organization. To be considered for the MTSNAC, applicants/nominators should submit the following information:
(1) Contact Information for the nominee, consisting of:
(2) Statement of interest limited to 250 words on why the nominee wants to serve on the MTSNAC and the unique perspectives and experiences the nominee brings to the Committee;
(3) Resume limited to 3 pages describing professional and academic expertise, experience, and knowledge, including any relevant experience serving on advisory committees, past and present;
(4) An affirmative statement that the nominee is not a federally registered lobbyist seeking to serve on the Committee in their individual capacity and the identity of the interests they intend to represent, if appointed as member of the Committee; and
(5) Optional letters of support.
Please do not send company, trade association, organization brochures, or any other promotional information. Materials submitted should total five pages or less and must be in a 12 font, formatted in Microsoft Word or PDF. Should more information be needed, MARAD staff will contact the nominee, obtain information from the nominee's past affiliations, or obtain information from publicly available sources. Those interested in applying to become a member of the Committee, may send a completed application package by email listed in the
A selection team comprising representatives from MARAD will review the application packages. The selection team will make recommendations regarding membership to the Administrator based on the following criteria: (1) Professional or academic expertise, experience, and knowledge; (2) stakeholder representation; (3) availability and willingness to serve; (4) relevant experience in working in committees and advisory panels; and (5) the MTSNAC Charter and Membership Balance Plan. Nominations are open to all individuals without regard to race, color, religion, sex, national origin, age, mental or physical disability, marital status, or sexual orientation.
By Order of the Maritime Administrator.
National Highway Traffic Safety Administration (NHTSA), Department of Transportation.
Notice and request for comments on a new information collection.
In compliance with the Paperwork Reduction Act of 1995 (PRA), this notice announces that the Information Collection Request (ICR) abstracted below is being submitted to the Office of Management and Budget (OMB) for review and approval. The ICR describes the nature of the information collection and its expected burden. This new information collection seeks to assess the knowledge of drivers nationwide about the laws governing passing a school bus. A
Comments must be received on or before February 8, 2021.
Written comments and recommendations for the proposed information collection, including suggestions for reducing the burden, should be submitted to the Office of Management and Budget at
For additional information or access to background documents, contact Kristin Rosenthal, Highway Safety Specialist, 1200 New Jersey Avenue SE, W44-245, Washington, DC 20590. Ms. Rosenthal's phone number is 202-366-8995, and her email address is
Under the PRA (44 U.S.C. 3501
To make this assessment, NHTSA will conduct a study that consists of two new voluntary surveys of drivers in the general public. The first survey will collect data from current drivers of motor vehicles in the AmeriSpeak panel who volunteer to participate. AmeriSpeak is funded and operated by National Opinion Research Center (NORC) at the University of Chicago and is a probability-based panel designed to be representative of the U.S. household population to take part in online and telephone surveys. Screening and data collection for this national survey will take place in the respondents' homes or wherever respondents choose to operate their own computer, laptop, or mobile device. The second will evaluate the effectiveness of a high visibility enforcement (HVE) program, including the use of automated cameras on the school bus in two communities, aimed at reducing violations of the school bus passing laws. A survey in each community before and after the HVE application will be part of the evaluation. Screening and data collection for the community survey will take place on a computer or tablet provided by the study at a public venue frequented by drivers across the socioeconomic and demographic spectra, such as a mall or motor vehicle department office. All collection of data will be anonymous.
NHTSA estimates that for the 3,400 AmeriSpeak panelists that will have to be screened, the estimated total burden is 113 hours (3,400 × 2 min./60). For the 3,100 qualified volunteers who take the national survey, the estimated total burden hours are 775 hours (3,100 × 15 min./60), yielding at least 3,000 fully completed surveys. Likewise, the total estimated burden for the maximum of 1,600 potential participants to be screened for the community survey (400 per wave × 2 communities x 2 waves) is 80 hours (1,600 × 3 min./60). The estimated total burden hours for the 1,200 fully completed surveys (300 per wave × 2 communities × 2 waves) is 300 hours (1,200 × 15 min./60). Table 1 provides a summary of the burden hours per survey.
Issued in Washington, DC.
National Highway Traffic Safety Administration (NHTSA), Department of Transportation (DOT).
Notice of public meeting.
This notice announces a meeting of the National Emergency Medical Services Advisory Council (NEMSAC).
The meeting will be held February 10-11, 2021, from 9:00 a.m. to 5:00 p.m. EST.
Requests to attend the meeting must be received by February 5, 2021.
Requests for accommodations to a disability must be received by February 5, 2021.
If you wish to speak during the meeting, you must submit a written copy of your remarks to DOT by February 5, 2021.
Requests to submit written materials to be reviewed during the meeting must be received no later than February 5, 2021.
The meeting will be held virtually. Copies of the meeting minutes will be available on the NEMSAC internet website at
Clary Mole, EMS Specialist, DOT, at
The NEMSAC was established pursuant to Section 31108 of the Moving Ahead for Progress in the 21st Century (MAP-21) Act of 2012, under the Federal Advisory Committee Act. The purpose of NEMSAC is to serve as a nationally recognized council of emergency medical services (EMS) representatives to provide advice and consult with:
a. The Federal Interagency Committee on Emergency Medical Services (FICEMS) on matters relating to EMS issues; and
b. The Secretary of Transportation on matters relating to EMS issues affecting DOT.
The NEMSAC provides an important national forum for the non-Federal deliberation of national EMS issues and serves as a platform for advice on DOT's national EMS activities. NEMSAC also provides advice and recommendations to the FICEMS. NEMSAC is authorized under Section 31108 of the MAP-21 Act of 2012, codified at 42 U.S.C. 300d-4.
At the meeting, the agenda will cover the following topics:
The meeting will be open to the public. Members of the public who wish
There will be a thirty (30) minute period allotted for comments from members of the public joining the meeting. To accommodate as many speakers as possible, the time for each commenter may be limited. Individuals wishing to reserve speaking time during the meeting must submit a request at the time of registration, as well as the name, address, and organizational affiliation of the proposed speaker. If the number of registrants requesting to make statements is greater than can be reasonably accommodated during the meeting, the NHTSA office of EMS may conduct a lottery to determine the speakers. Speakers are requested to submit a written copy of their prepared remarks for inclusion in the meeting records and for circulation to NEMSAC members. All prepared remarks submitted on time will be accepted and considered as part of the record. Any member of the public may present a written statement to the committee at any time.
42 U.S.C. 300d-4(b); 49 CFR part 1.95(i)(4).
Issued in Washington, DC.
National Highway Traffic Safety Administration (NHTSA), U.S. Department of Transportation (DOT).
Notice of public meeting.
This notice announces a meeting of the National Emergency Medical Services Advisory Council (NEMSAC).
The meeting will be held November 17-18, 2021, from 9:00 a.m. to 5:00 p.m. EST Requests to attend the meeting must be received by November 13, 2021.
Requests for accommodations to a disability must be received by November 13, 2021.
If you wish to speak during the meeting, you must submit a written copy of your remarks to DOT by November 13, 2021.
Requests to submit written materials to be reviewed during the meeting must be received no later than November 13, 2021.
The meeting will be held virtually (depending on the status of the Coronavirus Disease 2019 (COVID-19) public health emergency) or at the U.S. Department of Transportation, 1200 New Jersey Avenue SE, Washington, DC 20590. Copies of the meeting minutes will be available on the NEMSAC internet website at
Clary Mole, EMS Specialist, DOT, at
The NEMSAC was established pursuant to Section 31108 of the Moving Ahead for Progress in the 21st Century (MAP-21) Act of 2012, under the Federal Advisory Committee Act. The purpose of NEMSAC is to serve as a nationally recognized council of emergency medical services (EMS) representatives to provide advice and consult with:
a. The Federal Interagency Committee on Emergency Medical Services (FICEMS) on matters relating to EMS issues; and
b. The Secretary of Transportation on matters relating to EMS issues affecting DOT.
The NEMSAC provides an important national forum for the non-Federal deliberation of national EMS issues and serves as a platform for advice on DOT's national EMS activities. NEMSAC also provides advice and recommendations to the FICEMS. NEMSAC is authorized under Section 31108 of the MAP-21 Act of 2012, codified at 42 U.S.C. 300d-4.
At the meeting, the agenda will cover the following topics:
The meeting will be open to the public on a first-come, first-served basis, as space is limited. Members of the public who wish to attend in person must RSVP to the person listed in the
There will be a thirty (30) minute period allotted for comments from members of the public joining the meeting. To accommodate as many speakers as possible, the time for each commenter may be limited. Individuals wishing to reserve speaking time during the meeting must submit a request at the time of registration, as well as the name, address, and organizational affiliation of the proposed speaker. If the number of registrants requesting to make statements is greater than can be reasonably accommodated during the meeting, the NHTSA office of EMS may conduct a lottery to determine the speakers. Speakers are requested to submit a written copy of their prepared remarks for inclusion in the meeting records and for circulation to NEMSAC members. All prepared remarks submitted on time will be accepted and considered as part of the record. Any member of the public may present a written statement to the committee at any time.
42 U.S.C. 300d-4(b); 49 CFR part 1.95(i)(4))
Issued in Washington, DC.
National Highway Traffic Safety Administration, U.S. Department of Transportation (DOT).
Notice of public meeting.
This notice announces a meeting of the National Emergency Medical Services Advisory Council (NEMSAC).
The meeting will be held August 11-12, 2021, from 9:00 a.m. to 5:00 p.m. EDT Requests to attend the meeting must be received by August 6, 2021.
Requests for accommodations to a disability must be received by August 6, 2021.
If you wish to speak during the meeting, you must submit a written copy of your remarks to DOT by August 6, 2021.
Requests to submit written materials to be reviewed during the meeting must be received no later than August 6, 2021.
The meeting will be held virtually (depending on the status of the Coronavirus Disease 2019 (COVID-19) public health emergency) or at the U.S. Department of Transportation, 1200 New Jersey Avenue SE, Washington, DC 20590. Copies of the meeting minutes will be available on the NEMSAC internet website at EMS.gov. The detailed agenda will be posted on the NEMSAC internet website at EMS.gov at least one week in advance of the meeting.
Clary Mole, EMS Specialist, U.S. Department of Transportation, at
The NEMSAC was established pursuant to Section 31108 of the Moving Ahead for Progress in the 21st Century (MAP-21) Act of 2012, under the Federal Advisory Committee Act. The purpose of NEMSAC is to serve as a nationally recognized council of emergency medical services (EMS) representatives to provide advice and consult with:
a. The Federal Interagency Committee on Emergency Medical Services (FICEMS) on matters relating to EMS issues; and
b. The Secretary of Transportation on matters relating to EMS issues affecting DOT.
The NEMSAC provides an important national forum for the non-Federal deliberation of national EMS issues and serves as a platform for advice on DOT's national EMS activities. NEMSAC also provides advice and recommendations to the FICEMS. NEMSAC is authorized under Section 31108 of the MAP-21 Act of 2012, codified at 42 U.S.C. 300d-4.
At the meeting, the agenda will cover the following topics:
The meeting will be open to the public. Members of the public who wish to attend in person must RSVP to the person listed in the
There will be a thirty (30) minute period allotted for comments from members of the public joining the meeting. To accommodate as many speakers as possible, the time for each commenter may be limited. Individuals wishing to reserve speaking time during the meeting must submit a request at the time of registration, as well as the name, address, and organizational affiliation of the proposed speaker. If the number of registrants requesting to make statements is greater than can be reasonably accommodated during the meeting, the NHTSA office of EMS may conduct a lottery to determine the speakers. Speakers are requested to submit a written copy of their prepared remarks for inclusion in the meeting records and for circulation to NEMSAC members. All prepared remarks submitted on time will be accepted and considered as part of the record. Any member of the public may present a written statement to the committee at any time.
42 U.S.C. 300d-4(b); 49 CFR part 1.95(i)(4).
Issued in Washington, DC.
Office of Foreign Assets Control, Treasury.
Notice.
The Department of the Treasury's Office of Foreign Assets Control (OFAC) is publishing the names of one or more persons that have been placed on OFAC's Specially Designated Nationals and Blocked Persons List based on OFAC's determination that one or more applicable legal criteria were satisfied. All property and interests in property subject to U.S. jurisdiction of these persons are blocked, and U.S. persons are generally prohibited from engaging in transactions with them.
See
The Specially Designated Nationals and Blocked Persons List and additional information concerning OFAC sanctions programs are available on OFAC's website (
On January 5, 2021, OFAC determined that the property and interests in property subject to U.S. jurisdiction of the following persons are blocked under the relevant sanctions authorities listed below.
Department of the Treasury.
Notification.
This notification announces that information about the Emergency Rental Assistance Program for States, U.S. Territories, certain local governments, and tribal communities is available on the U.S. Department of the Treasury (Treasury) website,
Hannah Resig, Senior Policy Analyst, Domestic Finance, 202-622-1407, or Stephen T. Milligan, Deputy Assistant General Counsel (Banking & Finance), 202-622-4051.
On December 27, 2020, the President signed into law the Consolidated Appropriations Act, 2021 (the “Act”), Public Law 116-260. Division N, Section 501(a) of the Act provides $25 billion for Treasury to make payments directly to States (including the District of Columbia), U.S. Territories (Puerto Rico, the United States Virgin Islands, Guam, the Commonwealth of the Northern Mariana Islands, and American Samoa), local governments with more than 200,000 residents, the Department of Hawaiian Home Lands, and Indian tribes (defined to include Alaska native corporations) or the tribally designated housing entity of an Indian tribe, as applicable. Division N, Section 501(c) of the Act requires that grantees use at least 90 percent of the funds to provide financial assistance such as the payment of rent, rental arrears, utilities and home energy costs, and utility and home energy cost arrears on behalf of eligible households and permits grantees to use no more than ten percent of the funds to provide housing stability services to eligible households and cover administrative costs. More information is available at
(b) The Secretary is directed to continue to evaluate Chinese connected software applications that may pose an unacceptable risk to the national security, foreign policy, or economy of the United States, and to take appropriate action in accordance with Executive Order 13873.
(c) Not later than 45 days after the date of this order, the Secretary, in consultation with the Attorney General and the Director of National Intelligence, shall provide a report to the Assistant to the President for National Security Affairs with recommendations to prevent the sale or transfer of United States user data to, or access of such data by, foreign adversaries, including through the establishment of regulations and policies to identify, control, and license the export of such data.
(d) The prohibitions in subsection (a) of this section apply except to the extent provided by statutes, or in regulations, orders, directives, or licenses that may be issued pursuant to this order, and notwithstanding any contract entered into or any license or permit granted before the date of this order.
(e) Not earlier than 45 days after the date of this order, the Secretary shall identify the transactions and persons that develop or control the Chinese connected software applications subject to subsection (a) of this section.
(b) Any conspiracy formed to violate any of the prohibitions set forth in this order is prohibited.
(a) the term “connected software application” means software, a software program, or group of software programs, designed to be used by an end user on an end-point computing device and designed to collect, process, or transmit data via the internet as an integral part of its functionality.
(b) the term “entity” means a government or instrumentality of such government, partnership, association, trust, joint venture, corporation, group, subgroup, or other organization, including an international organization;
(c) the term “person” means an individual or entity;
(d) the term “personally identifiable information” (PII) is information that, when used alone or with other relevant data, can identify an individual. PII may contain direct identifiers (e.g., passport information) that can identify a person uniquely, or quasi-identifiers (e.g., race) that can be combined with other quasi-identifiers (e.g., date of birth) to successfully recognize an individual.
(e) the term “United States person” means any United States citizen, permanent resident alien, entity organized under the laws of the United
(b) The heads of agencies shall provide, in their discretion and to the extent permitted by law, such resources, information, and assistance to the Department of Commerce as required to implement this order, including the assignment of staff to the Department of Commerce to perform the duties described in this order.
(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.
(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Proposed rule; request for comments and information.
NMFS has received a request from the Hampton Roads Connector Partners (HRCP) for authorization to take small numbers of marine mammals incidental to pile driving and removal activities at the Hampton Roads Bridge Tunnel Expansion Project (HRBT) in Norfolk, Virginia over the course of five years (2021-2026). Pursuant to the Marine Mammal Protection Act (MMPA), NMFS is proposing regulations to govern that take, and requests comments on the proposed regulations. NMFS will consider public comments prior to making any final decision on the issuance of the requested MMPA authorization, and agency responses will be summarized in the final notice of our decision.
Comments and information must be received no later than February 8, 2021.
You may submit comments, identified by NOAA-NMFS-2020-0164, by the following method:
•
Robert Pauline, Office of Protected Resources, NMFS, (301) 427-8401.
A copy of HRCP's application and any supporting documents, as well as a list of the references cited in this document, may be obtained online at:
This proposed rule would establish a framework under the authority of the MMPA (16 U.S.C. 1361
Section 101(a)(5)(A) of the MMPA (16 U.S.C. 1371(a)(5)(A)) directs the Secretary of Commerce to allow, upon request, the incidental, but not intentional taking of small numbers of marine mammals by U.S. citizens who engage in a specified activity (other than commercial fishing) within a specified geographical region for up to five years if, after notice and public comment, the agency makes certain findings and issues regulations that set forth permissible methods of taking pursuant to that activity and other means of effecting the “least practicable adverse impact” on the affected species or stocks and their habitat (see the discussion below in the Proposed Mitigation section), as well as monitoring and reporting requirements. Section 101(a)(5)(A) of the MMPA and the implementing regulations at 50 CFR part 216, subpart I provide the legal basis for issuing this proposed rule containing five-year regulations, and for any subsequent LOAs. As directed by this legal authority, this proposed rule contains mitigation, monitoring, and reporting requirements.
Following is a summary of the major provisions of this proposed rule regarding HRCP's construction activities. These measures include:
• Shutdown of construction activities under certain circumstances to avoid injury of marine mammals.
• Required monitoring of the construction areas to detect the presence of marine mammals before beginning construction activities.
• Soft start for impact pile driving to allow marine mammals the opportunity to leave the area prior to initiating impact pile driving at full power.
• Use of bubble curtains during impact driving of steel piles except when water depth is less than 20 feet.
Section 101(a)(5)(A) 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), and if the permissible methods of taking and requirements pertaining to the mitigation, monitoring and reporting of the 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.
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).
To comply with the National Environmental Policy Act of 1969 (NEPA; 42 U.S.C. 4321
This action is consistent with categories of activities identified in Categorical Exclusion B4 (Incidental harassment authorizations (IHAs) with no anticipated serious injury or mortality) of the Companion Manual for NOAA Administrative Order 216-6A, which do not individually or cumulatively have the potential for significant impacts on the quality of the human environment and for which we have not identified any extraordinary circumstances that would preclude this categorical exclusion. Accordingly, NMFS has preliminarily determined that the issuance of the proposed IHA qualifies to be categorically excluded from further NEPA review.
We will review all comments submitted in response to this notice prior to concluding our NEPA process or making a final decision on the incidental take authorization request.
On November 19, 2019, NMFS received an application from HRCP requesting authorization for take of marine mammals incidental to construction activities related to a major road transport infrastructure project along the existing I-64 highway in Virginia, consisting of roadway improvements, trestle bridges, and bored tunnels crossing Hampton Roads between Norfolk and Hampton, Virginia. HRCP submitted a revised LOA application on June 27, 2020 which included changes to construction methods. We determined the application was adequate and complete on September 29, 2020. On October 7, 2020 (85 FR 63256), we published a notice of receipt (NOR) of HRCP's application in the
HRCP requests authorization to take a small number of five species of marine mammals by Level A and Level B harassment only. Neither HRCP nor NMFS expects serious injury or mortality to result from this activity. The proposed regulations would be valid for five years (2021-2026). Note that HRCP had previously applied for an IHA to cover initial in-water pile driving work. NMFS issued the IHA on July 10, 2020 (85 FR 48153; August 10, 2020).
HRCP is proposing to conduct construction activities associated with the HRBT project. This is a major road transport infrastructure project along the existing I-64 highway in Virginia, consisting of roadway improvements, trestle bridges, and bored tunnels crossing Hampton Roads between Norfolk and Hampton. The Project will address severe traffic congestion at the existing HRBT crossing by increasing capacity. The Project will include widening I-64 to create an eight-lane facility with a consistent six-lanes between the I-64/I-664 and I-64/I-564 Interchange, which could expand to eight-lanes during peak travel periods with the use of drivable shoulder lanes within the Project limits. The Project will include the construction of two new two-lane tunnels, expansion of the existing portal islands, and full replacement of the existing North and South bridge-trestles.
The proposed HRBT project would include pile installation and pile removal. Pile installation methods will include impact and vibratory driving, jetting, and DTH pile installation. Pile removal techniques for temporary piles will include vibratory pile removal or cutting three feet below the mudline. Impact pile installation is projected to take place at 3 to 4 locations simultaneously and there is the potential for as many as 7 pile installation locations operating concurrently with different hammer types. Pile installation and removal can occur at variable rates, from a few minutes one day to several hours the next. HRCP anticipates that between 1 to 10 piles could be installed per day, depending on project scheduling.
The proposed action may incidentally expose marine mammals occurring in the vicinity to elevated levels of underwater sound, thereby resulting in incidental take, by Level A and Level B harassment.
The proposed regulations would be valid for a period of five years (2021-2026). The specified activities may occur at any time during the five-year period of validity of the proposed regulations. HRCP expects pile driving and removal to occur six days per week. The overall number of anticipated days of pile installation and removal is 312 each year for years 1-4 and 181 days for year 5, based on a 6-day work week. Over five years this would result in an estimated total of 1,429 days of in-water construction work, which may last from a few minutes up to several hours per day.
HRCP plans to conduct work during daylight hours although pile installation and removal may extend into evening or nighttime hours as needed to accommodate pile installation requirements (
The proposed project area is located in the waterway of Hampton Roads adjacent to the existing bridge and island structures of the HRBT. Hampton Roads is located at the confluence of the James River, the Elizabeth River, the Nansemond River, Willoughby Bay, and the Chesapeake Bay. Navigational channels are maintained by the U.S. Army Corps of Engineers (USACE) within Hampton Roads to provide transit to the many ports in the region. Maintained navigation channels near the project area consist of:
• Norfolk Harbor Entrance Reach (1,000 to 1,400 feet wide and is maintained at a depth of 50 feet Mean Lower Low Water [MLLW]);
• Hampton Creek Entrance Channel (200 feet wide and is maintained at a depth of 12 feet MLLW);
• Phoebus Channel (150 feet wide and is maintained at a depth of 12 feet MLLW); and
• Willoughby Channel (200 feet wide and is maintained at a depth of 10 feet MLLW).
Sediments are mostly fine and medium sands with various amounts of coarse sand and gravel, and low organic carbon content. There is no naturally occurring rocky or cobble bottom present at or adjacent to the project area. The North Shore in Hampton contains estuarine intertidal sandy shore,
A map of the HRBT Project Area is provided in Figure 1 below and Figures 1-1 and 2-1 in HRCP's application.
The proposed project will widen I-64 for approximately 9.9 miles along I-64 from Settlers Landing Road in Hampton, Virginia, to the I-64/I-564 interchange in Norfolk, Virginia. The project will create an eight-lane facility with six consistent use lanes and will include full replacement of the North and South Trestle-Bridges, two new parallel tunnels constructed using a tunnel boring machine (TBM), expansion of the existing portal islands, and widening of the Willoughby Bay Trestle-Bridges, Bay Avenue Bridges, and Oastes Creek Bridges. Also, upland portions of I-64 will be widened to accommodate the additional lanes, the Mallory Street Bridge will be replaced, and the I-64 overpass bridges will be improved.
The proposed project design is divided into five segments as shown in Table 1. However, only the sub-segments identified in Table 1 and described below would include in-water marine construction activities that have the potential to affect marine mammals:
This segment includes new and replacement north tunnel approach trestles, This segment is located in Construction Area 2 as shown in Figure 1 above and Figure 1-1 in HRCP's application.
Temporary Work Trestles for Bridge Construction at the North Trestle—Several temporary work trestles will support construction of the permanent eastbound and westbound North Trestle-Bridges. The temporary North Shore Work Trestle will support construction of the permanent eastbound North Trestle-Bridge in the shallow water (<4 to 6 feet Mean Low Water (MLW)) closer to the North Shore, avoiding the need to dredge or deepen this area. The temporary North Shore Work Trestle (194 36-inch steel pipe piles) will be installed under the 2020 IHA (85 FR 48153; August 10, 2020) and will be removed using a vibratory hammer at the end of the project under this LOA (See Table 6). Unless stated otherwise, all of the work described below will be conducted as part of the proposed LOA.
Additional temporary work trestles will support construction of the permanent westbound North Trestle-Bridge in the shallow water near the North Island. These work trestles will be the same or similar to the North Shore Work Trestle, steel structures founded on 36-inch diameter steel pipe piles with 30 to 40 feet spans sized to accommodate a 300-ton crane. Approximately 182 36-inch steel piles will be installed to support these trestles using a combination of vibratory and impact hammers except along the shoreline where drilling with a DTH hammer may be needed to install piles through the armor stone.
Once that portion of the permanent eastbound and westbound North Trestle-Bridge is complete, the temporary pile foundations will be removed using a vibratory hammer and the work trestle reused for similar purposes at a different location on the project (
Jump Trestles for Bridge Construction at the North Trestle—Jump Trestles are temporary heavy duty platforms used to support cranes and other equipment, will be used the North Trestle for constructing trestle bridges. Jump trestles are built with a maximum of three spans which are progressively removed and reinstalled one span at a time, moving forward with the construction of the adjacent structure. Each span is supported by six (6) temporary 36-inch steel pipe piles. The steel pipe piles will be installed, removed, and reinstalled as the spans move forward using a combination of vibratory and impact hammers for installation except along the shoreline where drilling with a DTH hammer may be needed to install piles through the armor stone and vibratory hammers will be used for removal. Approximately 270 individual pile installations and 270 removals will be needed to support the Jump Trestle movement for construction of the permanent westbound North Trestle-Bridge.
Templates and Permanent Piles at the North Trestle—Temporary template piles will be used to guide installation of the permanent concrete piles used to support the new North Trestle-Bridge (Table 7). The templates will be supported by four temporary steel piles up to 36-inch in diameter, generally one at each corner of the template. A two-tier template will be used to account for the possible batter of the permanent piles. Each template will allow installation of multiple permanent concrete piles. A vibratory hammer will be used to install and remove the temporary 36-inch steel piles supporting the template.
Five hundred and sixty-two (562) permanent 54-inch concrete cylinder piles will be installed using an impact hammer and will remain in place at the end of construction. Pre-drilling will be done in the open without the use of a casing.
The drill, drill steel, and auger would be in leads and either attached to the pile leads or used independently and indexed to the template to resist rotation. The auger is anticipated to be 54-inch in diameter and 10 feet or less in height.
In areas containing rock obstructions, a casing will be advanced prior to installation of the permanent North Trestle piles. The DTH hammer will advance a 60-inch (outer diameter) steel pipe pile casing before installation of the 54-inch concrete cylinder pile. Approximately 15 60-inch steel pipe casings may be required. The 60-inch steel pipe casings will be left in place and cut to an appropriate length to accommodate final island construction.
Demolition Trestle at the North Trestle—The North Trestle Demolition Trestle will consist of a series of jump trestles, similar to or the same as that used to construct the permanent westbound North Trestle-Bridge. The jump trestles will be located in the shallow water near the North Shore and will be installed, removed, and reinstalled as demolition of the existing structures moves from the shoreline towards deeper water. Each jump trestle used for demolition will be 45 feet wide and approximately 1,200 feet long. Each jump trestle span will be supported by temporary 36-inch steel pipe piles. Approximately 344 individual pile installations and 344 removals will be needed to support the jump trestle movements using a combination of vibratory and impact hammers for installation except along the shoreline where a DTH hammer may be needed to install piles through the armor stone and vibratory hammers will be used for removal.
Moorings at the North Shore Work Trestle—Mooring dolphins that were installed under the existing IHA (85 FR 48153; August 10, 2020) at the southern end and along the outside edge of the North Shore Work Trestle will be removed as part of the LOA. Each dolphin consists of three 24-inch steel piles (Table 6). An additional thirteen
Sheet Piles at the North Shore Abutment—Approximately 187 temporary panels of steel sheet piles (AZ-700-19) will be installed using a vibratory hammer at the North Shore shoreline to support excavation and construction of the North Shore Abutment. Most of this work is planned to be done at lower tides so that in-water work is minimized. However, some installation work below the tidal elevations (in-water) can be expected. Sheet piles will be removed using a vibratory hammer.
This segment includes new bored tunnels, the tunnel approach structures, buildings, the North Island improvements for tunnel facilities, and South Island improvements. This segment is located in Construction Area 3 as shown in Figure 1.
Moorings at the North Island Expansion—Eighty (80) temporary moorings were installed along the perimeter of the North Island Expansion (North and South) under the existing IHA (HRCP 2020). All moorings will be removed using a vibratory hammer or cut to approximately 3 feet below the mudline.
Hampton Creek Approach Channel Marker at the North Island—An existing pile-mounted (Aid to Navigation) channel marker at the entrance to the Hampton Creek Approach Channel will be removed and relocated to allow expansion of the North Island. It will be removed using a vibratory hammer and a new permanent pile (36-inch steel pile) will be installed using a vibratory hammer.
Steel sheet piles will be installed as part of the North Island Expansion and at the shoreline of the North Island (Attachment 1, Figure 9) to support excavation and construction of the North Island Abutments and Expansion. Approximately 54 panels of sheet pile will be installed using a vibratory hammer around the perimeter of the North Island Expansion to support dredge and replacement of native soft soils. An additional 122 sheet pile panels will be installed around the perimeter of the North Island Expansion to support construction of the abutment and tunnel approach structure.
Approximately 128 panels of sheet pile will be installed at the North Island shoreline to support excavation and construction of the North Island Abutment. Most of this work is expected to be done at lower tides so that in-water work is minimized. However, some sheet pile installation work below the tidal elevations (in-water) can be expected. All sheet piles will be removed using a vibratory hammer.
TBM Platform at the South Island—HRCP is constructing the temporary TBM Platform or “quay” at the South Island to allow for the delivery, unloading, and assembly of the TBM components from barges to the Island. The installation of the TBM platform will occur under the existing IHA (HRCP 2020).
The TBM Platform is a steel structure erected on 216 36-inch diameter steel piles, with an overall area of approximately 0.70 acre (approximately 377 feet x 81 feet). The TBM Platform piles will be removed using a vibratory hammer or cut to approximately 3 feet below the mudline at the conclusion of the project.
Conveyor Trestle at the South Island—Tunnel boring spoils and other related materials will be moved between the South Island and barges via a conveyor belt and other equipment inside the tunnel boring. The Conveyor Trestle will also be used for maintenance and mooring of barges and vessels carrying TBM materials and other project-related materials. The Conveyor Trestle will be erected on 84 36-inch diameter steel piles. Installation of the Conveyor Trestle will occur under the existing IHA (85 FR 48153; August 10, 2020). At the conclusion of the project, the Conveyor Trestle piles will be removed using a vibratory hammer or cut to approximately 3 feet below the mudline.
