Animal and Plant Health Inspection Service
Forest Service
Rural Utilities Service
Foreign-Trade Zones Board
International Trade Administration
National Oceanic and Atmospheric Administration
National Telecommunications and Information Administration
Defense Acquisition Regulations System
Federal Energy Regulatory Commission
Centers for Disease Control and Prevention
Centers for Medicare & Medicaid Services
Children and Families Administration
Food and Drug Administration
Health Resources and Services Administration
National Institutes of Health
U.S. Customs and Border Protection
Fish and Wildlife Service
Geological Survey
Land Management Bureau
National Indian Gaming Commission
National Park Service
Surface Mining Reclamation and Enforcement Office
Federal Contract Compliance Programs Office
Occupational Safety and Health Administration
Institute of Museum and Library Services
Federal Aviation Administration
Federal Motor Carrier Safety Administration
Federal Railroad Administration
Community Development Financial Institutions Fund
Comptroller of the Currency
Financial Crimes Enforcement Network
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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Farm Credit Administration.
Notification of effective date.
The Farm Credit Administration (FCA, we, or our) issued a final rule amending our regulations governing young, beginning, and small farmers and ranchers (YBS).
The final rule was published on December 27, 2023 (88 FR 89280), and is effective as of February 14, 2024.
or
On October 12, 2023, FCA issued a final rule amending our regulations at 12 CFR parts 614 and 620 governing service to YBS. The final rule clarifies the responsibilities of funding banks in the review and approval of direct lender association YBS programs, strengthens funding bank internal controls, and bolsters YBS business planning.
In accordance with 12 U.S.C. 2252(c)(1), the effective date of the rule is no earlier than 30 days from the date of publication in the
Federal Energy Regulatory Commission, DOE.
Policy statement.
The Federal Energy Regulatory Commission revises its process for resolving by settlement investigations pursuant to the Commission's regulations. Pursuant to this policy statement, the Commission grants the Director of Enforcement the discretion to authorize Office of Enforcement staff to engage in settlement negotiations without first seeking settlement authority from the Commission. When Office of Enforcement staff receives a viable offer of settlement from the subject of an investigation, it will present that offer to the Commission for voting, as is the case now. While the new process grants Office of Enforcement staff new discretion to commence settlement negotiations, it does not change the fact that it is the Commission that ultimately determines whether any proposed settlement of an investigation is in the public interest.
This policy statement is effective February 26, 2024.
1. The Commission issues this policy statement to provide updated guidance as to our enforcement process and policies concerning resolution by settlement of investigations that are initiated pursuant to part 1b of the Commission's regulations.
2. As discussed in more detail below, pursuant to this Policy Statement, we replace the Commission's existing process whereby Office of Enforcement (Enforcement) staff must seek settlement authority from the Commission prior to engaging in settlement negotiations with the subject of an investigation, with a process where the Director of Enforcement has the discretion to authorize Enforcement staff to engage in such negotiations. Under this new process, formal settlement authority, with settlement terms pre-reviewed by the Commission, will not be a necessary precondition to the initiation of settlement negotiations. Instead, with the Director of Enforcement's authorization, Enforcement staff will engage in negotiations with the subject of an investigation and, if and when Enforcement staff receives a viable settlement offer from the subject, it will negotiate the applicable terms and thereafter present the written Offer of Settlement to the Commission for formal voting. Importantly, while the new process grants Enforcement staff new discretion to commence and engage in settlement negotiations, it does not
3. Given the significant role settlements play in the Commission's enforcement program, it is important to ensure that the policies and practices governing the settlement process are efficient and effective. Ensuring that the Commission moves expeditiously benefits the subjects of Commission investigations who want to resolve investigations early, as well as any market participants, customers, and the public who may have been harmed by the alleged violations and to whom disgorgement and restitution may be directed once settlement is achieved. The reforms adopted herein to the Commission's settlement process enhance both Enforcement staff's and investigative subjects' ability to negotiate settlements and reduce the time it takes to reach resolution by settlement. As a result, the Commission's settlement practices will better align with those of similarly situated Federal agencies which do not require that Enforcement staff request settlement authority prior to engaging in settlement negotiations with subjects of investigations.
4. Settlement is the preferred means for the Commission to resolve investigations that would otherwise result in a recommendation of remedial action.
5. In 2008, the Commission issued its Revised Policy Statement on Enforcement to “provide guidance to the regulated community as to [its] enforcement policies concerning our governing statutes, regulations, and orders.”
6. The Revised Policy Statement on Enforcement explained that, before recommending the Commission commence an enforcement proceeding, Enforcement staff will attempt to reach a settlement with the subject of an investigation. The Commission noted that this is valuable to the subjects of investigations, who benefit from potentially lower negotiated penalties
7. With regard to process, the Revised Policy Statement on Enforcement set forth a means by which Enforcement staff would request settlement authority from the Commission,
8. Since issuance of the Revised Policy Statement on Enforcement in 2008, Enforcement staff has followed the process detailed therein whereby it seeks settlement authority from the Commission prior to entering into settlement negotiations with the subject of an investigation. Pursuant to this process, after commencing an investigation under part 1b of the Commission's regulations and engaging in initial discovery, but before any formal settlement negotiations take place, Enforcement staff presents to the Commission its views, as developed to that date by the investigation,
9. Settlement authority is not pre-approval of any settlement ultimately reached between Enforcement staff and an investigative subject consistent with the authority granted. Any settlement reached after obtaining settlement authority must still subsequently be approved by the Commission to be effective, based on a finding that the settlement is in the public interest. Thus, while Enforcement staff can recommend a settlement to the Commission, it cannot guarantee that the Commission will approve a recommended settlement, including the specific terms and conditions of the final stipulation and agreement. After Enforcement staff reaches a proposed settlement with a subject, it submits a Stipulation and Consent Agreement—executed by both the subject and the Director of Enforcement—to the Commission for formal voting. The Stipulation and Consent Agreement, as well as the related order approving the settlement, are generally released publicly upon approval.
10. The Commission's existing process for settling cases, which requires staff to seek settlement authority from the Commission in all cases prior to engaging in settlement negotiations, would benefit from certain improvements in light of both Enforcement staff's increased and broad experience investigating violations and recommending appropriate sanctions for such violations, and inefficiencies that the current authorization process can present in many cases for the Commission, Enforcement and other Commission staff, and investigative subjects.
11. The existing settlement authority process was adopted in the 2008 Revised Policy Statement on Enforcement, as part of the Commission's efforts to provide guidance to the regulated community as to our enforcement policies in light of the enhanced enforcement tools created by EPAct 2005.
12. Over the past 15 years, the Commission has gained significant experience implementing its enhanced enforcement authorities. Since 2007, Enforcement staff has negotiated over 150 settlements, pursuant to which investigative subjects have agreed to pay almost a billion dollars in civil penalties and over a half a billion dollars in disgorgement.
13. Further, in 2010, after adoption of the existing settlement authority process, the Commission adopted its Penalty Guidelines to “add greater fairness, consistency, and transparency to our enforcement program.”
14. We note also that one of the only stated justifications for adopting the existing settlement authority process in the 2008 Revised Policy Statement on Enforcement was that it would “ensure[ ] that the Commission, not staff, determines the appropriate range of remedies for purposes of settlement.”
15. Further, in addition to developments over the past 15 years, the Commission has also found that, in its experience, requiring pre-authorization to engage in settlement negotiations in all cases—regardless of the seriousness of the alleged violation or the complexity of the case—creates unnecessary burdens on Commission staff and investigative subjects who are seeking prompt resolution of investigations.
16. The existing settlement authority process can result in an inefficient allocation of limited agency resources. Under the existing process, in all cases Enforcement staff and other Commission program offices invest significant time in seeking approval to commence negotiations, no matter how likely the prospects of settlement are. However, after all the time and effort spent on pre-authorization to engage in settlement negotiations, the parties may not agree to the terms of a settlement.
17. Investigative subjects have also expressed frustration at the time it can take to complete the settlement authority process in some cases. Enforcement staff has found that increasingly subjects are inclined to try to resolve investigations quickly through settlement, particularly in cases where there are no factual disputes. Moreover, prolonging the settlement process by requiring authorization to negotiate can result in added burden and expense on investigative subjects. As a result, investigative subjects are often ready to begin negotiations and determine whether a settlement is attainable, and the existing settlement authority process represents a delay—sometimes of several months or more—in getting to this step.
18. Finally, the prolonged settlement authority process also delays public dissemination of information about the alleged misconduct. Transparency can help prevent further misconduct by sending a message of deterrence. Moreover, expedient resolution of investigations by settlement ensures that ill-gotten gains are returned to harmed market participants and consumers as quickly as possible.
19. Both the experience Enforcement staff has gained investigating and settling diverse cases over the past 15 years and the adoption of, and experience applying, the Penalty Guidelines have created a strong framework for Enforcement staff to evaluate whether settlement of an investigation, and on what terms, can be recommended to the Commission to be found to be in the public interest. Further, we find that the existing settlement authority process is inefficient, in that it unnecessarily consumes limited agency resources and potentially delays resolution of investigations by settlement. These factors weigh heavily in favor of streamlining the settlement process to eliminate the unnecessary intermediate step of getting settlement authority.
20. In light of our experience and also feedback received from the regulated industry and subjects of Commission investigations, we hereby revise our existing process for settling investigations initiated pursuant to part 1b of the Commission's regulations. Specifically, we will no longer require Enforcement staff to obtain settlement authority from the Commission prior to initiating and negotiating a potential settlement of an investigation. Instead, we hereby grant the Director of Enforcement the authority to authorize Enforcement staff to commence settlement negotiations and/or respond with counteroffers to settlement negotiations initiated by a subject. The Director of Enforcement retains the existing discretion to engage with the Commission for feedback prior to authorizing staff to engage in such settlement negotiations on any particular investigation.
21. After engaging in settlement negotiations, should an investigative subject submit a viable Offer of Settlement,
22. The major benefit of this approach to settlement negotiations is that it will greatly improve the efficiency of the settlement process, thereby allowing Enforcement staff to devote time that would otherwise be spent seeking settlement authority to other Commission investigations or proceedings. Further, unlike the existing settlement authority process, this new process ensures that Commission staff and the Commissioners are only investing time analyzing settlement terms that are known to be acceptable to the subject of the investigation, as they have been presented in an Offer of Settlement. We expect that these efficiency gains will lead to speedier resolutions of investigations, which will better serve the subjects of investigations, as well as the public who will see the benefits of required remediation faster. We also note that the approach to settlement negotiations set forth in this policy statement aligns with other similarly situated Federal agency enforcement programs, including the Securities and Exchange Commission and the Commodity Futures Trading Commission.
23. Further, as previously stated, this new process does not change the fact that it is the Commission, not staff, that ultimately determines whether or not any settlement of an investigation is in the public interest. Consistent with our existing process, an Offer of Settlement, as well as the related order approving the settlement, will generally be released publicly upon approval.
24. The settlement authority process and enhancements detailed in this policy statement apply only to the process by which the Commission resolves investigations conducted by Enforcement staff pursuant to 18 CFR part 1b, including investigations that relate to violations of the mandatory Reliability Standards. The reforms discussed herein do not change the process by which parties to a docketed proceeding pending before the Commission or set for hearing submit settlements to the Commission for consideration,
25. As a Commission, we are always striving to responsibly implement our enforcement authorities, and to that end, to continually improve and enhance our enforcement policies and procedures to better serve the public. Consistent with that goal, we issue this policy statement and hereby streamline our settlement process by eliminating the requirement that Enforcement staff seek settlement authority from the Commission prior to initiating settlement negotiations, and instead grant new discretion to the Director of Enforcement to authorize the commencement of settlement negotiations. We believe these reforms will result in more effective and efficient resolutions of part 1b investigations by settlement.
26. In addition to publishing the full text of this document in the
27. From the Commission's homepage on the internet, this information is available on eLibrary. The full text of this document is available on eLibrary in PDF and Microsoft Word format for viewing, printing, and/or downloading. To access this document in eLibrary, type the docket number excluding the last three digits of this document in the docket number field.
28. User assistance is available for eLibrary and the Commission's website during normal business hours from the Commission's Online Support at (202) 502-6652 (toll free at 1-866-208-3676) or email at
29. This policy statement is effective February 26, 2024.
By the Commission.
Food and Drug Administration, (HHS).
Final rule; technical amendment.
The Food and Drug Administration (FDA or Agency) is amending its regulations to update a link regarding user fee disputes. This technical amendment is non-substantive.
This rule is effective February 26, 2024.
Nate Mease and Tamika Hopkins, Center for Tobacco Products, Food and Drug Administration, Document Control Center, 10903 New Hampshire Ave., Bldg. 71, Rm. G335, Silver Spring, MD 20993-0002, 1-877-287-1373, email:
FDA is amending § 1150.15 (21 CFR 1150.15) to update the web address for information regarding user fee disputes. FDA's user fee dispute regulations currently link to FDA's general web page on tobacco products. FDA is revising § 1150.15 to specifically direct firms to FDA's web page on tobacco product user fees by replacing “
Publication of this document constitutes final action on these changes under the Administrative Procedure Act (APA) (5 U.S.C. 553). The APA generally exempts rules from the requirements of notice and comment rulemaking when an agency “for good cause finds (and incorporates the finding and a brief statement of reasons therefor in the rules issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest” (5 U.S.C. 553(b)(B)).
FDA has determined that notice and public comment are unnecessary because this amendment to the regulation provides only technical or non-substantive, ministerial changes to specify the location of information on FDA's web page regarding tobacco product user fee program. Such technical, non-substantive changes are “routine determination[s], insignificant in nature and impact, and inconsequential to the industry and to the public.” (
In addition, FDA finds good cause for these amendments to become effective on the date of publication of this action. The APA allows an effective date of less than 30 days after publication as “provided by the agency for good cause found and published with the rule” (5 U.S.C. 553(d)(3)). A delayed effective date is unnecessary in this case because the amendments do not impose any new regulatory requirements on affected parties. As a result, affected parties do not need time to prepare before the rule takes effect. Therefore, FDA finds good cause for this correction to become effective on the date of publication of this action.
Tobacco products, User fees.
Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, 21 CFR part 1150 is amended as follows:
21 U.S.C. 371, 387a, 387b, 387i, 387s, 21 CFR 1100.1.
(a) * * *
(4) Sent to the address found on our website (
(d) A request for further Agency review under § 10.75 of this chapter may be submitted. Such a request must be submitted in writing by the domestic manufacturer or importer and received by FDA within 30 days from the date on FDA's response. The request for further Agency review must be legible, in English, and submitted to the address found on our website (
Postal Service
Final rule.
The Postal Service is amending its Postage Evidencing Systems (PES) regulations to ensure compliance for Automated Clearinghouse or ACH payment transactions and to clarify obligations related to all payments. These changes require the applicable resetting company (RC) and PC Postage provider to comply with the latest NACHA rules published by the North American Clearing House Association for ACH transactions. These changes also require the applicable RC and PC Postage provider to obtain and store an agreement with each customer utilizing ACH debit as a payment method. Failure to comply may result in revocation of access to applicable Postal Service ACH programs.
Effective March 27, 2024.
Douglas Graham, Banking Manager, United States Postal Service, 475 L'Enfant Plaza SW, RM 8134, Washington, DC 20260. Phone: (202) 268-2188.
The Postal Service issued proposed revisions to 39 CFR part 501, set forth in the
The proposal that PES providers must comply with NACHA rules received comments highlighting the need for clarification on which version of the NACHA rules will apply, as the rules are regularly updated. The commentors suggest including a provision for a grace period for PES providers to adopt and comply with future updates, which could either be fixed, or flexible and proportionate to the scope and complexity of future changes.
The rule will be re-worded to specify “must comply with the most recently published edition of NACHA Operating Rules & Guidelines, published by NACHA annually.” It is not the intention through this rulemaking to alter or supersede NACHA rules, but to follow existing NACHA rules and compliance that industry should reasonably understand and expect. Under this approach, the Postal Service cannot provide NACHA compliance exemptions as any entity involved in ACH related activity must already comply with NACHA rules, therefore the Postal Service will also not specify “sections to comply with” nor “grace periods”. Changes to the NACHA Operating Rules and Guidelines typically provide for future dated requirements and therefore an implementation period is normally provided within the NACHA rules.
Commentors expressed opposition to the proposal's requirement for an annual written attestation of compliance for PES providers. One commentor opined that the requirement is unnecessary, since PES providers are already required to provide the Postal Service with System and Organizational Controls Reports (SOC 1 and SOC 2) that incorporate NACHA compliance. The proposed rule's requirement of a written plan to address any noncompliance of NACHA rules is duplicative of the existing requirement for a remediation plan as a part of the SOC process. If the requirement is retained, one commentor recommends that the Postal Service should provide the text of the attestation or clarify what the attestation must contain.
The requirement to provide an annual written attestation of compliance will be removed.
Commentors expressed concerns about the proposed rule's new record-keeping requirements for ACH agreements for PES providers. One commenter suggested revising the requirements to minimize administrative burden and focus only on essential information. This commenter proposes accommodating customer agreements predating the rule by either grandfathering them for a specified period or providing an extended grace period, such as 12 to 18 months, for historic account information. The comment also argues against duplicative elements, such as the need for bank address information for every customer agreement. Another commenter also supports the idea of a grace period for providers to obtain and document the required contracts and suggest making a bank address an optional requirement, since it can be derived from the Routing/ABA number.
1. Regarding supplying the bank address information, it is agreed, and that data element requirement will be removed.
2. Regarding requiring signature evidence of termination, it is agreed, and that data element requirement will be removed.
3. To comply with NACHA rules, the ability to provide a copy of the ACH Debit upon request must already be in place, therefore “grandfathering” an exemption to this requirement is not an option. All customers of the providers must have an ACH Debit Agreement on file with the provider. All terminated ACH Debit Agreements must have a termination date noted on the agreement and the agreement must be kept on file for at least 2 years after the termination date.
4. It is agreed that an ACH Debit Agreement “form (hard copy or electronic)” revision period will be provided to update agreement “forms” to include the minimum data elements
One commenter expressed the view that the proposed rule's specific timelines for reimbursement of the Postal Service by PES providers for ACH returned payments do not provide sufficient time for PES providers to work with customers on returned payments. The commenter recommends modifying the proposed sections to extend the reimbursement timeframe.
This is a comment based on §§ 501.15(g)(1) and 501.16(d)(1). While the text of these rules is included in the rulemaking, changes are not being made to these existing provisions of the rule that have been in effect prior to the proposed rulemaking. No changes to these existing provisions were intended to be included in this proposal, and none will be made in the final rule.
We also added one further conforming change to § 501.16 to aid in the implementation of these changes.
Administrative practice and procedure, Postal Service.
5 U.S.C. 552(a); 39 U.S.C. 101, 401, 403, 404, 410, 2601, 2605; Inspector General Act of 1978, as amended (Pub. L. 95-452, as amended); 5 U.S.C. App. 3.
(g) The RC must reimburse the Postal Service for returned payments promptly, comply with NACHA rules, and maintain customer ACH debit agreements.
(1)
(2)
(3)
(d) The provider must reimburse the Postal Service for returned payments promptly, comply with NACHA rules, and maintain customer ACH agreements.