Settlement Reduction Piles and Deep Foundation Piles at the South Island—Existing geotechnical conditions at the planned South Island Expansion will require additional considerations to reduce island settlement and support roadway construction. Therefore, approximately 394 24-inch steel pipe settlement reduction piles and 507 30-inch concrete-filled steel pipe deep foundation piles will be installed at the South Island Expansion to address these geotechnical conditions. The settlement reduction piles and the deep foundation piles will be installed using vibratory and impact hammers. Furthermore, the use of drilling with a DTH hammer may be needed to install the deep foundation piles through the armor stone. Temporary templates (Table 7) will be supported by four temporary steel pipe piles up to 36-inch in diameter that will be spudded in place and used to align the piles during installation. Steel sheet piles will be installed to partially enclose the deep foundation piles as installation progresses north to south along the island expansion area. For steel pipe piles in water depths greater than 20 feet, a bubble curtain will be used for pile installation to reduce hydroacoustic impacts caused by the impact hammer. A portion of the settlement reduction piles and deep foundation piles will be installed using a bubble curtain. See Mitigation for additional detail.
Moorings at the South Island—Temporary moorings will be installed along the perimeter of the South Island Expansion to support the construction of the island expansion. Twenty-five (25) 42-inch steel pipe piles will be installed to provide mooring points for barges and vessels. The mooring point piles will be installed using a vibratory hammer and eventually removed using a vibratory hammer.
Sheet Piles at the South Island Expansion and Abutment—Steel sheet piles will be installed as part of the South Island Expansion and at the shoreline of the South Island to support excavation and construction of the South Island Abutment. Approximately 152 panels of AZ-700-26 sheet pile will be installed around the perimeter of the South Island Expansion deep foundation piles using a vibratory hammer as pile installation progresses to support backfilling.
In addition, approximately 226 panels of AZ-700-26 temporary steel sheet pile will be installed around the perimeter of the South Island Expansion to support dredge and replacement of native soft soils. Temporary steel sheet piles will be installed using a vibratory hammer and will be removed using a vibratory hammer after completion of dredging/replacement works.
Approximately 70 panels of AZ-700-19 sheet pile will be installed at the South Island shoreline to support excavation and construction of the abutment and tunnel approach structure at the South Island. Similar to the North Shore Abutment work, most of this work is expected to be done at lower tides so that in-water work is minimized. However, some sheet pile installation work below the tidal elevations (in-water) can be expected. All sheet piles will be removed using a vibratory hammer.
This segment includes the new South Trestle-Bridge and any bridge elements that interface with the South Island to the south end of the south abutments at Willoughby Spit. This segment is
Moorings at the South Trestle—Temporary moorings will be installed in the area of the South Trestle to support the construction of temporary work trestles and permanent trestle bridges. The installation of the moorings at the South Trestle will be performed under the existing IHA (HRCP 2020). The temporary moorings will be removed at the conclusion of the project using a vibratory hammer.
Temporary Work Trestles for Bridge Construction at the South Trestle—Several temporary work trestles will support construction of the temporary bridges used for maintaining traffic at the South Trestle during construction (
The temporary South Trestle Work Trestle at South Island South 1 is a steel structure approximately 504 feet long and 44 feet wide, founded on 72 36-inch diameter steel piles with 30 to 40 feet spans sized to accommodate a 300-ton crane. Once the permanent roadway is complete, the temporary MOT Bridge will be removed as well as the South Island South 1 Work Trestle, including the temporary pile foundations and mooring piles. They will be removed via vibratory hammer and the work trestle will be reused for similar purposes at a different project location.
The temporary South Trestle Work Trestle at South Island South 2 is a steel structure approximately 634 feet long and 54 feet wide, founded on 90 36-inch diameter steel piles with 30 to 40 feet spans sized to accommodate a 300-ton crane. The pile foundations will be removed using a vibratory hammer once the permanent roadway is complete.
The temporary South Trestle Work Trestle at the South Shore or Norfolk shoreline will be similar to that used elsewhere on the project. The work trestle will be approximately 500 feet long and 66 feet wide with four 30 feet wide finger piers. The finger piers will consist of 94 36-inch diameter steel piles installed using a vibratory hammer.
Temporary steel pile foundations for each of the work trestles will be installed using vibratory and impact hammers. A bubble curtain will be used during installation of steel pipe piles in water depths greater than 20 feet. Some areas near the shores and islands will require the use of drilling with a DTH hammer to install the temporary piles. The South Trestle Work Trestle pile foundations will be removed using a vibratory hammer.
Templates and Permanent Piles at the South Trestle—Temporary template piles (Table 7) will be used to guide installation of the permanent concrete piles used to support the new South Trestle-Bridge. The templates will use four temporary steel piles up to 36-inch in diameter as supports, generally one at each corner of the template. A two-tier template will be used to account for the possible batter of the piles. Each template will allow installation of multiple permanent concrete piles. A vibratory hammer will be used to install and remove the temporary 36-inch steel piles supporting the template.
Eight hundred and ten (810) permanent 54-inch concrete cylinder piles will be installed using an impact hammer and will remain in place at the end of construction. Pre-drilling will be done in the open without the use of a casing. The drill, drill steel, and drill auger would be in leads and either attached to the pile leads or used independently and indexed to the template to resist rotation. The drill auger is anticipated to be 54-inch in diameter and 10-feet less in height. It is expected that the drill, drill steel, and drill auger would have almost no impact on noise levels.
In areas where there may be rock obstructions, such as at the toe of the existing South Island slope, a casing will be advanced prior to installation of the permanent South Trestle piles. The DTH hammer will advance a 60-inch (outer diameter) steel pipe pile casing before installation of the 54-inch concrete cylinder pile. Approximately 65 60-inch steel pipe casings may be required. The 60-inch steel pipe casings will be left in place and cut to an appropriate length to accommodate final island construction.
Jump Trestle for Bridge Construction at the South Trestle—Temporary jump trestles will be used for constructing trestle bridges (both new permanent and temporary MOT bridges) at the South Trestle. A combination of jump trestles and working from the existing trestles will be used to build the new trestle bridges.
The 36-inch steel pipe piles will be installed, removed, and reinstalled as the spans move forward using a combination of vibratory and impact hammers for installation except along the shoreline where drilling with a DTH hammer may be needed to install piles through the armor stone. Vibratory hammers will be used for removal. A bubble curtain will be used for installation of steel pipe piles in water depths greater than 20 feet. Approximately 420 individual pile installations and 420 removals will be needed to support the jump trestle movement for construction of the permanent westbound South Trestle-Bridge.
Temporary MOT Trestles at the South Trestle—Two temporary MOT Trestle bridges at the South Trestle will be used to phase construction and carry traffic prior to completion of the new structures. The eastbound traffic will be shifted on the new MOT Trestle to allow for a partial demolition of the existing eastbound bridge-trestle. Once the partial demolition is completed, the new eastbound connection to the eight-lane trestle will be built with the support of a jump trestle and eastbound traffic will be shifted on it. A temporary MOT Trestle will be built from South Island next to the existing westbound trestle. The westbound traffic will be shifted on the new MOT Trestle to allow for a partial demolition of the existing westbound bridge-trestle. A portion of the existing eastbound bridge-trestle will also be demolished to allow the new connection between the eight-lane structure and the new westbound bridge-trestle. The temporary MOT Trestle at the South Trestle will be a steel structure erected on 218 36-inch steel pipe piles that will be installed using a combination of vibratory and impact hammers except along the shoreline where drilling with a DTH hammer may be needed to install piles through the armor stone. A bubble curtain will be used for installation of steel pipe piles in water depths greater than 20 feet. Pile foundations will be removed using a vibratory hammer.
Thirty 42-inch steel pipe pile casings will be installed using a vibratory hammer in areas where the MOT trestle is in the footprint of the South Island Expansion. The 42-inch steel pipe pile casings will be left in place and cut to an appropriate length to accommodate final island construction.
Demolition Trestle at the South Trestle—The South Trestle Demolition Trestle will be similar to the work trestles previously described (
This segment includes the new South Trestle-Bridge and any bridge elements that interface with the South Island to the south end of the south abutments at Willoughby Spit. This segment is located in Construction Area 2 as shown in Figure 1.
Moorings at Willoughby Bay—Temporary moorings will be installed in Willoughby Bay to support the construction of temporary work trestles and permanent trestle bridges, and to provide a safe haven (harbor of safe refuge) for vessels in the event of severe weather. Moorings will consist of six dolphins—each consisting of three 24-inch steel piles—and 50 42-inch steel pipe piles. The mooring dolphin piles and the single mooring point piles will be installed under the existing IHA (85 FR 48153; August 10, 2020).
An additional 40 42-inch steel pipe piles will be installed in Willoughby Bay to complete the safe haven (50 42-inch piles will be installed under the existing IHA; HRCP 2020). The moorings will be configured as two 2,000-feet long lines with a 42-inch mooring pile every 80-feet. The piles will be installed using a vibratory hammer and removed at the conclusion of the project using a vibratory hammer.
Temporary Work Trestles for Bridge Construction at Willoughby Bay—The existing Willoughby Bay Bridge structure will be modified by widening the two existing structures to the outside in both directions to accommodate new travel lanes, shoulders, and new sound walls. This will require installation of two to three additional piles at each pier location on the outside of both eastbound and westbound structures. Two temporary work trestles, each approximately 500 feet long and 45 feet wide, will be installed along the outside edge of the existing eastbound structure to provide access in the shallow water area near both shorelines. Approximately 212 36-inch steel pipe piles will be installed using a combination of vibratory and impact hammers to support the temporary work trestles. The temporary steel piles will be removed using a vibratory hammer.
Jump Trestle for Bridge Construction at Willoughby Bay—A combination of jump trestles and working from the existing trestles will be used to construct the widening of the existing Willoughby Bay westbound roadway. Similar to other locations (
Templates and Permanent Piles at Willoughby Bay—Temporary template piles (Table 7) will be used to guide installation of the permanent concrete piles used to support widening of the eastbound and westbound Willoughby Bay roadway. The templates will be supported by four temporary steel piles up to 36-inch in diameter with one at each corner of the template.
A vibratory hammer will be used to install and remove the temporary 36-inch steel piles supporting the template. Some areas near the shorelines may require the use of a DTH hammer to install the templates (Table 7).
Five hundred and four (504) 24-inch concrete square permanent piles will be installed using an impact hammer and will remain in place at the end of construction. Where geotechnical conditions require, the permanent piles may also be installed via jetting. Where jetting is required, an outer steel pipe pile casing (up to 42-inch in diameter) may be installed using a vibratory hammer before installation of the concrete pile. Approximately 300 casings (60 percent of the 504 concrete piles) will be installed prior to installing the concrete piles. The casing will be driven and the sediment and sand removed from the casing prior to installing the permanent pile. The casing will be removed using a vibratory hammer.
This segment includes the Willoughby Spit Laydown Area which is a temporary construction staging and laydown area that will include the installation and removal of temporary piers. This segment is located in Construction Area 4 as shown in Figure 1.
Temporary Docks on Spuds and Piles at the Willoughby Spit Laydown Area—HRCP has been granted use of property on Willoughby Spit next to the South Trestle-Bridge to be used for laydown areas and as a base for marine operations. Two temporary piers will be constructed to allow barge access: One will be a fixed pier on 44 36-inch steel pipe piles, and the other will be a floating dock on 8 36-inch steel pipe (spuds) piles. Piles will be installed using vibratory and impact hammers, as well as a pile template. The pile template will be supported by four temporary steel piles up to 36-inch in diameter (Table 7). The temporary piers, including the steel pile foundations, will be removed upon completion of the Project via vibratory hammer.
Temporary Finger Piers on Timber Piles at the Willoughby Spit Laydown Area—The existing bulkheads and piers located on the inside of Willoughby Spit will be repaired to provide access for crew boats and similar-sized vessels. Three timber piers will replace the existing piers and will be constructed using 36 16-inch CCA timber piles, each pier consisting of 12 16-inch CCA timber piles. The piles will be installed using a vibratory hammer. Any existing timber piers will be pulled out of place.
HRCP plans to employ five methods of pile installation including vibratory hammer, impact hammer, pre-drilling, jetting, and use of DTH hammers. More than one installation method could be used within a day and at each location and multiple piles could be installed and/or removed concurrently. Steel pipe piles will most likely be installed using a combination of vibratory (ICE 416L or similar) and impact hammers (S35 or similar). Approximately 80 percent of the time steel pipe piles will be installed using a vibratory hammer while an impact hammer will be used approximately 20 percent of the time. Most piles will be advanced using vibratory methods and then impact driven to final tip elevation.
Temporary steel pile templates will be used to set permanent piles. Templates will be positioned and held in place using spuds or steel pipe piles, up to 36-inch diameter with one at each corner of the template. Template piles are temporary and generally do not bear significant vertical loads, therefore installation (
Pre-drilling will be performed on the 54-inch concrete cylinder permanent piles without the use of a casing in the open. The drill, drill steel, and auger will be in leads and either attached to the pile leads or used independently and indexed to the template to resist rotation. A 54-inch diameter auger 10-feet or less in height is expected to be employed. Pre-drilling will be conducted to loosen soils directly underneath the pile to maximize pile advancement before the drive and shorten the length of driving time. Pre-drilling may reduce driving times by as much as 50 percent and pre-drilling depth is expected to be less than half the pile length. HRCP may drill to within 3-4 diameters above the final tip elevation in cases of dense sand. HRCP assumed and NMFS agrees that use of the drill, drill turntable, drill steel, drill auger, and drill bit will not result in harassment. These devices have low source levels and, therefore, low signal-to-noise ratios. The signal characteristics (continuous noise) would be occurring in a relatively noisy coastal environment where low-level continuous noise is common. Therefore, they would be unlikely to provoke a reaction consistent with what we would consider to be harassment. Therefore, harassment zone sizes were not estimated for these activities. These devices simply rotate in the sediments and do not displace them without creating a hole. No pile is installed during pre-drilling, and much less energy is expended than during pile installation. The equipment and nature of the act of pre-drilling in soils produce minimal noise and the pre-drilling will significantly reduce the driving time which in turn reduces the total noise levels.
The pile installation methods used will depend on sediment depth and conditions at each pile location. Table 2 through Table 7 provides additional information on the pile driving operation including estimated pile driving times. Note that the sum of the days of pile installation and removal is greater than the anticipated number of days because more than one pile installation method will be used within a day and at each location. The overall number of anticipated days of pile installation and removal is 312 per year, based on a six-day work week for years 1-4. Year 5 will require an estimated 181 days of in-water work. It is possible that installation and removal numbers might shift from one month to another depending on schedule constraints.
HRCP will employ a bubble curtain when installing steel pipe piles in water depths greater than 20 feet to minimize hydroacoustic impacts caused by the impact hammer. Bubble curtains will be used at the South Island to install a portion of the permanent settlement reduction piles and deep foundation piles and at the South Trestle to install a portion of the Temporary MOT Trestle, Jump Trestle, and Work Trestle.
Before installing steel pipe piles near shorelines protected with rock armor and/or rip rap (
DTH pile installation uses both rotary and percussion-type drill devices and will be used frequently. The device consists of a drill bit that drills through stone using both rotary and pulse impact mechanisms. This breaks up the stone to allow removal of the fragments and insertion of the pile. The pile is usually advanced at the same time that drilling occurs. Drill cuttings are expelled from the top of the pile using compressed air and will be directed through a pipe to a designated location for waste.
Piles may be also be installed without moving the armor stone by first drilling through the stone with a DTH hammer. It is estimated that drilling with a DTH hammer will be used for approximately 1 to 2 hours per pile, when necessary. It is anticipated that approximately 7 percent of the North Shore Work Trestle piles, 4 percent of the North Trestle Jump Trestle piles, 7 percent of the North Trestle Demolition Trestle piles, 100 percent of the North Trestle Casings, 14 percent of the South Trestle Work Trestle piles, 6 percent of the South Trestle Jump Trestle piles, 10 percent of the South Trestle Temporary MOT Trestle piles, 17 percent of the South Trestle Demolition Trestle piles, 100 percent of the South Trestle Casings, and 10 percent of the South Island deep foundation piles may require installation with a DTH hammer (See Table 2 through Table 6).
Temporary steel sheet piles and steel pipe piles will be removed using a vibratory hammer or cut to approximately 3 feet below the mudline. Temporary concrete piles will only be removed by cutting to approximately 3 feet below the mudline.
Table 2 through 6 below show the number and types of piles planned for installation and removal each year by component and segment while Table 7 shows the total number of template piles over five years by location.
Proposed mitigation, monitoring, and reporting measures are described in detail later in this document (please see Proposed Mitigation and Proposed Monitoring and Reporting).
Sections 3 and 4 of the application summarize available information regarding status and trends, distribution and habitat preferences, and behavior and life history, of the potentially affected species. Additional information regarding population trends and threats may be found in NMFS' Stock Assessment Reports (SAR);
Table 8 lists all species with expected potential for occurrence in the project area 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 (as described in NMFS' SARs). While no mortality is anticipated or authorized here, PBR and annual serious injury and mortality from anthropogenic sources are included here as gross indicators of the status of the species and other threats.
Marine mammal abundance estimates presented in this document represent the total number of individuals that make up a given stock or the total number estimated within a particular study or survey area. NMFS's stock abundance estimates for most species represent the total estimate of individuals within the geographic area, if known, that comprises that stock. For some species, this geographic area may extend beyond U.S. waters. All managed stocks in this region are assessed in NMFS's U.S. Atlantic and Gulf of Mexico SARs (
As indicated above, all five species (with seven managed stocks) in Table 8 temporally and spatially co-occur with the activity to the degree that take is reasonably likely to occur, and we have proposed authorizing take. While North Atlantic right whales (
Based on sighting data and passive acoustic studies, the North Atlantic right whale could occur off Virginia year-round (DoN 2009; Salisbury
North Atlantic right whales have stranded in Virginia, one each in 2001, 2002, 2004, 2005: Three during winter (February and March) and one in summer (September) (Costidis
Fin whales have been sighted off Virginia (Cetacean and Turtle Assessment Program (CeTAP) 1981, 1982; Swingle
Eleven fin whale strandings have occurred off Virginia from 1988 to 2016 mostly during the winter months of February and March, followed by a few in the spring and summer months (Costidis
Minke whales have been sighted off Virginia (CeTAP 1981, 1982; Hyrenbach
Humpback whales are distributed worldwide in all major oceans and most seas. Most humpback whale sightings are in nearshore and continental shelf waters; however, humpback whales frequently travel through deep oceanic waters during migration (Calambokidis
Although humpback whales are migratory between feeding areas and calving areas, individual variability in the timing of migrations may result in the presence of individuals in high-latitude areas throughout the year (Straley, 1990). Records of humpback whales off the U.S. mid-Atlantic coast (New Jersey to North Carolina) from January through March suggest these waters may represent a supplemental winter feeding ground used by juvenile and mature humpback whales of U.S. and Canadian North Atlantic stocks (LaBrecque
The immediate project area is not within normal humpback whale feeding or migration areas. They are most likely to occur near the mouth of the Chesapeake Bay and coastal waters of Virginia Beach between January and March; however, they could be found in the area year-round, based on shipboard sighting and stranding data (Barco and Swingle, 2014; Aschettino
Along the U.S. East Coast and northern Gulf of Mexico, there are currently 53 management stocks identified by NMFS in the western North Atlantic and Gulf of Mexico, including oceanic, coastal, and estuarine stocks (Hayes
The population structure of bottlenose dolphins off Virginia is complex. There are two morphologically and genetically distinct bottlenose dolphin morphotypes (distinguished by physical differences) described as coastal and offshore forms (Duffield
Two coastal stocks are likely to be present in the HRBT project area: Western North Atlantic Northern Migratory Coastal stock and Western North Atlantic Southern Migratory Coastal stock. Additionally, the Northern North Carolina Estuarine System stock may occur in the project area.
The northern migratory coastal stock is best defined by its distribution during warm water months when the stock occupies coastal waters from the shoreline to approximately the 20-m isobath between Assateague, Virginia, and Long Island, New York (Garrison
The southern migratory coastal stock migrates seasonally along the coast between North Carolina and northern Florida (Garrison
The NNCES stock is best defined as animals that occupy primarily waters of the Pamlico Sound estuarine system (which also includes Core, Roanoke, and Albemarle sounds, and the Neuse River) during warm water months (July-August). Members of this stock also use coastal waters (≤1 km from shore) of North Carolina from Beaufort north to Virginia Beach, Virginia, including the lower Chesapeake Bay. A community of NNCES dolphins are likely year-round Bay residents (Patterson, Pers. Comm).
Vessel surveys conducted along coastal and offshore transects from NAVSTA Norfolk to Virginia Beach in most months from August 2012 to August 2015 reported bottlenose dolphins throughout the survey area, including the vicinity of NAVSTA Norfolk (Engelhaupt
Harbor porpoises inhabit cool temperate-to-subpolar waters, often where prey aggregations are concentrated (Watts and Gaskin, 1985). Thus, they are frequently found in shallow waters, most often near shore, but they sometimes move into deeper offshore waters. Harbor porpoises are rarely found in waters warmer than 63 degrees Fahrenheit (17 degrees Celsius) (Read 1999) and closely follow the movements of their primary prey, Atlantic herring (Gaskin 1992).
In the western North Atlantic, harbor porpoise range from Cumberland Sound on the east coast of Baffin Island, southeast along the eastern coast of Labrador to Newfoundland and the Gulf of St. Lawrence, then southwest to about 34 degrees North on the coast of North Carolina (Waring
Based on stranding reports, passive acoustic recorders, and shipboard surveys, harbor porpoise occur in coastal waters primarily in winter and spring months, but there is little information on their presence in the Chesapeake Bay. They do not appear to be abundant in the HRBT project area in most years, but this is confounded by wide variations in stranding occurrences over the past decade. Since 1999, stranding incidents have ranged widely from a high of 40 in 1999 to 2 in 2011, 2012, and 2016 (Barco
The Western North Atlantic stock of harbor seals occurs in the HRBT project area. Harbor seal distribution along the U.S. Atlantic coast has shifted in recent years, with an increased number of seals reported from southern New England to the mid-Atlantic region (DiGiovanni
Harbor seals regularly haul out on rocks around the portal islands of the CBBT and on mud flats on the nearby southern tip of the Eastern Shore from December through April (Rees
The Western North Atlantic stock of gray seal occurs in the project area. The western North Atlantic stock is centered in Canadian waters, including the Gulf of St. Lawrence and the Atlantic coasts of Nova Scotia, Newfoundland, and Labrador, Canada, and the northeast U.S. continental shelf (Hayes
Gray seals are uncommon in Virginia and in the Chesapeake Bay. Only 15 gray seal strandings were documented in Virginia from 1988 through 2013 (Barco and Swingle, 2014). They are rarely found resting on the rocks around the portal islands of the CBBT from December through April alongside harbor seals. Seal observation surveys conducted at the CBBT recorded one gray seal in each of the 2014/2015 and 2015/2016 seasons while no gray seals were reported during the 2016/2017 and 2017/2018 seasons (Rees
An unusual mortality event (UME) is defined under Section 410(6) of the MMPA as a stranding that is unexpected; involves a significant die-off of any marine mammal population; and demands immediate response. Currently, ongoing UME investigations are underway for pinnipeds along the Northeast coast, and humpback whales along the Atlantic coast.
Since July 2018, elevated numbers of harbor seal and gray seal mortalities have occurred across Maine, New Hampshire and Massachusetts. This event has been declared an UME. Additionally, seals showing clinical signs have been stranding as far south as Virginia, although not in elevated numbers; therefore, the UME investigation now encompasses all seal strandings from Maine to Virginia. Lastly, while take is not proposed for these species in this proposed rule, ice seals (harp and hooded seals) have also started stranding with clinical signs, again not in elevated numbers, and those two seal species have also been added to the UME investigation. Additional information is available at
Since January 2016, elevated humpback whale mortalities have occurred along the Atlantic coast from Maine through Florida. This event has been declared an UME. A portion of the whales have shown evidence of pre-mortem vessel strike; however, this finding is not consistent across all whales examined, and additional research is needed. Additional information is available at
Hearing is the most important sensory modality for marine mammals underwater, and exposure to anthropogenic sound can have deleterious effects. To appropriately assess the potential effects of exposure to sound, it is necessary to understand the frequency ranges marine mammals are able to hear. Current data indicate that not all marine mammal species have equal hearing capabilities (
The pinniped functional hearing group was modified from Southall
For more detail concerning these groups and associated frequency ranges, please see NMFS (2018) for a review of available information. Five marine mammal species (three cetacean and two phocid pinniped species) have the reasonable potential to co-occur with the proposed construction activities. Please refer to Table 8. Of the cetacean species that may be present, one is classified as a low-frequency cetacean (
This section includes a summary and discussion of the ways that components of the specified activity may impact marine mammals and their habitat. The Estimated Take section later in this document includes a quantitative analysis of the number of individuals that are expected to be taken by this activity. The Negligible Impact Analysis and Determination section considers the content of this section, the Estimated Take section, and the Proposed Mitigation section, to draw conclusions regarding the likely impacts of these activities on the reproductive success or survivorship of individuals and how those impacts on individuals are likely to impact marine mammal species or stocks.
The marine soundscape is comprised of both ambient and anthropogenic sounds. Ambient sound is defined as the all-encompassing sound in a given place and is usually a composite of sound from many sources both near and far. The sound level of an area is defined by the total acoustical energy being generated by known and unknown sources. These sources may include physical (
The sum of the various natural and anthropogenic sound sources at any given location and time—which comprise “ambient” or “background” sound—depends not only on the source levels (as determined by current weather conditions and levels of biological and shipping activity) but also on the ability of sound to propagate through the environment. In turn, sound propagation is dependent on the spatially and temporally varying properties of the water column and sea floor, and is frequency-dependent. As a result of the dependence on a large number of varying factors, ambient sound levels can be expected to vary widely over both coarse and fine spatial and temporal scales. Sound levels at a given frequency and location can vary by 10-20 dB from day to day (Richardson
In-water construction activities associated with the project would include vibratory pile driving and pile removal, impact pile driving, jetting, and DTH pile installation. The sounds produced by these activities fall into one of two general sound types: Impulsive and non-impulsive. Impulsive sounds (
Impact hammers operate by repeatedly dropping a heavy piston onto a pile to drive the pile into the substrate. Sound generated by impact hammers is characterized by rapid rise times and high peak levels, a potentially injurious combination (Hastings and Popper, 2005). Vibratory hammers install piles by vibrating them and allowing the weight of the hammer to push them into the sediment. Vibratory hammers produce significantly less sound than impact hammers. Peak sound pressure levels (SPLs) may be 180 dB or greater, but are generally 10 to 20 dB lower than SPLs generated during impact pile driving of the same-sized pile (Oestman
The likely or possible impacts of HRCP's proposed activity on marine mammals could involve both non-acoustic and acoustic stressors. Potential non-acoustic stressors could result from the physical presence of the equipment and personnel; however, any impacts to marine mammals are expected to primarily be acoustic in nature. Acoustic stressors include effects of heavy equipment operation during pile driving and removal.
The introduction of anthropogenic noise into the aquatic environment from pile driving and removal is the primary means by which marine mammals may be harassed from HRCP's specified activity. In general, animals exposed to natural or anthropogenic sound may experience physical and psychological effects, ranging in magnitude from none to severe (Southall
NMFS defines a noise-induced threshold shift (TS) as a change, usually an increase, in the threshold of audibility at a specified frequency or portion of an individual's hearing range above a previously established reference level (NMFS 2018). The amount of threshold shift is customarily expressed in dB. A TS can be permanent or temporary. As described in NMFS (2018), there are numerous factors to consider when examining the consequence of TS, including, but not limited to, the signal temporal pattern (
Depending on the degree (elevation of threshold in dB), duration (
Currently, TTS data only exist for four species of cetaceans (bottlenose dolphin, beluga whale (
Disturbance may result in changing durations of surfacing and dives, number of blows per surfacing, or moving direction and/or speed; reduced/increased vocal activities; changing/cessation of certain behavioral activities (such as socializing or feeding); visible startle response or aggressive behavior (such as tail/fluke slapping or jaw clapping); avoidance of areas where sound sources are located. Pinnipeds may increase their haul out time, possibly to avoid in-water disturbance (Thorson and Reyff 2006). Behavioral responses to sound are highly variable and context-specific and any reactions depend on numerous intrinsic and extrinsic factors (
Disruption of feeding behavior can be difficult to correlate with anthropogenic sound exposure, so it is usually inferred by observed displacement from known foraging areas, the appearance of secondary indicators (
Neuroendocrine stress responses often involve the hypothalamus-pituitary-adrenal system. Virtually all neuroendocrine functions that are affected by stress—including immune competence, reproduction, metabolism, and behavior—are regulated by pituitary hormones. Stress-induced changes in the secretion of pituitary hormones have been implicated in failed reproduction, altered metabolism, reduced immune competence, and behavioral disturbance (
The primary distinction between stress (which is adaptive and does not normally place an animal at risk) and “distress” is the cost of the response. During a stress response, an animal uses glycogen stores that can be quickly replenished once the stress is alleviated. In such circumstances, the cost of the stress response would not pose serious fitness consequences. However, when an animal does not have sufficient energy reserves to satisfy the energetic costs of a stress response, energy resources must be diverted from other functions. This state of distress will last until the animal replenishes its energetic reserves sufficient to restore normal function.
Relationships between these physiological mechanisms, animal behavior, and the costs of stress responses are well studied through controlled experiments and for both laboratory and free-ranging animals (
Airborne noise would primarily be an issue for pinnipeds that are swimming or hauled out near the project site within the range of noise levels exceeding the acoustic thresholds. We recognize that pinnipeds in the water could be exposed to airborne sound that may result in behavioral harassment when looking with their heads above
HRCP's construction activities could have localized, temporary impacts on marine mammal habitat by increasing in-water sound pressure levels and slightly decreasing water quality. Construction activities are of short duration and would likely have temporary impacts on marine mammal habitat through increases in underwater sound. Increased noise levels may affect acoustic habitat (see masking discussion above) and adversely affect marine mammal prey in the vicinity of the project area (see discussion below). During impact and vibratory pile driving, elevated levels of underwater noise would ensonify the project area where both fish and mammals may occur and could affect foraging success. Additionally, marine mammals may avoid the area during construction, however, displacement due to noise is expected to be temporary and is not expected to result in long-term effects to the individuals or populations.
A localized increase in turbidity near the seafloor during construction would occur in the immediate area surrounding the area where piles are installed (and removed in the case of the temporary piles). The sediments on the sea floor will be disturbed during pile driving; however, suspension will be brief and localized and is unlikely to measurably affect marine mammals or their prey in the area. In general, turbidity associated with pile installation is localized to about a 25-ft (7.6-meter) radius around the pile (Everitt
The proposed activities would not result in permanent impacts to habitats used directly by marine mammals except for the actual footprint of the project. The total seafloor area affected by pile installation and removal is small compared to the vast foraging area available to marine mammals in the project area and lower Chesapeake Bay.
Avoidance by potential prey (
Sound may affect marine mammals through impacts on the abundance, behavior, or distribution of prey species (
Fish utilize the soundscape and components of sound in their environment to perform important functions such as foraging, predator avoidance, mating, and spawning (
Fish react to sounds which are especially strong and/or intermittent low-frequency sounds, and behavioral responses such as flight or avoidance are the most likely effects. Short duration, sharp sounds can cause overt or subtle changes in fish behavior and local distribution. The reaction of fish to noise depends on the physiological state of the fish, past exposures, motivation (
SPLs of sufficient strength have been known to cause injury to fish and fish mortality. However, in most fish species, hair cells in the ear continuously regenerate and loss of auditory function likely is restored when damaged cells are replaced with new cells. Halvorsen
The most likely impact to fish from pile driving activities at the project areas would be temporary behavioral avoidance of the area. The duration of fish avoidance of an area after pile driving stops is unknown, but a rapid return to normal recruitment, distribution and behavior is anticipated.
In summary, given the relatively small areas being affected, and the fact that these areas do not include habitat of particularly high quality or importance, pile driving and removal activities associated with the proposed action are not likely to have a permanent, adverse effect on any fish habitat, or populations of fish species. Thus, we conclude that impacts of the specified activity are not likely to have more than short-term adverse effects on any prey habitat or populations of prey species. Further, any impacts to marine mammal habitat are not expected to result in significant or long-term consequences for individual marine mammals, or to
This section provides an estimate of the number of incidental takes proposed for authorization through this LOA, which will inform both NMFS' consideration of small numbers and the negligible impact determination.
Harassment is the only type of take expected to result from these activities. Except with respect to certain activities not pertinent here, section 3(18) of the MMPA defines harassment as: Any act of pursuit, torment, or annoyance which (i) has the potential to injure a marine mammal or marine mammal stock in the wild (Level A harassment); or (ii) has the potential to disturb a marine mammal or marine mammal stock in the wild by causing disruption of behavioral patterns, including, but not limited to, migration, breathing, nursing, breeding, feeding, or sheltering (Level B harassment).
Authorized takes would primarily be by Level B harassment, as noise generated from in-water pile driving (vibratory and impact) has the potential to result in disruption of behavioral patterns for individual marine mammals. There is also some potential for auditory injury (Level A harassment) to result, primarily for low- and high-frequency species and phocids because predicted auditory injury zones are larger than for mid-frequency species. Auditory injury is unlikely to occur for mid-frequency species. The proposed mitigation and monitoring measures are expected to minimize the severity of such taking to the extent practicable.
As described previously, no serious injury or mortality is anticipated or proposed to be authorized for this activity. Below we describe how the take is estimated.
Generally speaking, we estimate take by considering: (1) Acoustic thresholds above which marine mammals will be behaviorally disturbed or incur some degree of permanent hearing impairment; (2) the area or volume of water that will be ensonified above these levels in a day; (3) the density or occurrence of marine mammals within these ensonified areas; and, (4) and 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 (
NMFS recommends the use of acoustic thresholds that identify the received level of underwater sound above which exposed marine mammals would be reasonably expected to experience behavioral disturbance (equated to Level B harassment) or to incur PTS of some degree (equated to Level A harassment).
HRCP's proposed activity includes the use of continuous (vibratory pile driving, DTH pile installation) and impulsive (impact pile driving, DTH pile installation), sources, and therefore the 120 and 160 dB re 1 μPa (rms) criteria are applicable. Note that the 120 dB criterion is used for DTH pile installation, as the continuous noise produced through the activity will produce the largest harassment isopleths.
These thresholds are provided in the Table 10 below. The references, analysis, and methodology used in the development of the thresholds are described in NMFS 2018 Technical Guidance, which may be accessed at:
Here, we describe operational and environmental parameters of the activity that will feed into identifying the area ensonified above the acoustic thresholds, which include source levels and transmission loss coefficient.
The sound field in the project area is the existing background noise plus additional construction noise from the project. Marine mammals are expected to be affected via sound generated by the primary components of the project (
Sound source levels (SSLs) for each method of installation and removal were estimated using empirical measurements from similar projects in Norfolk and Little Creek (Craney Island), elsewhere in Virginia, or outside of Virginia (California, Florida, Washington, Alaska) (Table 11). It is assumed that jetting will be quieter than vibratory installation of the same pile size, but data for this activity are limited; therefore, SSLs for vibratory installation have been applied to jetting.
DTH pile installation includes drilling (non-impulsive sound) and hammering (impulsive sound) to penetrate rocky substrates (Denes
The source level employed to derive Level B harassment isopleths for DTH pile installation of all pile sizes was derived from the Denes
The source level employed to derive Level A harassment isopleths for DTH pile installation of piles/holes above 24-inch up to 42-inch in diameter came from a combination of (whichever higher for given metric) Reyff and Heyvaert (2019), Denes
Simultaneous use of hammers could result in increased SPLs and harassment zone sizes given the proximity of the component driving sites and the rules of decibel addition. Impact pile installation is projected to take place concurrently at 3 to 4 locations and there is the potential for as many as 7 pile installation locations operating concurrently. NMFS (2018b) handles overlapping sound fields created by the use of more than one hammer differently for impulsive (impact hammer and Level A harassment zones for drilling with a DTH hammer) and continuous sound sources (vibratory hammer and Level B harassment zones for drilling with a DTH hammer) (See Table 12). It is unlikely that the two impact hammers would strike at the same instant, and therefore, the SPLs will not be adjusted regardless of the distance between impact hammers. In this case, each impact hammer will be considered to have its own independent Level A and Level B harassment zones and drilling with a DTH hammer will be considered to have its own independent Level A harassment zones. It will be unlikely that more than one DTH hammer will be used within a day at more than one location; therefore, only one DTH hammer was included in the multiple hammer calculations for Level B harassment zones.
When two continuous noise sources, such as vibratory hammers, have overlapping sound fields, there is potential for higher sound levels than for non-overlapping sources. The method described below was used by Washington State Department of Transportation (WSDOT) and has been used by NMFS (WSDOT 2020).
When two or more vibratory hammers are used simultaneously, and the isopleth of one sound source encompasses the sound source of another isopleth, the sources are considered additive and combined using the following rules (Table 12) for addition of two simultaneous vibratory hammers, the difference between the two SSLs is calculated, and if that difference is between 0 and 1 dB, 3 dB are added to the higher SSL; if difference is between 2 or 3 dB, 2 dB are added to the highest SSL; if the difference is between 4 to 9 dB, 1 dB is added to the highest SSL; and with differences of 10 or more decibels, there is no addition.
When three or more continuous sound sources are used concurrently, such as vibratory hammers, the three overlapping sources with the highest SSLs are identified. Of the three highest SSLs, the lower two are combined using
It is common for pile installation to start and stop multiple times as each pile is adjusted and its progress is measured and documented. For short durations, it is anticipated that multiple hammers could be in use simultaneously. Following an approach modified from WSDOT in their Biological Assessment manual and described in Table 13, decibel addition calculations were carried out for possible combinations of vibratory installations of 24-, 30-, 36-, and 42-inch steel pipe piles throughout the Project area.
These source levels are used to compute the Level A harassment zones and to estimate the Level B harassment zones.
When the NMFS' Technical Guidance (2016) was published, in recognition of the fact that ensonified area/volume could be more technically challenging to predict because of the duration component in the new thresholds, we developed a User Spreadsheet that includes tools to help predict a simple isopleth that can be used in conjunction with marine mammal density or occurrence to help predict takes. We note that because of some of the assumptions included in the methods used for these tools, we anticipate that isopleths produced are typically going to be overestimates of some degree, which may result in some degree of overestimate of Level A harassment take. However, these tools offer the best way to predict appropriate isopleths when more sophisticated 3D modeling methods are not available, and NMFS continues to develop ways to quantitatively refine these tools, and will qualitatively address the output where appropriate. For stationary sources such as in-water pile driving activities during the HRBT project, NMFS User Spreadsheet predicts the closest distance at which, if a marine mammal remained at that distance the whole duration of the activity, it would incur PTS.
Inputs used in the User Spreadsheet (Table 14 and Table 15) and the resulting isopleths are reported below (Table 14). Level A harassment thresholds for impulsive sound sources (impact pile driving, DTH pile installation) are defined for both SELcum and Peak SPL, with the threshold that results in the largest modeled isopleth for each marine mammal hearing group used to establish the effective Level A harassment isopleth.
For purposes of estimated take by Level A harassment, NMFS assumed that the strike rate for impact pile installation was 50 percent of the estimated number of strikes displayed in Table 14 and 15. Similarly, for vibratory driving NMFS assumed that the driving time for each pile was 50 percent of the estimated total. For the DTH hammer calculations, Reyff and Heyvaert 2019 identified a strike rate of 10 Hz. This was also reduced by 50 percent to 5 Hz which to achieve the same 50 percent Level A harassment reduction as was done for impact and vibratory driving. Strikes per Pile values were not altered when calculating Level A harassment zones for DTH pile installation.
Since the marine mammals proposed for authorization are highly mobile, it is unlikely that an animal would remain within an established Level A harassment zone for the entire duration or number of strikes associated with installation or removal of a specified number of piles throughout a given day. This was done to provide more realistic take estimates by Level A harassment. NMFS applied this reduction across all pile sizes, types, and installation/removal methods as shown in Tables 14 and 15. Additionally, note that under some driving scenarios a 7 dB attenuation was applied to impact installation of 24-inch steel, 30-inch Steel, and 36-inch steel due to use of bubble curtains as shown in Table 14.
The calculated Level A isopleths for different size pile and driving types are shown in Tables 16-18.
Transmission loss (TL) is the decrease in acoustic intensity as an acoustic pressure wave propagates out from a source. TL parameters vary with frequency, temperature, sea conditions, current, source and receiver depth, water depth, water chemistry, and bottom composition and topography. The general formula for underwater TL is:
The recommended TL coefficient for most nearshore environments is the practical spreading value of 15. This value results in an expected propagation environment that would lie between spherical and cylindrical spreading loss conditions, which is the most
Using the practical spreading model, HRCP determined underwater noise would fall below the behavioral effects threshold of 120 dB rms for marine mammals at a maximum radial distance of 15,849 m for vibratory pile driving of 42- and 36-inch diameter piles. Other activities including impact driving and vibratory installation sheet piles have smaller Level B harassment zones. All Level B harassment isopleths are reported in Table 19 below. It should be noted that based on the geography of the project area, and pile driving locations, in many cases sound will not reach the full distance of the Level B harassment isopleth. The radial distances provided in Table 19 and Table 20 are shown as calculated. However, the land areas presented in these tables take into account truncation by various land masses in the project area and only shows the in-water ensonified area.
The daily duration in which more than one vibratory hammer or DTH pile installation could occur is difficult to predict and quantify. As noted previously, DTH pile installation is considered by NMFS to be both impulsive and continuous. Therefore, decibel addition will not be used to calculate Level A harassment zones during concurrent DTH pile installation activities. The Level A harassment zones for each DTH activity will be based on a single DTH hammer. To simplify implementation of Level A harassment zones for use of more than one vibratory hammer within a day and/or during simultaneous use of multiple vibratory hammers with overlapping isopleths, whether at a single site or multiple sites, Level A harassment zone sizes were calculated for the longest anticipated duration of the largest pile sizes that could be installed within a day. For example, if 18 42-inch steel pipe piles were installed with a vibratory hammer on a single day by multiple hammers with overlapping sound fields, the Level A harassment zone for each of the functional hearing groups likely to be present near the project area would remain smaller than 100 meters as shown in Table 21 with the largest Level A harassment zone being 81 m for harbor porpoises. However, it is highly unlikely that a harbor porpoise could accumulate enough sound from the installation of multiple piles in multiple locations for the duration required to meet the calculated Level A harassment threshold. Furthermore, installation of 18 42-inch steel pipe piles likely represents an unrealistic level of efficiency that will not be achieved in the field. Other combinations of pile sizes and numbers would result in Level A harassment zones smaller than 100 meters. To be precautionary, shutdown zones outlined in Table 21 for each species will be implemented for each vibratory hammer on days when it is anticipated that multiple vibratory hammers will be used, whether at a single or multiple sites. This mitigation measure would also minimize the need for onsite coordination among project sites and components.
The size of the Level B harassment zone during concurrent operation of multiple vibratory hammers will depend on the combination of sound sources due to decibel addition of multiple hammers producing continuous noise. The distances to Level B harassment isopleths during simultaneous installation of piles using two or more vibratory hammers is shown in Table 22. As noted previously, pile installation often involves numerous stops and starts of the hammer for each pile. Therefore, decibel addition is applied only when the adjacent continuous sound sources experience overlapping sound fields, which generally requires close proximity of driving locations. Furthermore, it is expected to be a rare event when three or more 30-, 36-, or 42-inch piles are being installed simultaneously with vibratory hammers.
In this section we provide the information about the presence, density, or group dynamics of marine mammals that will inform the take calculations. We describe how the information provided above is brought together to produce a quantitative take estimate.
While humpback whales are observed near the mouth of the Chesapeake Bay and the nearshore waters of Virginia during winter and spring months, they are relatively rare in the project area. Density data for this species within the project vicinity do not exist or were not calculated because sample sizes were too small to produce reliable estimates of density. Humpback whale sighting data collected by the U.S. Navy near Naval Station Norfolk and Virginia Beach from 2012 to 2015 (Table 22) (Engelhaupt
The total estimated number of takes for bottlenose dolphins in the Project area was estimated using a combined approach of daily sighting rates and density methods from conventional line-transect vessel surveys near Naval Station Norfolk and adjacent areas near Virginia Beach, Virginia, from August 2012 through August 2015 (Engelhaupt
HRCP estimated potential exposure using daily sighting data for areas west of the HRBT area and within the Core Monitoring Area (shown in Figure 11-1 in the LOA application) and used seasonal densities of bottlenose dolphins from Engelhaupt
This approach also factored in the number of days of pile installation and removal, which is estimated to be 312 days per year for Years 1-4 and 181 days for Year 5. Due to the complex schedule and the inexact timeline in
Sighting rates (numbers of dolphins per day) were determined for each of the four seasons from observations located in the inshore Chesapeake Bay zone (the Chesapeake Bay waters near Naval Station Norfolk) which were used to estimate potential exposure west of the project site and within the Core Monitoring Area. Sightings per season ranged from 5 in spring to 24 in fall while no bottlenose dolphins were sighted in the winter months in this inshore area (Table 25). Note that the winter sighting total of 0 was a result of truncating winter survey data to only include sighting data within the vicinity of the project location. Bottlenose dolphin abundance was highest in the fall, (24 sightings representing 245 individuals), followed by the spring (
Table 25 depicts values in the average dolphins sighted per day column that are from within the Core Monitoring Area, which is smaller and closer to the river mouth. Values in the seasonal density column (individuals per km
For each month and year, the average area within the Level B harassment zones and outside the Core Monitoring Area was calculated and used to estimate potential exposure east of the project site and outside the Core Monitoring Area. The weighted average area within the relevant Level B harassment zones outside the Core Monitoring Area was used to calculate potential exposure or take of bottlenose dolphin for each month. The weighting incorporated the number of piles that produce the different zone sizes ensonified by each pile size/hammer/location. The number of piles with each different zone size was multiplied by its relevant ensonified area; those were then summed and the total was divided by the total number of piles.
For example, if there are 5 piles with a 20 km
The sum of potential exposures within the Core Monitoring Area (daily sighting rate method) and outside the Core Monitoring Area (density method for zones that extend into Chesapeake Bay) yields the total number of potential bottlenose dolphin exposures (Table 26) for each month and year.
Level A harassment zones and areas are relatively small for bottlenose dolphins. The largest Level A harassment isopleth is 236 m for DTH pile installation of 60-inch steel pipe piles (casings) at the South Trestle and covers an area less than 0.18 km
The total number of bottlenose dolphin takes by Level A and Level B harassment is expected to be split between three bottlenose dolphin stocks: Western North Atlantic Southern Migratory Coastal; Western North Atlantic Northern Migratory Coastal; and NNCES. There is insufficient data available to apportion the requested takes precisely to each of these three stocks present in the project area. Given that most of the NNCES stock are found in the Pamlico Sound Estuarine System, the Project will assume that no more than 200 of the requested takes will be from this stock during any given year. Since members of the Western North Atlantic Northern Migratory Coastal and Western North Atlantic Southern Migratory Coastal stocks are thought to occur in or near the Project area in greater numbers, HRCP will conservatively assume that no more than half of the remaining animals will belong to either of these stocks. Additionally, a subset of these takes would likely be comprised of Chesapeake Bay resident dolphins, although the size of that population is unknown. It is assumed that an animal will be taken once over a 24-hour period; however, the same individual may be taken multiple times over the duration of the project. Therefore, both the number of takes for each stock and the affected population percentages represent the maximum potential take numbers.
Harbor porpoises are rarely seen in the project area although they are known to occur in the coastal waters near Virginia Beach (Hayes
HRCP estimated that one group of two harbor porpoises could be exposed to project-related underwater noise each month during the spring (March-May) for a total of 6 harbor porpoises takes (
The largest calculated Level A harassment zone for harbor porpoises extends 7,901 m from the noise source during DTH installation of 60-inch steel pipe piles (casings) at the South Trestle, for a harassment area of 102.16 km
HRCP estimated the expected number of harbor seals in the project area using systematic, land- and vessel-based survey data for in-water and hauled-out seals collected by the U.S. Navy at the CBBT rock armor and portal islands from November 2014 through April 2019 (Rees
The estimated total number of harbor seals potentially exposed to in-water noise at harassment levels is 13.6 per day (the average of the 5-year average daily harbor seal count) (Table 28) for 156 days based on a 6-day work week from mid-November to mid-May. Seals are not expected to be present in the Chesapeake Bay from June through October. It is estimated that 13.6 harbor seals could be exposed per day to Project-related underwater noise for 156 days for a total of 2,122 exposures per year for Years 1-4. In Year 5, it is estimated that 1,591 harbor seals could be exposed to Project-related underwater noise from November through March (Table 29).
The largest Level A harassment isopleth associated with drilling with a DTH hammer of 60-inch steel pipe piles (casings) at the South Trestle for harbor seals is 3,550 meters (Table 17) with a Level A harassment zone of 27.12 km
Gray seals are expected to be very uncommon in the Project area. As described below, historical data indicate that approximately one gray seal has been seen per year in the Chesapeake Bay. Similar to the harbor seal, HRCP estimated the expected number of gray seals in the Project area using systematic, land- and vessel-based survey data for in-water and hauled-out seals collected by the U.S. Navy at the CBBT rock armor and portal islands from 2014 through 2019 (Rees
As a precautionary measure, HRCP assumed that there could be three gray seals taken by Level B harassment during each of the winter months (December through February). Therefore, HRCP requested and NMFS is proposing to authorize nine gray seal takes per year for years 1-4 (3 gray seals per month × 3 months per year = 9 gray seals) and 5 for project year five for a total of 41 takes of gray seals (Table 30). Given the size of the Level A harassment zones and potential for a gray seal to be present within the zone for sufficient duration to incur injury, nine takes by Level A harassment have also been requested (2 during years 1-4 and 1 during year 5). NMFS concurs with this assessment and is proposing to authorize seven takes by Level B harassment per year for years 1-4 (9 takes−2 takes by Level A harassment = 7 takes by Level B harassment) and 4 takes for year 5 (5 total takes−1 take by Level A harassment = 4 takes by Level B harassment). NMFS is also proposing to authorize 2 takes of gray seal per year by Level A harassment for years 1-4 and a single take for year 5.
Table 30 below summarizes proposed take numbers by species per project year while Table 31 describes the proposed authorized take for all the species described above as a percentage of stock abundance.
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 (latter not applicable for this action). NMFS regulations require applicants for incidental take authorizations to include information about the availability and feasibility (economic and technological) of equipment, methods, and manner of conducting such activity or other means of effecting the least practicable adverse impact upon the affected species or stocks and their habitat (50 CFR 216.104(a)(11)).
In evaluating how mitigation may or may not be appropriate to ensure the least practicable adverse impact on species or stocks and their habitat, as well as subsistence uses where applicable, we carefully consider two primary factors:
(1) The manner in which, and the degree to which, the successful implementation of the measure(s) is expected to reduce impacts to marine mammals, marine mammal species or stocks, and their habitat. This considers the nature of the potential adverse impact being mitigated (likelihood, scope, range). It further considers the likelihood that the measure will be effective if implemented (probability of accomplishing the mitigating result if implemented as planned) the likelihood of effective implementation (probability implemented as planned); and
(2) The practicability of the measures for applicant implementation, which may consider such things as cost, 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.
In addition to the measures described later in this section, HRCP will employ the following mitigation measures:
• For in-water heavy machinery work other than pile driving, if a marine mammal comes within 10 m, operations shall cease and vessels shall reduce speed to the minimum level required to maintain steerage and safe working conditions;
• HRCP will conduct briefings between construction supervisors and crews and the marine mammal monitoring team prior to the start of all pile driving activity and when new personnel join the work, to explain responsibilities, communication procedures, marine mammal monitoring protocol, and operational procedures;
• For those marine mammals for which Level A or Level B harassment take has not been requested, in-water pile installation/removal will shut down immediately if such species are observed within or entering the Level A or Level B harassment zone; and
• If take reaches the authorized limit for an authorized species, pile installation/removal will shut down immediately if these species approach the Level A or Level B harassment zone to avoid additional take.
The following mitigation measures apply to HRCP's in-water construction activities.
For pile driving, work would occur only during daylight hours, when visual monitoring of marine mammals can be conducted. Installation or removal of new piles will not commence after daylight hours.
For all pile driving activities, HRCP will establish shutdown zones for a marine mammal species which correspond to the Level A harassment zones. The purpose of a shutdown zone is generally to define an area within which shutdown of the activity would occur upon sighting of a marine mammal (or in anticipation of an animal entering the defined area). In some instances, however, large zone sizes will make it impossible to monitor the entirety of the Level A harassment zones.
During use of a single hammer the following measures will be employed by HRCP:
• A minimum 10-meter shutdown zone will be implemented for all species, pile sizes, and hammer types to prevent direct injury of marine mammals.
• A 15-meter shutdown zone will be implemented for seals to prevent direct injury.
• A 100-meter shutdown zone will be implemented for harbor porpoises when utilizing a DTH hammer and impact hammering to prevent direct injury.
• When the Level A harassment zone is larger than 50 meters, shutdown zones have been rounded up relative to the calculated Level A harassment zones as a precautionary measure. HRCP will also document the duration any animal spends within the Level A harassment zone.
When two or more vibratory hammers are in use HRCP will employ the following measures:
• A shutdown zone will be implemented for each species for each vibratory hammer on days when it is anticipated that multiple vibratory hammers will be used, whether at a single site or multiple sites.
• A 35-meter shutdown zone will be implemented for harbor seals and gray seals to prevent direct injury.
• An 85-meter shutdown zone will be implemented for harbor porpoise to prevent direct injury.
• A 55-meter shutdown zone will be implemented for humpback whales to prevent direct injury.
Calculated Level A harassment zones and shutdown zones for each activity and pile size and type are depicted in Table 32 and Table 33. Note that shutdown zones in Table 33 include a 7 dB reduction due to the use of bubble curtains. Compare shutdown zones in Table 32 with Level A harassment zones contained in Tables 16, 17 and 18. Under some pile driving scenarios, the Level A harassment zones are larger than the specified shutdown zones.
The placement of protected species observers (PSOs) during all pile driving and removal activities (described in the Proposed Monitoring and Reporting section) will ensure that the entire shutdown zone is visible during pile driving and removal. Should environmental conditions deteriorate such that marine mammals within the entire shutdown zone would not be visible (
HRCP will establish monitoring zones based on calculated Level A harassment isopleths associated with specific pile driving activities and scenarios. These are areas beyond the established shutdown zones in which animals could be exposed to sound levels that could result in Level A harassment in the form of PTS. HRCP will also establish and monitor Level B harassment zones which are areas where SPLs are equal to or exceed the 160 dB rms threshold for impact driving and 120 dB rms threshold during vibratory driving and DTH pile installation.
The Level A and Level B harassment monitoring zones are given in Tables 16-19.
HRCP will monitor the Level B harassment zones to the extent practicable, as well as Level A harassment zones extending beyond shutdown zones. HRCP will monitor at least a portion of the Level B harassment zone on all pile driving days. Monitoring zones provide utility for observing by establishing monitoring protocols for areas adjacent to the shutdown zones. Monitoring zones enable observers to be aware of and communicate the presence of marine mammals in the project area outside the shutdown zone and thus prepare for a potential cessation of activity should the animal enter the shutdown zone.
Use of air bubble curtain systems will be implemented by HRCP during impact driving of steel piles except in situations where the water depth is less than 20 ft in depth. The use of this sound attenuation device will reduce SPLs and the size of the zones of influence for Level A harassment and Level B harassment. Bubble curtains will meet the following requirements:
• The bubble curtain must distribute air bubbles around 100 percent of the piling perimeter for the full depth of the water column.
• The lowest bubble ring shall be in contact with the mudline and/or rock bottom for the full circumference of the ring, and the weights attached to the bottom ring shall ensure 100 percent mudline and/or rock bottom contact. No parts of the ring or other objects shall prevent full mudline and/or rock bottom contact.
• The bubble curtain shall be operated such that there is proper (equal) balancing of air flow to all bubblers.
• The applicant shall require that construction contractors train personnel in the proper balancing of air flow to the bubblers and corrections to the attenuation device to meet the performance standards. This shall occur prior to the initiation of pile driving activities.
The use of soft-start procedures are believed to provide additional protection to marine mammals by providing warning and/or giving marine mammals a chance to leave the area prior to the hammer operating at full capacity. For impact pile driving, HRCP will be required to provide an initial set of strikes from the hammer at reduced energy, with each strike followed by a 30-second waiting period. This procedure will be conducted a total of three times before impact pile driving begins. Soft start will be implemented at the start of each day's impact pile driving and at any time following cessation of impact pile driving for a period of 30 minutes or longer. Soft start is not required during vibratory or DTH pile driving activities.
If a marine mammal is present within the shutdown zone, ramping up will be delayed until the PSO has determined, through sighting, that the animal(s) has moved outside the shutdown zone. If a marine mammal is present in the Level A or Level B harassment zone, ramping up may begin and a Level A or Level B harassment take will be recorded. If a marine mammal is present in the Level A or Level B harassment zone, HRCP may elect to delay ramping up to avoid a Level A or Level B harassment take. To avoid a take by Level A or Level B harassment, ramping up will begin only after the PSO has determined, through sighting, that the animal(s) has moved outside the corresponding Level A or Level B harassment zone or 15 minutes have passed.
Prior to the start of daily in-water construction activity, or whenever a break in pile driving of 30 minutes or longer occurs, PSOs will observe the shutdown and monitoring zones for a period of 30 minutes. The shutdown zone will be cleared when a marine mammal has not been observed within the zone for that 30-minute period. If a marine mammal is observed within the shutdown zone, a soft-start cannot proceed until the animal has left the zone or has not been observed for 15 minutes. If the Level A and Level B harassment zones have been observed for 30 minutes and non-permitted species are not present within the zone, soft start procedures can commence and work can continue even if visibility becomes impaired within the Level A or Level B harassment monitoring zones. When a marine mammal permitted for take by Level A or Level B harassment is present in the Level A or Level B harassment zone, activities may begin and Level A or Level B harassment take will be recorded as appropriate. If work ceases for more than 30 minutes, the pre-activity monitoring of both the Level B harassment and shutdown zone will commence again. Additionally, in-water construction activity must be delayed or cease, if poor environmental conditions restrict full visibility of the shut-down zone(s) until the entire shut-down zone(s) is visible.
Based on our evaluation of HRCP's proposed measures, as well as other measures considered by NMFS, NMFS has preliminarily determined that the proposed mitigation measures provide the means of effecting the least practicable impact on the affected species or stocks and their habitat, paying particular attention to rookeries, mating grounds, and areas of similar significance.
In order to issue 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. NMFS' MMPA implementing regulations further describe the information that an applicant should provide when requesting an authorization (50 CFR 216.104 (a)(13)), including the means of accomplishing the necessary monitoring and reporting that will result in increased knowledge of the species and the level of taking or impacts on populations of marine mammals. 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.
HRCP will submit a Marine Mammal Monitoring Plan which must be approved by NMFS in advance of the start of construction.
Marine mammal monitoring during pile driving and removal must be conducted by PSOs in a manner consistent with the following:
• Independent PSOs (
• At least one PSO must have prior experience performing the duties of a PSO during construction activity pursuant to a NMFS-issued incidental take authorization;
• Other PSOs may substitute education (degree in biological science or related field) or training for experience;
• Where a team of three or more PSOs is required, a lead observer or monitoring coordinator must be designated. The lead observer must have prior experience working as a marine mammal observer during construction; and
• HRCP must submit PSO Curriculum Vitae for approval by NMFS prior to the onset of pile driving.
PSOs must have the following additional qualifications:
• Ability to conduct field observations and collect data according to assigned protocols;
• Experience or training in the field identification of marine mammals, including the identification of behaviors;
• Sufficient training, orientation, or experience with the construction operation to provide for personal safety during observations;
• Writing skills sufficient to prepare a report of observations including but not limited to the number and species of marine mammals observed; dates and times when in-water construction activities were conducted; dates, times, and reason for implementation of mitigation (or why mitigation was not implemented when required); and marine mammal behavior; and
• Ability to communicate orally, by radio or in person, with project personnel to provide real-time information on marine mammals observed in the area as necessary.
PSOs will be positioned at the best practical vantage point(s). The position(s) may vary based on construction activity and location of piles or equipment. At least one of the monitoring locations will have an unobstructed view of the pile being driven, and an unobstructed view of the Level A shutdown and Level B harassment zones, Core Monitoring Area, as well as the 100-meter shutdown zone.
Between one and four PSOs will be stationed at locations offering the best available views of the Level A and Level B harassment monitoring zones during in-water pile installation and removal, depending on where active in-water work is taking place. It is anticipated that a PSO will observe from the North Island when in-water pile installation is occurring at the North Island and North Trestle. If the view field is adequate, Level A and Level B harassment zones may be monitored for multiple pile driving locations by the same individual PSO. Two PSOs will be located at the South Island, where they will monitor for marine mammals passing into and out of the Core Monitoring Area as well as monitor the active hammer sites. This location also provides good views to the east for monitoring when zones extend beyond the Core Monitoring Area into Chesapeake Bay. One PSO will be stationed on Willoughby Spit or a similar location that offers the best available views of the Level A and Level B harassment monitoring zones during in-water pile installation and removal within Willoughby Bay. Finally, on days when use of multiple hammers is planned and it is anticipated that the Level B harassment isopleth will encompass the CBBT, a PSO will be located on one of the CBBT Portal Islands to monitor the extended ensonified area. A central position will generally be staffed by the lead PSO, who will monitor the shutdown zones and communicate with construction personnel about shutdowns and take management. PSOs at the pile installation and removal locations will be able to see at least a radius around the construction site that exceeds the largest Level A harassment zone. PSOs will watch for marine mammals entering and leaving the James River and will alert the lead PSO of the number and species sighted, so that no unexpected marine mammals will approach the construction site. This will minimize Level A harassment take of all species.
Decibel addition is not a consideration when sound fields do not overlap at the sound sources. Willoughby Bay is largely surrounded by land, and sound will be prevented from propagating to other Project construction sites. Therefore, Willoughby Bay will be treated as an independent site with its own monitoring and shutdown zones, as well as observer requirements when construction is taking place within the bay. The Bay is relatively small and will be monitored from the construction site by one to two observers.
HRCP would submit an annual draft report for each construction year to NMFS within 90 calendar days of the completion of marine mammal monitoring. A final annual report will be prepared and submitted to NMFS within 30 days following receipt of comments on the draft report from NMFS.