(1)
(2)
(3)
(4)
(i) * * *
(5) * * *
(ii) * * *
(C) Authorizes the PC Postage provider to disclose the customer's personal information to the Postal Service, and such other information retained by the PC Postage provider that may enable the Postal Service to collect debts owed to it, and has the proper authority to disclose such information;
Bureau of Land Management, Interior.
Final rule.
This final rule adjusts the amounts of civil monetary penalties contained in the Bureau of Land Management's (BLM) regulations governing onshore oil and gas operations and coal trespass. This final rule is required by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 and consistent with applicable Office of Management and Budget (OMB) guidance. The adjustments made by this final rule constitute the 2024 annual inflation adjustments and account for one year of inflation spanning the period from October 2022 through October 2023.
This rule is effective on February 26, 2024.
For information regarding the BLM's Fluid Minerals Program, please contact Yvette Fields, Division Chief, Fluid Minerals Division, telephone: 204-712-8358; email:
For questions relating to regulatory process issues, please contact Stephen Pollard, Division of Regulatory Affairs, email:
Individuals in the United States who are deaf, deafblind, hard of hearing, or have a speech disability may dial 711 (TTY, TDD, or TeleBraille) to access telecommunications relay services. Individuals outside the United States should use the relay services offered within their country to make international calls to the point-of-contact in the United States.
On November 2, 2015, the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Sec. 701, Pub. L. 114-74) (the 2015 Act) became law, amending the Federal Civil Penalties Inflation Adjustment Act of 1990 (Pub. L. 101-410).
On an annual basis, the 2015 Act requires agencies to:
1. Adjust the level of civil monetary penalties for inflation; and
2. Report inflation adjustments in the Agency Financial Reports as directed by OMB Circular A-136, or any successor thereto.
The purpose of these adjustments is to maintain the deterrent effect of civil monetary penalties and promote compliance with the law (
As required by the 2015 Act, on June 28, 2016, the BLM issued an interim final rule that adjusted the level of civil monetary penalties in BLM regulations with the initial “catch-up” adjustment (RIN 1004-AE46, 81 FR 41860). In subsequent years, the BLM has issued final rules, adjusting the level of civil monetary penalties for inflation, as appropriate for 2017 to 2023.
OMB issued Memorandum M-24-07 on December 19, 2023, entitled, Implementation of Penalty Inflation Adjustments for 2024, Pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, which explains agency responsibilities for identifying applicable penalties and calculating the annual adjustment for 2024 in accordance with the 2015 Act.
In accordance with the 2015 Act and OMB Memorandum M-24-07, the BLM has identified applicable civil monetary penalties in its regulations and calculated the annual adjustments. A civil monetary penalty is any assessment with a dollar amount that is levied for a violation of a Federal civil statute or regulation and is assessed or enforceable through a civil action in Federal court or an administrative proceeding. A civil monetary penalty does not include a penalty levied for violation of a criminal statute, nor does
The 2015 Act requires the BLM to adjust the civil penalty amounts in 43 CFR 3163.2 and 9239.5-3(f)(1). To accomplish this, the BLM multiplied the current penalty amounts in those paragraphs by the multiplier set forth in OMB Memorandum M-24-07 (1.03241) to obtain the adjusted penalty amounts. The 2015 Act requires that the resulting amounts be rounded to the nearest $1.00 at the end of the calculation process.
The adjusted penalty amounts will take effect immediately upon publication of this rule. Pursuant to the 2015 Act, the adjusted civil penalty amounts apply to civil penalties assessed after the date the increase takes effect, even if the associated violation predates such increase. This final rule adjusts the following civil penalties:
In accordance with the 2015 Act, agencies must adjust civil monetary penalties “notwithstanding Section 553 of the Administrative Procedure Act” (Sec. 4(b)(2), 2015 Act). The BLM is promulgating this 2024 inflation adjustment for civil penalties as a final rule pursuant to the provisions of the 2015 Act and OMB guidance. A proposed rule is not required because the 2015 Act expressly exempts the annual inflation adjustments from the notice and comment requirements of the Administrative Procedure Act. In addition, the 2015 Act does not give the BLM any discretion to vary the amount of the annual inflation adjustment for any given penalty to reflect any views or suggestions provided by commenters. Accordingly, the BLM will not provide an opportunity for public comment on this rule.
Executive Order (E.O.) 12866, as amended by E.O. 14094, provides that the Office of Information and Regulatory Affairs (OIRA) in the OMB will review all significant rules. OIRA has determined that this rule is not significant. (
E.O. 13563 reaffirms the principles of E.O. 12866 while calling for improvements in the nation's regulatory system to promote predictability and to reduce uncertainty and to use the best, most innovative, and least burdensome tools for achieving regulatory ends. E.O. 13563 directs agencies to consider regulatory approaches that reduce burdens and maintain flexibility and freedom of choice for the public where these approaches are relevant, feasible, and consistent with regulatory objectives. E.O. 13563 emphasizes further that regulations must be based on the best available science, and that the rulemaking process must allow for public participation and an open exchange of ideas. We have developed this rule in a manner that is consistent with these requirements to the extent permitted by the 2015 Act.
The Regulatory Flexibility Act (RFA) requires an agency to prepare a regulatory flexibility analysis for all rules unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. The RFA applies only to rules for which an agency is required to first publish a proposed rule.
This rule is not a major rule under the Congressional Review Act. This rule:
(a) Will not have an annual effect on the economy of $100 million or more.
(b) Will not cause a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; and
(c) Will not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign-based enterprises.
This rule does not impose an unfunded mandate on State, local, or Tribal governments, or the private sector of more than $100 million per year. The rule does not have a significant or unique effect on State, local, or Tribal governments or the private sector. Therefore, a statement containing the information required by the Unfunded Mandates Reform Act (2 U.S.C. 1531
This rule does not effect a taking of private property or otherwise have takings implications under E.O. 12630. Therefore, a takings implication assessment is not required.
Under the criteria in section 1 of E.O. 13132, this rule does not have federalism implications that warrant the preparation of a federalism summary impact statement. Therefore, a federalism summary impact statement is not required.
This rule complies with the requirements of E.O. 12988. Specifically, this rule:
(a) Meets the criteria of section 3(a) requiring that all regulations be reviewed to eliminate errors and
(b) Meets the criteria of section 3(b)(2) requiring that all regulations be written in clear language and contain clear legal standards.
The Department of the Interior strives to strengthen its government-to-government relationship with Indian Tribes through a commitment to consultation with Indian Tribes and recognition of their right to self-governance and tribal sovereignty. We have evaluated this rule under the Department's consultation policy and under the criteria in E.O. 13175 and have determined that it has no substantial direct effects on federally recognized Indian Tribes and that consultation under the Department's Tribal consultation policy is not required.
This rule does not contain information collection requirements, and a submission to OMB under the Paperwork Reduction Act (44 U.S.C. 3501
This rule does not constitute a major federal action because of the non-discretionary nature of the civil penalty adjustment as required by law (see 40 CFR 1508.1(q)(1)(ii)). The Department of Labor's Consumer Price Index sets the amount of the annual civil penalty adjustment to account for inflation as required by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. Accordingly, BLM has no discretion in the execution of the civil penalty adjustments. Even if this were a discretionary action, which it is not, a detailed statement under NEPA would also not be required because, as a regulation of an administrative nature, this rule would otherwise be covered by a categorical exclusion. See 43 CFR 46.210(i). BLM has determined that the rule does not implicate any of the extraordinary circumstances listed in 43 CFR 46.215 that would prevent reliance on the categorical exclusion. Because this rule is not a major federal action, it is therefore not subject to the requirements of NEPA.
This rule is not a significant energy action under the definition in E.O. 13211. Therefore, a Statement of Energy Effects is not required.
Administrative practice and procedure; Government contracts; Indians—lands; Mineral royalties; Oil and gas exploration; Penalties; Public lands—mineral resources; Reporting and recordkeeping requirements.
Penalties, Public lands.
For the reasons given in the preamble, the BLM amends Chapter II of Title 43 of the Code of Federal Regulations as follows:
25 U.S.C. 396d and 2107; 30 U.S.C. 189, 306, 359, and 1751; 43 U.S.C. 1732(b), 1733, 1740; and Sec. 107, Pub. L. 114-74, 129 Stat. 599, unless otherwise noted.
R.S. 2478; 43 U.S.C. 1201.
This action by the Principal Deputy Assistant Secretary is taken pursuant to an existing delegation of authority.
Federal Motor Carrier Safety Administration (FMCSA), Department of Transportation (DOT).
Final rule.
FMCSA amends its regulations to implement the statutory exemption from its operating authority registration requirements for providers of recreational activities. The exemption applies to motor carriers operating a motor vehicle designed or used to transport between 9 and 15 passengers (including the driver), whether operated alone or with a trailer attached to the transport vehicle, if the motor vehicle is operated by a person that provides recreational activities within a 150 air-mile radius of the location at which passengers initially boarded the motor vehicle at the beginning of the trip. FMCSA also defines
This final rule is effective April 26, 2024.
Petitions for Reconsideration of this final rule must be submitted to the FMCSA Administrator no later than March 27, 2024.
Mr. Antonio Harris, Registration, Licensing and Insurance Division, Office of Research and Registration, FMCSA, 1200 New Jersey Avenue SE, Washington, DC 20590-0001; (202) 366-2964;
FMCSA organizes this final rule as follows:
To view any documents mentioned as being available in the docket, go to
Section 23012 of the Infrastructure Investment and Jobs Act (IIJA) (Pub. L. 117-58, 135 Stat. 429 (H.R. 3684, Nov. 15, 2021)) amended 49 United States Code (U.S.C.) 13506 by adding, in paragraph (b)(4), a new exemption from FMCSA's operating authority registration requirements. FMCSA adds new regulatory text implementing this statutory exemption. The exemption from operating authority registration applies to motor carriers operating a motor vehicle designed or used to transport between 9 and 15 passengers (including the driver), whether operated alone or with a trailer attached to the transport vehicle, if the motor vehicle is operated by a person
FMCSA also defines
The cost savings associated with this rulemaking include changes in paperwork, fees, and insurance costs associated with maintaining for-hire operating authority. Because there is no pre-existing definition of
Section 23012 of the IIJA amended 49 U.S.C. 13506 by adding a new exemption from the requirement to obtain operating authority registration for “providers of recreational activities” operating passenger vehicles designed or used to transport between 9 and 15 passengers (including the driver) (see 49 U.S.C. 13506(b)(4)). The statute, which requires that the motor vehicle be operated “by a person that provides recreational activities,” does not define
Under Title 49, Code of Federal Regulations (CFR) 1.87(a)(5), the authority of the Secretary of the Department of Transportation (the Secretary) to carry out the functions relating to the registration requirements in 49 U.S.C. 13901 and 13902 is delegated to the FMCSA Administrator. Sections 13901 and 13902 generally require that any person wishing to provide transportation subject to jurisdiction under subchapter I of chapter 135
Under 49 CFR 1.87(a)(3), the authority of the Secretary to carry out the functions related to the jurisdiction requirements in 49 U.S.C. 13506 is delegated to the FMCSA Administrator. Section 13506 provides miscellaneous motor carrier transportation exemptions, including the exemption from operating authority for providers of recreational activities added by the IIJA. The statutory exemption provided in section 13506 provides the basis for the regulatory exemption added under this rule in 49 CFR 372.113, including the definition of recreational activities added to 49 CFR 372.107.
On June 21, 2023, FMCSA published in the
FMCSA solicited comments concerning the NPRM for 60 days ending August 21, 2023, and by that date four comments were received. AWM Associates, LLC (AWM), the National Association of Mutual Insurance Companies (NAMIC), and a private citizen each submitted a comment, and a joint comment was submitted by the Motorcycle Industry Council, Specialty Vehicle Institute of America, and Recreational Off-Highway Vehicle Association (the “Vehicle Associations”).
FMCSA did not receive any comments regarding the portion of the
AWM's comment questions whether the cost of obtaining and maintaining operating authority is burdensome, and it critiques portions of the comment from the America Outdoors Association (AOA) relating to this issue. The AOA comment, which relates to operating authority for recreational activity providers, predates both the IIJA and this rule, and AOA submitted it in response to a DOT notice requesting that the public identify and provide input on the Department's existing guidance documents that are good candidates for repeal, replacement, or modification.
Regarding the applicability of operating authority requirements in part 365, 49 U.S.C. 13901 and 13902 generally require that any person that wishes to provide transportation subject to jurisdiction under subchapter I of chapter 135 be registered as a
Regarding potential confusion with State insurance requirements, the Agency believes this rule will alleviate confusion. The rule provides a definition for
Whether certain insurance policies are available to motor carriers providing recreational activities eligible for the operating authority exemption, where such policies offer cost savings to the motor carriers due to the exemption, is a separate concern from the applicability of the exemption. Changing the extent of the exemption is outside the Agency's authority, and the Agency declines to make any changes to the exemption based on this portion of NAMIC's comment but does consider it in relation to the RIA for the rule.
In the NPRM, the Agency's RIA included an estimate of potential insurance cost savings, among other potential cost savings, for eligible motor carriers.
Based on the information gathered and the Agency's experience administering the relevant regulations, FMCSA believes it is possible for a motor carrier providing recreational activities on a seasonal basis to carry an insurance policy during its operating season, terminate the policy at the end of the season, and obtain a new policy at the beginning of its next operating season.
In response to a comment, FMCSA is changing the definition of
Congress created an exemption from FMCSA's operating authority registration rules for “providers of recreational activities.” (49 U.S.C. 13506(b)(4)). This final rule adds new regulatory text implementing this statutory exemption and defines the term
This section-by-section analysis describes the proposed changes in numerical order.
As proposed in the NPRM, FMCSA adds a new paragraph (i), which defines
As proposed in the NPRM, FMCSA adds a new § 372.113 to subpart A of 49 CFR 372. This new section outlines the exemption from operating authority registration in 49 U.S.C. 13506(b)(4).
FMCSA has considered the impact of this final rule under E.O. 12866 (58 FR 51735, Oct. 4, 1993), Regulatory Planning and Review, E.O. 13563 (76 FR 3821, Jan. 21, 2011), Improving Regulation and Regulatory Review, and E.O. 14094 (88 FR 21879, Apr. 11, 2023), Modernizing Regulatory Review. The Office of Information and Regulatory Affairs within the Office of Management and Budget (OMB) determined that this final rule is not a significant regulatory action under section 3(f) of E.O. 12866, as supplemented by E.O. 13563, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that order. Accordingly, OMB has not reviewed it under that E.O.
This final rule codifies the exemption for providers of recreational activities in regulation and defines
This rule provides clarity to both motor carriers and enforcement officials regarding which carriers qualify for the new exemption in section 23012 of the IIJA as of November 15, 2021. Because Congress did not define
For the purposes of this analysis, the changes in this rule are compared to the baseline established by section 23012 of the IIJA and the current requirements for providers of recreational activities under 49 U.S.C. 13901 and 13902 and 49 CFR part 365. As discussed above, the IIJA created a new exemption from the requirement to obtain FMCSA operating authority registration for providers of recreational activities. Accordingly, this exemption has been available to these motor carriers since the IIJA was enacted on November 15, 2021. Therefore, the incremental impacts of this rule relative to the baseline lie in how the affected industry and enforcement officials have been interpreting the term in the absence of a definition in the FMCSRs.
The Agency relies on the Motor Carrier Management Information System (MCMIS) database to obtain information on commercial motor carriers subject to the FMCSRs. While MCMIS does contain data on passenger vehicle size (
In the NPRM, the Agency invited the public to provide information to address uncertainty surrounding the size of the affected population and the frequency of exemption use. While FMCSA did not receive such information, a comment from AWM provided questions about whether an exemption from the current requirements for obtaining and maintaining operating authority was necessary. However, FMCSA is not determining through this rulemaking whether there should be an exemption from the operating authority registration rules for providers of recreational activities. This decision was made by Congress when it passed the IIJA in 2021, which created a statutory exemption. FMCSA's role in this rulemaking is only to define the term
The resulting cost impacts of the definitional clarification in this rule include changes in paperwork, fees, and insurance costs associated with maintaining operating authority. Because there is no pre-existing definition of recreational activities, motor carriers may be interpreting their eligibility for the operating authority exemption in varying ways. Depending on current interpretations, this rule will either increase, decrease, or have no incremental impact on the degree to which the operating authority exemptions are used relative to the baseline. Because FMCSA is unable to ascertain how various carriers interpreted this exemption set forth by section 23012 of the IIJA in 2021, the Agency estimates the impacts of this rule based on four hypothetical scenarios of exemption use. These four scenarios make use of the forms and insurance cost analyses set forth below, in advance of the scenarios.
Currently, there are several forms that providers of recreational activities are responsible for submitting to FMCSA in order to maintain operating authority registration. As detailed later in this analysis, the use of these forms, as explained in Table 1, may change as a result of this rule, depending on how the affected carriers are interpreting this exemption.
Tables 2 and 3 display the paperwork burden of these forms to private entities and to the Government, respectively. These estimates are based on the Information Collection Request (ICR) supporting statements associated with each form. For example, Table 2 shows that Forms BMC-91 and BMC-91X are estimated to take 10 minutes to complete by an insurance claims and policy processing clerk at a wage rate
FMCSA computes its estimates of labor costs using data gathered from several sources. Labor costs comprise wages, fringe benefits, and overhead. Fringe benefits include paid leave, bonuses and overtime pay, health and other types of insurance, retirement plans, and legally required benefits (Social Security, Medicare, unemployment insurance, and workers compensation insurance). Overhead includes any expenses to a firm associated with labor that are not part of employees' compensation; this typically includes many types of fixed costs of managing a body of employees, such as management and human resource staff salaries or payroll services. The economic costs of labor to a firm should include the costs of all forms of compensation and labor-related expenses. For this analysis, costs of labor to a firm have been calculated relative to total compensation (base wages, plus fringe benefits, plus overhead).
The primary source for industry wages is the median hourly wage data (May 2022) from the U.S. Department of Labor (DOL), Bureau of Labor Statistics (BLS), Occupational Employment and Wage Statistics (OEWS).
BLS does not publish data on fringe benefits for specific occupations, but it does for the broad industry groups in its Employer Costs for Employee Compensation release. For office clerk employees, this analysis uses an average hourly wage of $28.89 and average hourly benefits of $14.85 for private industry workers in “transportation and warehousing”
For estimating the overhead rates on wages, the Agency used industry data gathered for the Truck Costing Model developed by the Upper Great Plains Transportation Institute, North Dakota State University as a proxy for the overhead cost of employees in the transportation intermediary and surety and trustee industries.
It is assumed that FMCSA reviewers will be Federal government employees located in the Washington, DC region at the GS-9 Step 5 wage rate.
In addition to submitting forms to FMCSA, providers of recreational activities wishing to maintain a valid operating authority registration must also have proof of liability insurance filed with FMCSA. The Agency estimates that such liability insurance currently costs entities an average of $190 per month for one vehicle, or $2,280 per year ($190 × 12 = $2,280).
The following four scenarios build on the forms and insurance cost analyses detailed above and examine how the impact of this rule on carrier costs may vary under different exemption use conditions. The scenarios are an increase in exemption use by carriers, a decrease in exemption use by carriers, no change in exemption use, and exemption use by new carriers entering the industry.
Scenario One includes providers of recreational activities that have been eligible for the operating authority exemption established by section 23012 of the IIJA in 2021 but are not utilizing it due to the definitional ambiguity of
Carriers under Scenario One that are currently maintaining their operating authority registration year-round would experience cost savings associated with maintaining financial responsibility. In the NPRM, the Agency invited the public to provide additional information on the scenarios presented in the RIA, and the estimated insurance premiums. While no data were provided on these estimates, NAMIC suggested that the Agency further research the availability of insurance policies that provide coverage on a monthly basis, and whether States would permit similar staggering of required insurance coverage.
As detailed above in section V.B. Comments and Responses, based on the information gathered and the Agency's experience administering the relevant regulations, FMCSA believes it is possible for a motor carrier providing recreational activities on a seasonal basis to carry an insurance policy during its operating season, terminate the policy at the end of the season, and obtain a new policy at the beginning of its next operating season.
Regarding the second part of NAMIC's comment, the Agency concurs that the degree of insurance cost savings is dependent on several factors, including other Federal or State insurance requirements. FMCSA amends this RIA by removing quantified estimates of insurance cost savings and acknowledging the varying impacts State insurance requirements will have on the degree of cost savings.
As described above, FMCSA estimates average monthly insurance premiums of $190 per vehicle. The Agency maintains that certain motor carriers will experience insurance cost savings; however, the quantified amount of those savings may be offset by the need to satisfy other Federal or State insurance requirements. Motor carriers that do not have to meet other Federal or State insurance requirements would save on insurance costs during months they are not in operation.
There may also be cost savings as a result of avoided insurance-related administrative requirements. Currently, carriers must choose an insurance plan or other acceptable form of financial responsibility, and have proof filed with FMCSA whenever they apply for or reinstate operating authority. The Agency estimates that it takes carriers 8 hours to research and identify which insurance company, financial surety, or bond provider they will use. Assuming this task is performed by an office clerk, this activity is estimated to cost each carrier $256 ($31.99 × 8 hours = $256).
As displayed in Table 2, carriers under Scenario One were also required to ensure that their financial responsibility provider submit Forms BMC-91 or BMC-91X to FMCSA at a cost of $7 per form. These administrative requirements for insurance were no longer required after the enactment of the IIJA in 2021; therefore, the definitional clarification in this rule may lead to cost savings of $256 to the carrier and $7 to the insurance company.
Some carriers under Scenario One were filing Form OCE-46 to voluntarily revoke their operating authority registrations during the off-season months so that they did not need to maintain insurance at FMCSA's minimum prescribed levels during those months. To resume operations, the providers were then required to submit Form MCSA-5889 to reinstate their operating authority registrations during the months when they were operating. As displayed in Tables 2 and 3, it is estimated to cost $8 to submit Form
It is also possible that this rule will limit the use of this exemption for certain carriers. Because neither FMCSA nor Congress provided a definition of
There may also be eligible carriers that correctly interpreted Congress' intent and have been utilizing the exemption correctly since the IIJA's enactment. These carriers are not expected to be impacted by this rule relative to the baseline. They have already gone through the steps of voluntarily revoking their operating authority with FMCSA, are maintaining financial responsibility only while in operation, and are not paying fees or completing paperwork associated with maintaining operating authority.
This rule may also affect eligible providers considering engaging in providing recreational activities in the future. If there are new carriers considering entering this field that were not aware of the IIJA exemption, they would no longer need to account for the following costs as a result of this rule: year-round financial responsibility premiums required by FMCSA, financial responsibility-related administrative costs, and operating authority fees and paperwork.
Prior to the enactment of the IIJA, new providers of recreational activities had to submit the “Application for Motor Passenger Carrier Authority” (Form OP-1(P)).
In addition to the cost to carriers analyzed in the four scenarios above, this rule may have government costs. The changes implemented by this rule will not require additional training for enforcement personnel. The Agency expects that the definitional clarification set forth in this rule will be communicated to FMCSA personnel and the Agency's State-based enforcement partners through existing means, such as policy updates and ongoing training. The Agency will be impacted by the costs and cost savings associated with this rule, as outlined in Table 3 ($479 for Form OP-1(P), $18 for Form OCE-46 and Form MCSA-5889).
The affected entities are providers of recreational activities that typically consist of physically demanding outdoor experiences or excursions that do not have transportation as an integral part of the activity itself. Overall, the outdoor recreation economy accounted for 1.9 percent ($454 billion) of current-dollar gross domestic product (GDP) for the nation in 2021.
Differences in interpretation between regulated entities and enforcement officials may be hindering consistent enforcement practices, thereby impacting business-related decisions in providing transportation for recreational activities. This rule may resolve this information asymmetry by creating a common understanding between FMCSA and motor carriers. Because this rule may also lead to an increase in exemption use, it will benefit carriers by improving the efficiency of their business operations and therefore increase both consumer and producer surplus.
This rule is not a
The Regulatory Flexibility Act of 1980, Public Law 96-354, 94 Stat. 1164 (5 U.S.C. 601-612), as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121, 110 Stat. 857, March 29, 1996) and the Small Business Jobs Act of 2010 (Pub. L. 111-240, 124 Stat. 2504, September 27, 2010), requires Federal agencies to consider the effects of the regulatory action on small business and other small entities and to minimize any significant economic impact. The term
FMCSA has not determined whether this final rule will have a significant economic impact on a substantial number of small entities. Therefore, FMCSA prepared an initial regulatory flexibility analysis (IRFA) for the NPRM and a final regulatory flexibility analysis (FRFA) for the final rule.
A FRFA must contain the following:
1. A statement of the need for, and objectives of, the rule.
2. A statement of the significant issues raised by the public comments in response to the IRFA, a statement of the assessment of the agency of such issues, and a statement of any changes made in the proposed rule as a result of such comments.
3. The response of the agency to any comments filed by the Chief Counsel for Advocacy of the Small Business Administration (SBA) in response to the proposed rule, and a detailed statement of any change made to the proposed rule in the final rule as a result of the comments.
4. A description of and an estimate of the number of small entities to which the rule will apply or an explanation of why no such estimate is available.
5. A description of the projected reporting, recordkeeping, and other compliance requirements of the rule, including an estimate of the classes of small entities which will be subject to the requirement and the type of professional skills necessary for preparation of the report or record.
6. A description of the steps the agency has taken to minimize the significant economic impact on small entities consistent with the stated objectives of applicable statutes, including a statement of the factual, policy, and legal reasons for selecting the alternative adopted in the final rule and why each of the other significant alternatives to the rule considered by the agency which affect the impact on small entities was rejected.
7. Description of steps taken by a covered agency to minimize costs of credit for small entities.
1. A statement of the need for, and objectives of, the rule.
Section 23012 of the IIJA amended 49 U.S.C. 13506 by adding a new exemption in paragraph (b)(4) from the operating authority registration requirements. FMCSA is adding a new regulatory section incorporating that statutory exemption and also including a definition for the exempt operations. The exemption from operating authority registration applies to motor carriers operating a motor vehicle designed or used to transport between 9 and 15 passengers (including the driver) whether operated alone or with a trailer attached to the transport vehicle, if the motor vehicle is operated by a person that provides recreational activities and the transportation is provided within a 150 air-mile radius of the location at which passengers initially boarded the motor vehicle at the outset of the trip. The new statutory exemption did not include a definition of recreational activities, creating some ambiguity in the exemption's applicability. The Agency is codifying the exemption in regulation and removing ambiguity by defining
2. A statement of the significant issues raised by the public comments in response to the IRFA, a statement of the assessment of the agency of such issues, and a statement of any changes made in the proposed rule as a result of such comments.
The public comments raised no significant issues in response to the IRFA. The Agency received four comments from AWM, NAMIC, the Vehicle Associations, and a private citizen.
In response to the Vehicle Associations' comment, the Agency is modifying the definition of
As detailed in paragraph 4 of this FRFA, FMCSA provided a wide range of North American Industry Classification System (NAICS) codes of the recreational activities industry in the IRFA, in order to capture all of the potential sectors that providers of recreational activities may operate under. The addition of “off-highway vehicle driving and riding” to the list of examples is intended for additional clarification and will not expand the list of affected NAICS codes that were estimated in the IRFA, as presented in Table 6.
As described in section IX.A Regulatory Analyses, the Agency's preliminary RIA included quantified estimates of potential insurance cost savings, among other potential cost savings, for eligible motor carriers and the Agency invited the public to provide additional information on these estimates. While no data were provided as to the estimated premiums, NAMIC suggested that the Agency further research the availability of insurance policies that provide coverage on a monthly basis. The Agency maintains that certain motor carriers may save on insurance costs as a result of this rule, depending on their particular circumstances as detailed in section IX.A, but the Agency removes the quantified estimates of that savings from the RIA.
The Agency concurs that the degree of insurance cost savings is dependent on several factors, including other Federal or State insurance requirements. Therefore, FMCSA amends this RIA by removing quantified estimates of insurance cost savings and acknowledging the varying impacts State insurance requirements will have on the degree of cost savings. The quantified amount of those savings may be offset by the need to satisfy other Federal or State insurance requirements. Motor carriers that do not have to meet other Federal or State insurance requirements would save on insurance costs during months they are not in operation.
The remaining comments from AWM and the private citizen did not relate to the clarification of the recreational activities exemption. AWM questioned the magnitude of the burden associated with obtaining and maintaining operating authority, and the private citizen raised concerns about effects on public land usage. As detailed in section V. Discussion of Proposed Rulemaking and Comments, FMCSA is not determining through this rulemaking whether there should be an exemption from the operating authority registration rules for providers of recreational activities. This decision was made by Congress when it passed the IIJA in 2021, which created a statutory exemption. FMCSA's scope in this rulemaking is only to define the term
3. The response of the agency to any comments filed by the Chief Counsel for Advocacy of the SBA in response to the proposed rule, and a detailed statement of any change made to the proposed rule in the final rule as a result of the comments.
The Chief Counsel for Advocacy of the SBA filed no comments to the proposed rule. Thus, FMCSA has nothing to respond to from the Chief Counsel for Advocacy of the SBA.
4. A description of and an estimate of the number of small entities to which the rule will apply or an explanation of why no such estimate is available.
This final rule affects motor carriers operating a motor vehicle designed or used to transport between 9 and 15 passengers (including the driver) whether operated alone or with a trailer attached to the transport vehicle, if the motor vehicle is operated by a person that provides recreational activities and the transportation is provided within a 150 air-mile radius of the location at which passengers initially boarded the motor vehicle at the outset of the trip. Providers of recreational activities affected by this rule operate under many different NAICS
In the IRFA for the proposed rule, FMCSA provided a wide range of NAICS codes in the recreational activities industry, in order to capture all of the potential NAICS codes that providers of recreational activities may operate under. In doing so, FMCSA highlighted many entities that perform various other functions beyond transporting passengers to and from recreational activities. The Agency also requested public comment on the NAICS codes analyzed in the IRFA but did not receive any such comments. Therefore, the Agency assumes the NAICS codes analyzed in the IRFA are representative of the composition of the affected industries and is retaining those codes for the purposes of this FRFA.
As shown in Table 6 below, the SBA size standards for providers of recreational activities range from $9 million in revenue per year for the All Other Amusement Recreation Industries NAICS national industry, to $47 million in revenue per year for Racetracks.
FMCSA examined data from the 2017 Economic Census, the most recent Census for which data were available, to determine the percentage of firms that have revenue at or below SBA's thresholds within each of the NAICS industries.
The Agency estimates that many entities affected by this rule fall under the Scenic and Sightseeing Transportation NAICS subsector (487). Firms in this subsector utilize transportation equipment to provide recreation and entertainment. These operations are distinct from passenger transportation carried out for other types of for-hire transportation. The recreational activities involved are local in nature, usually involving a same-day return to the point of departure.
The Scenic and Sightseeing Transportation, Land NAICS national industry (487110) has a revenue size standard of $20.5 million, which falls between two Economic Census revenue
For Scenic and Sightseeing Transportation, Water (487210), the $14 million SBA threshold falls between two Economic Census revenue categories, $10 million and $25 million. Entities in this national industry are primarily engaged in providing scenic and sightseeing transportation on water, such as fishing boat charter operation. The percentages of Scenic and Sightseeing Transportation, Water with revenue less than these amounts ranged from 97 percent to 99 percent. Because the SBA threshold is closer to the lower of these two boundaries, FMCSA has assumed that the percent of these entities that are small will be closer to 97 percent and is using that figure.
Scenic and Sightseeing Transportation, Other (487990) focuses on all other scenic and sightseeing transportation, such as hot air balloon rides and glider excursions. The SBA size standard for this national industry is $25 million. The $25 million SBA threshold falls between two Economic Census revenue categories, $10 million and $25 million. The percentages of these entities with revenue less than these amounts were 93 percent and 98 percent. Because the SBA threshold coincides with the higher of these two boundaries, FMCSA has assumed that the percent of these providers that are small will be closer to 98 percent and is using that figure.
Firms falling under the Travel Arrangement and Reservation Services industry group (5615) may also be impacted by this NPRM. This industry group comprises the Travel Agencies (561510), Tour Operators (561520), and Convention and Visitors Bureaus (561591) national industries.
Tour Operators (561520) focuses on arranging and assembling tours, including travel or wholesale tour operators. The SBA size standard for this national industry is $25 million, which falls between two Economic Census revenue categories, $25 million and $100 million. The percentages of Tour Operators with revenue less than these amounts were 92 percent and 100 percent. The Agency presents a high-end estimate of 100 percent due to limitations in Economic Census data availability. Revenue data for firms with revenue less than $100,000, which would be considered small, are suppressed by the Economic Census to avoid disclosing for individual companies. Because the Agency is unable to ascertain the revenue for the suppressed firms, the high-end estimate assumes that all such firms fall under the $25 million SBA threshold and would be considered small. The low-end estimate assumes the suppressed firms are not small. Because the SBA threshold is closer to the lower of these two boundaries, FMCSA has assumed that the percent of Tour Operators that is small will be closer to 92 percent and is using that figure.
The Agency estimates that many providers of recreational activities affected by this NPRM would also fall under the Arts, Entertainment, and Recreation sector (71). This sector includes a wide range of firms operating facilities that meet varied cultural, entertainment, and recreational interests of patrons.
The industry groups under the Spectator Sports and Related Industries (711) subsector cover Spectator Sports (7112). Spectator Sports includes the Racetracks (711212) and Other Spectator Sports (711219) national industries.
Racetracks (711212) focuses on firms operating racetracks without casinos, such as auto, motorcycle, snowmobile, and horse races. The SBA size standard for this national industry is $47 million. The $47 million SBA threshold falls between two Economic Census revenue categories, $25 million and $100 million. The percentages of these entities with revenue less than these amounts were 83 percent and 100 percent.
Other Spectator Sports (711219) focuses on independent athletes, owners of racing participants (such as cars, dogs, and horses), and firms engaged in specialized services in support of said participants. The SBA size standard for this national industry is $16.5 million, which falls between two Economic Census revenue categories, $10 million and $25 million. The percentages of these entities with revenue less than these amounts were 82 percent and 100 percent.
The industry groups under the Amusement, Gambling, and Recreation Industries (713) subsector include Amusement Parks and Arcades (7131), Gambling Industries (7132), and Other Amusement and Recreation Industries (7139).
Entities falling under Golf Courses and Country Clubs (713910) primarily engage in operating such facilities, and providing food and beverage services, equipment rental, or golf instruction. The SBA size standard for this national industry is $19 million, which falls between two Economic Census revenue categories, $10 million and $25 million. The percentages of Golf Courses and
Skiing Facilities (713920) industries primarily operate downhill, cross country, or related skiing areas, and provide food and beverage services, equipment rental, and ski instruction. The SBA size standard for this national industry is $35 million, which falls between two Economic Census revenue categories, $25 million and $100 million. The percentages of Skiing Facilities with revenue less than these amounts were 93 percent and 98 percent.
The Agency estimates that the majority of entities affected by this Final Rule would fall under the All Other Amusement Recreation Industries (713990) national industry. This includes whitewater rafting, hunting, horseback riding stables, boating clubs, canoeing, archery and shooting ranges, hiking, and others. The SBA size standard for this national industry is $9 million. The $9 million SBA threshold falls between two Economic Census revenue categories, $5 million and $10 million. The percentages of these providers with revenue less than these amounts were 60 percent and 99.6 percent. The Agency estimates a wide range in estimates due to limitations in Economic Census data for this NAICS category. Specifically, of the 12,688 firms in this industry, 12,631 have revenue between $100,000 and $10 million. However, data on small entities with revenue under $250,000 are suppressed. There are 7,490 small entities (59 percent) with revenue between $250,000 and $5 million, and 139 firms with revenue between $5 million and $10 million (1.1 percent). Of the 12,688 firms in All Other Amusement Recreation Industries, there are 5,002 firms without revenue data (39.4 percent). The high-end estimate assumes all such firms are small (99.6 percent) and FMCSA uses that figure.
Table 7 below shows the complete estimates of the number of small entities within the national industries affected by this rule.
5. A description of the reporting, recordkeeping, and other compliance requirements of the final rule, including an estimate of the classes of small entities subject to the requirements and the type of professional skills necessary for preparation of the report or record.
This rule will not result in new recordkeeping requirements.
6. A description of the steps the agency has taken to minimize the significant economic impact on small entities consistent with the stated objectives of applicable statutes, including a statement of the factual, policy, and legal reasons for selecting the alternative adopted in the final rule and why each of the other significant alternatives to the rule considered by the agency which affect the impact on small entities was rejected.
Given that the recreational activities exemption was statutorily mandated, FMCSA did not have an alternative or discretion as to whether to adopt the exemption but did consider whether to clarify a definition of the term
7. Description of steps taken by a covered agency to minimize costs of credit for small entities.
FMCSA is not a covered agency as defined in section 609(d)(2) of the Regulatory Flexibility Act and has taken no steps to minimize the additional cost of credit for small entities.
In accordance with section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121, 110 Stat. 857), FMCSA wants to assist small entities in understanding this final rule so they can better evaluate its effects on themselves and participate in the rulemaking initiative. If the final rule will affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please consult the person listed under
Small businesses may send comments on the actions of Federal employees who enforce or otherwise determine compliance with Federal regulations to the Small Business Administration's Small Business and Agriculture Regulatory Enforcement Ombudsman (Office of the National Ombudsman, see
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) (UMRA) requires Federal agencies to assess the effects of their discretionary regulatory actions. The Act addresses actions that may result in the expenditure by a State, local, or Tribal government, in the aggregate, or by the private sector of $192 million (which is the value equivalent of $100 million in 1995, adjusted for inflation to 2022 levels) or more in any 1 year. Though this final rule would not result in such an expenditure, and the analytical requirements of UMRA do not apply as a result, the Agency discusses the effects of this rule elsewhere in this preamble.
This final rule contains no new information collection requirements under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
A rule has implications for federalism under section 1(a) of E.O. 13132 if it has “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.”