The report will detail the monitoring protocol and summarize the data recorded during monitoring. Specifically, the report must include
• Dates and times (begin and end) of all marine mammal monitoring.
• Construction activities occurring during each daily observation period, including how many and what type of piles were driven or removed and by what method (
• Environmental conditions during monitoring periods (at beginning and end of PSO shift and whenever conditions change significantly), including Beaufort sea state and any other relevant weather conditions including cloud cover, fog, sun glare, and overall visibility to the horizon, and estimated observable distance (if less than the harassment zone distance).
• The number of marine mammals observed, by species, relative to the pile location and if pile driving or removal was occurring at time of sighting.
• Age and sex class, if possible, of all marine mammals observed.
• PSO locations during marine mammal monitoring.
• Distances and bearings of each marine mammal observed to the pile being driven or removed for each sighting (if pile driving or removal was occurring at time of sighting).
• Description of any marine mammal behavior patterns during observation, including direction of travel and
• Number of marine mammals detected within the harassment zones, by species.
• Detailed information about any implementation of any mitigation triggered (
• Description of attempts to distinguish between the number of individual animals taken and the number of incidences of take, such as ability to track groups or individuals.
If no comments are received from NMFS within 30 days, the draft report will constitute the final report. If comments are received, a final report addressing NMFS comments must be submitted within 30 days after receipt of comments.
In the event that personnel involved in the construction activities discover an injured or dead marine mammal, HRCP shall report the incident to the Office of Protected Resources (OPR) (301-427-8401), NMFS and to the Greater Atlantic Region New England/Mid-Atlantic Regional Stranding Coordinator as soon as feasible. If the death or injury was clearly caused by the specified activity, HRCP must immediately cease the specified activities until NMFS is able to review the circumstances of the incident and determine what, if any, additional measures are appropriate to ensure compliance with the terms of the authorization. HRCP must not resume their activities until notified by NMFS.
The report must include the following information:
i. Time, date, and location (latitude/longitude) of the first discovery (and updated location information if known and applicable);
ii. Species identification (if known) or description of the animal(s) involved;
iii. Condition of the animal(s) (including carcass condition if the animal is dead);
iv. Observed behaviors of the animal(s), if alive;
v. If available, photographs or video footage of the animal(s); and
vi. General circumstances under which the animal was discovered.
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 (
To avoid repetition, this introductory discussion of our analyses applies to all of the species listed in Table 31, given that many of the anticipated effects of this project on different marine mammal stocks are expected to be relatively similar in nature. Where there are meaningful differences between species or stocks in anticipated individual responses to activities, impact of expected take on the population due to differences in population status, or impacts on habitat, they are described independently in the analysis below.
Pile driving activities associated with the project, as outlined previously, have the potential to disturb or displace marine mammals. Specifically, the specified activities may result in take, in the form of Level B harassment from underwater sounds generated by pile driving. Potential takes could occur if marine mammals are present in zones ensonified above the thresholds for Level B harassment, identified above, while activities are underway. No serious injury or mortality would be expected even in the absence of the proposed mitigation measures.
A limited number of animals could experience Level A harassment in the form of PTS if they remain within the Level A harassment zone long enough during certain impact driving scenarios. However, the number of animal affected and the degree of injury is expected to be limited to, at most, mild PTS. Furthermore, the reproduction or survival of the individual animals is not likely to affected. It is expected that, if hearing impairments occurs, most likely the affected animal would lose a few dB in its hearing sensitivity, which in most cases is not likely to affect its survival and recruitment.
HRCP's proposed pile driving activities and associated impacts will occur within a limited portion of the confluence of the Chesapeake Bay area. Localized noise exposures produced by project activities may cause short-term behavioral modifications in affected cetaceans and pinnipeds. However, as described previously, the mitigation and monitoring measures are expected to further reduce the likelihood of injury as well as reduce behavioral disturbances.
Effects on individuals that are taken by Level B harassment, on the basis of reports in the literature as well as monitoring from other similar activities, will likely be limited to reactions such as increased swimming speeds, increased surfacing time, or decreased foraging (if such activity were occurring) (
As previously described, UMEs have been declared for Northeast pinnipeds (including harbor seal and gray seal) and Atlantic humpback whales. However, we do not expect takes proposed for authorization in this action to exacerbate or compound upon these ongoing UMEs. As noted previously, no injury, serious injury, or mortality is expect or proposed for authorization,
With regard to humpback whales, the UME does not yet provide cause for concern regarding population-level impacts. Despite the UME, the relevant population of humpback whales (the West Indies breeding population, or distinct population segment (DPS)) remains healthy. Prior to 2016, humpback whales were listed under the ESA as an endangered species worldwide. Following a 2015 global status review (Bettridge
For the WNA stock of harbor seals, the estimated abundance is 75,834 individuals. The estimated M/SI for this stock (350) is well below the PBR (2,006). As such, the proposed Level B harassment takes of harbor seal are not expected to exacerbate or compound upon the ongoing UMEs.
The project is also not expected to have significant adverse effects on affected marine mammals' habitats. The project activities will not modify existing marine mammal habitat for a significant amount of time. The activities may cause some fish to leave the area of disturbance, thus temporarily impacting marine mammals' foraging opportunities in a limited portion of the foraging range; but, because of the relatively small area of the habitat that may be affected (with no known particular importance to marine mammals), the impacts to marine mammal habitat are not expected to cause significant or long-term negative consequences. Furthermore, there are no known biologically important areas (BIAs), ESA-designated critical habitat, rookeries, or features of special significance for foraging or reproduction.
In summary and as described above, the following factors primarily support our preliminary determination that the impacts resulting from this activity are not expected to adversely affect the species or stock through effects on annual rates of recruitment or survival:
• No serious injury or mortality is anticipated or authorized;
• Authorized Level A harassment would be limited and of low degree;
• The intensity of anticipated takes by Level B harassment is relatively low for all stocks;
• The number of anticipated takes is very low for humpback whale, harbor porpoise, and gray seal;
• The specified activity and associated ensonifed areas are very small relative to the overall habitat ranges of all species and do not include habitat areas of special significance;
• The lack of anticipated significant or long-term negative effects to marine mammal habitat; and
• The presumed efficacy of the mitigation measures in reducing the effects of the specified activity.
Based on the analysis contained herein of the likely effects of the specified activity on marine mammals and their habitat, and taking into consideration the implementation of the proposed monitoring and mitigation measures, NMFS preliminarily finds that the total marine mammal take from the proposed activity will have a negligible impact on all affected marine mammal species or stocks.
As noted above, only small numbers of incidental take may be authorized under section 101(a)(5)(A) of the MMPA for specified activities other than military readiness activities. The MMPA does not define small numbers and so, in practice, where estimated numbers are available, NMFS compares the number of individuals taken to the most appropriate estimation of abundance of the relevant species or stock in our determination of whether an authorization is limited to small numbers of marine mammals. When the predicted number of individuals to be taken is fewer than one third of the species or stock abundance, the take is considered to be of small numbers. Additionally, other qualitative factors may be considered in the analysis, such as the temporal or spatial scale of the activities.
The maximum annual take of take of humpback whale, harbor porpoise, harbor seal, and gray seal comprises less than one-third of the best available stock abundance estimate for each of these stocks (Table 31). The maximum number of animals authorized to be taken from these stocks would be considered small relative to the relevant stock's abundances even if each estimated taking occurred to a new individual, which is an unlikely scenario.
Three bottlenose dolphin stocks could occur in the project area: WNA Coastal Northern Migratory, WNA Coastal Southern Migratory, and NNCES stocks. Therefore, the estimated takes of bottlenose dolphin by Level B harassment would likely be portioned among these stocks. Based on the stocks' respective occurrence in the area, NMFS estimated that there would be no more than 200 takes from the NNCES stock each year over the five-year period, with the remaining takes evenly split between the northern and southern migratory coastal stocks. Based on consideration of various factors described below, we have determined the maximum number of individuals taken per year would likely comprise less than one-third of the best available population abundance estimate of either coastal migratory stock.
Both the WNA Coastal Northern Migratory and WNA Coastal Southern Migratory stocks have expansive ranges and they are the only dolphin stocks thought to make broad-scale, seasonal migrations in coastal waters of the western North Atlantic. Given the large ranges associated with these stocks it is unlikely that large segments of either stock would approach the project area and enter into the Chesapeake Bay. The majority of both stocks are likely to be found widely dispersed across their respective habitat ranges and unlikely to be concentrated in or near the Chesapeake Bay.
Furthermore, the Chesapeake Bay and nearby offshore waters represent the boundaries of the ranges of each of the two coastal stocks during migration. The WNA Coastal Northern Migratory stock
The Chesapeake Bay and waters offshore of its mouth are located on the periphery of the migratory ranges of both coastal stocks (although during different seasons). Additionally, each of the migratory coastal stocks are likely to be located in the vicinity of the Chesapeake Bay for relatively short timeframes. Given the limited number of animals from each migratory coastal stock likely to be found at the seasonal migratory boundaries of their respective ranges, in combination with the short time periods (~two months) animals might remain at these boundaries, it is reasonable to assume that takes are likely to occur to only a small portion of either of the migratory coastal stocks.
Both migratory coastal stocks likely overlap with the NNCES stock at various times during their seasonal migrations. The NNCES stock is defined as animals that primarily occupy waters of the Pamlico Sound estuarine system (which also includes Core, Roanoke, and Albemarle sounds, and the Neuse River) during warm water months (July-August). Animals from this stock also use coastal waters (≤1 km from shore) of North Carolina from Beaufort north to Virginia Beach, Virginia, including the lower Chesapeake Bay. Comparison of dolphin photo-identification data confirmed that limited numbers of individual dolphins observed in Roanoke Sound have also been sighted in the Chesapeake Bay (Young, 2018). Like the migratory coastal dolphin stocks, the NNCES stock covers a large range. The spatial extent of most small and resident bottlenose dolphin populations is on the order of 500 km
Many of the dolphin observations in the Bay are likely repeated sightings of the same individuals. The Potomac-Chesapeake Dolphin Project has observed over 1,200 unique animals since observations began in 2015. Re-sightings of the same individual can be highly variable. Some dolphins are observed once per year, while others are highly regular with greater than 10 sightings per year (J. Mann, Potomac-Chesapeake Dolphin Project, pers. comm.). Similarly, using available photo-identification data, Engelhaupt
In summary and as described above, the following factors primarily support our determination regarding the incidental take of small numbers of the affected stocks of bottlenose dolphin:
• Potential bottlenose dolphin takes in the project area are likely to be allocated among three distinct stocks;
• Bottlenose dolphin stocks in the project area have extensive ranges and it would be unlikely to find a high percentage of any one stock concentrated in a relatively small area such as the project area or the Chesapeake Bay;
• The Chesapeake Bay represents the migratory boundary for each of the specified dolphin stocks and it would be unlikely to find a high percentage of any stock concentrated at such boundaries; and
• Many of the takes would likely be repeats of the same animals and likely from a resident population of the Chesapeake Bay.
Based on the analysis contained herein of the proposed activity (including the proposed mitigation and monitoring measures) and the anticipated take of marine mammals, NMFS preliminarily finds that small numbers of marine mammals will be taken relative to the population size of the affected species or stocks.
There are no relevant subsistence uses of the affected marine mammal stocks or species implicated by this action. Therefore, NMFS has determined that the total taking of affected species or stocks would not have an unmitigable adverse impact on the availability of such species or stocks for taking for subsistence purposes.
The regulations governing the take of marine mammals incidental to HRCP construction activities would contain an adaptive management component. The reporting requirements associated with this proposed rule are designed to provide NMFS with monitoring data from completed projects 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 HRCP 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.
Section 7(a)(2) of the Endangered Species Act of 1973 (ESA: 16 U.S.C. 1531
No incidental take of ESA-listed species is proposed for authorization or expected to result from this activity. Therefore, NMFS has determined that formal consultation under section 7 of the ESA is not required for this action.
NMFS requests interested persons to submit comments, information, and suggestions concerning HRCP's request and the proposed regulations (see
Pursuant to the procedures established to implement Executive Order 12866, the Office of Management and Budget has determined that this proposed rule is not significant. Pursuant to section 605(b) of the Regulatory Flexibility Act (RFA), the Chief Counsel for Regulation of the Department of Commerce has certified to the Chief Counsel for Advocacy of the Small Business Administration that this proposed rule, if adopted, would not have a significant economic impact on a substantial number of small entities. HRCP is the sole entity that would be subject to the requirements in these proposed regulations, and HRCP is not a small governmental jurisdiction, small organization, or small business, as defined by the RFA. Because of this certification, a regulatory flexibility analysis is not required and none has been prepared.
Notwithstanding any other provision of law, no person is required to respond to nor shall a person be subject to a penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act (PRA) unless that collection of information displays a currently valid OMB control number. This proposed 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.
Administrative practice and procedure, Alaska, Endangered and threatened species, Exports, Fish, Imports, Indians, Labeling, Marine mammals, Oil and gas exploration, Penalties, Reporting and recordkeeping requirements, Seafood, Transportation, Wildlife.
For reasons set forth in the preamble, 50 CFR part 217 is proposed to be amended as follows:
16 U.S.C. 1361
(a) Regulations in this subpart apply only to the Hampton Roads Connector Partners (HRCP) and those persons it authorizes or funds to conduct activities on its 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 activities including marine structure maintenance, pile replacement, and select waterfront improvements at the Hampton Roads Bridge Tunnel Expansion Project (HRBT).
(b) The taking of marine mammals by HRCP may be authorized in a Letter of Authorization (LOA) only if it occurs at the Hampton Roads Bridge Tunnel Expansion project location.
Regulations in this subpart are effective from [EFFECTIVE DATE OF THE FINAL RULE] to [DATE 5 YEARS AFTER EFFECTIVE DATE OF THE FINAL RULE].
(a) Under an LOA issued pursuant to §§ 216.106 of this chapter and 217.26, the Holder of the LOA (hereinafter “HRCP”) may incidentally, but not intentionally, take marine mammals within the area described in § 217.20(b) by Level A and Level B harassment associated with construction activities, provided the activity is in compliance with all terms, conditions, and requirements of the regulations in this subpart and the applicable LOA.
(b) [Reserved]
(a) Except for the takings contemplated in § 217.22 and authorized by an LOA issued under §§ 216.106 of this chapter and 217.26, it is unlawful for any person to do any of the following in connection with the activities described in § 217.20:
(1) Violate, or fail to comply with, the terms, conditions, and requirements of this subpart or a LOA issued under §§ 216.106 of this chapter and 217.26;
(2) Take any marine mammal not specified in such LOA;
(3) Take any marine mammal specified in such LOA in any manner other than as specified;
(4) Take a marine mammal specified in such LOA if NMFS determines such taking results in more than a negligible impact on the species or stocks of such marine mammal; or
(5) Take a marine mammal specified in such LOA 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.
(b) [Reserved]
(a) When conducting the activities identified in § 217.20(a), the mitigation measures contained in any LOA issued under §§ 216.106 of this chapter and 217.26 must be implemented. These mitigation measures shall include but are not limited to:
(1) A copy of any issued LOA must be in the possession of HRCP, its designees, and work crew personnel operating under the authority of the issued LOA.
(2) HRCP shall conduct briefings for construction supervisors and crews, the monitoring team, and HRCP staff prior to the start of all pile driving activity, and when new personnel join the work, in order to explain responsibilities, communication procedures, the marine
(3) For in-water heavy machinery work other than pile driving, if a marine mammal comes within 10 meters (m), HRCP shall cease operations and reduce vessel speed to the minimum level required to maintain steerage and safe working conditions.
(4) For all pile driving activity, HRCP shall implement a minimum shutdown zone of a 10 m radius around the pile. If a marine mammal comes within or approaches the shutdown zone, such operations shall cease.
(5) For all pile driving activity, HRCP shall implement shutdown zones with radial distances as identified in a LOA issued under §§ 216.106 of this chapter and 217.26. If a marine mammal comes within or approaches the shutdown zone, such operations shall cease.
(6) HRCP deploy protected species observers (observers or PSOs) as indicated in its Marine Mammal Monitoring Plan approved by NMFS.
(7) For all pile driving activities, between one and four observers shall be stationed at the best vantage points practicable to monitor for marine mammals and implement shutdown/delay procedures.
(8) Monitoring shall take place from 30 minutes prior to initiation of pile driving activity through 30 minutes post-completion of pile driving activity. Pre-activity monitoring shall be conducted for 30 minutes to ensure that the shutdown zone is clear of marine mammals, and pile driving may commence when observers have declared the shutdown zone clear of marine mammals. In the event of a delay or shutdown of activity resulting from marine mammals in the shutdown zone, animals shall be allowed to remain in the shutdown zone (
(9) If a marine mammal approaches or enters the shutdown zone, all pile driving activities at that location shall be halted. In the event of a delay, the activity may not commence or resume until either the animal has voluntarily left and been visually confirmed beyond the shutdown zone or fifteen minutes have passed without re-detection of the animal.
(10) Pile driving activity must be halted upon observation of either a species for which incidental take is not authorized or a species for which incidental take has been authorized but the authorized number of takes has been met, entering or within the harassment zone.
(11) Should environmental conditions deteriorate such that marine mammals within the entire shutdown zone would not be visible (
(12) Monitoring shall be conducted by trained observers, who shall have no other assigned tasks during monitoring periods. Trained observers shall be placed at the best vantage point(s) practicable to monitor for marine mammals and implement shutdown or delay procedures when applicable through communication with the equipment operator. HRCP shall adhere to the following additional observer qualifications:
(i) Independent observers are required;
(ii) At least one observer must have prior experience working as an observer;
(iii) Other observers may substitute education (degree in biological science or related field) or training for experience;
(iv) Where a team of three or more observers are required, one observer shall be designated as lead observer or monitoring coordinator. The lead observer must have prior experience working as an observer; and
(v) HRCP must submit PSO CVs for approval by NMFS prior to the beginning of pile driving and drilling.
(13) HRCP shall use soft start techniques for impact pile driving. Soft start for impact driving requires HRCP and those persons it authorizes to provide an initial set of three strikes at reduced energy, followed by a thirty-second waiting period, then two subsequent reduced energy three-strike sets. Soft start shall be implemented at the start of each day's impact pile driving and at any time following cessation of impact pile driving for a period of thirty minutes or longer.
(14) HRCP shall employ bubble curtain systems during impact driving of steel piles except under conditions where the water depth is less than 20 feet in depth. Bubble curtains must meet the following requirements:
(i) The bubble curtain must distribute air bubbles around 100 percent of the piling perimeter for the full depth of the water column.
(ii) The lowest bubble ring must be in contact with the mudline and/or rock bottom for the full circumference of the ring, and the weights attached to the bottom ring shall ensure 100 percent mudline and/or rock bottom contact. No parts of the ring or other objects shall prevent full mudline and/or rock bottom contact.
(iii) The bubble curtain must be operated such that there is proper (equal) balancing of air flow to all bubblers.
(iv) HRCP shall require that construction contractors train personnel in the proper balancing of air flow to the bubblers and corrections to the attenuation device to meet the performance standards. This shall occur prior to the initiation of pile driving activities.
(b) [Reserved]
(a) HRCP shall submit a Marine Mammal Monitoring Plan to NMFS for approval in advance of construction.
(b) HRCP shall deploy observers as indicated in its approved Marine Mammal Monitoring Plan.
(c) Observers shall be trained in marine mammal identification and behaviors. Observers shall have no other construction-related tasks while conducting monitoring.
(d) HRCP shall monitor the Level B harassment zones and Level A harassment zones extending beyond the designated shutdown zones to the extent practicable.
(e) HRCP shall monitor the shutdown zones during all pile driving and removal activities.
(f) HRCP shall submit a draft annual monitoring report to NMFS within 90 work days of the completion of annual marine mammal monitoring. The report must detail the monitoring protocol and summarize the data recorded during monitoring. If no comments are received from NMFS within 30 days, the draft report will constitute the final report. If comments are received, a final report addressing NMFS comments must be submitted within 30 days after receipt of comments. Specifically, the report must include:
(1) Dates and times (begin and end) of all marine mammal monitoring.
(2) Construction activities occurring during each daily observation period, including how many and what type of piles were driven or removed and by what method (
(3) Environmental conditions during monitoring periods (at beginning and end of PSO shift and whenever conditions change significantly), including Beaufort sea state and any other relevant weather conditions including cloud cover, fog, sun glare, and overall visibility to the horizon, and estimated observable distance (if less than the harassment zone distance).
(4) The number of marine mammals observed, by species, relative to the pile location and if pile driving or removal was occurring at time of sighting.
(5) Age and sex class, if possible, of all marine mammals observed.
(6) PSO locations during marine mammal monitoring.
(7) Distances and bearings of each marine mammal observed to the pile being driven or removed for each sighting (if pile driving or removal was occurring at time of sighting).
(8) Description of any marine mammal behavior patterns during observation, including direction of travel and estimated time spent within the Level A and Level B harassment zones while the source was active.
(9) Number of marine mammals detected within the harassment zones, by species.
(10) Detailed information about any implementation of any mitigation triggered (
(11) Description of attempts to distinguish between the number of individual animals taken and the number of incidences of take, such as ability to track groups or individuals.
(g) In the event that personnel involved in the construction activities discover an injured or dead marine mammal, HRCP shall report the incident to the Office of Protected Resources (OPR) (301-427-8401), NMFS and to the Greater Atlantic Region New England/Mid-Atlantic Regional Stranding Coordinator as soon as feasible. If the death or injury was clearly caused by the specified activity, HRCP must immediately cease the specified activities until NMFS is able to review the circumstances of the incident and determine what, if any, additional measures are appropriate to ensure compliance with the terms of the authorization. HRCP must not resume their activities until notified by NMFS. The report must include the following information:
(1) Time, date, and location (latitude/longitude) of the first discovery (and updated location information if known and applicable);
(2) Species identification (if known) or description of the animal(s) involved;
(3) Condition of the animal(s) (including carcass condition if the animal is dead);
(4) Observed behaviors of the animal(s), if alive;
(5) If available, photographs or video footage of the animal(s); and
(6) General circumstances under which the animal was discovered.
(a) To incidentally take marine mammals pursuant to the regulations in this subpart, HRCP 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 the regulations in this subpart.
(c) If an LOA expires prior to the expiration date of the regulations in this subpart, HRCP 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, HRCP must apply for and obtain a modification of the LOA as described in § 217.27.
(e) The LOA shall set forth the following information:
(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 LOA shall be based on a determination that the level of taking will be consistent with the findings made for the total taking allowable under the regulations in this subpart.
(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 217.26 for the activity identified in § 217.20(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 the regulations in this subpart; and
(2) NMFS determines that the mitigation, monitoring, and reporting measures required by the previous LOA under the regulations in this subpart were implemented.
(b) For LOA modification or renewal requests by the applicant that include changes to the activity or the mitigation, monitoring, or reporting that do not change the findings made for the regulations in this subpart 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 LOA in the
(c) An LOA issued under §§ 216.106 of this chapter and 217.26 for the activity identified in § 217.20(a) may be modified by NMFS under the following circumstances:
(1) HRCP may modify (including augment) the existing mitigation, monitoring, or reporting measures (after consulting with NMFS regarding the practicability of the modifications) if doing so creates a reasonable likelihood of more effectively accomplishing the goals of the mitigation and monitoring set forth in the regulations in this subpart.
(i) Possible sources of data that could contribute to the decision to modify the mitigation, monitoring, or reporting measures in a LOA:
(A) Results from HRCP's monitoring from previous years.
(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 the regulations in this subpart 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) If NMFS determines that an emergency exists that poses a significant risk to the well-being of the species or stocks of marine mammals specified in a LOA issued pursuant to §§ 216.106 of this chapter and 217.26, a LOA may be modified without prior notice or opportunity for public comment. Notice would be published in the
Federal Communications Commission.
Final rule.
In this document, the Commission eliminates unbundling requirements, subject to reasonable transition periods, for enterprise-grade DS1 and DS3 loops here there is evidence of actual and potential competition, for broadband-capable DS0 loops and subloops in the most densely populated areas, for operations support systems nationwide except for the purposes of managing remaining UNEs, number portability, and interconnection, and for voice-grade narrowband loops, multiunit premises subloops, and network interface devices nationwide. The Commission preserves unbundling requirements for DS0 loops in less densely populated areas and DS1 and DS3 loops in areas without sufficient evidence of competition. The Commission further eliminates unbundled dark fiber transport provisioned from wire centers within a half-mile of competitive fiber networks, but provides an eight-year transition period for existing circuits so as to avoid stranding investment and last-mile deployment by competitive LECs that may harm consumers. The
Effective February 8, 2021.
For further information, please contact Megan Danner, Competition Policy Division, Wireline Competition Bureau, at
The full text of this document, WC Docket No. 19-308; FCC 20-1522, adopted on October 27, 2020, and released on October 28, 2020, is available for public inspection on the Commission's website at:
1. The Telecommunications Act of 1996 (the 1996 Act) changed the focus of telecommunications law and policy from the regulation of monopolies to the encouragement of robust intermodal competition. Few of its effects were as consequential as ending the local exchange monopolies held by incumbent local exchange carriers (LECs) and opening local markets to competition. To facilitate new entry into the local exchange market, the 1996 Act imposed special obligations on incumbent LECs, including requirements to offer these new competitive carriers unbundled network elements and retail telecommunications services for resale, both on a rate-regulated basis.
2. In the nearly quarter-century since the passage of the 1996 Act, the telecommunications marketplace has transformed from a marketplace dominated by monopolies to a marketplace characterized by competition and technological innovation. Former monopolist incumbent LECs are now one of many intermodal competitors, facing fierce competition from competitive LECs, cable providers, and wireless providers, among others. And that competition has itself shifted from siloed markets to the internet, as increasingly local and long distance voice, data, video, and nearly all communications technologies are delivered via broadband connections. The Commission has repeatedly adjusted the incumbent LEC-specific obligations in the 1996 Act to account for changed circumstances.
3. In this document, we continue on that path of modernizing our unbundling and resale regulations. We eliminate unbundling requirements, subject to a reasonable transition period, for enterprise-grade DS1 and DS3 loops where there is evidence of actual and potential competition, for broadband-capable DS0 loops in the most densely populated areas, and for voice-grade narrowband loops nationwide. But we preserve unbundling requirements for DS0 loops in less densely populated areas and DS1 and DS3 loops in areas without sufficient evidence of competition. We eliminate unbundled dark fiber transport provisioned from wire centers within a half-mile of competitive fiber networks, but provide an eight-year transition period for existing circuits so as to avoid stranding investment and last-mile deployment by competitive LECs that may harm consumers. In all, we end unbundling and resale requirements where they stifle technology transitions and broadband deployment, but preserve unbundling requirements where they are still necessary to realize the 1996 Act's goal of robust intermodal competition benefiting all Americans.
4. The 1996 Act and implementing Commission regulations imposed a number of obligations on incumbent LECs to promote competitive entry into the telecommunications marketplace, including obligations to unbundle network elements to other carriers on a rate-regulated basis and to offer telecommunications services for resale on a rate-regulated basis. In the 24 years since the passage of the 1996 Act, the Commission has continually reviewed and, when warranted, reduced incumbent LEC unbundling and resale obligations to encourage competition and development of advanced telecommunications capability within the changing communications marketplace. The Commission has consistently aimed to promote sustainable facilities-based competition, recognizing that permanent unbundling obligations can reduce incentives for both incumbent and competitive LECs to deploy next-generation networks.
5. Before the enactment of the 1996 Act, incumbent LECs controlled more than 99% of the local voice marketplace because of their “virtually ubiquitous” networks and subsequently low relative incremental costs. To open this monopolized market, Congress required, among other things, incumbent LECs to offer their competitors unbundled network elements and telecommunications services for resale on a discounted basis.
6.
7. The impairment inquiry considers whether a hypothetical “reasonably efficient competitor” would be impaired when lack of access to a particular network element creates a barrier to entry that renders entry uneconomic. The Commission presumes that the reasonably efficient competitor would use “reasonably efficient technologies and take advantage of existing alternative facilities deployment where possible.” The impairment inquiry makes reasonable inferences about competition, including that if competitive providers have successfully entered using their own facilities in one market, other providers could enter similar markets on a similar basis. The Commission's impairment determinations account for the existence of intermodal competition, as “[t]he fact that an entrant has deployed its own facilities—regardless of the technology chosen—may provide evidence that any barriers to entry can be overcome.” Furthermore, the courts and the Commission have interpreted section 251(d)(2)'s “at a minimum” language to allow the Commission to consider other factors “rationally related to the goals of the Act,” even where impairment exists. The Commission has identified broadband deployment, as called for by section 706 of the 1996 Act, as one such goal.
8. When first implementing section 251(d)(2) and adopting the unbundling requirements, the Commission acknowledged that the availability of UNEs to competitive LECs “is a necessary precondition to the development of self-provisioned network facilities.” Consistent with its preference for facilities-based competition, the Commission expected UNEs to provide competitors a means to enter the local marketplace in order to obtain a sufficient subscriber base and revenue to support the development of their own competitive facilities. The Commission also recognized that rural areas face higher deployment costs and longer deployment timeframes.
9.
10.
11. The Commission has broad discretion in analyzing whether the forbearance criteria have been satisfied, and “the agency [may] reasonably interpret[] the statute to allow the forbearance analysis to vary depending on the circumstances.” When the Commission undertakes a competitive analysis, “the statute imposes no particular mode of market analysis or level of geographic rigor.” In addition, the Commission can consider the section 706 goal of fostering the deployment of advanced telecommunications capabilities in making forbearance decisions. In considering forbearance from unbundling obligations, the Commission is entitled to rely on its expert predictive judgment and may balance “the positive short-term impact of unbundling” against the “longer-term positive impact that
12.
13. In its initial orders implementing section 251(c)(3), the Commission adopted nationwide unbundling obligations for local loops used to serve mass market and enterprise customers on a technology-neutral basis, for dedicated and shared interoffice transport, and various other network elements. The courts rejected these initial attempts, in whole or in part, for a variety of reasons, including that overly-broad unbundling is inappropriate. For example, the
14. Following the D.C. Circuit's remand, the Commission issued the
15. In 2004, in response to the D.C. Circuit's remand, the Commission adopted the
16. While the
17. More recently, in 2019, in response to USTelecom's petition for forbearance, we granted forbearance from certain loop and transport unbundling and resale obligations that had become increasingly outdated due to competitive fiber deployment, technological change, and intermodal competition. Throughout this Order, when referencing the
18.
19. In November 2019, we adopted the
20. Various parties, particularly incumbent and competitive LECs, vigorously debated the issues raised by the
21. On September 14, 2020, INCOMPAS, USTelecom, and many of their respective members, representing a majority of buyers and sellers of UNE Dark Fiber Transport, additionally reached a compromise proposal with regard to UNE Dark Fiber Transport. The parties agreed that the Commission should forbear and find non-impairment vis-a-vis Tier 3 wire centers located within half a mile of alternative fiber, subject to an eight-year transition period for existing UNE Dark Fiber Transport.