FMCSA has determined that this rule will not have substantial direct costs on or for States, nor would it limit the policymaking discretion of States. Nothing in this document preempts any State law or regulation. Therefore, this rule does not have sufficient federalism implications to warrant the preparation of a Federalism Impact Statement.
The Consolidated Appropriations Act, 2005,
The Privacy Act (5 U.S.C. 552a) applies only to Federal agencies and any non-Federal agency that receives records contained in a system of records from a Federal agency for use in a matching program.
The E-Government Act of 2002,
In addition, the Agency submitted a Privacy Threshold Assessment (PTA) to evaluate the risks and effects the proposed rulemaking might have on collecting, storing, and sharing personally identifiable information. The PTA was adjudicated by DOT's Chief Privacy Officer on December 15, 2023.
This rule does not have Tribal implications under E.O. 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian Tribes, on the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes.
FMCSA analyzed this rule pursuant to the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321
Agricultural commodities, Buses, Cooperatives, Freight forwarders, Motor carriers, Moving of household goods, Seafood.
Accordingly, FMCSA amends 49 CFR chapter III, part 372 as follows:
49 U.S.C. 13504 and 13506; Pub. L. 105-178, sec. 4031, 112 Stat. 418; and 49 CFR 1.87.
(i)
(1) for which the activity offered or sold is occurring simultaneously with the transportation; or
(2) for which the transportation is the primary service offered for sale.
Transportation by a motor vehicle designed or used to transport not fewer than 9, and not more than 15, passengers (including the driver), whether operated alone or with a trailer attached for the transport of recreational equipment, is exempted from regulation promulgated pursuant to Part B of Title 49 U.S.C. subtitle IV if:
(a) the motor vehicle is operated by a person that provides recreational activities;
(b) the transportation is provided within a 150 air-mile radius of the location at which passengers initially boarded the motor vehicle at the outset of the trip; and
(c) in the case of a motor vehicle transporting passengers over a route between a place in a State and a place in another State, the person operating the motor vehicle is lawfully providing transportation of passengers over the entire route in accordance with applicable State law.
Issued under authority delegated in 49 CFR 1.87.
Office of Energy Efficiency and Renewable Energy, Department of Energy.
Supplemental notice of proposed rulemaking; correction.
On December 21, 2022, the U.S. Department of Energy (“DOE”) published a supplemental notice of proposed rulemaking that proposed energy performance standards for certain new Federal buildings and Federal buildings undergoing major renovations. This document corrects errors in the proposed regulatory text published with the supplemental notice of proposed rulemaking. These errors do not affect the substance of the rulemaking or any conclusions reached in support of the proposed rule.
Effective February 26, 2024.
Mr. Rick Mears, U.S. Department of Energy, Office of the Under Secretary for Infrastructure, Federal Energy Management Program, FEMP-1, 1000 Independence Avenue SW, Washington, DC 20585-0121. Email:
Ms. Laura Zuber, U.S. Department of Energy, Office of the General Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC 20585-0121. Telephone: (240) 306-7651. Email:
On December 21, 2022, DOE published a supplemental notice of proposed rulemaking (2022 SNOPR) that proposed energy performance standards for certain new Federal buildings and Federal buildings undergoing major renovations. The 2022 SNOPR proposed revisions to the energy performance standards at title 10 of the Code of Federal Regulations (“CFR”) parts 433 and 435. 87 FR 78382. Since publication of the 2022 SNOPR, DOE has identified printing errors in the regulatory text proposed by the 2022 SNOPR. DOE is issuing this correction to address certain errors in the 2022 SNOPR, specifically in 10 CFR 433.200 and 10 CFR 435.1. The corrections are described in the following paragraphs.
In the 2022 SNOPR, DOE proposed a compliance date of one year after the publication of the final rule. The proposed revisions to 10 CFR 433.1 reflect this proposed compliance date. However, the proposed revisions to 10 CFR 433.200(a) do not reflect this proposed compliance date. Instead, proposed 10 CFR 433.200(a) includes a compliance date of December 21, 2023, which was one year after the 2022 SNOPR was published in the
As published, the proposed regulatory text in the 2022 SNOPR may lead to confusion on the application of the energy performance standards proposed in the 2022 SNOPR. Because this document would simply correct printing errors in the proposed regulatory text without making substantive changes to energy performance standards proposed in the 2022 SNOPR, the changes addressed in this document are technical in nature.
DOE has concluded that the determinations made pursuant to the various procedural requirements applicable to the 2022 SNOPR remain unchanged for these technical corrections to the proposed regulatory text. These determinations are set forth in the 2022 SNOPR. 87 FR 78328, 78412-78420.
Pursuant to the Administrative Procedure Act, 5 U.S.C. 553(b), DOE finds that there is good cause to not issue a separate notice to solicit public comment on the technical corrections contained in this document. Issuing a separate notice to solicit public comment would be impracticable, unnecessary, and contrary to the public interest. As explained previously, the corrections in this document do not affect the substance of or any of the conclusions reached in support of the 2022 SNOPR. Additionally, given the 2022 SNOPR is a product of an extensive administrative record with numerous opportunities for public comment, DOE finds additional comment on the technical corrections is unnecessary. Therefore, providing prior notice and an opportunity for public comment on correcting objective errors that do not change the substance of the proposed energy performance standards serve no useful purpose.
In the
This document of the Department of Energy was signed on February 21, 2024, by Mary Sotos, the Director of the Federal Energy Management Program, pursuant to delegated authority from the Secretary of Energy. That document with the original signature and date is maintained by DOE. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DOE Federal Register Liaison Officer has been
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
This action proposes to amend the Class D and Class E airspace at Beaumont/Port Arthur, TX. The FAA is proposing this action as the result of airspace reviews conducted as part of the decommissioning of the Beaumont very high frequency omnidirectional range (VOR) as part of the VOR Minimum Operational Network (MON) Program. This action would also update the name and geographic coordinates of various airports. This action will bring the airspace into compliance with FAA orders to support instrument flight rule (IFR) operations.
Comments must be received on or before April 11, 2024.
Send comments identified by FAA Docket No. FAA-2024-0269 and Airspace Docket No. 24-ASW-2 using any of the following methods:
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*
*
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FAA Order JO 7400.11H, Airspace Designations and Reporting Points, and subsequent amendments can be viewed online at
Jeffrey Claypool, Federal Aviation Administration, Operations Support Group, Central Service Center, 10101 Hillwood Parkway, Fort Worth, TX 76177; telephone (817) 222-5711.
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it would amend the Class D airspace, Class E surface airspace, and Class E airspace extending upward from 700 feet above the surface at Jack Brooks Regional Airport, Beaumont/Port Arthur, TX, and the Class E airspace extending upward from 700 feet above the surface at Beaumont Municipal Airport, Beaumont, TX, and Orange County Airport, Orange, TX, (Contained within the Beaumont/Port Arthur, TX, airspace legal description.) to support IFR operations at these airports.
The FAA invites interested persons to participate in this rulemaking by submitting written comments, data, or views. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. The most helpful comments reference a specific portion of the proposal, explain the reason for any recommended change, and include supporting data. To ensure the docket does not contain duplicate comments, commenters should submit only one time if comments are filed electronically, or commenters should send only one copy of written comments if comments are filed in writing.
The FAA will file in the docket all comments it receives, as well as a report summarizing each substantive public contact with FAA personnel concerning this proposed rulemaking. Before acting on this proposal, the FAA will consider all comments it received on or before the closing date for comments. The FAA will consider comments filed after the comment period has closed if it is possible to do so without incurring expense or dely. The FAA may change this proposal in light of the comments it receives.
An electronic copy of this document may be downloaded through the internet at
You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Office (see the
Class D and E airspace is published in paragraphs 5000, 6002, and 6005 of
FAA Order JO 7400.11H lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.
The FAA is proposing an amendment to 14 CFR part 71 by:
Modifying the Class D airspace at Jack Brooks Regional Airport, Beaumont/Port Arthur, TX, by updating the name of the airport (previously Jefferson County Airport) to coincide with the FAA's aeronautical database; updating the header of the airspace legal description to Beaumont/Port Arthur, TX (previously Beaumont, TX) to coincide with the FAA's aeronautical database; removing the city associated with the airport in the airspace legal description to comply with changes to FAA Order JO 7400.2P, Procedures for Handling Airspace Matters; and replacing the outdated terms “Notice to Airmen” and “Airport/Facility Directory” with “Notice to Air Missions” and “Chart Supplement”;
Modifying the Class E surface airspace at Jack Brooks Regional Airport by updating the name of the airport (previously Jefferson County Airport) to coincide with the FAA's aeronautical database; updating the header of the airspace legal description to Beaumont/Port Arthur, TX (previously Beaumont, TX) to coincide with the FAA's aeronautical database; removing the city associated with the airport in the airspace legal description to comply with changes to FAA Order JO 7400.2P; and replacing the outdated terms “Notice to Airmen” and “Airport/Facility Directory” with “Notice to Air Missions” and “Chart Supplement”;
And modifying the Class E airspace extending upward from 700 feet above the surface to within a 7.5-mile (decreased from a 7.7-mile) radius of Jack Brooks Regional Airport; removing the extension northwest of Beaumont Municipal Airport, Beaumont, TX, from the airspace legal description as it is no longer needed; within a 6.5-mile (decreased from a 6.6-mile) radius of Orange County Airport, Orange, TX; updating the name of Jack Brooks Regional Airport (previously Southeast Texas Regional Airport) to coincide with the FAA's aeronautical database; updating the geographic coordinates of Beaumont Municipal Airport and Orange County Airport to coincide with the FAA's aeronautical database; updating the header of the airspace legal description to Beaumont/Port Arthur, TX (previously Beaumont, TX) to coincide with the FAA's aeronautical database; and removing the cities associated with the airports in the airspace legal description to comply with changes to FAA Order JO 7400.2P.
This action is the result of airspace reviews conducted as part of the decommissioning of the Beaumont VOR as part of the VOR MON Program and supports instrument procedures at these airports.
The FAA has determined that this proposed regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore: (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this proposed rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures” prior to any FAA final regulatory action.
Airspace, Incorporation by reference, Navigation (air).
In consideration of the foregoing, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:
49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.
That airspace extending upward from the surface to and including 2,500 feet MSL within a 5-mile radius of Jack Brooks Regional Airport. This Class D airspace area is effective during the specific dates and times established in advance by a Notice to Air Missions. The effective dates and times will thereafter be continuously published in the Chart Supplement.
Within a 5-mile radius of Jack Brooks Regional Airport. This Class E airspace area is effective during the specific dates and times established in advance by a Notice to Air Missions. The effective dates and times will thereafter be continuously published in the Chart Supplement.
That airspace extending upward from 700 feet above the surface within a 7.5-mile radius of Jack Brooks Regional Airport; and within a 6.4-mile radius of Beaumont Municipal Airport; and within a 6.5-mile radius of Orange County Airport.
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
This action proposes to amend the Class D and Class E airspace at Lake Charles, LA. The FAA is proposing this action as the result of airspace reviews conducted as part of the decommissioning of the Beaumont very high frequency omnidirectional range (VOR) as part of the VOR Minimum Operational Network (MON) Program. This action would also update the geographic coordinates of various airports. This action will bring the airspace into compliance with FAA orders to support instrument flight rule (IFR) operations.
Comments must be received on or before April 11, 2024.
Send comments identified by FAA Docket No. FAA-2024-0270 and Airspace Docket No. 24-ASW-3 using any of the following methods:
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*
*
*
FAA Order JO 7400.11H, Airspace Designations and Reporting Points, and subsequent amendments can be viewed online at
Jeffrey Claypool, Federal Aviation Administration, Operations Support Group, Central Service Center, 10101 Hillwood Parkway, Fort Worth, TX 76177; telephone (817) 222-5711.
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it would amend: the Class D airspace, Class E surface airspace, and Class E airspace extending upward from 700 feet above the surface at Lake Charles Regional Airport, Lake Charles, LA; the Class D airspace and Class E airspace extending upward from 700 feet above the surface at Chennault International Airport, Lake Charles, LA; and the Class E airspace extending upward from 700 feet above the surface at Southerland Field, Sulphur, LA, (Contained within the Lake Charles, LA, airspace legal description.) to support IFR operations at these airports.
The FAA invites interested persons to participate in this rulemaking by submitting written comments, data, or views. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. The most helpful comments reference a specific portion of the proposal, explain the reason for any recommended change, and include supporting data. To ensure the docket does not contain duplicate comments, commenters should submit only one time if comments are filed electronically, or commenters should send only one copy of written comments if comments are filed in writing.
The FAA will file in the docket all comments it receives, as well as a report summarizing each substantive public contact with FAA personnel concerning this proposed rulemaking. Before acting on this proposal, the FAA will consider all comments it received on or before the closing date for comments. The FAA will consider comments filed after the comment period has closed if it is possible to do so without incurring expense or dely. The FAA may change this proposal in light of the comments it receives.
An electronic copy of this document may be downloaded through the internet at
You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Office (see the
Class D and E airspace is published in paragraphs 5000, 6002, and 6005 of FAA Order JO 7400.11, Airspace Designations and Reporting Points, which is incorporated by reference in 14 CFR 71.1 on an annual basis. This document proposes to amend the current version of that order, FAA Order JO 7400.11H, dated August 11, 2023, and effective September 15, 2023. These updates would be published subsequently in the next update to FAA Order JO 7400.11. That order is publicly available as listed in the
FAA Order JO 7400.11H lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.
The FAA is proposing an amendment to 14 CFR part 71 by:
Modifying the Class D airspace at Lake Charles Regional Airport, Lake Charles, LA, by removing the Lake Charles VORTAC and associated extension as they are no longer required; and replacing the outdated terms “Notice to Airmen” and “Airport/Facility Directory” with “Notice to Air Missions” and “Chart Supplement”;
Modifying the Class D airspace to within a 4.4-mile (decreased from a 4.5-mile) radius of Chennault International Airport, Lake Charles, LA; adding an extension within 1 mile each side of the 334° bearing from the airport extending from the 4.4-mile radius to 4.5 miles northwest of the airport; updating the header of the airspace legal description from “Lake Charles, Chennault International Airport, LA” to “Lake Charles, LA” to comply with changes to FAA Order JO 7400.2P, Procedures for Handling Airspace Matters; and removing the city associated with the airport to comply with changes to FAA Order JO 7400.2P; updating the geographic coordinates of the airport to coincide with the FAA's aeronautical database; and replacing the outdated terms “Notice to Airmen” and “Airport/Facility Directory” with “Notice to Air Missions” and “Chart Supplement”;
Modifying the Class E surface airspace at Lake Charles Regional Airport by removing the Lake Charles VORTAC and associated extension as they are no longer required; and replacing the outdated terms “Notice to Airmen” and “Airport/Facility Directory” with “Notice to Air Missions” and “Chart Supplement”;
And modifying the Class E airspace extending upward from 700 feet above the surface to within a 6.9-mile (decreased from a 7-mile) radius of Chennault International Airport; removing the extension southeast of Chennault International Airport from the airspace legal description as it is no longer required; removing the Sulphur NDB and associated extension as they are no longer required; updating the geographic coordinates of Chennault International Airport to coincide with the FAA's aeronautical database; and removing the cities associated with the airports in the airspace legal description to comply with changes to FAA Order JO 7400.2P.
This action is the result of airspace reviews conducted as part of the decommissioning of the Beaumont VOR as part of the VOR MON Program and supports instrument procedures at these airports.
The FAA has determined that this proposed regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore: (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this proposed rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures” prior to any FAA final regulatory action.
Airspace, Incorporation by reference, Navigation (air).
In consideration of the foregoing, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:
49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.
That airspace extending upward from the surface to and including 2,500 feet MSL within a 5-mile radius of Lake Charles Regional Airport. This Class D airspace area is effective during the specific dates and times established in advance by a Notice to Air Missions. The effective dates and times will thereafter be continuously published in the Chart Supplement.
That airspace extending upward from the surface to and including 2,500 feet MSL within a 4.5-mile radius of Chennault International Airport, and within 1 mile each side of the 334° bearing from the airport extending from the 4.4-mile radius to 4.5 miles northwest of the airport, excluding that airspace within the Lake Charles Regional Airport, Lake Charles, LA, Class D airspace. This Class D airspace area is effective during the specific dates and times established in advance by a Notice to Air Missions. The effective dates and times will thereafter be continuously published in the Chart Supplement.
Within a 5-mile radius of Lake Charles Regional Airport. This Class E airspace area is effective during the specific dates and times established in advance by a Notice to Air Missions. The effective dates and times will thereafter be continuously published in the Chart Supplement.
That airspace extending upward from 700 feet above the surface within a 7.5-mile radius of Lake Charles Regional Airport; and within a 6.9-mile radius of Chennault International Airport; and within a 6.5-mile radius of Southland Field.
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
This action proposes to amend the Class E airspace extending upward from 700 feet above the surface of Hollister Municipal Airport, Hollister, CA, due to the newly developed Area Navigation (RNAV) (Global Positioning System [GPS]) Runway (RWY) 13 approach. This action would support the safety and management of instrument flight rules (IFR) operations at the airport.
Comments must be received on or before April 11, 2024.
Send comments identified by FAA Docket No. FAA-2023-1852 and Airspace Docket No. 23-AWP-50 using any of the following methods:
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FAA Order JO 7400.11H, Airspace Designations and Reporting Points, and subsequent amendments can be viewed online at
Jeffrey Drasin, Federal Aviation Administration, Western Service Center, Operations Support Group, 2200 S 216th Street, Des Moines, WA 98198; telephone (206) 231-2248.
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of the airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it would modify Class E airspace to support IFR operations at Hollister Municipal Airport, Hollister, CA.
The FAA invites interested persons to participate in this rulemaking by submitting written comments, data, or views. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. The most helpful comments reference a specific portion of the proposal, explain the reason for any recommended change, and include supporting data. To ensure the docket does not contain duplicate comments, commenters should submit only one time if comments are filed electronically, or commenters should send only one copy of written comments if comments are filed in writing.
The FAA will file in the docket all comments it receives, as well as a report summarizing each substantive public contact with FAA personnel concerning this proposed rulemaking. Before acting on this proposal, the FAA will consider all comments it receives on or before the closing date for comments. The FAA will consider comments filed after the comment period has closed if it is possible to do so without incurring expense or delay. The FAA may change this proposal in light of the comments it receives.
An electronic copy of this document may be downloaded through the internet at
You may review the public docket containing the proposal, any comments received and any final disposition in person in the Dockets Operations office (see
Class E5 airspace designations are published in paragraph 6005 of FAA Order JO 7400.11, Airspace Designations and Reporting Points, which is incorporated by reference in 14 CFR 71.1 on an annual basis. This document proposes to amend the current version of that order, FAA Order JO 7400.11H, dated August 11, 2023, and effective September 15, 2023. These updates would be published in the next update to FAA Order JO 7400.11. That order is publicly available as listed in the
FAA Order JO 7400.11H lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.
The FAA is proposing an amendment to 14 CFR part 71 that would modify the Class E airspace extending upward from 700 feet above the surface at Hollister Municipal Airport, Hollister, CA.
The FAA is proposing to reduce the Class E airspace extending upward from 700 feet above the surface within 2 miles on either side of the 142° bearing from the airport extending from the 6.5-mile radius to 13.5 miles southeast of the airport to better contain arriving IFR
In addition, the FAA is proposing to extend the Class E airspace extending upward from 700 feet above the surface northwest to include that airspace within 2 miles on either side of the airport's 322° bearing extending from the 6.5-mile radius to 9.6 miles northwest of the airport. This would contain arriving IFR operations below 1,500 feet above the surface while executing the RNAV (GPS) RWY 13 approach.
The FAA has determined that this proposed regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore: (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this proposed rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1F,
Airspace, Incorporation by reference, Navigation (air).
In consideration of the foregoing, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:
49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.
That airspace extending upward from 700 feet above the surface within a 6.5-mile radius of the airport, within 1.2 miles northeast and 1.1 miles southwest of the 142° bearing from the airport extending from the 6.5-mile radius to 8.2 miles southeast of the airport, and that airspace within 2 miles either side of the 322° bearing from the airport extending from the 6.5-mile radius to 9.6 miles northwest of the airport.
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
This action proposes to amend the Class E airspace at Greenville, IL, and Vandalia, IL. The FAA is proposing this action as the result of airspace reviews conducted due to the decommissioning of the Vandalia very high frequency omnidirectional range (VOR) as part of the VOR Minimum Operating Network (MON) Program. The geographic coordinates of the airports would also be updated to coincide with the FAA's aeronautical database. This action will bring the airspace into compliance with FAA orders to support instrument flight rule (IFR) operations.
Comments must be received on or before April 11, 2024.
Send comments identified by FAA Docket No. FAA-2024-0271 and Airspace Docket No. 24-AGL-3 using any of the following methods:
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*
*
*
FAA Order JO 7400.11H, Airspace Designations and Reporting Points, and subsequent amendments can be viewed online at
Jeffrey Claypool, Federal Aviation Administration, Operations Support Group, Central Service Center, 10101 Hillwood Parkway, Fort Worth, TX 76177; telephone (817) 222-5711.
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the
The FAA invites interested persons to participate in this rulemaking by submitting written comments, data, or views. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. The most helpful comments reference a specific portion of the proposal, explain the reason for any recommended change, and include supporting data. To ensure the docket does not contain duplicate comments, commenters should submit only one time if comments are filed electronically, or commenters should send only one copy of written comments if comments are filed in writing.
The FAA will file in the docket all comments it receives, as well as a report summarizing each substantive public contact with FAA personnel concerning this proposed rulemaking. Before acting on this proposal, the FAA will consider all comments it received on or before the closing date for comments. The FAA will consider comments filed after the comment period has closed if it is possible to do so without incurring expense or delay. The FAA may change this proposal in light of the comments it receives.
An electronic copy of this document may be downloaded through the internet at
You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Office (see the
Class E airspace is published in paragraph 6005 of FAA Order JO 7400.11, Airspace Designations and Reporting Points, which is incorporated by reference in 14 CFR 71.1 on an annual basis. This document proposes to amend the current version of that order, FAA Order JO 7400.11H, dated August 11, 2023, and effective September 15, 2023. These updates would be published subsequently in the next update to FAA Order JO 7400.11. That order is publicly available as listed in the
FAA Order JO 7400.11H lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.
The FAA is proposing to amend 14 CFR part 71 by:
Modifying the Class E airspace extending upward from 700 feet above the surface to within a 6.4-mile (decreased from a 7-mile) radius of Greenville Airport, Greenville, IL; and updating the geographic coordinates of the airport to coincide with the FAA's aeronautical database;
And modifying the Class E airspace extending upward from 700 feet above the surface at Vandalia Municipal Airport, Vandalia, IL, by updating the geographic coordinates of the airport to coincide with the FAA's aeronautical database.
The FAA is proposing this action as the result of airspace reviews conducted due to the decommissioning of the Vandalia VOR as part of the VOR MON Program and to support IFR operations.
The FAA has determined that this proposed regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore: (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this proposed rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures” prior to any FAA final regulatory action.
Airspace, Incorporation by reference, Navigation (air).
In consideration of the foregoing, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:
49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.
That airspace extending upward from 700 feet above the surface within a 6.4-mile radius of Greenville Airport.
That airspace extending upward from 700 feet above the surface within a 6.4-mile radius of the Vandalia Municipal Airport.
Commodity Futures Trading Commission.
Extension of comment period.
On December 18, 2023, the Commodity Futures Trading Commission (Commission) issued a notice of proposed rulemaking (NPRM) titled Operational Resilience Framework for Futures Commission Merchants, Swap Dealers, and Major Swap Participants. The comment period for the NPRM was to close on March 2, 2024. The Commission is extending the comment period for this NPRM by an additional 30 days to April 1, 2024.
The comment period for the NPRM titled Operational Resilience Framework for Futures Commission Merchants, Swap Dealers, and Major Swap Participants is extended through April 1, 2024.
You may submit comments, identified by RIN 3038-AF23, by any of the following methods:
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•
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Please submit your comments using only one of these methods. Submissions through the CFTC Comments Portal are encouraged.
All comments must be submitted in English, or if not, accompanied by an English translation. Comments will be posted as received to
The Commission reserves the right, but shall have no obligation, to review, pre-screen, filter, redact, refuse, or remove any or all of your submission from
Amanda L. Olear, Director, at 202-418-5283 or
On December 13, 2023, the Commission approved an NPRM proposing to require that futures commission merchants, swap dealers, and major swap participants establish, document, implement, and maintain an Operational Resilience Framework (ORF) reasonably designed to identify, monitor, manage, and assess risks relating to information and technology security, third-party relationships, and emergencies or other significant disruptions to normal business operations.
The ORF NPRM was published on the Commission's website on December 18, 2023, making it available for public comment through March 2, 2024, for a total comment period of 75 days.
The following appendix will not appear in the Code of Federal Regulations.
On this matter, Chairman Behnam and Commissioners Johnson, Goldsmith Romero, Mersinger, and Pham voted in the affirmative. No Commissioner voted in the negative.
Internal Revenue Service (IRS), Treasury.
Notice of proposed rulemaking; reopening of comment period.
The Department of the Treasury and the IRS are reopening the comment period for REG-131418-14, relating to the reporting requirements for qualified tuition and related expenses under Section 6050S, as well as to the proposed amendments to the regulations on the education tax credits under section 25A.
The comment period for REG-131418-14, 81 FR 50657 (August 2, 2016) is reopened, and additional written or electronic comments and requests for a public hearing must be received by April 26, 2024.
Commenters are strongly encouraged to submit additional public comments electronically. Submit electronic submissions via the Federal eRulemaking Portal at
Concerning section 25A, Mon Lam or YoungNa Lee at (202) 317-4178; concerning section 6050S, Blaise Dusenberry at (202) 317-5405 (not toll-free numbers): Concerning submissions of comments, Vivian Hayes, (202) 317-6901 (not a toll-free number) or by email to
The proposed regulations were published on August 2, 2016, (81 FR 50657) and a correction was made on September 26, 2016 (81 FR 65983) (the “2016 proposed regulations”). Generally, the 2016 proposed regulations provided guidance to educational institutions relating to the preparation and submission of reporting forms under section 6050S, for use by students claiming educational credits under section 25A. The 2016 proposed regulations also would amend the Income Tax Regulations on the education tax credits under section 25A to conform the regulations to the rules for changes made to section 25A by the Trade Preferences Extension Act of 2015 (Pub. L. 114-27 (129 Stat. 362)) (TPEA) and the Protecting Americans from Tax Hikes Act of 2015 (Pub. L. 114-113 (129 Stat. 2242)) (PATH Act). In addition, the 2016 proposed regulations would amend the Income Tax Regulations on the education tax credits under section 25A to update the definition of qualified tuition and related expenses in § 1.25A-2(d) to reflect changes made by the American Recovery and Reinvestment Act of 2009 (Pub. L. 111-5 (123 Stat. 115)), to clarify the prepayment rule in § 1.25A-5(e), and to clarify the rule for refunds in § 1.25A-5(f).
The Treasury Department and the IRS are considering finalizing the 2016 proposed regulations and, therefore, are reopening the comment period with respect to the 2016 proposed regulations for 60 days. Comments that were previously submitted in accordance with the 2016 proposed regulations will be considered and do not need to be submitted again in response to this reopening of the comment period. The Treasury Department and the IRS are particularly interested in comments regarding the impact of any statutory changes on the reporting process. The Treasury Department and the IRS are also interested in the impact of technological changes to the reporting process.
In addition, the Treasury Department and the IRS are also considering updating the section 25A regulations to reflect statutory changes to the education tax credits under section 25A since the TPEA and PATH Act, including changes made by the Tax Cuts and Jobs Act (Pub. L. 115-97 (131 Stat. 2054)), the Consolidated Appropriations Act, 2018 (Pub. L. 115-141 (132 Stat. 351)), and the Consolidated Appropriations Act, 2020 (Pub. L. 116-260 (134 Stat. 1182)). Specifically, the statutory changes modify the amount of the American Opportunity Tax Credit (AOTC); modify the number of years an eligible student can claim the AOTC; increase the phaseouts for the Lifetime Learning Credit and the AOTC; repeal the inflation adjustment; and change the “Hope Credit” to the “American Opportunity Tax Credit” and remove the terminology of “Hope Credit.” The Treasury Department and the IRS request comments on the need for updating the section 25A regulations to reflect any such statutory changes in final regulations.
Forest Service, Agriculture; Fish and Wildlife Service, Interior.
Proposed rule.
This proposed rule would revise the regulations concerning the composition of the Federal Subsistence Board (Board) by adding three public members nominated or recommended by federally recognized Tribal governments, requiring that those nominees have personal knowledge of and direct experience with subsistence uses in rural Alaska including Alaska Native subsistence uses, defining requirements used for the selection of the Board Chair, affirming the Secretaries' authority to replace members from the Board, and affirming the Secretaries' responsibility and oversight regarding Board decisions while incorporating a ratification requirement. In January 2022, the Department of the Interior (DOI) and the U.S. Department of Agriculture (USDA) held joint consultations with federally recognized Tribes of Alaska and various Tribal Consortia. Later during October-November 2022, DOI leadership and the Department of Commerce, National Oceanic and Atmospheric Administration, held joint consultations with various Alaska Tribes regarding
Comments on this proposed rule must be received or postmarked by April 26, 2024.
You may submit comments by one of the following methods:
We will post all comments on
Amee Howard, Deputy Assistant Regional Director, Office of Subsistence Management; 907-786-3888;
When Alaska became a State in 1959, Alaska Natives held aboriginal title to lands across the new State. Immediately after statehood, Alaska Natives filed blanket protests to State land selections authorized by the Statehood Act. Because the State's land selection rights were only for “vacant, unappropriated and unreserved lands,” the Secretary of the Interior imposed a formal land freeze on any title transfers to Alaska in 1969. After oil was discovered at Prudhoe Bay in the late 1960s, an injunction against the Secretary of the Interior's attempt to grant a right of way for the Trans-Alaska Pipeline made it clear that Congress would have to settle aboriginal claims before an oil pipeline across Alaska could be built. Congress then extinguished aboriginal title in the Alaska Native Claims Settlement Act (ANCSA) in 1971. 43 U.S.C. 1603(b). The ANCSA conference report reflects that Congress anticipated that the Secretary of the Interior would “exercise his existing withdrawal authority” to “protect Native subsistence needs and requirements.” H. Conf. Rep. No. 92-746 at 37 (1971). The Secretary immediately reinitiated withdrawals to protect subsistence while a solution was negotiated. In 1980, this issue, among others, was addressed in the Alaska National Interest Lands Conservation Act (ANILCA). Title VIII of ANILCA addressed the loss of aboriginal hunting and fishing rights by providing rural residents, including Alaska Native rural residents, with protections for continuing use of subsistence uses on the public lands. The congressional findings in ANILCA describe this intent and purpose:
The Congress finds and declares that—
. . . (4)
(5) the national interest in the proper regulation, protection, and conservation of fish and wildlife on the public lands in Alaska and the continuation of the opportunity for a subsistence way of life by residents of rural Alaska require that an administrative structure be established for the purpose of enabling rural residents who have personal knowledge of local conditions and requirements to have a meaningful role in the management of fish and wildlife and of subsistence uses on the public lands in Alaska.
Title VIII originally contemplated the State administering the ANILCA rural subsistence priority. It outlined a State regulatory structure to protect subsistence uses by rural Alaska residents, providing that if, within one year of ANILCA's enactment, the State “enacts and implements laws of general applicability which are consistent with, and which provide for the definition, preference, and participation specified in” ANILCA for rural residents, then the Secretary shall not implement the provisions of ANILCA directing the establishment of regional advisory councils. 16 U.S.C. 3115(d). And such State laws, “unless and until repealed, shall supersede such sections [of ANILCA] . . . for the taking of fish and wildlife on the public lands for subsistence uses.”
However, the State was unable to implement title VIII through State regulations. When ANILCA was enacted in 1980, an Alaska statute provided a priority for nonwasteful subsistence use of wild, renewable resources, but it did not limit the priority to “rural Alaska residents,” as ANILCA requires.
As a result of Alaska's inability to satisfy ANILCA's requirements for State management, the Secretaries of the Interior and Agriculture were obligated under ANILCA to effectuate the rural subsistence priority.
Because the Program is a joint effort between the Departments of the Interior and Agriculture (USDA), these regulations are located in two different titles of the Code of Federal Regulations (CFR): The USDA regulations are at title 36, “Parks, Forests, and Public Property,” and the DOI regulations are at title 50, “Wildlife and Fisheries,” at 36 CFR 242.1-28 and 50 CFR 100.1-28, respectively. Consequently, to indicate that identical changes are proposed for regulations in both titles 36 and 50, in this document we present references to the specific section of both titles of the CFR as: § __.10.
The Program regulations contain subparts as follows: Subpart A, General Provisions; Subpart B, Program Structure; Subpart C, Board Determinations; and Subpart D, Subsistence Taking of Fish and Wildlife. Consistent with subpart B of these regulations, the Secretaries established a Federal Subsistence Board to administer the Program. Subpart C sets forth important Board determinations regarding program eligibility,
In administering the Program, the Secretaries divided Alaska into 10 subsistence resource regions, each of which is represented by a Federal Subsistence Regional Advisory Council (Council). The Councils provide a forum for rural residents with personal knowledge of local conditions and resource requirements to have a meaningful role in the subsistence management of fish and wildlife on Federal public lands in Alaska. The Council members represent varied geographical, cultural, and user interests within each region.
The current Board comprises:
In January 2022, DOI and USDA held joint consultations with approximately 445 individual subsistence users and representatives from federally recognized Tribes of Alaska, Tribal consortia, Native organizations, and Alaska Native corporations. In October-November 2022, DOI leadership and the Department of Commerce, National Oceanic and Atmospheric Administration, held joint consultations with various Alaska Tribes regarding fisheries. During all of these consultations, a primary request from commenters was to make changes to the Federal Subsistence Board, including increasing the number of public members to five and adding more voting members who represent Alaska Native Villages and have local knowledge and direct subsistence experience.
We propose to revise titles 36 (in part 242) and 50 (in part 100) of the CFR at § __.10 to be responsive to that request by defining the requirements used for the selection of the Board Chair, increasing the number of public members of the Board, and including a voice for federally recognized Tribal governments to nominate or recommend a certain number of the public members of the Board. We propose that the Board Chair, like the two current public members, be required to possess personal knowledge of and direct experience with subsistence uses in rural Alaska. We further propose adding three public members to the Board, all of whom will be required to possess personal knowledge of and direct experience with subsistence uses in rural Alaska, including Alaska Native subsistence uses, and will be nominated or recommended by federally recognized Tribal governments.
As is currently required in the regulations, the Board Chair and all public members will be appointed by the Secretary of the Interior with the concurrence of the Secretary of Agriculture. Also as is currently the case, the public members will become special governmental employees for the purpose of serving on the Board. The Secretaries retain the authority to remove public members from the Board, and also retain their existing authorities to replace agency personnel on the Board, and we have added language affirming those authorities in this proposed rule. Because this proposed rule would increase the total number of Board members, the number required for a quorum would increase to six.
Lastly, consistent with title VIII, we propose clarifying that the Secretaries retain the authority to modify, disapprove, or stay any action taken by the Board, and also propose incorporating a requirement for ratification. Recognizing that a Board's action may be time sensitive, we propose that for temporary special actions (36 CFR 242.19(b) and 50 CFR
The current Board includes a Chair, two public Board members, and five Federal agency personnel. None of the current agency personnel, nor any of their predecessors, are federally qualified subsistence users while serving on the Board as a result of the urban location for their duty location. The Secretaries are proposing to add three public members nominated or recommended by Tribes, while also requiring that they possess personal knowledge of and direct experience with subsistence uses in rural Alaska, including Alaska Native subsistence uses, for the purpose of ensuring adequate representation by members with rural subsistence experience on the Board at any particular meeting. Adding three public members to the Board could further the goals of ANILCA and also could be responsive to commenters' requests for: (1) an increase in the number of public board members to five; and (2) adding more voting members who represent Alaska Native villages and have local knowledge of direct subsistence experience.
Related to this, the Secretaries specifically request public comments on the issues listed below:
(1) Are federally recognized Tribal governments the only groups that should nominate/recommend public board members that possesses the qualifications identified in this proposed rule? Should Alaska Native Corporations and other entities also be included as entities to nominate/recommend public board members, so long as the nominees possess personal knowledge of and direct experience with subsistence uses in rural Alaska (including Alaska Native subsistence uses)?
(2) Would it be preferable for federally recognized Tribes to nominate/recommend only two of the three new public board members?
(3) How should the Secretaries solicit and receive nominations/recommendations? Should the Secretaries broadly solicit nominations or recommendations from federally recognized Tribal governments, or should the Secretaries identify as a matter of their sole discretion one or more specific federally recognized Tribal governments?
(4) Is the proposed quorum of six appropriate with the addition of the three new public board members, or should it be increased?
Commenters also expressed concerns that the public Board members at present do not have alternates who can stand in for them in times of illness or unavailability due to conflicts with subsistence activities. This is not the case for Federal agency personnel, who have qualified designees who can act in their stead. This issue was specifically raised by the Board in a meeting with the Secretary. While the Secretaries preliminarily view the proposal to add additional public board members as eliminating the need to further consider whether public board members should have the ability to appoint alternates, the Secretaries invite public comment on this issue.