22. The communications marketplace has dramatically transformed since Congress passed the 1996 Act. Incumbent LECs controlled 99.7% of the local telephone service market at that time. Incumbent LECs' wireline voice subscriptions now account for only approximately 39% of all wireline voice
23. The communications marketplace has also seen rapid technological change. In the enterprise services marketplace, DS1 and DS3 loops, dominated by incumbent LECs, have been increasingly replaced by packet-based services, provided by a range of providers who benefit from a “considerably more level playing field” compared to TDM-based services. The copper-to-fiber and TDM-to-IP transitions have also increasingly reached residential consumers, as incumbent LECs have been retiring last-mile copper and replacing it with fiber or fixed wireless technologies. And of course, American consumers have themselves transitioned to newer technologies, increasingly moving from fixed legacy voice to fixed or nomadic voice over internet protocol (VoIP) and mobile voice services, and from DSL to broadband provided over fiber and fixed and mobile wireless. The widespread deployment of 5G wireless networks will only accelerate this process.
24. In this document, we modernize our unbundling rules in light of the dramatic changes to the communications marketplace since 2004, when the Commission last examined unbundling obligations through the impairment lens. We eliminate, subject to a transition period, unbundling obligations for loops, transport, and other elements where record evidence shows that they are no longer necessary for reasonably efficient competitors to enter the market. Recognizing that some unbundling obligations have continued benefits in providing competitive telecommunications services and broadband access in rural areas, where competitive entry is harder because of entry barriers to fixed broadband services, including sunk costs, we maintain several unbundling requirements, including for mass market broadband-capable loops in less densely populated areas. Sunk costs are investments that have no scrap value or value in an alternative use,
25. Loops are the “last mile of a carrier's network,” connecting end-users to the network to access voice, broadband, and other technologies. Under existing law, incumbent LECs must provide at least some limited unbundled access nationwide to (1) DS1 and DS3 loops and associated subloops, (2) DS0 loops and associated subloops, and (3) the TDM-capabilities, features, and functionalities of hybrid copper-fiber loops. Subject to previous grants of forbearance, incumbent LECs must also provide unbundled access to UNE Analog Loops in non-price cap incumbent LEC service areas and to 64-kbps channels over fiber loops that were ordered before 2015.
26. We proposed in the
27.
28. In explaining these findings, the Commission noted that its “selection of specific criteria is not an exact science, and the Commission may exercise line-drawing discretion when rendering determinations based on agency expertise, our reading of the record before us, and a desire to provide an easily implemented and reasonable bright-line rule to guide the industry.” The Commission limited the availability of these UNEs to ten UNE DS1 Loops and one UNE DS3 Loop per building, respectively, finding that competitors are more likely to self-provision higher capacity loops at a certain level of bandwidth demand because of the greater economic feasibility resulting from the fact that “revenue opportunities increase with the capacity level.” It also indicated that even these revised unbundling obligations were designed to be removed “over time as carriers deploy their own networks and downstream local exchange markets exhibit the same robust competition that characterizes the long distance and wireless markets.”
29. In the more recent
30. Relying upon the most comprehensive data collected from both purchasers and providers of BDS services to date, including circuit-based and packet-based BDS providers and significant providers of best-efforts services, and Form 477 data, the Commission created a Competitive Market Test to determine which counties are competitive for purposes of business data services. Best-efforts services are internet access services generally marketed to residential and small business consumers, rather than enterprise consumers. Unlike dedicated packet-based BDS, best-efforts services often provide asymmetrical speeds and lack service performance guarantees. While the Commission found in the
31.
32. Given the demands for ever-increasing broadband speeds, and packet-based services, we find that a reasonably efficient competitor would not use UNE DS1 and DS3 Loops as a reasonably efficient technology for entering the enterprise services market in the Competitive Counties. The communications marketplace today is dramatically different from the one that existed when the Commission last addressed impairment over a decade ago. Incumbent LECs were the dominant providers of TDM-based DS1s and DS3s in 2004, and cable was only beginning to make inroads into the enterprise services market at that time. Today, TDM-based DS1 and DS3 loops are becoming obsolete in the face of increasing bandwidth demands and the transition to IP-based networks and services. Their availability will become further constrained as incumbent LECs move forward with retiring their copper facilities, deploying packet-based services, and phasing out TDM services like DS1 and DS3 business data services. Indeed, the Commission found in the
33. This actual and potential competition comes in many forms, including from cable and fixed wireless providers who entered, or are entering, the market without reliance on UNEs. The record demonstrates that cable providers are even more significant competitors for enterprise services today than they were when the Commission explained their significance three years ago in the
34. We realize that the
35. Some competitive LEC commenters assert that the Commission's reliance on the
36. We also disagree with competitive LEC objections to the Commission taking into consideration competition from cable providers in conducting its impairment analysis. Cable providers are much more significant competitors for enterprise services than they were 15 years ago when the Commission initially considered their role in the marketplace for determining unbundling obligations for DS1 and DS3 loops. Indeed, only three years later in the
37. We also reject commenter arguments concerning the
38. We are further unpersuaded by commenter assertions that the findings in the
39.
40.
41.
42.
43.
44. We also decline to eliminate UNE DS1 and DS3 requirements in grandfathered counties, as one commenter requests. The
45.
46.
47. Our decision to adopt modified and different transition timeframes for these enterprise UNE loops is based on both record evidence and the Compromise Proposal between and among a majority of incumbent and competitive LEC stakeholders and participants in this proceeding, each of which individually would have preferred a shorter or longer transition period having different accompanying conditions than what their compromise proposal suggests. The Commission has long found compromise proposals negotiated by interested parties representing different interests to be reasonable and to serve the public interest. We acknowledge, however, the need to base our findings on an independent rationale. We find the transition periods contained in the Compromise Proposal to be reasonable and in the public interest, based both on the record in this proceeding and because the proposal has been advanced by most of the major buyers and sellers of these UNEs. We therefore adopt the following transition timeframes for eliminating the availability of UNE DS1 and DS3 Loops. We also reject Verizon's assertion that we should modify the “provision-then-dispute” process adopted in the
48. First, we permit competitive LECs to order new UNE DS1 Loops for 24 months after the effective date of this order. This timeframe will enable competitive LECs to continue to execute short-term business plans and honor contractual obligations with new or existing customers, including small businesses, while they determine which alternative voice service option will best serve their customers' needs. Second, we adopt a 42-month grandfathering period for UNE DS1 Loops for all competitive LEC customers. We adopt a 36-month grandfathering period for UNE DS3 Loops for all competitive LEC customers, with no period included for new orders. The record demonstrates that demand for UNE DS3 Loops is
49. We reject proposals for either a longer transition period or a shorter transition period and find the Compromise Proposal to be reasonable. Indeed, Puerto Rico Telephone Company, which was not a party to the INCOMPAS-USTelecom Compromise Proposal, supports the DS1 relief, transition period, and associated conditions because as a whole, it “strikes a reasonable balance that modernizes regulatory requirements and promotes competition,” providing additional evidence of its reasonableness. We find that these transition periods will provide competitive LECs with sufficient time to make alternative arrangements, particularly given the availability of DS1 and DS3 BDS channel terminations as discussed above, without continuing to impose these burdensome and costly requirements on incumbent LECs for longer than necessary.
50. The 42-month transition timeframe within which all UNE DS1 Loops (including any new UNE DS1 Loops ordered during the first 24 months) and the 36-month transition timeframe within which all UNE DS3 Loops must be transitioned to alternative arrangements will commence on the effective date of this order. These transition periods should provide more than enough time for competitive LECs and their customers to transition to alternative voice and broadband service arrangements as evidenced by the willingness of the major competitive LEC trade association and the majority of its members to support this timeframe. Competitive LECs that have provided record information about the length of their customer contracts have typically referenced contract lengths of a minimum of three years with business or government customers. To the extent competitive LECs have entered into longer-term contracts with their customers without securing long-term contracts with their suppliers, they have done so at their own risk like any other business does, and we see no reasonable basis for accommodating that risk. Moreover, the fact that the major incumbent LECs currently subject to these unbundling obligations have agreed to support this transition timeframe suggests the burdens they claim to incur as a result of continuing to provide such UNEs during the transition are outweighed by the benefit of a compromised transition proposal.
51. In addition, during the relevant transition periods for any competitive LEC customer, any UNE DS1 and DS3 Loops that a competitive LEC leases as of the effective date of this order shall be available for lease from the incumbent LEC at regulated UNE rates. Such rates are established either through negotiated interconnection agreements or through state-commission-arbitrated rates applying certain Commission-developed pricing formulas. Our forbearance action is not intended to upset pre-existing interconnection agreements or other contractual arrangements that may currently exist nor pre-existing state-commission-arbitrated rates during the transition period (including any already-adopted state commission scheduled changes in UNE rates), which should quell concerns of those fearing near-term price increases for UNE DS1 and DS3 Loops resulting from this Order. Of course, the transition mechanism we adopt is simply a default process, and competitive LECs and price cap LECs remain free to negotiate different arrangements superseding this transition period and replacing UNE DS1 and DS3 Loop arrangements with negotiated commercial arrangements at any earlier time. We find this approach will ensure an orderly transition for end-user customers of affected competitive LECs by mitigating any immediate rate changes that could otherwise be experienced by these end users if current rates for UNE DS1 and DS3 Loops were immediately eliminated. The transition timeframes we adopt will also work to ensure that consumers do not experience any undue service disruption as a result.
52. We proposed in the
53. Section 51.319(a)(1) of our rules requires incumbent LECs to make available on an unbundled basis digital copper loops and two-wire and four-wire copper loops conditioned to transmit digital signals (collectively, DS0s or UNE DS0 Loops). We exclude from the purview of this term UNE Analog Loops, which are addressed separately below. UNE DS0 Loops are used predominantly to serve residential and small and medium businesses. UNE Copper Subloops are the portions of the copper DS0 loops that are used to connect certain end-user premises with local loops.
54. USTelecom, INCOMPAS, and most of their members participating in this proceeding agree that, subject to the applicable transition period and associated conditions we adopt for UNE DS0 Loops in this Order, competitive LECs are no longer impaired without access to UNE DS0 Loops in urbanized areas. We agree with this assessment. We also find that continued unbundling of those network elements in urbanized areas frustrates the goal of ensuring deployment of advanced communications capability. Independently, we conclude that forbearance from the UNE DS0 Loop obligation is warranted in urbanized areas, subject to the transition period and associated conditions we adopt. Our findings of non-impairment and forbearance from UNE DS0 Loops and UNE Copper Subloops requirements do not apply to UNE DS0 Loops and associated UNE Copper Subloops in less densely populated urban clusters or rural areas where the record and Commission data do not provide sufficient evidence of entry by facilities-based competitors, intermodal or otherwise, without the use of UNE DS0 Loops.
55.
56. In the past 17 years, the communications marketplace has dramatically changed. The most recent data at the time that the DS0 unbundling requirements were adopted showed that wireline switched access was the leading form of telecommunications, and incumbent LECs were the dominant providers of wireline switched access. It followed that unbundling requirements were focused on providing competitive LECs with the network elements, such as local loops, to provide wireline switched access in competition with incumbent LECs. The data available in early 2003 reported 187.5 million wireline switched access lines, with incumbent LECs providing approximately 167.5 million of those lines, about 88% of the total. Cable providers reported serving only 2% of all switched access lines (via coaxial cable) in the reported data available when the Commission adopted the
57. The change over 17 years has been even more dramatic for broadband. In 2003, the Commission defined advanced services as transmission speeds of more than 200 kbps both upstream and downstream, and found just over 20 million mass market advanced service lines in use. The Commission now defines fixed broadband as speeds of at least 25/3 Mbps, and it was available to approximately 96% of all Americans by the end of 2019. We exclude Barrier Communications Corporation's deployment data from our analysis because of inaccuracies and overstatements in that company's Form 477 filings. While the Commission does not yet consider satellite broadband to be a substitute for wireline broadband, the Commission found that “[i]f we include satellite service in our estimate, the December 2018 data shows that fixed 25/3 Mbps service is deployed to nearly every American.” Further, more than 87% of Americans had access to fixed speeds of 250/25 Mbps by the end of 2019. Deployment of last-mile fiber loops, which was not widespread in 2003, has expanded extensively. Between 2014 and 2019, residential subscription to a fiber based broadband service more than doubled, increasing from 8.3 million to 16.7 million. And mobile broadband, provided via LTE technology, which did not even exist in 2004, is now available in geographic areas covering virtually all Americans. Approximately 96% of Americans now have access to both 25/3 Mbps terrestrial broadband and
58.
59.
60. Intermodal competition in the form of cable competition alone is enough to establish the existence of sufficient competition even in the absence of UNEs. Nearly all households in urbanized areas (98%) live in census blocks served by cable broadband with speeds of at least 25/3 Mbps, and incumbent LECs have deployed broadband meeting this speed threshold in 73% of these areas. Incumbent LEC affiliation is determined at the holding company level and for all census block which the incumbent LEC's study area overlaps the census block. We exclude a provider's deployment if the provider is not an incumbent LEC and whose last mile connection is based upon a copper technology (
61. Moreover, it is our predictive judgment, supported by the record, that reasonably efficient competitors seeking to enter the fixed voice and broadband marketplace in urbanized areas for residential and small business customers are likely to use a variety of technologies, including fixed wireless, rather than relying upon the existing copper-based local loop network or building a similar network. That is, the use of DS0 loops to enter the broadband and voice marketplace in urbanized areas is no longer a reasonably efficient technology. Indeed, the three national mobile wireless carriers continue to invest in 5G-based fixed wireless service, which will provide additional fixed-service choices for voice and broadband services, particularly in dense urbanized areas where 5G is being first deployed and where small cell technology is most efficiently used. And other fixed wireless providers are similarly deploying innovative solutions. The record also indicates that a range of providers are deploying fiber-to-the-home networks, including but not limited to incumbent and competitive LECs. To the extent competitive LECs claim they remain dependent upon UNE DS0 Loops in these urbanized areas to serve new customers in order to obtain the necessary scale and revenue to fund such fiber-to-the-home builds, we no longer find these claims compelling. These competitive LECs are not “new entrants” in these urbanized areas any longer, and network expansion like that for other types of technology providers should no longer be based on unnecessary unbundled DS0 loops. These and other technologies, rather than copper loops, are reasonably efficient methods of entry into urbanized areas today.
62. Our conclusions about actual and potential competition are supported by our “at a minimum” authority under section 251(d)(2). We are not only permitted to look to the impact of unbundling requirements on broadband deployment as “rationally related to the goals of the Act,” but are required to take this important policy goal into account. We reject the Electronic Frontier Foundation's argument that we should reconsider our decisions in the 2000s to end the unbundling of fiber-to-the-home loops. As the Commission has consistently found, unbundling fiber-based loops could reduce the incentives for both incumbent and competitive LECs to invest in next-generation networks, and there is no evidence to suggest that unbundling's effect on incentives to invest would be any different in low-income urban markets. In doing so, we find that continued unbundling of DS0 loops would inhibit, rather than promote, broadband deployment and the transition to next-generation networks and services in urbanized areas, because continued unbundling at regulated rates could artificially slow the transition away from legacy services and reduce incentives to invest in more advanced technologies, such as fixed wireless and fiber-based networks.
63. While we proposed in the
64.
65.
66.
67.
68.
69. Alternatively, other commenters urge us to make our findings of no impairment or forbearance on a county basis rather than on a census block basis, as proposed in the
70.
71.
72.
73.
74.
75.
76. We reject proposals calling for either a longer transition period or a shorter transition period. We find this four-year period to be a reasonable time frame that is sufficient to enable competitive LECs in these urbanized areas to transition away from depending on UNE DS0 Loops without stranding any investments they may have made while not burdening incumbent LECs with the costs of unbundling longer than necessary. We note that Puerto Rico Telephone Company, which was not a party to the INCOMPAS-USTelecom Compromise Proposal, supports the UNE DS0 relief, transition period, and associated conditions as a “reasonable balance.”
77. During the relevant transition period for any competitive LEC customer, any UNE DS0 Loops that a competitive LEC leases as of the effective date of this Order shall be available for lease from the incumbent LEC at regulated UNE rates. Such rates are established either through negotiated interconnection agreements or through state-commission-arbitrated rates applying certain Commission-developed pricing formulas. Our forbearance action is not intended to upset pre-existing interconnection agreements or other contractual arrangements that may currently exist nor pre-existing state-commission-arbitrated rates during the transition period (including any already-adopted state commission scheduled changes in UNE rates), which should quell concerns of those fearing near-term price increases for UNE DS0 Loops resulting from this Order. However, beginning with month 37 of the grandfathering period, incumbent LECs may raise their prices by up to 25%. Delaying any price increase for the first three years of the transition period should obviate concerns about economic pressure accompanying any such increase. However, allowing a price increase during the final year of the transition will further incentivize competitive LECs to transition their customers off of legacy networks. And incumbent LECs will be entitled to charge market rates after month 48, when the grandfathering period will expire. And incumbent LECs have committed to providing commercial alternatives for DS0s at the end of the transition period where the facilities exist to do so. Of course, the transition mechanism we adopt is simply a default process, and competitive and incumbent LECs remain free to negotiate different arrangements superseding this transition period and replacing UNE DS0 Loop arrangements with negotiated commercial arrangements at any earlier time. We find this approach will ensure an orderly transition for end-user customers of affected competitive LECs by mitigating any immediate service disruption or rate changes that could otherwise be experienced by these end users if current rates for these UNE DS0 Loops were immediately eliminated.
78. In the
79.
80. UNE Analog Loops are one type of copper loop that incumbent LECs must make available to competitors under the Commission's rules implementing section 251(c)(3). Notably, UNE Analog Loops are capable of providing only legacy TDM voice service, often referred to as plain old telephone service, or “POTS.” UNE Analog Loops, by definition, are not capable of providing or supporting digital communications, including modern IP-based services or even digital subscriber line (DSL) service. In the recent USTelecom forbearance proceeding, we granted forbearance relief from unbundling requirements for UNE Analog Loops to price cap incumbent LECs in their service areas. We granted this relief due to extensive intermodal competition present in the voice marketplace, the harmful marketplace distortions generated by outdated regulations, and because the continued existence of UNE Analog Loops reduced incentives for both incumbent and competitive LECs to invest in their own facilities and to transition to next-generation networks.
81. UNE Hybrid Loops are another type of loop that incumbent LECs must make available to competitors under the Commission's rules implementing section 251(c)(3). Hybrid loops are local loops “composed of both fiber optic
82. The UNE 64 kbps Voice-Grade Channel Over Fiber Loops obligation was created when the Commission eliminated unbundled access to fiber-based local loops because, among other reasons, requiring unbundling of fiber-based local loops would “undermine important goals of the 1996 Act,” particularly the section 706 goal to encourage the deployment of advanced telecommunications capability to all Americans. The Commission found, however, that where an incumbent LEC has retired its copper facilities, lack of access to an incumbent LEC fiber loop would impair a competitive carrier in its provision of narrowband voice services it had been providing over the unbundled copper loop. In essence, this “very limited” requirement was intended to prevent incumbents from exercising their “sole control” over the disposition of copper loops (by retiring the copper loop and replacing it with a fiber-based local loop) to disrupt competitors' provision of narrowband services. By 2015, the Commission recognized that this requirement itself could undermine incentives for broadband deployment and granted forbearance on a forward-looking basis to incumbent LECs from the requirement to make available a 64 kbps voice-grade channel over overbuilt fiber loops. This 64 kbps unbundling requirement remains in the Code of Federal Regulations. The Commission found that this unbundling requirement could impede copper loop retirements and the ongoing transition from copper to fiber and from legacy TDM-based services to next-generation networks and services. While the Commission found that this UNE had a “decreasingly relevant purpose” as a safeguard to protect narrowband voice competition during the copper-to-fiber transition, it nevertheless retained the 64 kbps voice-grade channel unbundling obligation for existing users.
83. UNE Narrowband Voice-Grade Loops, be they UNE Analog Loops, UNE Hybrid Loops, or UNE 64 kbps Voice-Grade Channel Over Fiber Loops, are used, if at all, almost exclusively for the provision of switched access voice-grade service, which we have found customers are migrating away from in favor of IP- and wireless-based voice services provided by multiple intermodal providers. Our conclusions in the
84.
85.
86. Second, intermodal competition for voice services is so advanced that competitive providers, including cable providers, wireless providers, and other VoIP providers, have come to dominate the voice service marketplace. The level of competition, much of which evolved without UNEs, is such that the cost of unbundling can no longer be justified. As the Commission noted in 2004, impairment can only be found for low-capacity loops “
87. Finally, the declining share of incumbent LEC switched-access voice subscriptions in recent years and the prevalent deployment of facilities-based alternatives indicates that incumbent LECs no longer have a unique position in the voice service market. We further find that continued unbundling of these network elements that serve only to preserve outdated legacy voice services slows the transition to next-generation networks and services in contravention of our significant policy objectives in promoting the deployment of advanced telecommunications capabilities. Our decision to eliminate UNE Narrowband Voice-Grade Loop obligations furthers the Commission's ultimate goal of fostering the deployment of next-generation networks and services and consumers' migration to next-generation services.
88.
89.
90.
91.
92.
93.
94.
95.
96. No commenters specifically argued for a longer or shorter transition period for UNE Narrowband Voice-Grade Loops. We disagree with commenters who made more general assertions that the transition period for these and other UNEs should be shorter than three years for existing customers. We reason that three years is appropriate in this case to alleviate any potentially negative impact on previous investments in legacy customer premises equipment and service disruption.
97. We also disagree with commenters who made general assertions there should be a longer transition period to place new orders and for existing customers to continue services. UNE Narrowband Voice-Grade Loops are no longer an “integral part of the competitive landscape,” and thus three years is sufficient to protect against service disruption, based on the record evidence that these UNEs are not extensively leased or relied upon nationwide. We find that a period longer than three years is unjustified and not in the public interest as it does not coincide with the Commission's policy goal of advancing next-generation networks and services.
98. As with all UNE relief, we recognize that the transition mechanism we adopt today is simply a default process, and carriers remain free to negotiate alternative arrangements superseding this transition period. Our transition mechanism also does not replace or supersede any commercial arrangements carriers have reached for the continued provision of facilities or services. Therefore, we adopt a three-year transition of existing UNE Narrowband Voice-Grade Loops, commencing on the effective date of this Order.
99. In the
100.
101.
102. INCOMPAS and NWTA assert that competitive LECs “serving MTEs face significant barriers to entry because of the many anticompetitive practices imposed by MTE owners and managers”—not incumbent LECs—and allude to these anticompetitive practices as “incumbent providers and MTE owners entering into sale-and leaseback agreements”—which are largely agreements between cable providers and building owners. Indeed, most of the arguments against sale-and-leaseback arrangements in the MTE Docket contend that they are used by building owners and cable providers to circumvent the Commission's cable inside wiring rules, which only apply to certain video providers and not incumbent LECs. This argument is not directed at incumbent LECs, nor does it demonstrate that incumbent LECs face lower barriers to entry than competitive
103. Granting relief from this stand-alone requirement will not disrupt any policy decisions that we may make in other proceedings examining competition in multiunit premises. Although competitive LECs have asserted that special barriers still exist to accessing multiunit premises, we find that concerns about access to multiunit premises should be and would be better addressed in the MTE proceeding, where we are considering ways to improve competitive broadband access to multiple tenant environments, and where any action we take would apply to a broader group of providers rather than only incumbent LECs. The Commission found in the
104. The record further supports nationwide elimination of Multiunit Premises UNE Subloops as only a
105.
106. The Commission's rules prohibiting LECs from entering into exclusive access contracts with the owners of residential multiunit premises serves to protect consumers in accordance with section 10(a)(2) of the Act. Multiunit Premises UNE Subloops are also unnecessary to protect consumers given their lack of use. We further find that retaining this requirement would not be in the public interest as it would contravene the Commission's and the 1996 Act's broadband deployment goals—that is, “it would deter competitors from deploying their own facilities to reach the premises and ensuring durable competition for the business of its tenants.” Elimination of unbundling mandates will incentivize and promote new deployment by competitive LECs and broader commercial access to the incumbent LECs' facilities to thereby achieve lasting facilities-based competition consisted. Therefore, consistent with section 10(a)(3) of the Act, forbearing from Multiunit Premises UNE Subloops would serve the public interest. Accordingly, we find that forbearance from Multiunit Premises UNE Subloops meets the statutory requirements of section 10(a) of the Act.
107.
108.
109.
110.
111. Consistent with our proposal in the
112.
113. The
114. In the
115. In the
116.
117. Absent UNE Dark Fiber Transport, competitive LECs have been able to use alternatives such as commercial dark fiber, access to which has expanded greatly since we ordered UNE Dark Fiber Transport. Further, as we observed in the
118. The rules we adopt in this document modernize our dark fiber unbundling requirements to reflect changes in the marketplace since 2004, when we last revised our UNE Dark Fiber Transport rules. At that time, the Commission limited the extent to which incumbent LECs were obligated to provide UNE Dark Fiber Transport by finding that, under the impairment standard, competitive LECs are not impaired without access to UNE Dark Fiber Transport where both wire centers are classified as either Tier 1 or Tier 2 wire centers. As a result, the unbundling obligations for interoffice dark fiber only applied where at least one terminating end point is a Tier 3 wire center. The Commission has described Tier 3 wire centers as those that “show a generally low likelihood of supporting actual or potential competitive transport deployment.” We refer to these Tier 3 wire centers as “UNE triggering” wire centers. In this document, however, the record reflects that alternative fiber with respect to Tier 3 wire centers has expanded tremendously, indicating that competitive LECs are no longer impaired without the use of UNE Dark Fiber Transport where there is competitive fiber with a half-mile. One commenter suggests that the Commission should also “consider expanding its rural exemption for all elements of its NPRM, should it adopt its proposals,” including UNE Dark Fiber Transport. However, as discussed below, neither the impairment inquiry nor the forbearance criteria distinguish as between rural and urban communities. While we may, for example, extrapolate from routes when examining impairment, and look to,
119. While we observed in the
120. The record demonstrates that where alternative fiber exists within a half mile of a wire center, entry is possible—
121. We disagree with commenters that argue that new UNE Dark Fiber Transport remains essential to entry even where alternative fiber exists. Competitive LECs have claimed that unbundled dark fiber is essential to provisioning service, reaching new customers, and that alternative fiber is sometimes unavailable. Several competitive LECs have in fact used unbundled access to interoffice dark fiber and other UNEs to obtain a sufficient customer base within an incumbent LEC's local market, thus generating enough revenue to eventually build a competing fiber network. The use of UNE Dark Fiber Transport has then allowed many competitors to gradually deploy their own last-mile fiber networks to offer service to consumers, competing directly with incumbent LECs for market share. These arguments fail to engage with the impairment standard, however. While UNE Dark Fiber Transport may have helped new entrants to
122. One commenter argues that the impairment inquiry cannot simply look at whether there is alternative fiber within a half mile of a wire center; rather, it contends that a more granular analysis of whether alternative fiber reaches the same destination is necessary to determine if entry into a particular market is economically feasible, because switching to alternative fiber is otherwise not an option for existing providers. However, the impairment inquiry only asks if a reasonably efficient competitor could enter the market, as evidenced here by the existence of alternative fiber. Whether these competitors then make their fiber commercially available for other providers is not at issue. One commenter has contended that the “presence of competitive fiber within a half-mile of a wire center provides no insight as to the economic viability of such fiber deployments.” However, the Commission may use proxies and draw inferences therefrom rather than analyzing every route individually. In so doing, however, Uniti Fiber claims that the Commission must evaluate routes that are “similarly situated with regard to `barriers to entry,' ” and that “inferring no impairment in
123. Further, incumbent LECs claim they see little demand for unbundled dark fiber from competitive LECs and argue that UNE Dark Fiber Transport constitutes a small proportion of available dark fiber transport overall. Verizon reiterates that it both uses and sells a
124.
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129. Such a transition period for existing UNE Dark Fiber Transport avoids stranding significant investment by competitive LECs and negatively impacting their customers, including those in remote locations. Competitive LECs claim that a loss of UNE Dark Fiber Transport would result in abandoned service in such areas. Specifically, investment into fiber to the home and fiber rings may be abandoned, and some recent awards of government support grants for broadband deployment (
130. Incumbent LECs, however, argue that UNE Dark Fiber Transport constitutes a small portion of their dark fiber transport overall. Because this unbundled element comprises such a minute portion of incumbent LECs' business, this suggests that a lengthier period than we adopt for other UNEs today would have a relatively smaller effect on incumbent LECs. And as we have explained, the “at a minimum” language in section 251(d)(2) allows the Commission to consider other factors “rationally related to the goals of the Act,” including deployment of broadband, access to which may be impaired. Given the relatively smaller cost to incumbent LECs, we thus find that permitting competitive LECs to continue using UNE Dark Fiber Transport will avoid potential waste and safeguard existing customers.
131. One commenter also argued that competitive LECs should only be allowed to maintain UNE Dark Fiber Transport subject to capacity limits. The commenter claimed that the Commission should “make clear that purchasers are limited to using [UNEs] for transport capacities of no more than the equivalent of 12 DS3s,” claiming that in the
132. However, the rationale for limiting transport with respect to DS3s is inapplicable as applied to dark fiber. In the
133. Many incumbent LECs argued for a short transition period for existing UNE Dark Fiber Transport of only a few years. Prior to agreeing to an eight-year transition period, various incumbent LECs or their representatives argued for transition periods as short as 18 months but no longer than three to five years. However, we agree with competitive LECs that argue that these timelines are too short under the circumstances. For example, proponents of a longer transition timeframe argue than an abbreviated transition periods “downplay[] the costs of, and other barriers to, overbuilding existing, unused interoffice dark fiber transport routes,” which even over “the short period of a few years” can “easily run[] into the tens, if not hundreds, of millions of dollars.” In addition, we recognize that carriers may face other deployment issues, including state and local restrictions such as on rights-of-way, “attaching facilities to bridges or prohibitions on boring river levees,” as well as other “local terrain challenges,” at least in some areas dark fiber might not be easily replaceable in some areas in the short term. Considering these possibilities at the same time competitive LECs are transitioning to alternative solutions for unbundled loops that they may be relying on, the result could be that higher capacity advanced services may become unavailable in some areas where competitive LECs providing these services currently rely on UNE Dark Fiber Transport. Given the costs and time needed for deploying new replacement transport facilities at the same time these same competitive LECs are deploying alternative loop facilities, customers of these services could be forced to go without for potentially significant periods of time. Our longer transition period addresses this potential unintended consequence.
134. We do not believe that our eight-year transition period will significantly reduce incentives for continued deployment. Competitive LECs reliant on UNE Dark Fiber Transport have shown their propensity to deploy their own fiber as soon as they can to transition to their own network facilities and eliminate dependence on the incumbent LEC completely. We believe this transition timeframe will provide sufficient time for them to do so without unduly disrupting their customers and better advance broadband deployment than if these same competitors prematurely lost access to their existing UNE Dark Fiber Transport and instead withdrew from certain geographic markets entirely.
135. On the other hand, we do not believe indefinite grandfathering would be appropriate. Although some commenters convincingly argue that a longer period of time than the three years proposed in the
136. In the
137. Under our current rules, incumbent LECs must offer nondiscriminatory access to their operations support systems, or OSS, for qualifying services on an unbundled basis. OSS consists of pre-ordering, ordering, provisioning, maintenance and repair, and billing functions supported by an incumbent LEC's databases and information. The Commission previously found that the UNE OSS “requirement includes an ongoing obligation on the incumbent LECs to make modifications to existing OSS as necessary to offer competitive carriers nondiscriminatory access and to ensure that the incumbent LEC complies with all of its network element, resale and interconnection obligations in a nondiscriminatory manner.” OSS is used to provision other UNEs, and it is also a separate stand-alone UNE that is used for interconnection and other purposes, including number porting. The Commission required incumbent LECs to provide OSS on an unbundled basis in the
138.
139. We decline to find lack of impairment with regard to UNE OSS used for interconnection and number portability, however, as the record indicates that UNE OSS still plays an important role with respect to these critical local competition tools. Some competitive LECs and cable providers raised network interconnection and number portability implications if this real-time electronic interface is not maintained. Consistent with these comments and the comments of the majority of the LEC stakeholders commenting on this issue recognizing the importance of preserving continued UNE OSS access for these purposes, we maintain the status quo of UNE OSS for purposes of local interconnection and local number portability.
140.
141. We note that elimination of OSS unbundling obligations, as specified above, will not adversely impact public safety. Unbundled access to 911 and E-911 databases will remain available and the
142.
143. The
144. In August 2019, we granted price cap incumbent LECs forbearance from the Avoided-Cost Resale requirement based on “the breadth of the voice service marketplace and the number of wholesale input alternatives to competitive LECs seeking to continue serving customers currently served by Avoided-Cost Resale” and given that “Avoided-Cost Resale requirements . . . serve only to prolong dependence on legacy TDM voice services rather than pave the way for meaningful facilities-based competition over next-generation networks providing advanced communications capability.” We followed that action by seeking comment in the
145. As we found in the
146. The obligations and responsibilities imposed on incumbent LECs by the 1996 Act were “designed to open monopoly telecommunications markets to competitive entry.” This carefully crafted design applies equally to UNEs and Avoided-Cost Resale. Granite, the primary commenter on this issue, asserts that the Commission conflated UNEs and Avoided-Cost Resale in granting forbearance from the latter in the
147.
148.
149.
150.
151. We reject Granite's argument that we cannot consider the public interest benefits of facilities-based competition and expediting the transition to next-generation networks in a forbearance analysis. Indeed, the D.C. Circuit has specifically approved of the Commission considering section 706 goals in a forbearance analysis. Moreover, section 10's public interest determination gives the Commission broad discretion as to what public interest factors it may consider in determining whether section 10(a)(3)'s prong has been met. Commenters raise no new arguments opposing forbearance from the Avoided-Cost Resale requirements to non-price cap LECs than they did in opposing forbearance from those requirements for price cap LECs, except to point to fewer alternatives being available in rural locales. We address their arguments in detail below. However, as we noted above, rural incumbent LECs are largely exempt from the Avoided-Cost Resale requirements.
152. Moreover, we are unpersuaded that extending forbearance from Avoided-Cost Resale requirements to non-price cap incumbent LECs will provide incentives for incumbent LECs to harm competition and consumers. This argument stems almost wholly from the claimed potential for increased rates that might make particular competitors such as Granite unable to continue providing service to their end-user customers via commercial service offerings that Granite has negotiated with certain incumbent LECs. As we have repeatedly reminded Granite and others, however, the 1996 Act's market-opening provisions were put in place to protect competition, not specific competitors or particular business plans. And nothing in this Order eliminates the availability of TDM-based services. Eliminating the subsidy for legacy services that make them available at a lower price, though, may lead to greater adoption of next-generation services and further Congress's goal and the Commission's mission of encouraging the deployment of advanced communications capabilities.
153.
154. Regardless, when an incumbent LEC retires its copper, which it can do on 90-days' notice and without a need to first obtain Commission authorization, customers will still receive the same TDM-based service, albeit without the legacy feature of line power. At such point, when TDM service is provided over fiber, it requires the use of backup power to operate during power outages. In addition, where copper loops still exist and incumbent LECs provide voice telecommunications services over those loops, copper-based TDM service will remain available for resale under section 251(b)(1) regardless of our forbearance herein. Competitive LECs in non-price cap areas will also be able to purchase these services pursuant to commercially negotiated agreements, which is how they currently purchase the majority of their resold services.
155. Opponents of forbearance also point to the occurrence of natural disasters to support the continued necessity of Avoided-Cost Resale, thereby limiting their argument to TDM-based services provided over copper rather than fiber facilities. However, those same natural disasters can and do lead to expedited copper retirements, meaning that the TDM-based services available for resale are no longer line powered. Indeed, copper tends to perform more poorly in many such situations whereas fiber is more resilient and faces lower outage risks from weather events and aging. The Commission specifically adopted rules in 2017 expressly to accommodate such circumstances, as well as expedited copper retirements resulting from other circumstances outside the incumbent LEC's control. Assertions by the California PUC and Michigan PSC that we must consider public safety concerns are subject to this same response given that no actions taken in this Order remove the availability of legacy TDM-based services.
156.
157.
158.
159.
160. In any event, UNE DS0 Loops will remain available in rural and urban cluster census blocks, and UNE DS1 and DS3 Loops will continue to be available in non-competitive counties, to the extent the incumbent LEC is not entitled to the rural LEC exemption. Moreover, we find today and similarly found in the
161.
162.
163.
164. Accordingly, we condition our grant of forbearance from non-price cap LEC Avoided-Cost Resale obligations on a three-year grandfathering period. This transition period will begin on the effective date of this Order. During the relevant transition period, any Avoided-Cost Resale services that a competitive LEC purchases as of the effective date of this order shall be available for purchase from the incumbent LEC at regulated rates. Wholesale discounts are established either through negotiated interconnection agreements or through state-commission-Avoided-Cost Resale rate studies applying certain Commission-developed pricing formulas. Our forbearance action is not intended to upset pre-existing interconnection agreements or other contractual arrangements that may currently exist nor pre-existing state commission wholesale discount rates during the transition period (including any already-adopted state commission scheduled changes in the discount rates), which should quell concerns regarding near-term price increases following forbearance from Avoided-Cost Resale obligations. As with the transition for price cap LEC Avoided-Cost Resale, we find this transition period will minimize the impact of any immediate rate increase for end-user customers of affected competitive LECs that could otherwise occur if current pricing for these services were immediately eliminated. Further, the process that we describe is a default process from which competitive LECs and non-price cap incumbent LECs remain free to deviate pursuant to mutual agreement. The transition timeframe we adopt will work to ensure that end-user customers do not experience any undue service disruption as a result. We find no reason to adopt any longer transition period and thus we reject INCOMPAS's proposed seven-year transition period. INCOMPAS relies on the seven-year transition period provided for in the
165. We take a dynamic and forward-looking approach to evaluate the benefits and costs of regulation. The Commission has discussed at length the failings of
166.
167. In the short term, however, we do not want to disrupt the services currently received by customers of competitive LECs that purchase UNE DS1 and DS3 Loops in these areas, particularly given the impact on businesses and consumers from the recession and COVID-19 pandemic which has increased the need for reliable broadband services for businesses and consumers. Consequently, we find that the 42-month transition period for UNE DS1 Loops and the 36-month transition period for UNE DS3 Loops provides sufficient time for the competitive LECs to transition to alternative arrangements and/or to replace these productive inputs with their own facilities. As discussed in the DS1/DS3 section, there is record evidence that the use of UNE DS3 Loops is
168.
169. In contrast, the record presents insufficient evidence of competitive changes to end UNE DS0 Loop obligations in urban clusters and rural areas. We find that: (1) Mass market customers in these areas often either do not have access to a high speed broadband service or can only obtain such service from a single provider, which sometimes is a competitive LEC that relies on UNE DS0 loops; and (2) certain competitors rely on UNE DS0 loops to connect their customers to their own fiber networks and are swapping out these loops for their own last mile facilities as they build out their fiber network to their end-users' premises. Based on December 2019 Form 477 data, the proportion of households with either no or one provider option for 25/3 Mbps services was 57% in rural areas and 40% in urban clusters compared to 16% in urbanized areas. As noted above, of the approximately 42,000 thousand households who have a single option for 25/3 Mbps service that may rely upon UNE Loops, about 35,000 live in rural areas and urban clusters where UNE DS0 Loops will remain available. Thus, consistent with our initial imposition of UNE DS0 Loop requirements, access to UNE DS0 Loops in urban clusters and rural areas continues to support the development of competition and the deployment of advanced services in these areas.
170. In urbanized areas, we find the two-part transition for UNE DS0s Loops appropriately balances the short-term
171.
172. We find that there are net benefits to competitors to retain use of their existing UNE Dark Fiber Transport for a significant period of time, however, because of the risk of stranding competitors' investments that rely upon this transport. This concern is sharpened by the recession caused by the COVID-19 pandemic, which has increased the need for broadband services, and has made it harder to finance deployment. Some competitive LECs rely on embedded UNE Dark Fiber Transport to support the investments they have made in networks, notably including last-mile facilities, which represent substantial investments that are sunk for many years. Competitively replacing the UNE Dark Fiber Transport they currently rely on would in some instances require significant investments (on the part of the providers or third parties) and would take substantial time. The result, in some instances, would be the cessation of services to existing customers and of planned new last-mile deployments. And the cost of continuing to provision existing UNE Dark Fiber Transport is comparatively low. Accordingly, we are persuaded there are significant net benefits to permit competitors' continued use of embedded UNE Dark Fiber Transport at existing terms and conditions for eight years.
173.
174.
175.
176. We also reject WorldNet's argument that the Commission should exempt Puerto Rico from any elimination or reduction of UNE or resale obligations in this proceeding due to its unique economic circumstances. As WorldNet acknowledges, we recently decided not to exempt Puerto Rico with regard to the UNE and Avoided-Cost Resale obligations at issue in the
177.
178.
179.
180. In the
181. Specifically, in the
182. Drawing on the record in this proceeding along with data from a variety of sources, including findings in the
183. Based on the record in this proceeding, as well as the conclusions drawn in the
184. Based on the record in this proceeding, as well as Form 477 data, the Commission finds that cable companies provide significant competition, and therefore competitive LECs are no longer impaired without access to unbundled DS0 loops in urbanized census blocks, and
185. The Commission finds that competitors do not face significant barriers to entry into the voice-service market, and therefore forbear from any remaining UNE Narrowband Voice-Grade Loop obligations nationwide. The Commission also finds that impairment no longer exists without access to UNE Multiunit Premises Subloops and NIDs. Further, the Commission finds that competitive LECs are not impaired by lack of access to these UNEs, and that continued provision thereof contravenes the Commission's mandate to ensure deployment of next-generation networks.
186. The Commission finds that competitive LECs are not impaired without UNE dark fiber that is within a half mile from alternative fiber. Further, the Commission independently forbears from any UNE Dark Fiber Transport within a half mile from alternative fiber. However, access will be grandfathered for eight years for those who are already relying on it.
187. The Commission finds that competitive LECs are not impaired without access to OSS, except for the purposes of number portability and interconnection.
188. For the same reasons the Commission granted price-cap incumbent LECs forbearance from the Avoided-Cost Resale requirement in 2019, the Commission now extends that forbearance to non-price-cap incumbent LECs. The Commission finds that enforcement of these obligations is unnecessary to moderate end-user pricing nor to protect competitive LECs' ability to provide service due to the abundance of alternatives available across markets.
189. In this section, we respond to comments filed in response to the IRFA. To the extent we received comments raising general small business concerns during this proceeding, those comments are discussed throughout the Order and are summarized in part E, below.
190. We reject arguments that ending UNE access for competitive providers would damage their ability to compete in the affected markets because UNE loop obligations are being rolled back only in counties and study areas already deemed competitive, and access to dark fiber will be grandfathered for eight years for all providers currently utilizing it. Furthermore, the Commission's objective in finding non-impairment is to foster competition, not to promote any specific competitor. In making the impairment inquiry, we make the reasonable inference that if competitive providers have successfully entered one market using their own facilities, other providers can enter similar markets on a similar basis.
191. We also reject the claim that removing access to UNEs will inhibit development of next-generation infrastructure. Indeed, we find that continuing provision of UNEs in areas with robust competition in place will result in stagnation of innovation and delay the deployment of new technologies such as 5G networks.
192. With respect to whether small business customers will lose their choice in providers with the adoption of this Order, or may lose access all together if the only provider in their region is unable to provide service by way of UNEs, we note that because UNE loop obligations will only be removed in markets where competition is sufficiently robust. Additionally, we provide 8 years for competitive LECs to transition from UNE Dark Fiber Transport. While price increases are possible as a result of the transition to commercial pricing for some network elements, these increases do not constitute impairment.
193. With respect to the suggestion that a significant number of small entities may be unaware of this proceeding and that the Commission should engage in educational outreach to inform them of it, we disagree with this assertion because the
194. First, we disagree with the Chief Counsel's assertion that the Commission failed to consider in its IRFA the impact of the new regulations on small entities that will be directly impacted by the changes. To the contrary, the Commission specifically requested comments regarding economic impacts on small entities that may result from the changed regulations. Many such comments were submitted in response, allowing the Commission to consider the concerns of small competitive LECs and other entities throughout this Order. Though the Chief Counsel advises the Commission to issue a further notice of proposed rulemaking with a supplemental IRFA, we believe this is unnecessary because the
195. We disagree with the Chief Counsel's argument that removing these UNE obligations will prevent small competitive LECs from providing competitive services to consumers and from deploying their own networks. Indeed, the Commission is implementing these changes in order to promote facilities-based competition that will benefit large and small providers as well as end-users. Access to UNEs was always intended as a stepping stone for competitors to gain market entry and build their own networks, to be retired once competition was established. In evaluating the need for a given UNE the Commission considers the existence of competition, including intermodal competition, not the impact on any particular competitor. The Commission's impairment determinations consider the existence of intermodal competition because “[t]he fact that an entrant has deployed its own facilities—regardless of the technology chosen—may provide evidence that any barriers to entry can be overcome.” Further, examining these same facts, the Commission finds that the forbearance criteria are met, as competition will ensure that rates remain just and reasonable and protect consumers, while also promoting the public interest by spurring deployment of next-generation facilities. Additionally, those entities relying on dark fiber will have a significant period—eight years—to transition from UNE Dark Fiber Transport.
196. Unbundling requirements for DS1 and DS3 loops will be removed only in those counties already determined to be competitive in the
197. We disagree with the implication in the Chief Counsel's comments that the new regulations offer no economic benefit. In implementing these regulatory changes, the Commission is pursuing its congressionally mandated goal of ensuring deployment of next-generation networks and services. Pursuant to the provisions of the 1996 Act, the Commission revises its unbundling and resale requirements to account for changes in communications service markets where competition among incumbent and competitive LECs has flourished and UNEs are no longer necessary to facilitate market entry. Congress authorized the Commission to forbear from any regulatory obligations once the agency determined that they are obsolete, and encouraged the Commission to use forbearance and other means to encourage deployment of advanced telecommunications capability and remove barriers to infrastructure deployment. Promoting investment in innovation and advanced technologies can only provide greater economic benefits for all parties involved.
198. The RFA directs agencies to provide a description of, and, where feasible, an estimate of, the number of small entities that may be affected by the rules adopted herein. The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. A “small business concern” is one which (1) is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the Small Business Administration (SBA).
199. We have included small incumbent LECs in this present RFA analysis. As noted above, a “small business” under the RFA is one that,
200.
201.
202.
203.
204.
205.
206.
207.
208.
209.
210.
211.
212.
213.
214. The objective of the new regulatory framework is to encourage the deployment of next-generation networks and to unburden incumbent LECs where there is substantial evidence of facilities-based competition and market entry. Beyond the benefits that providers will enjoy from a decreased regulatory burden on their day-to-day operations, these changes will not affect the reporting, recordkeeping, or other compliance requirements of carriers, including small entities.
215. The RFA requires an agency to describe any significant alternatives that it has considered in reaching its proposed approach, which may include the following four alternatives (among others): (1) The establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance or reporting requirements under the rule for small entities; (3) the use of performance, rather than design, standards; and (4) an exemption from coverage of the rule, or any part thereof, for small entities.
216. In arriving at the conclusions described above, the Commission considered various alternatives, which it rejected or accepted for the reasons set forth in the body of this Order, and made certain changes to the rules to reduce undue regulatory burdens, consistent with the Communications Act and with guidance received from the courts. These efforts to reduce regulatory burden will affect both large and small carriers. The significant alternatives that commenters discussed and that we considered are as follows.
217.
218.
219.
220. The Commission will send a copy of the Report and Order, including this FRFA, in a report to be sent to Congress pursuant to the Congressional Review Act. In addition, the Commission will send a copy of the Report and Order, including this FRFA, to the Chief Counsel for Advocacy of the SBA. A copy of the Order and FRFA (or summaries thereof) will also be published in the
221.
222.
223. Accordingly,
224.
225.
226.
Communications, Communications common carriers, Telecommunications, Telephone.
For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR part 51 as follows:
47 U.S.C. 151-55, 201-05, 207-09, 218, 225-27, 251-52, 271, 332 unless otherwise noted.
The revisions and additions read as follows:
(a) * * *
(1)
(v)
(vi)
(4) * * *
(i)
(
(
(B) Once a wire center exceeds both the business line and fiber-based collocator thresholds, no future DS1 loop unbundling will be required in that wire center. A DS1 loop is a digital local loop having a total digital signal speed of 1.544 megabytes per second. DS1 loops include, but are not limited to, two-wire and four-wire copper loops capable of providing high-bit rate digital subscriber line services, including T1 services.
(iii)
(5) * * *
(i)
(
(
(B) Once a wire center exceeds the business line and fiber-based collocator thresholds, no future DS3 loop unbundling will be required in that wire center. A DS3 loop is a digital local loop having a total digital signal speed of 44.736 megabytes per second.
(iii)
(b)
(3) * * *
(i)
(c) * * *
(2) * * *
(iv)
(e)
U.S. Citizenship and Immigration Services, Department of Homeland Security.
Final rule.
The Department of Homeland Security (DHS or the Department) is amending its regulations governing the process by which U.S. Citizenship and Immigration Services (USCIS) selects H-1B registrations for the filing of H-1B cap-subject petitions (or H-1B petitions for any year in which the registration requirement is suspended), by generally first selecting registrations based on the highest Occupational Employment Statistics (OES) prevailing wage level that the proffered wage equals or exceeds for the relevant Standard Occupational Classification (SOC) code and area(s) of intended employment.
This final rule is effective March 9, 2021.
Charles L. Nimick, Chief, Business and Foreign Workers Division, Office of Policy and Strategy, U.S. Citizenship and Immigration Services, Department of Homeland Security, 5900 Capital Gateway Drive, Camp Springs, MD 20746; telephone 240-721-3000 (this is not a toll-free number). Individuals with hearing or speech impairments may access the telephone numbers above via TTY by calling the toll-free Federal Information Relay Service at 1-877-889-5627 (TTY/TDD).
DHS is amending its regulations governing the selection of registrations submitted by prospective petitioners seeking to file H-1B cap-subject petitions (or the selection of petitions, if the registration process is suspended), which includes petitions subject to the regular cap and those asserting eligibility for the advanced degree exemption, to allow for ranking and selection based on wage levels. When applicable, USCIS will rank and select the registrations received generally on the basis of the highest OES wage level that the proffered wage equals or exceeds for the relevant SOC code in the area of intended employment, beginning with OES wage level IV and proceeding in descending order with OES wage levels III, II, and I. The proffered wage is the wage that the employer intends to pay the beneficiary. This ranking process will not alter the prevailing wage levels associated with a given position for U.S. Department of Labor (DOL) purposes, which are informed by a comparison of the requirements for the proffered position to the normal requirements for the occupational classification. This final rule will not affect the order of selection as between the regular cap and the advanced degree exemption. The wage level ranking will occur first for the regular cap selection and then for the advanced degree exemption.
Rote ordering of petitions leads to impossible results because petitions are submitted simultaneously. While administering a random lottery system is reasonable, it is inconsiderate of Congress's statutory purposes for the H-1B program and its administration. Instead, a registration system that faithfully implements the Immigration and Nationality Act (INA) while prioritizing registrations based on wage level within each cap will incentivize H-1B employers to offer higher wages, or to petition for positions requiring higher skills and higher-skilled aliens that are commensurate with higher wage levels, to increase the likelihood of selection and eligibility to file an H-1B cap-subject petition. Moreover, it will maximize H-1B cap allocations, so that they more likely will go to the best and brightest workers; and it will disincentivize abuse of the H-1B program to fill relatively lower-paid, lower-skilled positions, which is a significant problem under the present selection system.
The Secretary of Homeland Security's authority for these regulatory amendments is found in various sections of the Immigration and Nationality Act (INA), 8 U.S.C. 1101
• INA section 101(a)(15)(H)(i)(b), 8 U.S.C. 1101(a)(15)(H)(i)(b), which classifies as nonimmigrants aliens coming temporarily to the United States to perform services in a specialty occupation or as a fashion model with distinguished merit and ability;
• INA section 214(a)(1), 8 U.S.C. 1184(a)(1), which authorizes the Secretary to prescribe by regulation the terms and conditions of the admission of nonimmigrants;
• INA section 214(c), 8 U.S.C. 1184(c), which, among other things, authorizes the Secretary to prescribe how an importing employer may petition for an H nonimmigrant worker, and the information that an importing employer must provide in the petition; and
• INA section 214(g), 8 U.S.C. 1184(g), which, among other things, prescribes the H-1B numerical limitations, various exceptions to those limitations, and criteria concerning the order of processing H-1B petitions.
• INA section 214(i), 8 U.S.C. 1184(i), which defines the term “specialty occupation,” referenced in INA section (101)(a)(15)(H)(i)(B), 8 U.S.C. 1101(a)(15)(H)(i)(B), a requirement for the classification.
Further, under HSA section 101, 6 U.S.C. 111(b)(1)(F), a primary mission of DHS is to “ensure that the overall economic security of the United States is not diminished by efforts, activities, and programs aimed at securing the homeland.”
Finally, as explained above, “Congress left to the discretion of USCIS how to handle simultaneous submissions.”
Following careful consideration of public comments received, including relevant data provided, DHS has declined to modify the regulatory text proposed in the Notice of Proposed Rulemaking (NPRM) published in the
The changes in this final rule will apply to all registrations (or petitions, in the event that registration is suspended), including those for the advanced degree exemption, submitted on or after the effective date of the final rule. The treatment of registrations and petitions filed prior to the effective date of this final rule will be based on the regulatory requirements in place at the time the registration or petition, as applicable, is properly submitted. DHS has determined that this manner of implementation best balances operational considerations with fairness to the public. USCIS will engage in public outreach and provide training to the regulated public on the modified registration system in advance of its implementation.
The H-1B visa program allows U.S. employers to temporarily hire foreign workers to perform services in a specialty occupation, services related to a U.S. Department of Defense (DOD) cooperative research and development project or coproduction project, or services of distinguished merit and ability in the field of fashion modeling.
Congress has established limits on the number of foreign workers who may be granted initial H-1B nonimmigrant visas or status each fiscal year (FY).
DHS implemented the current H-1B registration process by regulation after determining that it could introduce a cost-saving, innovative solution to facilitate the selection of H-1B cap-subject petitions toward the annual numerical allocations. Under the current selection process, all petitioners seeking to file an H-1B cap-subject petition must first electronically submit a registration for each beneficiary on whose behalf they seek to file an H-1B cap-subject petition, unless USCIS suspends the registration requirement. A prospective petitioner whose registration is selected is then eligible to file an H-1B cap-subject petition for the selected registration during the associated filing period.
USCIS monitors the number of H-1B registrations it receives during the announced registration period and, at the conclusion of that period, if more registrations are submitted than projected as needed to reach the numerical allocations, randomly selects from among properly submitted registrations the number of registrations projected as needed to reach the H-1B numerical allocations. USCIS first selects registrations submitted on behalf of
A prospective petitioner whose registration is selected is notified of the selection and instructed that the petitioner is eligible to file an H-1B cap-subject petition for the beneficiary named in the selected registration within a filing period that is at least 90 days in duration and begins no earlier than 6 months ahead of the actual date of need (commonly referred to as the employment start date).
Following careful consideration of all public comments received, DHS is issuing this final rule as proposed in the NPRM, without modifications to the regulatory text.
In response to the rulemaking, DHS received 1103 comments during the 30-day public comment period, and 388 comments on the rule's information collection requirements before the comment period ended. A large majority of public comments received are form letter copies rather than unique submissions. Commenters consisted primarily of individuals, including anonymous submissions. DHS received the remaining submissions from professional associations, trade or
DHS reviewed all of the public comments received in response to the proposed rule and is addressing substantive comments relevant to the proposed rule (
Public comments may be reviewed in their entirety at the Federal Docket Management System (FDMS) at
Comments generally opposing the proposed rule fell into various
Further, this rule is intended to potentially increase employment opportunities for relatively lower-skilled unemployed or underemployed U.S. workers. Recent college graduates, some of who otherwise would serve as U.S. workers, have the highest unemployment rate in decades, and the underemployment rate (which reflects the rate at which workers are accepting jobs lower than their academic or experience level) is at an all-time high.
Multiple commenters said the proposal would have negative impacts on new graduates and entry-level workers, academic institutions, healthcare workers and facilities, employers, and the economy.
Multiple commenters said the proposal would have negative impacts on new foreign graduates and entry-level workers, and they provided substantive rationale in support of those assertions. Specifically, several commenters, including a form letter campaign, said the rule would have a “direct and negative” impact on college-educated foreign-born professionals by “dramatically reducing” access to the H-1B visa program for early-career professionals because no aliens who are paid a level I wage would be selected to submit a petition. A trade association stated that early-career workers in science, math, and engineering might be shut out by the proposed rule, but that those are the workers the U.S. economy needs. Several commenters, including a university, a professional association, and a joint submission, argued that the proposed rule would reduce access to the H-1B program, negatively impacting graduating international students. A university stated that the proposed rule indirectly would affect F-1 and J-1 students and scholars by removing a pathway to employment after completion of educational or training experiences in the United States, which would also negatively impact the economy. The university argued that almost all F-1 and J-1 visa holders enter at level I wages.
DHS further disagrees with the assertion that this rule will preclude recent foreign medical graduates from obtaining H-1B status. Importantly, according to DHS data, in FY 2019, more than 93 percent of H-1B petitions approved for initial employment for physicians, surgeons, and dentists were cap-exempt and thus not subject to the H-1B cap selection process.
In terms of STEM-specific concerns, DHS disagrees with comments that this rule will make it “harder” or “nearly impossible” for employers to hire entry-level employees with degrees in STEM majors. These types of potential foreign workers have multiple avenues to obtain employment in the United States. In general, foreign STEM graduates can apply for the regular 12-month OPT plus an additional 24-month extension of their post-completion OPT.
Concerning the comments about non-STEM graduates who work in the humanities, arts, accounting, education, or other areas that generally may not receive as high of starting wages as other occupations, DHS does not believe these graduates will be unfairly impacted by this rule. Because USCIS will be ranking and selecting registrations (or petitions) generally based on the highest OES prevailing wage level that the proffered wage equals or exceeds for the relevant SOC code, this method of ranking takes into account wage variations by occupation.
A trade association stated, without evidence, that since graduating international students are unlikely to find employers who are willing to pay them the same rate as their median-wage workers, this would lead to U.S.-educated international students taking their knowledge and skills elsewhere. A university said that, if the proposed rule were implemented, the United States would lose “advanced science, technology, engineering, and mathematics knowledge and talent” because international students would choose to pursue their education in countries with more favorable immigration policies. Another commenter claimed that international students would study elsewhere if they could not identify employment opportunities after graduation, which would “crippl[e] a critical pipeline of future community members, workers, innovators and entrepreneurs.” A few commenters stated that, under this rule, the United States would lose money, talent, and inventiveness by reducing the employment potential of foreign students upon graduation from a U.S. educational institution, and the United States eventually would lose attractiveness and competitiveness because international students would go elsewhere. Some commenters provided specific figures to detail the contributions of foreign enrollment at U.S. universities. Specifically: Education service exports ranked sixth among service exports in 2019 according to data released by the U.S. Department of Commerce's Bureau of Economic Analysis; international students studying in the United States added an estimated $41 billion to the economy and supported over 458,000 jobs during the 2018 through 2019 academic year; international students make up 5.5 percent of the total U.S. higher education population and contributed $44.7 billion to the U.S. economy in 2018; international students have founded approximately one-quarter of U.S. start-up companies worth $1 billion or more; the Institution for International Education (IIE) reports that international students contributed $482.5 million to the State of Minnesota during 2018 through 2019, supporting 4,497 jobs; international students and scholars contributed an estimated $304.2 million to the local Ithaca, New York, economy and supported nearly 4,000 jobs during the 2018 through 2019 academic year; and, in one commenter's experience, foreign students paid more than $10,000 per year full tuition compared to less than $4,000 for in-state residents, which provided major subsidies for low income resident students.
Some commenters expressed that this is not the time to be driving students away, as State and college/university budgets have suffered greatly as a result of COVID-19. One commenter cited data indicating a “shocking decline” in international student enrollment at U.S. institutions of higher education for the Fall 2020 semester, as well as a study indicating that the overall economic impact generated by international students had already started to decline in 2019, down to $38.7 billion. The commenter said the declining enrollment numbers for 2020 are likely to perpetuate a large economic impact as we continue to deal with the economic fallout of the COVID-19 pandemic. A professional association stated that the proposed regulation would have a “monumentally negative” effect on U.S. colleges and universities at a time when those institutions would be reeling from the impact of the COVID-19 pandemic. The commenter cited statistics indicating that, in the current school year, new enrollment of international students dropped 43 percent because of COVID-19. The commenter concluded that the COVID-19 pandemic, uncertainty about immigration status, and “anti-immigrant rhetoric[,]” compounded with this rule that would further destabilize the career progression of foreign students by eliminating a legal pathway to temporary employment opportunities in the United States post-graduation, would create a “perfect storm” that would devastate the U.S. college and university system for years to come.
Several commenters, including a university, advocacy group, and individual commenters, said restricting the H-1B program for foreign students, while competitor nations seek to expand their ability to attract international students, would lead talented students to choose other countries of study and decrease enrollments in U.S. institutions. One of these commenters said countries such as Canada and Germany already are seeing increases in international student enrollment as U.S. restrictions to international students have led to waning interest from the future CEOs, inventors, and researchers of the world. An individual commenter said universities essentially would be training laborers for other countries.
Some commenters stated that colleges and universities rely, in particular, on foreign students who pay full tuition to help make up for declining Federal and State support and to subsidize the cost of education for U.S. students. An attorney stated that U.S. colleges, universities, and communities benefit financially from the attendance of foreign students, typically in F-1 foreign student nonimmigrant status or J-1 exchange visitor nonimmigrant status. The commenter said the economic and intellectual advancement of educational institutions and their communities is enhanced by the presence of these students from other countries.
A university stated that international students and scholars are essential to a university's makeup, as students and faculty benefit from exposure to intercultural differences and the leadership opportunities that arise from global collaborations. Another commenter stated that foreign national researchers and professors provide the needed diversity to help educate students to become the professionals they need, as they cannot compete globally if they do not have the ability to adapt culturally.