Commenters also focused on the desirability of considering Indigenous Knowledge in connection with Board decision making. The Secretaries preliminarily view this approach/practice as consistent with the Secretaries' policies and broader Federal Government policy. For example, on November 22, 2022, the White House Office of Science and Technology Policy and Council on Environmental Quality released the “Guidance for Federal Departments and Agencies on Indigenous Knowledge” at the White House Tribal Nations Summit. The guidance and accompanying implementation memorandum recognized that, to make the best scientific and policy decisions, the Federal Government should value and, as appropriate, respectfully consider Indigenous Knowledge in the decision-making process. The implementation memorandum for all Federal agencies noted that “. . . the U.S. Government can fulfill its trust responsibilities to Tribal Nations, recognize Tribal sovereignty and self-governance, and honor its commitment to strengthening relations with Indigenous Peoples by including Indigenous Knowledge in Federal decision making.” Further, the implementation memorandum encouraged Federal agencies “to pursue and promote inclusion of Indigenous Knowledge in Federal scientific and policy decisions consistent with this Guidance. . . .” The Guidance started with the following recognition:
The Federal Government recognizes the valuable contributions of the Indigenous Knowledge that Tribal Nations and Indigenous Peoples have gained and passed down from generation to generation and the critical importance of ensuring that Federal departments and agencies' (Agencies) consideration and inclusion of Indigenous Knowledge is guided by respect for the sovereignty and self-determination of Tribal Nations; the Nation-to-Nation relationship between the United States and Tribal Nations and the United States' trust responsibility; and the need for the consent of and honest engagement with Tribal Nations and Indigenous Peoples.
As discussed further below, incorporating to a greater degree this substantial and diverse body of Indigenous Knowledge into its decision making might better enable the Board to address subsistence uses for all federally qualified users in implementing the title VIII rural subsistence priority.
Alaska, given its vast and varied geography, has a wide variety of subsistence uses based on place and seasons. The variations include differences in species of fish, land mammals, and marine mammals subject to harvest, in addition to seasonal availability of the same resource, such as salmon, across different areas of the State. The breadth of subsistence practices may indicate a need for a diversity of subsistence use experiences on the Board to improve Federal decision making.
Consistent with this, many commenters highlighted the importance of Alaska Native “ecological knowledge and observations by local stakeholders to promote sustainable harvests and protect habitats.” Federal Subsistence Policy Consultation Summary Report (June 14, 2022) (
These comments reflect the unprecedented challenges the Alaska subsistence community is facing regarding the availability of subsistence resources as a result of climate change and other factors. The Secretaries acknowledge that the regional advisory councils provide opportunities to incorporate Indigenous Knowledge into Board decision making. The Secretaries view this proposed rule as creating another structural path for providing Indigenous Knowledge to the Board. Additional public board members who meet the specified qualifications have the potential to expand and diversify the kinds of evidence and knowledge available to the Board for critical decisions.
The Secretaries' inclusion of recommendations/nominations from federally recognized Tribes honors the Secretaries' political relationship with Tribal Nations and their commitment to strengthening relations with Indigenous Peoples. The Secretaries' consideration of these nominations/recommendations also would recognize Tribes' qualifications to identify individuals who possess personal knowledge of and direct experience with subsistence uses in rural Alaska, both Native and non-Native, and also to identify individuals who are best able to present Indigenous Knowledge that can be included in the Board's decision making. Tribal governments are well-situated to make these recommendations in part because Alaska Natives comprise approximately 55 percent of the rural population in all areas of the State and constitute a much larger majority—82 percent of the population—in the most remote and roadless regions.
In proposing this rule, the Secretaries acknowledge that they will retain ultimate authority to decide whether to appoint to the Board the particular individuals nominated or recommended by Tribes; the Secretaries are not delegating their authority to appoint.
In addition, the Secretaries propose to require that the Board Chair possess personal knowledge of and direct experience with subsistence uses in rural Alaska.
The Secretaries also are considering whether to impose term limits as to public Board members, including potentially the Chair. The proposed regulatory text includes reference to the potential for the Secretaries to establish term limits for service of Board members in such circumstances as the Secretaries deem appropriate. The Secretaries invite public comment on other possible approaches, such as including specific term limit requirements, with or without staggered terms, in the regulatory text that would apply when new appointments are made (and not to existing members). The comments may address, for example, what specific term limits may be appropriate (
Consistent with title VIII, the Secretaries propose clarifying that the Secretary of the Interior, or the Secretary of Agriculture with respect to a unit of the National Forest System, retains the authority to modify, disapprove, stay, or expressly ratify any action taken by the Board. The Secretaries also propose to incorporate a requirement for ratification. Under the proposal, recognizing that the Board may need to act quickly in response to changed circumstances, temporary special actions of the Board will not become effective for 10 calendar days (or any longer period specified by the Board when taking the action), allowing an opportunity for the Secretaries to modify, disapprove, stay, or expressly ratify the actions. For emergency special actions (36 CFR 242.19(a) and 50 CFR 100.19(a)), the Board action will likewise not become effective for 10 calendar days unless the Board determines that the emergency situation calls for responsive action within 24 hours to protect subsistence resources or public safety. If the Secretaries do not take action (
The Secretaries provide proposed draft regulatory text for this specific proposal at the end of this document, but also invite public comment on this proposal and expressly request comments on the following:
(1) Should the Secretaries consider adopting a different framework that, while not requiring ratification, allows for review of emergency and temporary Board actions? For example, should the Secretaries consider a framework in which the effective date of Board actions would be delayed to allow the Secretaries a limited time to review those actions (and potentially stay the action for a further limited time to facilitate decision making concerning whether to modify or disapprove the action)?
(2) Are the proposed timeframes for ratification of special actions and emergency actions sufficient to allow for the Board to respond to evolving resource and subsistence issues in real time while allowing for appropriate Secretarial oversight and approval?
(3) What specific mechanism(s) should the Secretaries use to modify, disapprove, stay, or expressly affirm an emergency or temporary Board action (
(4) Would it be helpful and/or necessary for the Secretaries to make any conforming changes to the other regulations in 36 CFR part 242 and 50 CFR part 100, such as the regulation governing Board reconsideration of actions (36 CFR 242.20 and 50 CFR 100.20), if the ratification requirement is included in the final rule?
You may submit written comments and materials concerning this proposed rule by one of the methods listed in
Comments and materials we receive, as well as supporting documentation we used in preparing this proposed rule, will be available for public inspection on
As expressed in Executive Order 13175, “Consultation and Coordination with Indian Tribal Governments,” the Federal officials that have been delegated authority by the Secretaries are committed to honoring the unique government-to-government political relationship that exists between the Federal Government and federally recognized Indian Tribes (Tribes) as listed in 82 FR 4915 (January 17, 2017). Consultation with Alaska Native corporations is based on Public Law 108-199, div. H, Sec. 161, Jan. 23, 2004, 118 Stat. 452, as amended by Public Law 108-447, div. H, title V, Sec. 518, Dec. 8, 2004, 118 Stat. 3267, which provides that: “The Director of the Office of Management and Budget and all Federal agencies shall hereafter consult with Alaska Native corporations on the same basis as Indian Tribes under Executive Order No. 13175.”
Because Tribal members are affected by subsistence regulations, the Secretaries will provide federally recognized Tribes of Alaska and Alaska Native corporations an opportunity to consult on this proposed rule.
As stated above, the Secretaries previously conducted consultations where the subject of Board membership was addressed. The Secretaries have directed that DOI and USDA representatives will hold joint consultations regarding this rulemaking effort. The Secretaries will engage in outreach efforts for this proposed rule, including a notification letter, to ensure that Tribes and Alaska Native corporations are advised of the mechanisms by which they can participate. The Secretaries will commit to efficiently and adequately providing an opportunity to Tribes and Alaska Native corporations for consultation regarding this subsistence rulemaking.
The Secretaries will consider Tribes of Alaska and Alaska Native corporations' information, input, and recommendations, and will address their concerns as much as practicable.
A draft environmental impact statement that described four alternatives for developing a Federal Subsistence Management Program was distributed for public comment on October 7, 1991. The final environmental impact statement (FEIS) was published on February 28, 1992. The Record of Decision (ROD) on Subsistence Management for Federal Public Lands in Alaska was signed April 6, 1992. The selected alternative in the FEIS (alternative IV) defined the administrative framework of an annual regulatory cycle for subsistence regulations.
A 1997 environmental assessment dealt with the expansion of Federal jurisdiction over fisheries and is available by contacting: U.S. Fish and Wildlife Service, Office of Subsistence Management, 1011 E Tudor Road, MS 121, Anchorage, Alaska 99503-6199. The Secretary of the Interior, with concurrence of the Secretary of Agriculture, determined that expansion of Federal jurisdiction does not constitute a major Federal action significantly affecting the human environment and, therefore, signed a finding of no significant impact.
Similarly, this proposed rule does not constitute a major Federal action significantly affecting the quality of the human environment. Further, a detailed statement under the National Environmental Policy Act of 1969 is not required because the rule is covered by a categorical exclusion under 43 CFR 46.210(i): “Policies, directives, regulations, and guidelines: that are of an administrative, financial, legal, technical, or procedural nature; or whose environmental effects are too broad, speculative, or conjectural to lend themselves to meaningful analysis and will later be subject to the NEPA process, either collectively or case-by-case.” We have also determined that the proposed rule does not involve any of the extraordinary circumstances listed in 43 CFR 46.215 that would require further analysis under the National Environmental Policy Act.
An ANILCA section 810 analysis was completed as part of the FEIS process on the Program. The intent of all Federal subsistence regulations is to accord subsistence uses of fish and wildlife on public lands a priority over the taking of fish and wildlife on such lands for other purposes, unless restrictions are necessary to conserve healthy fish and wildlife populations. The final section 810 analysis determination appeared in the April 6, 1992, ROD and concluded that the Federal Subsistence Management Program, under alternative IV with an annual process for setting subsistence regulations, may have some local impacts on subsistence uses, but will not restrict subsistence uses significantly.
During the subsequent environmental assessment process for extending fisheries jurisdiction, an evaluation of the effects of the subsistence program regulations was conducted in accordance with section 810. That evaluation also supported the Secretaries' determination that the regulations will not reach the “may significantly restrict” threshold that would require notice and hearings under ANILCA section 810(a).
This proposed rule contains existing information collections. All information collections require approval by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (PRA, 44 U.S.C. 3501
Executive Order 14094 reaffirms the principles of E.O. 12866 and E.O. 13563 and states that regulatory analysis should facilitate agency efforts to develop regulations that serve the public interest, advance statutory objectives, and are consistent with E.O. 12866, E.O. 13563, and the Presidential Memorandum of January 20, 2021 (Modernizing Regulatory Review). Regulatory analysis, as practicable and appropriate, shall recognize distributive impacts and equity, to the extent permitted by law. We have developed this proposed rule in a manner consistent with these requirements.
E.O. 12866, as reaffirmed by E.O. 13563 and E.O. 14094, provides that the Office of Information and Regulatory Affairs (OIRA) in the Office of Management and Budget (OMB) will review all significant rules. OIRA has determined that this proposed rulemaking action is not significant.
The Regulatory Flexibility Act of 1980 (5 U.S.C. 601
Under the Congressional Review Act (5 U.S.C. 804 (2)), this proposed rule is not a major rule. It will not have an effect on the economy of $100 million or more, will not cause a major increase in costs or prices for consumers, and will not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign-based enterprises.
Title VIII of ANILCA requires the Secretaries to administer a subsistence priority on public lands. The scope of this program is limited by definition to certain public lands in Alaska. Likewise, these proposed regulations have no potential takings of private property implications as defined by Executive Order 12630.
The Secretaries have determined and certify pursuant to the Unfunded Mandates Reform Act, 2 U.S.C. 1502
The Secretaries have determined that these proposed regulations meet the applicable standards provided in sections 3(a) and 3(b)(2) of Executive Order 12988, regarding civil justice reform.
In accordance with Executive Order 13132, this proposed rule does not have sufficient federalism implications to warrant the preparation of a federalism assessment. Title VIII of ANILCA precludes the State from exercising subsistence management authority over fish and wildlife resources on Federal public lands unless it meets certain requirements.
As described above under
This Executive order requires agencies to prepare statements of energy effects when undertaking certain actions. However, this proposed rule is not a significant regulatory action under E.O. 13211, affecting energy supply, distribution, or use, and no statement of energy effects is required.
Administrative practice and procedure, Alaska, Fish, National forests, Public lands, Reporting and recordkeeping requirements, Wildlife.
Administrative practice and procedure, Alaska, Fish, National forests, Public lands, Reporting and recordkeeping requirements, Wildlife.
For the reasons set out in the preamble, the Secretaries of the Interior and Agriculture propose to amend 36 CFR part 242 and 50 CFR part 100 as set forth below.
16 U.S.C. 3, 472, 551, 668dd, 3101-3126; 18 U.S.C. 3551-3586; 43 U.S.C. 1733.
The revisions and additions read as follows:
(a)
(b)
(2) Public board members serve at the will of the Secretaries. The Secretaries maintain their authorities for replacement of Federal agency members, public board members, or any designees.
(d) * * *
(2) A quorum consists of six members.
(11) The Secretary of the Interior, or the Secretary of Agriculture with respect to a unit of the National Forest System, retains authority to (at any time) stay, modify, or disapprove any action taken by the Board.
(12) Temporary special actions of the Board are not effective unless ratified by the Secretary of the Interior or the Secretary of Agriculture with respect to a unit of the National Forest System. To allow an opportunity for the Secretaries to modify, disapprove, stay, or expressly ratify any temporary action taken by the Board, such Board actions will not become effective until at least 10 calendar days after the date of the action (or any longer period specified by the Board when taking the action). For emergency special actions, the Board action will likewise not become effective for 10 calendar days (or any longer period specified by the Board when taking the action) unless the Board determines that the emergency situation calls for responsive action within 24 hours to protect subsistence resources or public safety. If no action is taken by the Secretary to modify, disapprove, stay, or expressly ratify within 10 days (or the longer period specified by the Board), the emergency or temporary Board action will be deemed automatically ratified for purposes of this subpart. The Secretaries may revisit a prior ratification (express or automatic) of a Board action at any time. For other Board actions (
(13) The Secretaries may establish term limits for service of Board members in such circumstances as the Secretaries deem appropriate.
Environmental Protection Agency (EPA).
Proposed rule; extension of comment period.
On January 9, 2024, the Environmental Protection Agency (EPA) proposed a rule titled, “Clarifying the Scope of “Applicable Requirements” Under State Operating Permit Programs and the Federal Operating Permit Program.” The EPA has received requests for additional time to review and comment on the proposed rule revisions. The EPA is extending the comment period on the proposed rule that was scheduled to close on March 11, 2024, by an additional 30 days, until April 10, 2024.
The public comment period for the proposed ruled published in the
You may send comments, identified by Docket ID No. EPA-HQ-OAR-2023-0401, by any of the following methods:
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Mr. Matthew Spangler, Air Quality Policy Division, Office of Air Quality Planning and Standards (C504-05), Environmental Protection Agency, Research Triangle Park, NC; telephone number: (919) 541-0327; email address:
After considering the requests to extend the public comment period received from various parties, the EPA has decided to extend the public comment period for 30 days, until April 10, 2024. This extension will ensure that the public has additional time to review proposed rule.
Federal Communications Commission.
Proposed rule.
In this document, the Federal Communications Commission (Commission) explores additional steps it could take and rules it could modify to provide more utility for very low power (VLP) unlicensed devices. Specifically, the Commission seeks
Comments are due on or before March 27, 2024 and reply comments are due on or before April 26, 2024.
You may submit comments, identified by ET Docket No. 13-115 and RM-11341, by any of the following methods:
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For detailed instructions for submitting comments and additional information on the rulemaking process, see the
Nicholas Oros of the Office of Engineering and Technology, at
This is a summary of the Commission's
• All filings must be addressed to the Commission's Secretary, Office of the Secretary, Federal Communications Commission.
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○ Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority Mail) must be sent to 9050 Junction Drive, Annapolis Junction, MD 20701.
○ U.S. Postal Service first-class, Express, and Priority mail must be addressed to 45 L Street NE, Washington, DC 20554.
1. As discussed in greater detail below, the Commission seeks comment on how it can refine the very low power (VLP) device rules to provide VLP devices greater use of the 6 GHz band while continuing to protect licensed incumbents. The Commission's intent is to seek comment on specific rules aimed at providing additional power and flexibility for VLP devices. With the limited exception of seeking comments on some aspects of the VLP out-of-band emission limits, the Commission is not seeking comment on any of the rules adopted in the
2. As discussed in the Second Report and Order, the Commission is permitting VLP devices to operate at power levels up to −5 dBm/MHz EIRP PSD and up to 14 dBm EIRP. Apple, Broadcom, et al. request that the Commission permits a higher maximum level of 1 dBm/MHz EIRP PSD with the same maximum total power of 14 dBm EIRP, which they contend would enable important new VLP devices while protecting incumbent operations. This PSD level would permit VLP devices to operate at the maximum 14 dBm EIRP levels for any channel bandwidth greater than 20 megahertz, whereas under the rules the Commission is adopting in the Second Report and Order that maximum EIRP level can only be achieved for 80 megahertz and wider channel bandwidths. Based on the record and the Commission's analysis of that record, it declined to adopt rules permitting VLP devices to operate at this requested level of 1 dBm/MHz EIRP PSD in the Second Report and Order. However, the Commission believes that it can leverage the automated frequency coordination (AFC) systems used for 6 GHz band standard-power devices for use within a framework that combines higher power operation with geofencing to keep these higher powered VLP devices in locations where there have an insignificant potential to cause harmful interference to other users in the band. The Commission notes that these proposals are not intended to curtail the VLP use the Commission is adopting in the Second Report and Order. The Commission is fully satisfied that VLP devices operating at −5 dBm/MHz EIRP PSD in the U-NII-5 (5.925-6.425 GHz) and U-NII-7 (6.525-6.875 GHz) bands will protect incumbent operations and the Commission does not seek comment on these existing rules. Rather, these proposals are designed to explore the possibility for providing more flexibility for higher power use at the expense of additional complexity to implement and use a geofencing capability so that additional use cases and applications can be brought to the American public.
3. The Commission believes that it could allow geofenced VLP devices to operate at the higher PSD level suggested by Apple, Broadcom, et al. if the Commission requires certain frequency and geographic area restrictions, specifically, that VLP devices with higher PSD be prohibited from operating co-channel and in close proximity to licensed incumbent services receive sites. Accordingly, the Commission proposes to allow VLP devices to operate in the U-NII-5 through U-NII-8 bands at a level greater than −5 dBm EIRP PSD and 14 dBm EIRP, specifically up to 1 dBm EIRP PSD and 14 dBm EIRP, provided they operate under the control of a geofencing system to minimize the likelihood of harmful interference to licensed incumbent services. Under this system, geofenced VLP devices would be required to incorporate a capability to ensure that they avoid transmitting on certain channels within certain geographic areas,
4. The Commission seeks comment on these proposals. Should the Commission allow VLP devices to operate with up to 1 dBm EIRP PSD and 14 dBm EIRP, provided they are prevented from operating in areas where there is an elevated risk of harmful interference? What are the advantages and disadvantages of allowing a higher PSD limit? What additional VLP applications could be enabled by this proposed increase? Could the Commission allow a power limit higher than 14 dBm EIRP,
5. Consistent with the rules the Commission adopts for VLP devices in the Second Report and Order, it proposes to require geofenced VLP devices operating within the U-NII-5 through U-NII-8 bands to employ a transmit power control mechanism that has the capability to operate at least 6 dB below the maximum EIRP the Commission permits for the bands (
6. The Commission proposes to require emissions from geofenced VLP devices within the U-NII-5 through U-NII-8 bands to comply with the transmission emission mask adopted for standard power and LPI devices in the
7. The Commission proposes emissions limits at the edge of the U-NII-5 and U-NII-8 bands for geofenced VLP devices that are identical to the emissions limits that the Commission adopted in the
8. The Commission seeks comment on the proposed emission mask and the proposed emission limits outside the U-NII-5 and U-NII-8 bands. Are these
9. The Commission proposes to allow VLP devices to operate at a PSD greater than −5 dBm/MHz EIRP PSD, up to a maximum of 1 dBm/MHz EIRP PSD, when they operate under the control of a geofencing system to minimize the likelihood of causing harmful interference to licensed incumbent services. The proposed geofencing system would ensure that geofenced VLP devices with greater than −5 dBm/MHz EIRP do not operate on the same channels as licensed incumbents inside of defined exclusion zones designed to minimize the potential for geofenced VLP devices to cause harmful interference. The Commission proposes requirements for geofencing systems and the criteria that would be used to calculate the exclusion zones as well as technical requirements for geofenced VLP devices. The Commission also proposes procedures for testing and approving geofencing systems to ensure that they would operate as intended and correctly restrict co-channel operation with licensed incumbents in the 6 GHz band at certain locations.