An individual stated that this rule would make it impossible for some colleges to fill teaching positions that they cannot fill with qualified U.S. workers. For example, the commenter stated that North Dakota colleges are not able to pay higher than the level I wage as that is the average salary paid to all of its beginning professors and researchers, and this rule would result in many of North Dakota colleges having unfilled teaching positions and a decrease in higher level class offerings, particularly in STEM fields, putting a strain on education in the state. Multiple commenters offered similar concerns, but at other levels of academic institutions and owing to their less-desirable locations.
Facilitating the admission of higher-skilled foreign workers, as indicated by their earning of wages that equal or exceed higher prevailing wage levels, would benefit the economy and increase the United States' competitive edge in attracting the “best and the brightest” in the global labor market, consistent with the goals of the H-1B program discussed in the NPRM.
Further, DHS disagrees that this rule will make it “impossible” for academic institutions to fill teaching and research positions. Congress already exempted from the annual H-1B cap aliens who are employed or have received offers of employment at institutions of higher education, nonprofit entities related to or affiliated with institutions of higher education, nonprofit research organizations or government research organizations.
A couple of professional associations said the rule potentially could eliminate the H-1B visa option for recent graduates, including IMGs and postdoctoral researchers, with serious consequences for the U.S. healthcare workforce. One of these commenters said IMGs compose nearly one-fourth of the U.S. physician workforce and one-fourth of the country's resident physicians in training. The commenter stated that, due to this rule, these highly qualified physicians may choose to go to other countries rather than risk being unable to complete training requirements, build up a medical practice, or perform clinical duties.
A professional association wrote specifically about the impacts of the rule on the availability of primary care physicians. The commenter cited data indicating that the United States is facing a primary care physician shortage and stated that IMGs play a vital role in filling this gap. The commenter went on to say that family medicine and other primary care physicians typically have lower annual salaries than specialty
In addition, Congress has established programs meant to encourage certain recent foreign medical graduates to serve in the United States as H-1B nonimmigrants. These programs are exempt from the annual caps and unaffected by this rule. Certain J-1 exchange visitors are subject to a 2-year foreign residence requirement under INA section 212(e), 8 U.S.C. 1182(e), which requires them to return to their country of nationality or country of last residence for at least two years in the aggregate prior to being eligible to apply for an immigrant visa; adjustment of status; or a nonimmigrant visa, such as an H-1B visa (with limited exceptions).
Further, DHS disagrees with the comment that this rule may unfairly discriminate against family physicians and other primary care physicians who typically have lower annual salaries than specialty physicians. In general, family physicians or other primary care physicians have different SOC codes than specialty physicians. As DOL prevailing wage level calculations generally differ by SOC codes, when wage data is available, the corresponding wage level would necessarily account for the different occupational classification for primary care physicians as opposed to other types of physicians. When such wage level data is unavailable, wage level ranking will be based on the skill, education, and experience requirements for the position, again taking into account the particulars of the relevant occupational classification, such that registrations or petitions for primary care physicians will be ranked in comparison to the normal requirements for primary care physicians and not in comparison to other types of physicians. As such, DHS does not believe that this rule will disadvantage registrations or petitions for primary care physicians or any other subset of physicians.
A professional association stated that Federally Qualified Healthcare Centers (FQHC), institutions that serve high-risk, medically underserved populations in HPSAs, do not qualify for exemption from the H-1B visa cap. To fill the physician gap, FQHCs utilize H-1B physicians to care for patients in these health care underserved areas. The commenter stated that, if the proposed rule is enacted, these FQHCs would be unable to obtain early-career H-1B physicians and are unlikely to be able to compete with larger, more affluent organizations to offer a higher proffered wage to increase their chances of obtaining H-1B physician candidates and reducing the physician shortages identified by HPSA data.
A company stated that rural hospitals and other health care facilities rely heavily on healthcare-staffing companies to fill their staffing needs, but the rates staffing companies are able to charge rural facilities usually are much lower than the rates they are able to charge facilities in affluent metropolitan areas. Thus, the rule would cause staffing companies to place their professionals where the staffing companies can charge the highest rates, so that staffing companies can maintain sufficient profitability and ensure that their workers are able to obtain H-1B visas. The commenter concluded that the rule would decrease the supply of healthcare labor to rural and other underserved communities, where it is needed most.
Also as noted above, physicians whose nonimmigrant status is changed to H-1B through their participation in any of the three waiver programs in INA section 214(l), 8 U.S.C. 1184(l), are not subject to the annual H-1B caps. The Conrad State 30 program (relating to waivers based on requests from a state agency of public health or its equivalent for service in an HHS-designated shortage area) is limited to 30 participants per eligible jurisdiction annually.
Congress has established a similar statute in the immigrant context, which also channels physicians to serve in HHS-designated shortage areas, commonly known as the Physician National Interest Waiver Program.
DHS agrees with the commenters who stated that medical institutions in rural and/or underserved areas may not be institutions of higher education, related or affiliated non-profit entities, or non-profit research organizations or governmental research organizations. As a result, aliens who are employed by or who have received an offer of employment from such medical institutions may not be exempt from the annual H-1B numerical limitations under INA section 214(g)(5), 8 U.S.C. 1184(g)(5). However, some of those medical institutions do meet the requirements to be cap-exempt, and their employees will not be subject to the numerical limitations.
DHS acknowledges that some alien physicians who currently serve in rural and/or underserved areas as H-1B nonimmigrants are not participating in the waiver programs of INA section 214(l), 8 U.S.C. 1184(l), and they are not working for cap-exempt employers. These physicians may be in positions categorized as prevailing wage levels I or II, depending on their individual circumstances. However, such physicians may avail themselves of alternative pathways to serve in these areas such as the Physician National Interest Waiver Program and not be subject to the annual H-1B numerical limitations.
Further, as with all other cap-subject H-1B visas, DHS will rank and select registrations for these positions generally according to the highest OES prevailing wage level that the proffered wage equals or exceeds, which necessarily takes into account the area of intended employment when such wage level data is available. Where there is no current OES prevailing wage information for the proffered position, which DHS recognizes is the case for some physician positions based on limitations in OES data, the registrant would follow DOL guidance on prevailing wage determinations to determine which OES wage level to select on the registration. The determination of the appropriate wage level in those instances would be based on the skill, education, and experience requirements of the position, and generally does not take into consideration the area of intended employment. Therefore, DHS does not believe that this rule necessarily will disadvantage rural and/or underserved communities relative to registrations or petitions based on offers of employment in other areas.
For example, DHS received submissions from unemployed and underemployed U.S. citizen medical graduates who attested to the decades-long problem of displacement of several thousands of qualified U.S. citizen IMGs and graduates of U.S. medical schools for federally funded residency training positions. This rule may benefit these unemployed and underemployed U.S. citizen medical graduates by potentially increasing employment opportunities. Further, DHS notes that this final rule is not a temporary rule that is limited in duration to the COVID-19 pandemic; moreover, this final rule will not have immediate impact on H-1B employment as it will first be applied to the FY 2022 registration and selection process, the beneficiaries of which will not be able to begin employment in H-1B classification until October 1, 2021.
A trade association stated that its members in the healthcare industry are very concerned about the impact this rule would have on their ability to continue hiring H-1B foreign medical graduates, who are critical for healthcare providers to meet the needs of their patients. The commenter said
A law firm stated that the salary market in healthcare is not like the salary market in other fields and explained that, because so much of hospitals' reimbursement processes are governed by Medicare and a tiny handful of large insurance companies, it would be impossible for U.S. healthcare facilities to negotiate reimbursement rates in a manner to significantly raise salaries. The commenter said that this rule is a “blunt object” that would lead to additional Silicon Valley, California, H-1B visas in place of visas that currently help the healthcare of U.S. citizens, and rural facilities would suffer the brunt of this policy.
A trade association said the rule would place an excessive cost burden on petitioners because they would be required to offer dramatically increased wages to prospective H-1B employees, especially in conjunction with the new increased wage levels implemented through the DOL IFR.
As for the concern about offering prevailing wages above the 95th percentile, DHS notes that the DOL IFR was set aside and no longer is being implemented as of the publication of this final rule.
An anonymous commenter said the rule would severely interrupt many U.S. companies' operations, as it would disqualify many foreign workers fulfilling specialty jobs and make it difficult for companies to find reasonable substitutes for the labor. The commenter stated that DHS' statement that these disadvantages would be offset by increased productivity and availability of higher wage H-1B petitioners is “optimistic” and lacks support.
An individual commenter said their company would be impacted because entry-level STEM candidates have played critical roles throughout the organization, and the proposal would mean they would be unable to draw from the world's leading talent. In addition, some of their H-1B employees gain OPT through the company, and it would be detrimental to their business to be forced to terminate these employees after they have received training.
An individual argued that a financial technology company would be negatively impacted, giving the example of a Database Administrator position, which the commenter said does not require a level III or IV prevailing wage, but often is difficult to fill with U.S. workers.
A couple of individual commenters, an advocacy group, and a professional association said that companies need workers through the H-1B program because there are not enough qualified U.S. workers in STEM fields. Another individual commenter cited a STEM worker shortage, arguing that the United States should be “rolling out the welcome mat” for high-skilled talent. A professional association and an individual commenter also addressed the claimed current STEM shortage and explained how the proposed rule would further hurt employers' ability to hire college-educated foreign workers. A trade association stated that the proposed rule would make the H-1B visa program unusable for many engineering firms. The association,
A trade association said that restricting H-1B visas to senior professionals with higher wages would negatively impact manufacturers and their ability to hire aliens with STEM education and training to fill roles as researchers, scientists, engineers, and technicians. The commenter explained that the NPRM may deter aliens from attending college in the United States and restrict the talent pipeline. Further, the commenter stated that manufacturers rely on a skilled and innovative workforce that allows them to remain competitive, and that this NPRM will provide other countries a competitive advantage. This is coupled with the claim that the workforce challenge is expected to get worse in the future, with studies showing that nearly half of the 4.6 million manufacturing jobs could go unfilled, according to the commenter.
A university and an individual stated that the proposed system would encourage employers to artificially inflate their job requirements to increase the chance of acceptance through the lottery, creating an unfair advantage for larger employers. An individual commenter similarly said the rule disproportionately favors companies willing to pay the most money to foreign workers. An individual commenter said the rule would pit companies against each other to provide the highest salary, which would give larger tech companies control over the H-1B selection lottery. A law firm stated that start-up companies would be negatively impacted because they do not have the capital to be able to offer “obscenely high salaries” to be competitive in this process.
A few commenters noted that the increased difficulty in obtaining H-1B workers could have a negative effect on R&D or innovation at their companies. For example, a professional association said that companies in the automotive sector that have committed hundreds of millions of dollars to developing fuel-efficient engines no longer would be able to hire and retain recent graduates who have the academic background necessary to drive innovation through the H-1B program. Another professional association wrote that the proposed rule would negatively impact companies developing products that strengthen national security, as it would diminish the ability of U.S. employers to hire workers for the development of technology including artificial intelligence, quantum information science, robotics, and fifth-generation communications technology.
Moreover, DHS disagrees with the assertion that this rule will make the H-1B visa program “unusable” for engineering firms. While DHS acknowledges that some data may show that the engineering workforce is growing slower than the demand for engineers, DHS disagrees with the commenter that this means engineering firms must hire entry-level foreign workers to fill this gap. In fact, DHS data shows that, for “Architecture and Engineering Occupations,” there has been a significant number of petitions filed for level III and IV positions. Specifically, for FYs 2018 and 2019, employers filed 11,519 and 7,045 petitions (total of 18,564) for level III and IV positions, respectively, compared to 15,625 and 25,147 petitions (total of 40,772) for level I and II positions, respectively.
DHS also disagrees that the rule will disadvantage the IT industry or stifle innovation. Conversely, DHS believes this rule may increase innovation and productivity.
An individual commenter stated that the proposal would “gut the system” and lead to further economic decline. Other commenters argued that this rule would hurt the economy during a global pandemic when the economy is suffering. An individual commenter said that, to rebound from the pandemic and meet the challenges that face the United States, the country must expand opportunities for skilled workers, particularly in the STEM and health professions. A few individual commenters asserted, without evidence, that the proposal is based on the “false premise” that individuals who earn more contribute more to the economy, and that the rule promotes falsities about the workers who strengthen the U.S. economy. A few individual commenters stated that the proposal provides no evidence that higher wages correspond with labor needs of employers or provide a greater economic benefit.
An advocacy group said that the rule would risk preventing highly skilled professionals from bringing their talents to the United States, despite their education and skill, which likely would result in the United States missing out on the contributions of needed talent across multiple industries. A trade association stated that “each facet” of the U.S. workforce is enabled by an
As explained in the NPRM, the ranking process established by this rule does not alter the prevailing wage level associated with a given position for DOL purposes, which is informed by a comparison of the requirements for the proffered position to the normal requirements for the occupational classification. While DHS acknowledges that this final rule will result in more registrations (or petitions, as applicable) being selected for relatively higher paid, higher-skilled beneficiaries, the rule does not change, and does not conflict with, prevailing wage requirements. This final rule merely fills in a statutory gap regarding how to administer the H-1B numerical allocations in years of excess demand.
DHS disagrees with the contentions that, by raising salaries for H-1B workers, this rule will cause employers to reduce their overall workforce including U.S. workers, rely less on labor, or pay their H-1B workers more than their U.S. workers holding comparable positions. First, by incentivizing employers to use the H-1B program to fill positions requiring higher prevailing wage levels, or proffering wages commensurate with higher prevailing wage levels, employers may see a possible increase in productivity, as explained in the NPRM. Because of the possible increase in productivity, it is not necessarily the case that employers would employ fewer workers overall or rely less on labor. DHS believes that this rule will facilitate the admission of higher-skilled workers, which will benefit the economy and increase the United States' competitive edge in attracting the best and the brightest in the global labor market, consistent with the goals of the H-1B program.
Second, concerning the contentions that this rule would force employers to pay their H-1B workers more than their U.S. workers or otherwise harm U.S. workers, this final rule does not mandate employers to pay more for their H-1B workers; again, this rule merely fills in a statutory gap regarding how to administer the H-1B numerical allocations in years of excess demand. And as stated in the NPRM, this rule may provide increased opportunities for lower-skilled U.S. workers in the labor market to compete for work as there would be fewer H-1B workers paid at the lower wage levels to compete with U.S. workers, and may incentivize employers to recruit available and qualified U.S. workers.
Regarding the concerns about fairness, DHS believes that this rule is fair to U.S. workers, H-1B workers, and petitioners. Conversely, the current random selection process is not fair to U.S. workers whose wages may be adversely affected by an influx of relatively lower-paid H-1B workers, or to U.S. employers who have sought to petition for foreign workers at higher OES prevailing wage levels and are not selected.
Further, because he has been serving as the Acting Secretary pursuant to an order of succession established under 6 U.S.C. 113(g)(2), the FVRA's prohibition on a nominee's acting service while his or her nomination is pending does not apply, and Mr. Wolf remains the Acting Secretary notwithstanding President Trump's September 10, 2020, transmission to the Senate of Mr. Wolf's nomination to serve as DHS Secretary.
That said, there have been recent challenges to whether Mr. Wolf's service is invalid, resting on the erroneous contention that the orders of succession issued by former Secretary Nielsen and former Acting Secretary McAleenan were invalid. The Department believes those challenges are not based on an accurate view of the law. But even if those contentions are legally correct—meaning that neither former Secretary Nielsen nor former Acting Secretary McAleenan issued a valid order of succession—under 6 U.S.C. 113(g)(2)—then the FVRA would have applied, and Executive Order 13753 would have governed the order of succession for the Secretary of Homeland Security from the date of former Secretary Nielsen's resignation.
The FVRA provides an alternative basis for an official to exercise the functions and duties of the Secretary temporarily in an acting capacity. In that alternate scenario, under the authority of the FVRA, Mr. Wolf would have been ineligible to serve as the Acting Secretary of DHS after his nomination was submitted to the Senate, 5 U.S.C. 3345(b)(1)(B), and Peter Gaynor, the Administrator of the Federal Emergency Management Agency (FEMA), would have—by operation of Executive Order 13753—become eligible to exercise the functions and duties of the Secretary temporarily in an acting capacity. This is because Executive Order 13753 pre-established the President's succession order for DHS when the FVRA applies. Mr. Gaynor would have been the most senior official eligible to exercise the functions and duties of the Secretary under that succession order, and thus would have become the official eligible to act as Secretary once Mr. Wolf's nomination was submitted to the Senate.
Out of an abundance of caution, and to minimize any disruption to DHS and to the Administration's goal of maintaining homeland security, on November 14, 2020, with Mr. Wolf's nomination still pending in the Senate, Mr. Gaynor exercised the authority of Acting Secretary that he would have had (in the absence of any governing succession order under 6 U.S.C. 113(g)(2)) to designate a new order of succession under 6 U.S.C. 113(g)(2) (the
On November 16, 2020, Acting Secretary Wolf ratified any and all actions involving delegable duties that he took between November 13, 2019, through November 16, 2020, including the NPRM that is the subject of this rulemaking.
Under section 103(a)(1) of the Act, 8 U.S.C. 1103(a)(1), the Secretary is charged with the administration and enforcement of the INA and all other immigration laws (except for the powers, functions, and duties of the President, the Attorney General, and certain consular, diplomatic, and Department of State officials). The Secretary is also authorized to delegate his or her authority to any officer or employee of the agency and to designate other officers of the Department to serve as Acting Secretary.
DHS acknowledges that INA section 214(g)(3), 8 U.S.C. 1184(g)(3), states that aliens subject to the H-1B numerical limitation in INA section 214(g)(1), 8 U.S.C. 1184(g)(1), shall be issued H-1B visas or otherwise provided H-1B nonimmigrant status “in the order in which petitions are filed for such visas or status.” Contrary to the commenters' assertions, this statutory provision, and, more specifically the term “filed” as used in INA section 214(g)(3), 8 U.S.C. 1184(g)(3), is ambiguous.
A literal application of this statutory language, as suggested by various commenters, would lead to an absurd or impossible result. The Department of State (DOS) does not issue H-1B visas, and USCIS does not otherwise provide H-1B status, based on the order in which petitions are filed. Such a literal application would necessarily mean that processing delays pertaining to a petition earlier in the petition filing order would preclude issuance of a visa or provision of status to all other H-1B petitions later in the petition filing order. To avoid such an absurd result, the longstanding approach to implementing the numerical limitation has been to project the number of petitions needed to reach the numerical limitation. The issue, however, is how to select registrations or petitions, as applicable, when the number of submissions exceeds the number projected as needed to reach the numerical limitation or the advanced degree exemption, particularly when those submissions all occur within the same narrow window of time. DHS is not changing the approach to administering the numerical allocations as it relates to the use of projections. DHS is, however, changing the selection process for selecting registrations or petitions, as applicable, to determine which petitions are properly filed and eligible for further processing consistent with INA section 214(g)(3), 8 U.S.C. 1184(g)(3).
DHS created the registration requirement based on its general statutory authority and its discretion to determine how best to handle simultaneous submissions in excess of the numerical allocations, to effectively and efficiently administer the H-1B cap selection process. As provided in the H-1B Registration Final Rule, unless suspended by USCIS, registration is an antecedent procedural step that must be completed by prospective petitioners before they are eligible to file an H-1B cap-subject petition. As with the filing of petitions, and as explained above, a first-come, first-served basis for submitting electronic registrations is unreasonable and practically impossible.
While the random selection of registrations or petitions, as applicable, DHS established in the H-1B Registration Final Rule is reasonable, it is neither the optimal nor the exclusive method of selecting petitions or registrations toward the numerical allocations when more registrations or petitions, as applicable, are submitted than projected as needed to reach the numerical allocations.
In that vein, DHS concludes that prioritization and selection based on wage levels “is a reasonable and rational interpretation of USCIS' obligations under the INA to resolve the issues of processing H-1B petitions”
DHS disagrees with the assertion that this rule will exclude entry-level workers. This final rule merely revises how USCIS will select H-1B cap-subject petitions toward the H-1B numerical allocations to determine which petitions are “filed” and eligible for further processing. The rule does not change substantive eligibility requirements. While DHS acknowledges that registrations or petitions, as applicable, based on a proffered wage that corresponds to a level I or level II wage likely will face a reduced chance of selection in the H-1B cap selection process, the rule does not preclude selection of registrations or petitions for entry-level workers.
DHS also disagrees with the commenters' claim that the prior statements by INS in the preamble to the
DHS also disagrees that comments made by INS in the preamble to the 1990 final rule,
DHS believes, contrary to commenters' assertions, that prioritization and selection generally based on the highest OES wage level that the proffered wage equals or exceeds “is a reasonable and rational interpretation of USCIS's obligations under the INA to resolve the issues of processing H-1B petitions”
DHS also disagrees with the premise of the commenters' recommendation that DHS work with DOL to set appropriate wage levels. This final rule is not setting wage levels. As explained in the NPRM and in response to other comments, this final rule changes how DHS will select registrations or petitions, as applicable, toward the projected number needed to reach the annual H-1B numerical allocations. While this final rule uses DOL wage levels to determine how to rank and select registrations or petitions, as applicable, based generally on the wage level that the proffered wage equals or exceeds, this final rule is not mandating employers pay a higher wage nor is it changing wage levels.
Although Congress instructed that cap-subject H-1B visas (or H-1B nonimmigrant status) be allocated based on the order in which petitions are filed, it was silent with regard to the allocation of simultaneously submitted petitions. While the random lottery selection process is a reasonable solution, DHS believes that an allocation generally based on the highest OES prevailing wage level that the proffered wage equals or exceeds better fulfills Congress' stated intent that the H-1B program help U.S. employers fill labor shortages in positions requiring highly skilled workers.
This legislative history, as cited in the proposed rule, is consistent with the Senate Report the commenters cite.
Some commenters said the proposed rule is based on the false premise that foreign workers depress wages and take away jobs from U.S. workers. A university stated that the foreign workers this rule targets fill critical needs in the U.S. labor market, bolster innovation, create jobs, and drive economic growth. The commenter, along with an individual commenter, stated that some studies show foreign workers have a positive impact on wages overall. Similarly, an advocacy group said limiting the amount of high-skilled foreign workers in the United States does not mean that there will be more jobs available to U.S. workers; rather, it would mean many companies would shift jobs overseas. The commenter stated that, if the H-1B program were expanded, it could result in up to 1.2 million new jobs for U.S. workers. The commenter went on to state that the program does not have a “depressive effect” on U.S. worker wages, and concluded by saying that, by restricting the H-1B program, the proposed rule would not have the intended effects of boosting American jobs and wages. An individual commenter stated that USCIS already has protected U.S. workers by increasing fees and updating the definition of “specialized knowledge,” and there is no need to distort the labor markets and harm U.S. competitiveness at a time when the U.S. can once again be a leader in technology development.
DHS acknowledges that aliens may be offered salaries at level I or level II prevailing wages to work in specialty occupations and may be eligible for H-1B status. However, DHS also believes that, in years of excess demand exceeding annual limits for H-1B visas subject to the numerical allocations, the current process of random selection does not optimally serve Congress' purpose for the H-1B program. Instead, in years of excess demand, selection of H-1B cap-subject petitions on the basis of the highest OES prevailing wage level that the proffered wage equals or exceeds is more consistent with the purpose of the H-1B program and with the administration's goal of improving policies such that H-1B classification is more likely to be awarded to petitioners seeking to employ higher-skilled and higher-paid beneficiaries.
DHS does not agree that the rule will limit or restrict the number of H-1B workers, and that is not the rule's intent. DHS also does not agree that this rule will result in companies shifting jobs overseas or will harm U.S. competitiveness. Rather, DHS believes that the admission of higher-skilled workers would benefit the economy and increase the United States' competitive edge in the global labor market.
Finally, concerning the comment that H-1B workers are more costly than U.S. workers, DHS recognizes that employers often incur upfront costs to file H-1B petitions (including filing fees and preparation fees). However, DHS believes these upfront costs are offset by the employer's ability to legally pay their H-1B employees relatively low wages below the local median wage. Data show that the majority of H-1B cap-subject petitions have been filed for positions certified at the level I or level II prevailing wages, both of which are set below the local median wage.
A joint submission from multiple organizations said that DHS even communicates its failure to gather sufficient evidence before publication, and that DHS appears to be operating under the misconception that anything can be published as an NPRM and the burden shifts to the public to analyze the potential impacts. The commenters said that DHS should gather more data before restarting the regulatory process. An individual commenter similarly said that the agency provides inadequate justifications for the proposed changes, while another individual commenter said that the proposed rule is “half-baked and flawed in a number of ways” and requires proper rule-making procedures. An individual commenter stated that the proposed rule does not explain how giving priority to higher wage levels is a more efficient allocation process than the current random lottery process. The commenter said the H-1B lottery is a fair solution to the issue of many petitions arriving on the same day or time, and the proposed rule would “go beyond the principle of fairness.”
A trade association stated that the APA does not allow an agency to make significant change without completing an accurate cost-benefit analysis, which the agency did not do, nor did it allow sufficient time for stakeholders to conduct their own assessments. A company similarly stated that the Department's “scant justification” for wage-based selection of H-1B petitions violates the APA because a Level I or II prevailing wage does not mean that that the worker is not highly skilled or vital. The company said that the Department's reasoning for the proposed rule lacks a “rational connection between the facts found and the choice made.” An anonymous commenter wrote that the proposal is arbitrary and capricious, asserting that DHS does not explain the rationale behind making wages the sole indicator of a worker's eligibility for visa sponsorship.
Based on its comprehensive review of the submitted comments and available evidence, DHS has concluded that, by changing the selection process, in these years of excess demand, from a random lottery selection to selection generally based on the highest OES prevailing wage level that the proffered wage equals or exceeds, DHS will implement the statute more faithfully to its dominant legislative purpose. DHS further believes that this will benefit the economy and increase the United States' competitive edge in attracting the best and the brightest in the global labor market, consistent with the goals of the H-1B program. It may also benefit U.S. workers as employers that might have petitioned for a cap-subject H-1B worker to fill relatively lower-paid, lower-skilled positions, may be incentivized to hire available and qualified U.S. workers for those positions. DHS believes that the available data and information support this rulemaking and that it is not necessary to gather more data or to restart the regulatory process.
DHS acknowledges that the “wage level” listed by the petitioner on the registration form may not always match the “wage level” indicated on the LCA. However, DHS believes that the instructions provided in the registration system and on the H-1B petition are sufficiently clear to avoid confusion. Further, USCIS officers will be sufficiently trained on the reasons why the wage level on the registration form may not always match the LCA, and may request additional evidence from the petitioner, as appropriate, to resolve material discrepancies in this regard. However, DHS notes that USCIS may deny or revoke a petition if USCIS determines that the statement of facts contained on the registration form is inaccurate, fraudulent, misrepresents any material fact, or is not true and correct.
DHS disagrees with the commenter's assertion that petitioners who use private survey data would be disadvantaged by the rule. Petitioners may continue to use private wage surveys, if they choose to do so, to establish that they will be paying the beneficiary a required wage. This rule, however, will rank and select registrations or petitions, as applicable, based on the highest OES wage level that the proffered wage equals or exceeds as OES wage data is the most comprehensive and objective source for comparing wages.
While prevailing wage level data remains unavailable for some SOC codes in some areas of intended employment, DHS believes that its solution in that limited circumstance, as proposed in the NPRM and retained in this final rule, still will allow DHS to select registrations according to the metric of the registrant's self-identified prevailing wage level as calculated using DOL's prevailing wage level guidance.
DHS believes that, in the absence of current OES prevailing wage information, selecting according to wage level is the best way to ensure that registrations (or petitions) are selected consistent with the primary purpose of the H-1B program, which is to help U.S. employers fill labor shortages in positions requiring highly skilled or highly educated workers. DHS data shows a correlation between higher salaries and higher wage levels.
During the adjudication process, if USCIS disagrees with the wage level selected by the petitioner, USCIS will comply with 8 CFR 103.2(b)(8) and may provide the petitioner an opportunity to explain the selected wage level, as applicable. If USCIS determines that the petitioner failed to meet its burden of proof in establishing that it selected the appropriate SOC code for the position, or if USCIS determines that the petition was not based on a valid registration (
DHS provides the following example for illustrative purposes only. A prospective employer intends to employ an H-1B beneficiary as a level I “Civil Engineer” position (SOC code 17-2051) at two locations: San Francisco, California and Montgomery, Alabama. The Alabama location was specifically chosen because of that locality's generally lower prevailing wages. The required level I prevailing wage for each area of intended employment is $77,147 per year
Further, DHS notes that, under the current registration system, the petitioner identified at the registration stage must match the petitioner of the subsequently filed petition. 8 CFR 214.2(h)(8)(iii)(D) states that a petitioner may not substitute the beneficiary named in the original registration or transfer the registration to another petitioner. This rule has not changed this requirement. Accordingly, USCIS may deny an H-1B cap-subject petition if an entity other than the petitioner identified at the registration stage, including a related entity, files the petition.
However, under new 8 CFR 214.2(h)(10)(ii), USCIS may deny a subsequent new or amended petition filed by the petitioner, or a related entity, on behalf of the same beneficiary, if USCIS determines that the filing of the new or amended petition is part of the petitioner's attempt to unfairly increase the odds of selection during the registration or petition selection process, as applicable, such as by reducing the proffered wage to an amount that would be equivalent to a lower wage level than that indicated on the original petition.
An individual commenter and a university requested that the comment period be extended to 60 days because of the proposed rule's magnitude and the impacts of COVID-19 on employers' resources. A professional association requested the same extension to allow for meaningful public comment, citing the language of E.O. 12866 and E.O. 13563, explaining that those executive orders recommend a comment period of no less than 60 days. The association listed six issues for which the proposed rule requests feedback and asserted that a 30-day comment period does not allow adequate time to address these issues. The association also said that, since this rule was published during the Thanksgiving season, the comment period was effectively shortened even further, undercutting the purpose of the notice and comment process. An individual commenter questioned why DHS was “rushing” the proposed rule during the holiday season as opposed to providing more time for public comment.
An advocacy group stated that the proposed rule should not be implemented while the DOL IFR and the DHS IFR,
As explained in response to other comments, DHS does not agree with the suggestions to separate OES prevailing wage level I from those falling below level I. DHS expects that all petitioners offering a wage lower than the OES wage level I wage will be using a legitimate source other than OES or an
An individual commenter called for relief for those who need housing and food, “instead of bringing in foreigners.” Another individual commenter said that the increase in H-1B visas and outsourcing to foreign contractors caused their spouse's wages to stagnate despite increased responsibility, and
Executive Orders (E.O.) 12866 and 13563 direct agencies to assess the costs, benefits, and transfers of available alternatives, and if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility.
Pursuant to Executive Order 12866 (Regulatory Planning and Review), the Office of Information and Regulatory Affairs (OIRA), of the Office of Management and Budget, has determined that this final rule is an economically significant regulatory action. However, OIRA has waived review of this regulation under section 6(a)(3)(A) of Executive Order 12866.
DHS is amending its regulations governing the selection of registrants eligible to file H-1B cap-subject petitions, which includes petitions subject to the regular cap and those asserting eligibility for the advanced degree exemption, to allow for ranking and selection based on OES wage levels corresponding to their SOC codes. USCIS will rank and select the registrations properly submitted (or petitions in any year in which the registration process is suspended) generally on the basis of the highest OES wage level that the proffered wage equals or exceeds for the relevant SOC code and in the area of intended employment. USCIS will begin with OES wage level IV and proceed in descending order with OES wage levels III, II, and I. DHS is amending the relevant sections of DHS regulations to reflect these changes.
The described change in selection is expected to result in a different allocation of H-1B visas (or grants of initial H-1B status) favoring petitioners that proffer relatively higher wages. In the analysis that follows, DHS presents its best estimate for how H-1B petitioners will be affected by and will respond to the increased probability of selection of registrations of petitions proffering the highest wages for a given occupation and area of employment. DHS estimates the net costs that will result from this final rule compared to the baseline of the H-1B visa program. For the 10-year implementation period of the rule, DHS estimates the annualized costs to the public would be $15,968,792 annualized at 3-percent, $16,089,770 annualized at 7-percent.
Table 1 provides a more detailed summary of the final rule provisions and their impacts.
In addition to the impacts summarized here, Table 2 presents the accounting statement as required by OMB Circular A-4.
The H-1B visa program allows U.S. employers to temporarily hire foreign workers to perform services in a specialty occupation, services related to a Department of Defense (DOD) cooperative research and development project or coproduction project, or services of distinguished merit and ability in the field of fashion modeling.
The number of aliens who may be issued initial H-1B visas or otherwise provided initial H-1B nonimmigrant status during any FY has been capped at various levels by Congress over time, with the current numerical limit generally being 65,000 per FY.
Under the current regulation, all petitioners seeking to file an H-1B cap-subject petition must first electronically submit a registration for each beneficiary on whose behalf they seek to file an H-1B cap-subject petition, unless USCIS suspends the registration requirement.
Prior to filing an H-1B petition, the employer is required to obtain a certified Labor Condition Application (LCA) from the Department of Labor (DOL).
The historic population consists of petitioners who file on behalf of H-1B cap-subject beneficiaries (in other words, beneficiaries who are subject to the annual numerical limitation, including those eligible for the advanced degree exemption). DHS uses the 5-year average of H-1B cap-subject petitions received for FYs 2016 to 2020 (211,797) as the historic estimate of H-1B cap-subject petitions that were submitted annually.
Table 3 also shows historical Form G-28 filings by attorneys or accredited representatives accompanying selected H-1B cap-subject petitions. DHS notes that these forms are not mutually exclusive. Based on the 5-year average, DHS estimates 79.7 percent
The H-1B selection process changed significantly after the publication of the H-1B Registration Final Rule.
Through these changes, petitioners will incur costs associated with additional time burden in completing the registration process and, if selected for filing, the petition process. In this analysis, DHS estimates the opportunity cost of time for these occupations using average hourly wage rates of $32.58 for HR specialists and $69.86 for lawyers.
This final rule primarily will change the manner in which USCIS selects H-1B registrations (or H-1B petitions for any year in which the registration requirement is suspended), by first
Prior to implementing the registration requirement, USCIS administered the H-1B cap by projecting the number of petitions needed to reach the numerical allocations. H-1B cap-subject petitions were randomly selected when the number of petitions received on the final receipt date exceeded the number projected as needed to reach the numerical allocations. All petitions eligible for the advanced degree exemption had an equal chance of being selected toward the advanced degree exemption, and all remaining petitions had an equal chance of being selected toward the regular cap. In FY 2019, USCIS first selected petitions toward the number of petitions projected as needed to reach the advanced degree exemption. If the petition was not selected under the advanced degree exemption, those cases then were added back to the pool and had a second chance of selection under the regular cap. In FY 2020, the selection order was reversed, such that USCIS first selected petitions toward the number projected as needed to reach the regular cap from among all petitions received. USCIS then selected toward the number of petitions projected as needed to reach the advanced degree exemption from among those petitions eligible for the advanced degree exemption, but that were not selected toward the number projected as needed to reach the regular cap.
Table 5 shows the number of petitions submitted and selected in FYs 2019 and 2020. It also displays the approximated 2-year averages of the petitions that were submitted and selected for the H-1B regular cap or advanced degree exemption. On average, DHS selected 56 percent
DHS does not have data on the OES wage levels for selected petitions prior to FY 2019.
Another data limitation was that some of the FY 2020 data was incomplete with missing fields, and could not be classified into the specific wage levels; therefore, the petitions were categorized as N/A. DHS expects each registrant that is classified as N/A will be able to identify the appropriate SOC code for the proffered position because all petitioners are required to identify the appropriate SOC code for the proffered position on the LCA, even when there is no applicable wage level on the LCA. Using the SOC code and the above-mentioned DOL guidance, all registrants will be able to determine the appropriate OES wage level for purposes of completing the registration, regardless of whether they specify an
DHS has OES wage level data only on the petitions that were selected toward the numerical allocations and does not have the wage level break down for the 85,725
ii. FY 2021 Data
The population affected by this final rule consists of prospective petitioners seeking to file H-1B cap-subject petitions, including those eligible for the advanced degree exemption. DHS regulations require all petitioners seeking to file H-1B cap-subject petitions to first electronically submit a registration for each beneficiary on whose behalf they seek to file an H-1B cap-subject petition, unless USCIS suspends the registration requirement.
For the FY 2021 H-1B cap selection process, 106,100 registrations initially were selected to submit a petition. Prospective petitioners with selected registrations only were eligible to file H-1B petitions based on the selected registrations during a 90-day filing window. USCIS did not receive enough H-1B petitions during the initial filing period to meet the number of petitions projected as needed to reach the H-1B numerical allocations, so the selection process was run again in August 2020. An additional 18,315 registrations were selected in August 2020 for a total of 124,415 selected registrations for FY 2021. While the current number of registrations selected toward the FY 2021 numerical allocations is 124,415, DHS estimates certain costs for this final rule using the number of registrations initially selected (106,100) as the best estimate of the number of petitions needed to reach the numerical allocations.
Table 3 shows historical Form G-28 filings by attorneys or accredited representatives accompanying selected H-1B cap-subject petitions. DHS notes that these forms are not mutually exclusive. Based on the historical 5-year average from earlier in this analysis, DHS estimates 79.7 percent
Additionally, DHS assumes that petitioners may use human resources (HR) specialists (or entities that provide equivalent services) (hereafter HR specialist) or use lawyers or accredited representatives
Petitioners who use lawyers to complete and file H-1B petitions may either use an in-house lawyer or hire an outsourced lawyer. Of the total number of H-1B petitions filed in FY 2021, DHS estimates that 26 percent were filed by in-house lawyers, while the remaining 54 percent were filed by outsourced lawyers.
26 (rounded) percent of petitions filed by in-house lawyers = 80 percent of petitions filed by lawyers or accredited representatives × 32.3 percent of lawyers work in private businesses.
54 (rounded) percent of petitions filed by outsourced lawyer = 80 percent of petitions filed by lawyers or accredited representatives × 67.7 percent of lawyers work in private law firms.
Based on the total estimated number of affected populations shown in Table 9, DHS further estimates the number of entities that will be affected by each requirement of this final rule to estimate the costs arising from the regulatory changes in the cost-benefit analysis section. Additionally, DHS uses the same proportion of HR specialists, in-house lawyers, and outsourced lawyers (20, 26, and 54 percent, respectively) to estimate the population that will be affected by the various requirements of this final rule.
Given that the demand for H-1B cap-subject visas, including those filed for the advanced degree exemption, frequently has exceeded the annual H-1B numerical allocations, this final rule will increase the chance of selection for registrations (or petitions, if registration were suspended) seeking to employ beneficiaries at level IV or level III wages. DHS believes this incentive for petitioners to offer wages that maximize their probability of selection is necessary to address the risk that greater numbers of U.S. employers could rely on the program to access relatively lower-cost labor, precluding other employers from benefitting from the H-1B program's intended purpose of providing high-skilled nonimmigrant labor to supplement domestic labor. This final rule could result in higher proffered wages or a reduction in the downward pressure on wages in industries and occupations with concentrations of relatively lower-paid H-1B workers. Additionally, this final rule may lead to an increase in employment opportunities for unemployed or underemployed U.S. workers seeking employment in positions otherwise offered to H-1B cap-subject beneficiaries at wage levels corresponding to lower wage positions. Employers that offer H-1B workers wages that correspond with level IV or level III OES wages will have higher chances of selection.
For the FY 2021 H-1B cap selection process, USCIS initially selected 106,100 (39 percent)
DHS estimated the wage level distribution for FY 2021 based on the average distribution observed in FYs 2019 and 2020. At the time of analysis, the wage level data was unavailable for FY 2021 because the petition filing process was ongoing. Table 11 displays the historic 2-year (FY 2019 and FY 2020) approximated average of H-1B cap-subject petitions that were selected, separated by OES wage level, and percentages of selected petitions by each wage category.
DHS assumes that FY 2021 wage level distribution of registrations will equal the wage level distribution observed in FYs 2019 through 2020 data. DHS multiplied the percentage of selected petitions by level from Table 11 to estimate the breakdown of registrations by wage level. For example, DHS multiplied 145,950 by 4.4 percent to estimate that a total of 6,422 registrations would have been categorized as wage level IV under the regular cap.
This final rule will change the H-1B cap selection process, but will leave in place selecting first toward the regular cap and second toward the advanced degree exemption. USCIS now will rank and select the registrations received (or petitions, as applicable) generally on the basis of the highest OES wage level that the proffered wage equals or exceeds for the relevant SOC code and in the area of intended employment, beginning with OES wage level IV and proceeding in descending order with OES wage levels III, II, and I and below. As a result of the approximated 2-year average from above, DHS displays the projected selection percentages for registrations under the regular cap and advanced degree exemption in Table 13. With the revised selection method based on corresponding OES wage level and ranking, the approximated average indicates that all registrations with a proffered wage that corresponds to OES wage level IV or level III will be selected and 58,999, or 75 percent, of the registrations with a proffered wage that corresponds to OES wage level II will be selected toward the regular cap projections. None of the registrations with a proffered wage that corresponds to OES wage level I or below will be selected toward the regular cap projections. For the advanced degree exemption, DHS estimates all registrations with a proffered wage that corresponds to OES wage levels IV and III will be selected and 12,744, or 20 percent, of the registrations with a proffered wage that corresponds to OES wage level II will be selected. DHS estimates that none of the registrations with a proffered wage that corresponds to OES wage level I or below will be selected.
DHS is using the approximated 2-year average from above to illustrate the expected distribution of future selected registration percentages by corresponding wage level. However, DHS is unable to quantify the actual outcome because DHS cannot predict the actual number of registrations that will be received at each wage level because employers may change the number of registrations they choose to submit and the wages they offer in response to the changes in this rule.
This final rule may primarily affect prospective petitioners seeking to file H-1B cap-subject petitions with a proffered wage that corresponds to OES wage level II, I, and below.
DHS acknowledges that this final rule might result in more registrations (or petitions, if registration is suspended) with a proffered wage that corresponds to level IV and level III OES wages for H-1B cap-subject beneficiaries. DHS believes a benefit of this final rule may be that some petitioners may choose to increase proffered wages for H-1B cap-subject beneficiaries, so that the petitioners may have greater chances of selection. This change will, in turn, benefit H-1B beneficiaries who ultimately will receive a higher rate of pay than they otherwise would have in the absence of this rule. However, DHS is not able to estimate the magnitude of such benefits. DHS acknowledges the change in the selection procedure resulting from this final rule will create distributional effects and costs. DHS is unable to quantify the extent or determine the probability of H-1B petitioner behavioral changes. Therefore, DHS does not know the portion of overall impacts of this rule that will be benefits or costs.
As a result of this final rule, costs will be borne by prospective petitioners that would hire lower wage level H-1B cap-subject beneficiaries, but are unable to do so because of a reduced chance of selection in the H-1B selection process compared to the random lottery process. Such employers also may incur additional costs to find available replacement workers. DHS estimates costs incurred associated with loss of productivity from not being able to hire H-1B workers, or the need to search for and hire U.S. workers to replace H-1B workers. Although DHS does not have data to estimate the costs resulting from productivity loss for these employers, DHS provides an estimate of the search and hiring costs for the replacement workers. Accordingly, based on the result of the study conducted by the Society for Human Resource Management (SHRM) in 2016, DHS assumes that an entity whose H-1B petition is denied will incur an average cost of $4,398 per worker (in 2019 dollars)
DHS also acknowledges that some petitioners might be impacted in terms of the employment, productivity loss, search and hire costs, and profits resulting from labor turnover. In cases where companies cannot find reasonable substitutes for the labor H-1B beneficiaries would have provided, affected petitioners also will lose profits from the lost productivity. In such cases, employers will incur opportunity costs by having to choose the next best alternative to fill the job prospective H-1B workers would have filled. There may be additional opportunity costs to employers such as search costs and training.
Such possible disruptions to companies will depend on the interaction of a number of complex variables that constantly are in flux, including national, state, and local labor market conditions, economic and business factors, the type of occupations and skills involved, and the substitutability between H-1B workers and U.S. workers. These costs to petitioners are expected to be offset by increased productivity and reduced costs to find available workers for petitioners of higher wage level H-1B beneficiaries.
DHS uses the compensation to H-1B employees as a measure of the overall impact of the provisions. While DHS expects wages paid to H-1B beneficiaries to be higher in light of this final rule, DHS is unable to quantify the benefit of increased compensation because not all of the wage increases will correspond with productivity increases. This final rule may indirectly benefit prospective petitioners submitting registrations with a proffered wage that corresponds to OES wage Level I and II registrations. The indirect benefit will be present during the COVID-19 pandemic and the ensuing economic recovery if the prospective petitioners are able to find replacement workers accepting a lower wage and factoring in the replacement cost of $4,398 per worker in the United States. Similarly, prospective petitioners that will be submitting registrations with a proffered wage that will correspond to OES wage level I and II and that substitute toward unemployed or underemployed individuals in the U.S. labor force will create an additional indirect benefit from this rule. This will benefit those in the U.S. labor force if petitioners decide to select a U.S. worker rather than a prevailing wage level I or II H-1B worker. DHS notes that, although the COVID-19 pandemic is widespread, the severity of its impacts varies by locality and industry, and there may be structural impediments to the national and local labor market. Accordingly, DHS cannot quantify with confidence, the net benefit of the redistribution of H-1B cap selections detailed in this analysis.
DHS also is changing the filing procedures to allow USCIS to deny or revoke approval of a subsequent new or amended petition filed by the petitioner,
DHS is amending Form I-129, which must be filed by petitioners on behalf of H-1B beneficiaries, to align with the regulatory changes DHS is making in this final rule. The changes to Form I-129 will result in an increased time burden to complete and submit the form.
Absent the changes implemented through this final rule, the current estimated time burden to complete and file Form I-129 is 2.84 hours per petition. As a result of the changes in this final rule, DHS estimates the total time burden to complete and file Form I-129 will be 3.09 hours per petition, to account for the additional time petitioners will spend reviewing instructions, gathering the required documentation and information, completing the petition, preparing statements, attaching necessary documentation, and submitting the petition. DHS estimates the time burden will increase by a total of 15 minutes (0.25 hours) per petition for completing a Form I-129 petition.
To estimate the additional cost of filing Form I-129, DHS applies the additional estimated time burden to complete and file Form 1-129 (0.25 hours) to the respective total population and compensation rate of who may file, including an HR specialist, in-house lawyer, or outsourced lawyer. As shown in Table 14, DHS estimates, the total additional annual opportunity cost of time to petitioners completing and filing Form I-129 petitions will be approximately $3,457,401.
DHS is amending the required information on the H-1B Registration Tool. In addition to the information required on the current registration tool, a registrant will be required to provide the highest OES wage level that the proffered wage equals or exceeds for the relevant SOC code in the area of intended employment, if such data is available. The proffered wage is the wage that the employer intends to pay the beneficiary. The SOC code and area of intended employment would be indicated on the LCA filed with the petition. For registrants relying on a private wage survey, if the proffered wage is less than the corresponding level I OES wage, the registrant will select the “Wage Level I and below” box on the registration tool. If the registration indicates that the H-1B beneficiary will work in multiple locations, or in multiple positions if the prospective petitioner is an agent, USCIS will rank and select the registration based on the lowest corresponding OES wage level that the proffered wage equals or exceeds. In the limited instance where there is no current OES prevailing wage information for the proffered position, the registrant will follow DOL guidance on prevailing wage determinations to select the OES wage level on the registration, and USCIS will rank and select based on the highest OES wage level. The changes to this registration requirement will impose increased opportunity costs of time to registrants, by adding additional information to their registration.
The current estimated time burden to complete and file an electronic registration is 30 minutes (0.5 hours) per registration.
To estimate the additional cost of submitting a registration, DHS applies the additional estimated time burden to complete and submit the registration (0.33 hours) to the respective total population and total rate of compensation of who may file, including HR specialists, in-house lawyers, or outsourced lawyers. As shown in Table 15, DHS estimates the total additional annual opportunity cost of time to the prospective petitioners of completing and submitting registrations will be approximately $11,795,997.
While the expectation is that the registration process will be run on an annual basis, USCIS may suspend the H-1B registration requirement, in its discretion, if it determines that the registration process is inoperable for any reason. The selection process also allows for selection based solely on the submission of petitions in any year in which the registration process is suspended due to technical or other issues. In years when registration is suspended, DHS estimates, based on the 5-year average of H-1B cap-subject petitions received for FYs 2016 to 2020, that 211,797 H-1B cap-subject petitions will be submitted annually. In the event registration is suspended and 211,797 H-1B cap-subject petitions are submitted, DHS estimates that 106,100 petitions will be selected for adjudication to meet the numerical allocations and 105,697 petitions will be rejected. For FY 2021, DHS selected 124,415 registrations to generate the 106,100 petitions projected to meet the numerical allocations. Therefore, DHS estimates that the additional cost to petitioners for preparing and submitting H-1B cap-subject petitions in light of this final rule will be significantly higher in the event registration is suspended because more petitions will be prepared and submitted in this scenario. However, if registration is suspended there will be no costs associated with registration, so the overall additional cost of this final rule to petitioners will be less (stated another way, the estimated added cost for submitting approximately 212,000 petitions if registration is suspended will be less than the added costs based on approximately 274,000 registrations and 106,000 petitions for those with selected registrations). Since the expectation is that registration will be run on an annual basis, and because the estimated additional costs resulting from this final rule will be less if registration is suspended, DHS is not separately estimating the costs for years when registration will be suspended and, instead, is relying on the additional costs created by this final rule when registration will be required to estimate total costs of this final rule to petitioners seeking to file H-1B cap-subject petitions.
Familiarization costs comprise the opportunity cost of the time spent reading and understanding the details of a rule to fully comply with the new regulation(s). To the extent that an individual or entity directly regulated by the rule incurs familiarization costs, those familiarization costs are a direct cost of the rule. The entities directly regulated by this rule are the employers who file H-1B petitions. Using FY 2020 internal data on actual filings of Form I-129 H-1B petitions, DHS identified 24,111
In this section, DHS presents the total annual costs of this final rule annualized over a 10-year implementation period. Table 17 details the total annual costs of this final rule to petitioners will be $21,538,925 in FY 2022 and $15,253,398 in FY 2023 through 2032.
Table 18 shows costs over the 10-year implementation period of this final rule. DHS estimates the 10-year total net cost of the rule to petitioners to be approximately $158,819,507 undiscounted, $136,217,032 discounted at 3-percent, and $113,007,809 discounted at 7-percent. Over the 10-year implementation period of the rule, DHS estimates the annualized costs of the rule to be $15,968,792 annualized at 3-percent, $16,089,770 annualized at 7-percent.
E.O. 13771 directs agencies to reduced regulation and control regulatory costs. This final rule is expected to be an E.O. 13771 regulatory action. DHS estimates the total cost of this rule will be $10,515,740 annualized using a 7- percent discount rate over a perpetual time horizon, in 2016 dollars, and discounted back to 2016.
DHS is revising the process and system by which H-1B registrations or petitions, as applicable, will be selected toward the annual numerical allocations. This final rule will require updates to USCIS IT systems and additional time spent by USCIS on H-1B registrations or petitions.
The INA provides for the collection of fees at a level that will ensure recovery of the full costs of providing adjudication and naturalization services by DHS, including administrative costs and services provided without charge to certain applicants and petitioners.
The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as amended by the Small Business Regulatory Enforcement Fairness Act of 1996, Public Law 104-121 (March 29, 1996), requires Federal agencies to consider the potential impact of regulations on
Although individuals, rather than small entities, submit the majority of immigration and naturalization benefit applications and petitions, this final rule will affect entities that file and pay fees for H-1B non-immigrant benefit requests. The USCIS forms that are subject to an RFA analysis for this final rule are Form I-129, Petition for a Nonimmigrant Worker and the Registration H-1B Tool.
DHS does not believe that the changes in this final rule will have a significant economic impact on a substantial number of small entities that will file H-1B petitions. A Final Regulatory Flexibility Analysis (FRFA) follows.
DHS's objectives and legal authority for this final rule are discussed earlier in the preamble. DHS is amending its regulations governing H-1B specialty occupation workers. The purpose of this final rule is to better ensure that H-1B classification is more likely to be awarded to petitioners seeking to employ relatively higher-skilled and higher-paid beneficiaries. DHS believes these changes will disincentivize use of the H-1B program to fill relatively lower-paid, lower-skilled positions.
Additionally, this rule does not treat people who work for small-sized entities differently than those who work for large companies. While DHS recognizes that some small businesses may operate on smaller margins than larger companies, if an employer values a beneficiary's work and the unique qualities the beneficiary possesses, the employer can offer a higher wage than required by the prevailing wage level to reflect that value. If a small company is unable to pay an employee at wage level III or IV for a greater chance of selection, they could then try to find a substitute U.S. worker.
DHS did not receive comments on this rule from the Chief Counsel for Advocacy of the Small Business Administration.
For this analysis, DHS conducted a sample analysis of historical Form I-129 H-1B petitions to estimate the number of small entities impacted by this final rule. DHS utilized a subscription-based online database of U.S. entities, ReferenceUSA, as well as three other open-access, free databases of public and private entities, Manta, Cortera, and Guidestar, to determine the North American Industry Classification System (NAICS) code,
Using FY 2020 internal data on actual filings of Form I-129 H-1B petitions, DHS identified 24,111
DHS randomly selected a sample of 473 entities from the population of 24,111 entities that filed Form I-129 for H-1B petitions in FY 2020. Of the 473 entities, 406 entities returned a successful match of a filing entity in the ReferenceUSA, Manta, Cortera, and Guidestar databases; 67 entities did not return a match. Using these databases' revenue or employee count and their assigned North American Industry Classification System (NAICS) code, DHS determined 312 of the 406 matches to be small entities, 94 to be non-small entities. Based on previous experience conducting RFAs, DHS assumes filing entities without database matches or missing revenue/employee count data are likely to be small entities. As a result, to prevent underestimating the number of small entities this rule will affect, DHS conservatively considers all the non-matched and missing entities as small entities for the purpose of this analysis. Therefore, DHS conservatively classifies 379 of 473 entities as small entities, including combined non-matches (67), and small entity matches (312). Thus, DHS estimates that 80.1% (379 of 473) of the entities filing Form I-129 H-1B petitions are small entities.
In this analysis DHS assumes that the distribution of firm size for our sample is the same as the entire population of Form I-129. Thus, DHS estimates the number of small entities to be 80.1% of the population of 24,111 entities that filed Form I-129 under the H-1B classification, as summarized in Table 19 below. The annual numeric estimate of the small entities impacted by this final rule is 19,319 entities.
Following the distributional assumptions above, DHS uses the set of 312 small entities with matched revenue data to estimate the economic impact of this final rule on each small entity. The economic impact on each small entity, in percentages, is the sum of the impacts of the final rule divided by the entity's sales revenue.
Based on this analysis, DHS does not believe that this final rule will have a significant economic impact on a substantial number of small entities that file H-1B petitions.
As stated above in the preamble, this final rule will impose additional reporting, recordkeeping, or other compliance requirements on entities that could be small entities.
DHS requested comments on, including potential alternatives to, the proposed ranking and selection of registrations based on the OES prevailing wage level that corresponds to the requirements of the proffered position in situations where there is no current OES prevailing wage information. In the RFA context, DHS sought comments on alternatives that would accomplish the objectives of the proposed rule without unduly burdening small entities. DHS also welcomed any public comments or data on the number of small entities that would be petitioning for an H-1B employee and any direct impacts on those small entities.
The Office of Information and Regulatory Affairs has determined that this final rule is a major rule, as defined in 5 U.S.C. 804, also known as the “Congressional Review Act” (CRA), as enacted in section 251 of the Small Business Regulatory Enforcement Fairness Act of 1996, Public Law 104-121, sec. 251, 110 Stat. 868, 873, and codified at 5 U.S.C. 801
The Unfunded Mandates Reform Act of 1995 (UMRA) is intended, among other things, to curb the practice of imposing unfunded federal mandates on State, local, and tribal governments. Title II of the UMRA requires each federal agency to prepare a written statement assessing the effects of any federal mandate in a proposed or final agency rule that may result in a $100 million or more expenditure (adjusted annually for inflation) in any one year by State, local, and tribal governments, in the aggregate, or by the private sector. Based on the Consumer Price Index for All Urban Consumers (CPI-U), the value equivalent of $100 million in 1995 adjusted for inflation to 2019 levels is approximately $168 million.
Calculation of inflation: (1) Calculate the average monthly CPI-U for the reference year (1995) and the current year (2019); (2) Subtract reference year CPI-U from current year CPI-U; (3) Divide the difference of the reference year CPI-U and current year CPI-U by the reference year CPI-U; (4) Multiply by 100 = [(Average monthly CPI-U for 2019−Average monthly CPI-U for 1995)/(Average monthly CPI-U for 1995)] * 100 = [(255.657−152.383)/152.383] * 100 = (103.274/152.383) *100 = 0.6777 * 100 = 67.77 percent = 68 percent (rounded)
Calculation of inflation-adjusted value: $100 million in 1995 dollars * 1.68 = $168 million in 2019 dollars.
This rule does not contain a “Federal mandate” as defined in UMRA that may result in $100 million or more expenditures (adjusted annually for inflation—$168 million in 2019 dollars) in any one year by State, local and tribal governments or the private sector. This rule also does not uniquely affect small governments. Accordingly, Title II of UMRA requires no further agency action or analysis.
This final rule will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with section 6 of Executive Order 13132, DHS has determined that this final rule does not have sufficient federalism implications to warrant the preparation of a federalism summary impact statement.
This final rule meets the applicable standards set forth in sections 3(a) and 3(b)(2) of Executive Order 12988.
This final rule does not have “tribal implications” because it does not have substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. Accordingly, E.O. 13175, Consultation and Coordination with Indian Tribal Governments, requires no further agency action or analysis.
DHS analyzes actions to determine whether the National Environmental Policy Act, Public Law 91-190, 42 U.S.C. 4321 through 4347 (NEPA), applies to them and, if so, what degree of analysis is required. DHS Directive 023-01 Rev. 01 (Directive) and Instruction Manual 023-01-001-01 Rev. 01,
The CEQ regulations allow federal agencies to establish, with CEQ review and concurrence, categories of actions (“categorical exclusions”) that experience has shown do not individually or cumulatively have a significant effect on the human environment and, therefore, do not require an Environmental Assessment (EA) or Environmental Impact Statement (EIS).
As discussed in more detail throughout this final rule, DHS is amending regulations governing the selection of registrations or petitions, as applicable, toward the annual H-1B numerical allocations. This final rule establishes that, if more registrations are received during the annual initial registration period (or petition filing period, if applicable) than necessary to reach the applicable numerical allocation, USCIS will rank and select the registrations (or petitions, if the registration process is suspended) received on the basis of the highest OES prevailing wage level that the proffered wage equals or exceeds for the relevant SOC code and in the area of intended employment, beginning with OES wage level IV and proceeding in descending order with OES wage levels III, II, and I and below. If a proffered wage falls below an OES wage level I, because the proffered wage is based on a prevailing wage from another legitimate source (other than OES) or an independent authoritative source, USCIS will rank the registration in the same category as OES wage level I.
Generally, DHS believes NEPA does not apply to a rule intended to change a discrete aspect of a visa program because any attempt to analyze its potential impacts would be largely speculative, if not completely so. This final rule does not propose to alter the statutory limitations on the numbers of nonimmigrants who: May be issued initial H-1B visas or granted initial H-1B nonimmigrant status, consequently will be admitted into the United States as H-1B nonimmigrants, will be allowed to change their status to H-1B, or will extend their stay in H-1B status. DHS cannot reasonably estimate whether the wage level-based ranking approach to select H-1B registrations (or petitions in any year in which the registration requirement were suspended) that DHS is implementing will affect how many petitions will be filed for workers to be employed in specialty occupations or whether the regulatory amendments herein will result in an overall change in the number of H-1B petitions that ultimately will be approved, and the number of H-1B workers who will be employed in the United States in any FY. DHS has no reason to believe that these amendments to H-1B regulations will change the environmental effect, if any, of the existing regulations. Therefore, DHS has determined that, even if NEPA applied to this action, this final rule clearly fits within categorical exclusion A3(d) in the Instruction Manual, which provides an exclusion for “promulgation of rules . . . that amend an existing regulation without changing its environmental effect.” This final rule will maintain the current human environment by proposing improvements to the H-1B program that will take effect during the economic crisis caused by COVID-19 in a way that more effectively will prevent an adverse impact from the employment of H-1B workers on the wages and working conditions of similarly employed U.S. workers. This final rule is not a part of a larger action and presents no extraordinary circumstances creating the potential for significant environmental effects. Therefore, this action is categorically excluded and no further NEPA analysis is required.
Under the Paperwork Reduction Act of 1995 (PRA) Public Law 104-13, 44 U.S.C. 3501,
The following is an overview of the information collections associated with this final rule:
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USCIS also uses the data to determine continued eligibility. For example, the data collected is used in compliance reviews and other inspections to ensure that all program requirements are being met.
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The Acting Secretary of Homeland Security, Chad F. Wolf, having reviewed and approved this document, is delegating the authority to electronically sign this document to Ian J. Brekke, who is the Senior Official Performing the Duties of the General Counsel for DHS, for purposes of publication in the
Administrative practice and procedure, Aliens, Cultural exchange programs, Employment, Foreign officials, Health professions, Reporting and recordkeeping requirements, Students.
Accordingly, DHS amends part 214 of chapter I of title 8 of the Code of Federal Regulations as follows:
6 U.S.C. 202, 236; 8 U.S.C. 1101, 1102, 1103, 1182, 1184, 1186a, 1187, 1221, 1281, 1282, 1301-1305 and 1372; sec. 643, Pub. L. 104-208, 110 Stat. 3009-708; Pub. L. 106-386, 114 Stat. 1477-1480; section 141 of the Compacts of Free Association with the Federated States of Micronesia and the Republic of the Marshall Islands, and with the Government of Palau, 48 U.S.C. 1901 note and 1931 note, respectively; 48 U.S.C. 1806; 8 CFR part 2; Pub. L. 115-218.
The revisions and additions read as follows:
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(24) * * * (i) The requirement to submit a registration for an H-1B cap-subject petition and the selection process based on properly submitted registrations under paragraph (h)(8)(iii) of this section are intended to be severable from paragraph (h)(8)(iv) of this section. In the event paragraph (h)(8)(iii) is not implemented, or in the event that paragraph (h)(8)(iv) is not implemented, DHS intends that either of those provisions be implemented as an independent rule, without prejudice to petitioners in the United States under this section, as consistent with law.