10.
11.
12. The Commission proposes to protect licensed services in the 6 GHz band by prohibiting geofenced VLP access points with power levels greater than −5 dBm/MHz EIRP PSD from operating on certain channels within defined exclusion zones around the sites where licensed incumbent services operate. The geofencing system would prevent a VLP access point from operating on the frequencies within these exclusion zones where there may be a higher risk of causing harmful interference. The Commission proposes that the exclusion zones be determined based on the operational frequency being used by the incumbent service licensee as well as the power of the geofenced VLP access point. A geofenced VLP access point located within an exclusion zone would be prohibited from operating only on the specific frequencies excluded within that zone and would be permitted to operate on any other frequencies that are available at its location at the maximum power level permitted. Depending on the number of incumbent licensees in an area and the size of the exclusion zones, a geofenced VLP access point could fall within multiple overlapping exclusion zones at a particular location. In such cases, the device would have to avoid all excluded frequencies for all the overlapping zones in which it is located. To provide manufacturers flexibility in developing geofencing systems, the Commission proposes that geofencing systems may also determine areas where particular frequencies are available throughout the entire area based on the same protection criteria used to calculate exclusion zones. Each approach may have advantages in terms of spectrum availability or device complexity, so permitting either approach would provide manufacturers with the ability to determine the most suitable implementation for a specific use case. The proposed methodology for calculating exclusion zones is described below.
13. The Commission seeks comment on these proposals. Is a geofencing system necessary to minimize the likelihood of harmful interference from VLP devices with a PSD greater than −5 dBm/MHz EIRP to licensed incumbent services in the 6 GHz band? Is the proposed method of using exclusion zones around licensed incumbent receive sites an appropriate way to protect these sites? Would the proposed alternative method allowing geofencing operators to calculate zones in which a channel is available over an entire zone provide the same protection to incumbent services as determining exclusion zones in which one or more channels are unavailable? Should the Commission permit use of either method, or is one method preferable to the other, and if so, why? How would the benefits of higher power VLP operations in the 6 GHz band vary with differences in exclusion zone design?
14. The Commission also seeks comment on whether an approach other than geofencing, such as requiring the
15.
16. The Commission proposes to require that geofenced VLP access points obtain or calculate the exclusion zones—where some operational restrictions are required—that will protect licensed services, have the capability to determine their location, and intelligently choose their operating channel to avoid operating on a prohibited frequency within an exclusion zone. The Commission further proposes to require that client devices operating under the control of a geofenced VLP access point operate only on channels as determined by its connected geofenced VLP access point. Under these proposals, client devices would not be required to directly obtain or calculate exclusion zone information as they would only be operating on channels already cleared through the geofenced VLP access point. The same client devices may also be capable of operating under the control of LPI access points and standard power access points, in which case the client devices must adjust their power levels depending on which type of access point they are connected to. That is, when connected to an LPI access point or standard power access point, the client device would have to follow the client device rules for those operations, which require those client devices to reduce their power at least 6 dB below the access point power level. Because geofenced VLP access points and client devices would operate at lower power levels than standard power and LPI devices, thus reducing the distance at which harmful interference may possibly occur, the Commission does not propose to require client devices to reduce their power below that of the access point and propose to limit both geofenced VLP access points and client devices operating under the control of a geofenced VLP access point to the same power levels.
17. The Commission seeks comment on these proposals. Is the proposed geofenced VLP two-tier model based on access points and client devices in which a geofenced VLP access point is required to obtain geofencing information, but the client device is not, appropriate? Is the proposed definition of VLP access point appropriate, or are different or additional definitions that better describe the types of permissible geofenced VLP devices necessary? Should all geofenced VLP devices be required to incorporate an integrated antenna? Should client devices be permitted to operate at a different power level than geofenced access points? Is there any need for a 6 dB power reduction for a client to a geofenced VLP device?
18.
19. The Commission seeks comment on these proposals. How much flexibility should the Commission provide in geofencing system architecture? Should the Commission provide flexibility for different geofencing system implementations or should a single approach be specified? What are the benefits and drawbacks of each approach? How would costs for users of a geofencing system vary between different approaches? Is there a need to specify the overall framework of geofencing systems in more detail,
20. The Commission proposes requirements for geofenced VLP devices operating at greater than −5 dBm/MHz EIRP to protect licensed incumbent services in the 6 GHz band, specifically, fixed microwave services, BAS and CARS receive sites, as well as radio astronomy and FSS receive sites. Consistent with the requirements for standard power access points and fixed client devices, the Commission proposes that geofencing systems use data from Commission databases to protect fixed microwave services. The Commission proposes that BAS and CARS receive sites be protected using data provided by licensees, as described
21.
22. The Commission also proposes to allow an assumption of 4 dB for body loss in the exclusion zone calculations because of its finding, discussed in the Second Report and Order, that due to the nature of VLP devices and how they will be used, an additional 4 dB attenuation for body loss is appropriate when analyzing the potential effect of their emissions. The Commission does not propose to consider aggregate interference from geofenced VLP devices since they will operate at a significantly lower power level than standard power access points and fixed client devices for which the Commission previously determined that an aggregate interference limit is not necessary.
23. The Commission seeks comment on these proposals. Are the proposed interference metric and body loss assumption appropriate? Would other values be more appropriate? Are there other parameters in addition to body loss that should be accounted for when determining exclusion zones (
24. The Commission proposes to require geofencing systems to use the same propagation models that are used for standard power access points and fixed client devices to determine the VLP device exclusion zones. Specifically, the Commission proposes to require geofencing systems to use the free space path-loss model at separation distances of up to 30 meters, the Wireless World Initiative New Radio phase II (WINNER II) model at separation distances greater than 30 meters and up to and including 1 kilometer, and the Irregular Terrain Model (ITM) combined with the appropriate clutter model at separation distances greater than 1 kilometer. Where such data are available, the Commission proposes that the exclusion zone calculation use site-specific information, including buildings and terrain data, for determining the line-of-sight/non-line-of-sight path component in the WINNER II model. For evaluating paths where such data are not available, the Commission proposes that the calculation use a probabilistic model combining the line-of-sight path and non-line-of-sight path into a single path-loss as set forth in the requirements for AFC systems. The Commission believes that these propagation models are appropriate for determining exclusion zones for geofenced VLP access points for the same reasons that they are appropriate for determining channel availability for standard power devices described in the
25. The Commission seeks comment on these proposals. Are the proposed propagation models appropriate for calculating geofenced VLP device exclusion zones? Could the Commission allow the use of different propagation models for calculating geofenced VLP device exclusion zones or simplify the methodology in some way? For example, could the Commission require use of a single propagation model, such as ITM, for all distances? If so, what is the appropriate propagation model? If the Commission specifies a different propagation model for determining exclusion zones, should the Commission make its use mandatory or should it be an optional alternative to the proposed propagation models? Parties should address how a different propagation model would ensure that incumbent services in the 6 GHz band are adequately protected. The Commission also seeks comment on the benefits and costs of requiring or allowing the use of different propagation models. Could this approach reduce the size of the exclusion zones where geofenced VLP devices are prohibited from operating on certain frequencies?
26. The Commission also seeks comment on whether there are land-use databases that could account, for example, for actual buildings and other structures, especially in cities and suburbs, that could allow a more accurate determination of where VLP devices can operate without causing harmful interference? If so, what databases are available for this purpose? If this information is not available, would it be possible for parties to develop it, either nationwide or for specific areas? Could the Commission allow modifications to any parameters used in the specified propagation models, and if so, which ones? If the Commission allows modifications to the method of determining spectrum availability for VLP devices, what criteria would the Commission have to specify in the rules? Would the Commission needs to develop a process for modifying the locations where VLP devices can and cannot operate? Should a geofencing system operator be required to obtain prior permission from the Commission to use a modified methodology, or could the Commission adopt rules that do not require operators to obtain prior permission?
27.
28. Because links from ENG trucks to BAS and CARS receive sites are essentially temporary fixed point-to-point links, the Commission proposes the use of the same −6 dB I/N interference protection criterion and propagation models along with an additional 4 dB body loss consistent with the Commission's proposal for calculating geofenced VLP device exclusion zones for fixed microwave links. Since BAS and CARS operations are typically licensed for the entire band(s) in which they operate (
29. A full record of BAS and CARS central receive sites would be needed in the Commission's licensing databases to calculate the geofencing exclusion zones. The Wireless Telecommunications Bureau, the Media Bureau, and the Office of Engineering and Technology could collect information from BAS and CARS licensees regarding locations and associated information for existing central receive sites to ensure that the Commission's databases are complete and up-to-date. The Commission would not permit geofenced VLP unlicensed devices to operate in the U-NII-6 and U-NII-8 bands until after the Commission's databases are updated.
30. The Commission seeks comment on these proposals. Although the Commission is proposing to protect BAS/CARS using the −6 dB I/N ratio and 4 dB body loss assumption, the Commission seeks comment on whether a different metric or assumption is more appropriate? Are the propagation models the Commission proposes above to protect fixed microwave links also appropriate for BAS/CARS? Commenters should provide detailed technical justification and analysis. The Commission seeks comment on whether there are ways that it could reduce the size of the exclusion zones to protect BAS and CARS receive sites, limit the number of frequencies excluded within those zones, or limit receive site protection to only the specific times when they are in use. For example, should the Commission requires BAS and CARS users to notify a geofencing system of their ENG operations, and for the geofencing systems to incorporate a push notification feature or similar functionality to provide information (
31. The Commission seeks comment on the benefits of obtaining more detailed information from BAS/CARS licensees and limiting protection to only the associated exclusion zones and times that these services actually operate. The Commission also seeks comment on how much spectrum ENG operations typically use. The
32. The Commission also seeks comment on whether multiple ENG operations at a location use the same or different receive sites. What is the number of ENG operations that typically occur at a news event, sporting event, or other event where such operations may be used? And what is the maximum that might be used at larger national events such as political conventions or large scale sporting events? How much time do ENG operations typically need to transmit for these events? Is continuous operation required before, during, and after an event or only within discrete timeframes? Are there ways to predict
33. Although the Commission proposes to allow either a distributed or centralized architecture model for VLP device geofencing systems, if the Commission were to adopt a push notification or similar approach to protect BAS/CARS based on actual usage, it appears that there would be a need for one or more centralized systems to register BAS/CARS usage and provide the information to geofencing systems. The Commission seeks comment on whether this would be necessary. If so, who would develop and operate these systems? How should any information be shared amongst geofencing systems? For example, in the white space rules, white space device operators are required to share registration information with all other database administrators. Would such a requirement be necessary here? If so, how would data sharing work to ensure that all geofencing systems, both centralized and decentralized, have up-to-date information to protect ENG operations at scheduled and unscheduled events? What information should licensees be required to file and what procedure would they use to get their information to the system? Should licensees be required to file or update information within a specific timeframe? What would be the burden on licensees for filing this information? Could the filing process be automated? The Commission seeks comment on any other options for transmitting channel utilization information to geofencing operators. Are there any other factors that should be considered in this process? Finally, the Commission seeks comment on whether there should be any channels (e.g, one or two channels) set aside as a safe harbor for ENG operations in these bands where ENG could operate without risk of harmful interference from VLP devices at times when the operator could not register its parameters? If so, how much spectrum would need to be set aside for such operation? Would spectrum be needed in both U-NII-6 and U-NII-8? Are there particular places in the band that would be most useful;
34. The Commission seeks comment, especially quantitative, on the benefits and costs of requiring a push notification system. Should any particular protocol or security measures be required? To what extent would a push notification system permit service continuity for geofenced VLP devices, as compared to how often such users would need to modify their channel usage to avoid exclusion zones when those areas are tailored to the specific situation rather than assuming that ENG might always be operating within a circular or part of a circular area around an ENG receive site? How would data rates be affected? What would be the potential costs associated with establishing, maintaining, and operating the push notification system? In particular, the Commission seeks comment on the costs for BAS and CARS licensees to report their location information to enable push notifications.
35.
36. The Commission believes that a similar approach for geofenced VLP devices will adequately reduce the risk that mobile service incumbents in the U-NII-6 and U-NII-8 bands will be subjected to harmful interference and keep that risk to an insignificant level. The Commission's reasoning is consistent with the
37. The Commission seeks comment on this proposal. Would requiring geofenced VLP devices to incorporate a contention-based protocol adequately protect mobile service incumbents? If not, what other protection measures could be used by geofenced VLP devices to protect mobile services? For example, could a registration system with a push notification provide near real-time information to geofenced VLP devices to
38.
39. Globalstar operates receiving earth stations for non-geostationary Mobile-Satellite Service feeder links at five locations. The Commission proposes to require that geofenced VLP access points protect Globalstar's earth stations using the same exclusion zone calculation methodology used to protect radio astronomy sites. The Commission proposes to require the geofencing system to implement these exclusion zones over 6875-7055 MHz at each of Globalstar's five feeder link earth station locations. As these exclusion zones are designed to protect extremely sensitive radio astronomy facilities, the Commission believes that they will provide more than adequate protection for Globalstar's earth stations.
40. The Commission seeks comment on this proposal. If different criteria are appropriate, what are the key parameters that must be considered to protect these earth stations? Are parameters such as minimum elevation angle from the earth station to the satellite, gain of earth station antenna, and earth station receiver characteristics readily available? Are Commission databases, such as the International Communications Filing System (ICFS), able to collect the necessary parameters for calculating exclusion zones? If not, and given the limited number of these Earth stations in the U-NII-8 band, could exclusion zones around these Earth stations be determined based on generalized parameters? What should those parameter values be? Would earth station receivers require a different level of protection than the −6 dB I/N ratio used to protect other incumbents in the band? If so, what is the protection criterion? What would be the cost of implementing and maintaining necessary protections for space-to-Earth stations from geofenced VLP devices? The Commission also seeks information on the economic harm from interference that these protections would prevent. Commenters should provide technical analysis to support their positions.
41.
42.
43. The Commission proposes additional requirements for geofencing systems and operators that are similar to certain requirements for 6 GHz AFC systems. Specifically, the Commission proposes that each geofencing system and operator thereof for centralized systems and the equipment certification responsible party for systems internal to the very low power device must: (1) ensure that a regularly updated
44. The Commission further proposes that for centralized geofencing systems, geofencing system operators must provide continuous service to all VLP devices for which it has been designated to provide service, and that if a geofencing system ceases operation, the operator must provide at least 30-days' notice to the Commission and a description of any arrangements made for those devices to continue to receive exclusion zone update information. In addition, the Commission proposes that a geofencing system operator may charge fees for providing service and that the Commission may, upon request, review the fees and can require changes to those fees if the Commission finds them to be unreasonable. The Commission also proposes that at the time that a VLP device receives equipment certification, the device must either have its geofencing system approved or specify an already approved geofencing system that it is using. The Commission further proposes that it may specify criteria for such approval, which could require test results to be submitted.
45. The Commission seeks comment on these proposals. Are all the proposed requirements appropriate and necessary? Should the Commission modify any of these proposed requirements or establish additional requirements for geofencing systems and operators? If so, what requirements are necessary? The Commission seeks quantitative analysis of the likely fee structure that would result under its proposal allowing fees. What would be the initial cost of developing a geofencing system and the ongoing cost of providing daily information to it? The Commission also seeks comment on how any fees would relate to usage or other costs of operating the geofencing system.
46. Finally, in light of the proposals to base higher power VLP operation on using a geofencing system, the Commission seeks comment on whether there are alternative methods to achieve the same result. Are there other technical or operational approaches that would similarly permit more flexible VLP operation while protecting incumbent operations? Commenters advocating for alternative approaches should provide specific detail regarding any alternative approach along with descriptions and analysis of how such an approach would protect incumbent operations.
47. In the
48. Second, the Commission proposes to permit direct client-to-client communications between VLP client devices when they are both under the control of the same VLP access point and the geofencing system determines that they are operating outside of any geofencing restrictions;
49. The Commission seeks comment on these proposals. Are these proposed limited exceptions to the prohibition on client-to-client device communications appropriate? Would any other exceptions with respect to VLP devices be appropriate? Does the Commission need to specify any additional requirements or limitations on client-to-client device communications? How much and what kinds of additional usage would these proposals create in client-to-client operations? Would these proposals impose any additional costs to users of the associated spectrum?
50. In the
51. A mobile geofenced VLP device operating at a power level greater than −5 dBm/MHz EIRP PSD would have to consider exclusion zone(s) not only at its present location, but also at all areas that may be traversed by a mobile VLP device between the present time and a future location update. Naturally, the area traversed by the mobile VLP device is a function of the VLP device's speed and direction. For example, a mobile VLP device located in a vehicle traveling 35 miles per hour could cover approximately one kilometer within one minute. However, there are other mobile use cases in which a pedestrian using a VLP device will cover well under a hundred meters in the same one-minute time period. Accordingly, rather than proposing a set time period within which a mobile VLP device must update its location to check if it is in an area with different geofencing requirements than the previous area in which it checked, the Commission proposes a flexible approach with varying recheck times based on speed to better meet device usage requirements. Thus, the recheck interval can be tailored to require fewer rechecks when moving at slow speeds and thus ease processing requirements and save battery power.
52.
53.
54. The Commission seeks comment on these proposals. Do they provide sufficient flexibility for mobile geofenced VLP devices? Is it necessary for us to specify more detailed requirements on how often a geofenced device must re-check its speed and its position with respect to exclusion zones? If so, what additional requirements should be specified and why? Is a requirement for devices to re-check their location and speed at least once per minute necessary? Is the proposed information that applicants for certification of geofenced VLP access points must submit appropriate, or should any additional information be required? If so, what information? The Commission seeks quantitative information on the benefits and costs to VLP device users, manufacturers and the wider public of its proposal and any proposed alternatives.
55.
56.
57.
58.
59.
60. Applicants seeking VLP device certifications would have to show in their applications how their device will comply with any geofencing requirements adopted in this proceeding. For example, applicants for geofenced VLP access point certification would have to demonstrate that the device operates only pursuant to a geofencing system and that the geofencing system prevents operation in areas where the −6 dB I/N metric is not met when calculated in accordance with the proposed methodology. They would also have to demonstrate that their devices could not operate on any channel that the geofencing system determines is prohibited at its location at a power level greater than −5 dBm/MHz EIRP PSD. Applicants would also be required to demonstrate that their VLP access points comply with the proposed requirements to periodically check their location and comply with the database recheck intervals proposed above as well as adjust their operating channel if they move into an exclusion zone where that channel is not available. They would further have to demonstrate how geofenced VLP access points obtain exclusion zone data either from a geofencing system or through calculations based on data downloaded from Commission databases.
61. The Commission seeks comment on testing and certification issues for geofenced VLP access points and client devices. Are there any specific testing or certification issues that the Commission will need to address, either in a subsequent item in this proceeding or subsequent to adopting rules,
62. The Commission seeks comment on any changes that it could make that would allow for increased spectrum availability for geofenced VLP devices without increasing the likelihood of harmful interference to incumbent services,
63. The Commission also seeks comment on whether to relax the restrictions on VLP device mobile operations (
64. As noted, these decisions were made largely to provide consistency with the Commission's prior decision regarding standard power and LPI devices. However, given the inherent differences between those devices and VLP devices, the Commission seeks comment on whether these restrictions on mobile operations on aircraft and oil platforms can be relaxed for non-geofenced VLP devices, geofenced VLP devices, or both. First, emissions from both types of VLP devices will be lower than standard power and LPI devices; geofenced VLP access points and associated client devices are permitted to operate with no more than 1 dBm/MHz EIRP PSD and 14 dBm EIRP while standard power and LPI devices may operate at 23 dBm/MHz EIRP PSD and 36 dBm EIRP and 5 dBm/MHz EIRP PSD and 30 dBm EIRP, respectively. VLP devices operate at an even lower −5 dBm/MHz EIRP PSD. Second, both types of VLP devices are mobile, generally operate close to the ground and in proximity to the body or other objects, are likely to be battery powered, and either operate pursuant to a geo-location system or at or below −5dBm/MHz EIRP PSD.
65. Considering expected use cases and the minimal potential for VLP and geofenced VLP devices to cause harmful interference, the Commission proposes to permit mobile operation on commercial and general aviation aircraft more generally, but not on UAS. The Commission can speculate that several prominent use cases will occur on aircraft. The Commission seeks comment on permitting more general use of VLP and geofenced VLP devices onboard commercial and general aviation aircraft. For example, because FAA guidance specifies that aircraft operators, when operating aircraft that have been certified to meet portable electronic device tolerance standards, may permit certain portable electronic devices to operate in all phases of flight (
66. The Commission continues to believe that any VLP operation when such devices are mounted on a UAS could pose more than an insignificant harmful interference risk, given the potential of UAS to fly almost anywhere and to have clear line of sight to an incumbent's receiver. In addition, because the geofencing system determines exclusion zones based on an assumed 1.5 meter antenna height, any exclusion zone associated with a UAS would be much larger than for general VLP device usage. Nevertheless, the Commission seeks comment on whether there are operational limitations or guidelines the Commission could adopt that could permit VLP devices to operate when mounted on a UAS. Are there applications that are specifically well-suited for use on a UAS? Are there methods using the geofencing system or otherwise that could be implemented to ensure that incumbent receivers are protected from harmful interference? If so, how complex and feasible would these methods be to implement? Would the costs associated with additional complexity outweigh any benefits that might be gained from permitting such operation?
67. In the Second Report and Order, the Commission maintained its prohibition on all types of 6 GHz device usage on oil platforms to protect EESS operations but did not prohibit the use of VLP devices on boats. The Commission now seeks comment on whether the prohibition on all types of 6 GHz device usage on oil platforms can be scaled back or lifted. For example, given the differences between VLP devices (both geofenced and non-geofenced) and standard power and LPI devices, does the use of VLP devices on oil platforms pose the same risk of harmful interference to EESS operations? Could standard power, LPI or either type of VLP devices be used on oil platforms without causing a risk to EESS ocean temperature monitoring operations? The Commission can foresee applications where a 6 GHz device could provide utility through augmented reality to a worker on an oil platform to provide relevant information, such as for safety, maintenance tasks, or general operating instructions. Is any restriction of VLP device use on boats appropriate to protect EESS operations? If such a restriction were adopted, could it be limited to boats located in the ocean, given that EESS is used for sensing over the ocean? How could the prohibition on use of VLP devices on oil platforms or a prohibition on use on boats, if adopted, be implemented for non-geofenced VLP devices?
68. Finally, the Commission seeks comment on whether there is additional flexibility that can be provided for terrestrial in-vehicle use (
69. The Commission invites commenters to address these issues and provide detailed information regarding whether the Commission can provide more flexibility to VLP devices, both geofenced and non-geofenced, for expanded use in aircraft, on boats, in vehicles, and in more places while still ensuring that incumbent operators' facilities are protected from harmful interference. The Commission seeks quantitative estimates of benefits or costs of its proposals for relaxing the VLP prohibition in these locations and potential alternatives. How much and what kinds of additional VLP operations might occur? How much and what kind of costs would be incurred to accommodate these increased operations?
70. In the Second Report and Order, the Commission adopted rules to permit VLP devices to operate in the U-NII-5 and U-NII-7 bands at power levels up to −5 dBm/MHz EIRP PSD and 14 dBm EIRP. The Commission determined that the risk of harmful interference to incumbent services in those bands,
71. As discussed above, both the U-NII-6 and U-NII-8 bands are used by mobile BAS and CARS, including outdoor electronic news gathering (ENG) trucks and low power short range devices, such as portable cameras and microphones. Low Power Auxiliary Stations, which are licensed in portions of the U-NII-8 band, operate on an itinerant basis and transmit over distances of approximately 100 meters for uses such as wireless microphones, cue and control communications, and TV camera synchronization signals. There are also BAS and CARS fixed microwave links in these bands, which are used for such purposes as video links between studios and transmitters and to relay video signals between cities.
72.
73. Apple, Broadcom, and Meta submitted a Monte Carlo simulation addressing the potential for VLP devices operating at −5 dBm/MHz to exceed −6 dB I/N for two specific ENG receive sites. For the ENG receivers, the simulation used the same two ENG receive sites and technical parameters that were used in a Monte Carlo simulation previously submitted by NAB that examined the potential for 6 GHz band unlicensed access points to interfere with ENG receivers. As the ENG receive antennas are directional but generally are able to provide 360° azimuthal coverage, it is not practical to simulate every azimuth. Thus, Apple, Broadcom, and Meta limited their simulation to the same three antenna orientations that NAB simulated for the two ENG receive sites. For the VLP devices, the simulation used similar assumptions for body loss, transmit power control, and propagation models as the Apple, Broadcom et al. and Apple simulations discussed in the Second Report and Order that assessed the potential for VLP devices to exceed −6 dB I/N for microwave links in San Franscisco and Houston. The Apple, Broadcom, and Meta Monte Carlo analysis found no instances where the VLP devices caused the signal received at the ENG receive sites to exceed −6 dB I/N. The Commission notes that NAB previously expressed skepticism about the accuracy of a similar Monte Carlo simulation provided by Apple, Broadcom, et al. that likewise found that the −6 dB I/N threshold was never exceeded for one of these ENG receive sites. The Commission seeks comment on the Apple, Broadcom, and Meta simulation. The Commission seeks comment on its conclusions that −6 dB I/N will not be exceeded or will only be exceeded in so few instances at ENG central receive sites that the Commission can conclude that the risk of harmful interference from VLP devices operating at −5 dB/MHz EIRP PSD is insignificant. Given that this simulation used two ENG receive sites that were chosen by NAB, can the Commission assume that they are representative of BAS and CARS receive sites in general? Are there particular scenarios that need further study?
74.
75. Broadcom submitted a simulation showing a low probability (<0.001%) that a VLP device operating at −5 dBm/MHz will cause the signal-to-interference-plus-noise ratio (SINR) at the ENG truck receiver to fall below 1 dB. Broadcom's 1 dB SINR threshold is based on a previously submitted Broadcom study showing that a 10 megahertz ENG channel with a 7/8 coding rate can maintain a signal with a bit-error-rate (BER) less than 1e-8 in the presence of an RLAN signal operating with a 2% duty cycle. Charter, Comcast, Cox and CableLabs also previously submitted studies of the ENG truck signal SINR requirements in the presence of RLANs operating at various duty cycles. While these studies examined the impact of LPI transmissions, which operate at a higher power than is proposed for VLP, their findings with respect to SINR are also applicable to assessing VLP impact to BAS operations. CableLabs finds that a 10 dB SINR “provides an accurate view of system requirements for high-quality BAS video delivery”.
76. The Commission proposes to permit non-geofenced VLP devices operate in the U-NII-6 and U-NII-8 bands and seeks comment on whether those devices could operate at up to −5 dBm/MHz EIRP PSD and 14 dBm EIRP while minimizing the risk of harmful interference to ENG truck receive sites. What is the appropriate metric for evaluating the harmful interference risk to a ENG truck receiver, which is fixed during operation but otherwise transportable, from a mobile or transient VLP transmission? Regarding potentially using SINR, because actual signal levels are not known prior to any transmission, what value or range of values should be used for the ENG signal level for any analysis? Commenters should provide insight and data regarding how any assumed signal level is consistent with the signal levels used for ENG operations. Previously submitted studies show that the required SINR will vary according to channel bandwidth and coding rate. What are the typical bandwidths and coding rates used by ENG truck receivers? If the Commission were to rely on evaluating SINR, what SINR threshold should be assumed to be necessary at the ENG truck receive site to maintain a high quality signal? Broadcom's study predicted an impact when the VLP device was within 5 meters of the receiver. Under normal operating conditions, how close could a random user's VLP device actually come to an ENG truck receiver? Is assuming at least a 5 meter separation distance realistic? Or is that distance too short or too long? Will the itinerant nature of VLP devices help reduce the likelihood of a VLP device causing harmful interference? Are there any particular connections the Commission should make between its reliance on an I/N metric when evaluating ENG trucks connecting to a central receive site and potentially evaluating the harmful interference risk from portable devices to an ENG truck based on SINR? In evaluating analysis methodology and protection metrics, commenters should detail how such an approach supports permitting non-geofenced VLP operations at power levels up to −5 dBm/MHz EIRP PSD or indicates that a different power level may be appropriate.
77.
78. The Commission believes that a similar approach for VLP devices will adequately reduce the risk that mobile service incumbents in the U-NII-6 and U-NII-8 bands would be subjected to harmful interference and keep that risk to an insignificant level. The Commission's reasoning is consistent with the
79. The Commission seeks comment on this proposal. Would requiring VLP devices to incorporate a contention-based protocol adequately protect mobile service incumbents in the U-NII-6 and U-NII-8 bands? If not, are there any other protection measures that could be used by VLP devices to protect mobile services? Is there a need to provide greater specificity in the requirements for a contention-based protocol used by VLP devices? If so, what particular requirements should be specified and why? What are the costs and benefits of requiring the use of a contention-based protocol?
80. The U-NII-7 and U-NII-8 bands contain Fixed Satellite Service (FSS) space-to-Earth allocations and are restricted to feeder links for Mobile-Satellite Service non-geostationary satellite systems. No such earth stations are currently licensed in the U-NII-7 band. The U-NII-8 space-to-Earth allocation is limited to use by Globalstar's non-geostationary Mobile-Satellite Service feeder links and earth stations receiving at locations within 300 m of coordinates in Brewster, WA, Clifton, TX, and Finca Pascual, PR. Globalstar also operates earth station receive sites at Naalehu, HI, Wasilla, AK, and Sebring, FL. These last two locations are authorized to operate on a co-primary basis for FSS feeder downlinks, except for the 7.025-7.055 GHz band, where they are authorized only on an unprotected basis. In the
81. The Commission seeks comment on whether any restrictions on VLP device operation is necessary to protect space-to-Earth stations. Because VLP devices would operate at significantly lower PSD levels than geofenced VLP access points and associated client devices, how does this impact the analysis of the potential for harmful interference occurring? As VLP devices operate without the supervision of a geofencing system, how could such restrictions, if needed, be implemented? Would there be differences in the cost of protection for VLP devices compared to geofenced VLP access point and associated client devices? The Commission also seeks comment on how the earth station antenna sites themselves provide interference protection by creating a physical barrier (
82. The 5.895-5.925 GHz band immediately below the U-NII-5 band is used by the Intelligent Transportation Service (ITS) which the Commission is requiring to transition to C-V2X-based technology. In the Second Report and Order, the Commission adopted the same −27 dBm/MHz out-of-band emission (OOBE) limit for VLP devices for emissions below the U-NII-5 band and above the U-NII-8 band as it had already required for standard power and low-power indoor 6 GHz devices. NTIA filed a technical exhibit into the record that includes a Department of Transportation study (
83. The Commission seeks additional information on the potential impact that VLP devices operating in motor vehicles could have on C-V2X performance when a VLP device is operating within the same motor vehicle as the C-V2X receiver. In seeking comment on this issue, the Commission notes that the
84. In this section, the Commission seeks comment on whether the Commission should permit direct communications between clients to LPI devices. The Commission also seeks comment on the requirements that it would have to specify to enable client-to-client communications without causing harmful interference to licensed incumbent operations in the 6 GHz band.
85.
86. In response to suggestions by Apple, Broadcom et al. that client devices could be permitted to directly communicate with each under certain conditions, OET released a public notice on January 11, 2021 seeking information regarding client-to-client device communications in the 6 GHz band. The conditions that Apple, Broadcom et al. suggest for permitting client-to-client communications include requiring client devices to decode an enabling signal transmitted by an LPI device within the last four seconds, and requiring that an enabling signal be received at a signal strength of at least −99 dBm/MHz. These parties assert that these requirements would ensure each individual client participating in client-to-client communications is safely inside the area where a client device is authorized to communicate with an access point.
87. Fourteen parties filed comments and 12 parties filed reply comments in response to the OET public notice. Advocates of unlicensed operation support permitting client-to-client communications by LPI devices, arguing that they will enable new applications that benefit the public, such as AR/VR and digital education and training. Incumbent operators in the 6 GHz band (
88.
89. Specifically, the Commission seeks comment on whether the Commission should permit 6 GHz client
90. The requirement that 6 GHz client devices operate under the control of either a standard-power or low-power indoor access point is intended to prevent client devices from causing harmful interference by limiting their operation either to outdoors in areas where an AFC system has determined that interference is unlikely to occur, or in the case of LPI devices to indoor locations where other factors such as building entry loss prevent harmful interference. It may be possible for a client device to receive an enabling signal from an access point even when the enabling signal is too weak to enable the client device to conduct communications with the access point. In such situations, the weak received signal level makes it more likely that the client device could be outdoors. By requiring that the enabling signal have a specific signal strength, this problem could be potentially avoided. If the Commission were to adopt rules permitting client-to-client communications, should it require the enabling signal from the low-power indoor access point to be received by the client device with a particular signal level, such as −99 dBm/MHz as suggested by Apple, Broadcom et al.? If not, what signal level would be appropriate? How can a specific signal level be correlated with the requirement that the client device be under the control of an access point? Should the enabling signal level be of sufficient strength to effectively require that the signal levels between the access point and client device be sufficiently strong to permit bi-directional communications between the client devices and the access point, thereby ensuring that both client devices are close to the access point? How frequently should a client device be required to receive an enabling signal to continue transmitting to another client device?
The Commission also seeks comment on whether client devices should be limited to receiving an enabling signal from the same access point or whether client-to-client communications could be permitted so long as each client device receives an enabling signal from any authorized access point. Apple, Broadcom et al.'s suggestion would potentially permit two client devices to communicate even if they receive enabling signals from two different access points. For example, client devices in two different buildings receiving enabling signals from different low-power indoor access points could attempt to communicate with each other. Would permitting this situation to occur increase the potential for the client devices to cause harmful interference to licensed services? Should other configurations be permitted? For example, could a client device controlled by a standard power access point be permitted to communicate with a client device controlled by a low-power indoor access point? In such a case, should the client device power level be restricted to the standard power client device power level? Could client-to-client communications be permitted between devices when both clients are controlled by a standard power access point? If so, are any changes needed to the AFC systems? Must an enabling signal be received on the same channel for each device under any of the scenarios contemplated? Under any envisioned client-to-client communication scenario, commenters should provide detailed descriptions of how such communications can be enabled including how such communications fit under the current rules that limit client devices to operating only under the control of a standard power access point or a low-power indoor access point or whether, and which, rules would need to be modified. Commenters should provide detailed analysis of how any client-to-client communication configurations they prefer would protect incumbent operations from harmful interference. Finally, commenters should provide any other information relevant to evaluating whether direct client-to-client communications should be permitted, including any alternative methods or necessary rule changes not directly discussed above.
1. Accordingly,
2.
Communications equipment, Radio, and Reporting and recordkeeping requirements.
For the reasons discussed in the document, the Federal Communications Commission proposes to amend 47 CFR part 15 as follows:
47 U.S.C. 154, 302a, 303, 304, 307, 336, 544a, and 549.
The revisions and additions read as follows:
(a) * * *
(7) For a geofenced very low power access point operating in the 5.925-7.125 GHz band, the maximum power spectral density must not exceed 1 dBm e.i.r.p in any 1-megahertz band. In addition, the maximum e.i.r.p over the frequency band of operation must not exceed 14 dBm.
(8) * * *
(iii) For client devices operating under the control of a geofenced very low power access point in the 5.925-7.125 GHz bands, the maximum power spectral density must not exceed 1 dBm e.i.r.p in any 1-megahertz band, and the maximum e.i.r.p over the frequency band of operation must not exceed 14 dBm.
(10) Access points operating under the provisions of paragraphs (a)(5), (6), and (7) of this section must employ a permanently attached integrated antenna.
(d) * * *
(3) Transmitters operating under the provisions of paragraphs (a)(5), (6), and (8)(ii) of this section are limited to indoor locations.
(5)(i) In the 5.925-7.125 GHz band, client devices must operate under the control of a standard power access point, low-power indoor access point, subordinate device, or geofenced very low power access point; Subordinate devices must operate under the control of a low-power indoor access point.
(ii) Fixed client devices may only connect to a standard power access point.
(iii) In all cases, an exception exists such that a client device may transmit brief messages to an access point when attempting to join its network after detecting a signal that confirms that an access point is operating on a particular channel.
(iv) Client-to-client communications: Client devices are prohibited from connecting directly to another client device, except that client devices under the control of the same indoor access point or geofenced very low power access point may communicate directly with each other.
(v) Client devices under the control of indoor access point, that directly connect to another client, transmit power must not exceed −1 dBm e.i.r.p. in any 1-meghertz band, and the maximum e.i.r.p. over the frequency band of operation must not exceed 14 dBm.
(7) [Reserved]
(8) Geofenced very low power and very low power devices may not employ a fixed outdoor infrastructure. Such devices may not be mounted on outdoor structures, such as buildings or poles.
(9) Geofenced very low power and very low power devices must prioritize operations on frequencies above 6.105 GHz prior to operating on frequencies between 5.925 GHz and 6.105 GHz.
(10) Transmit power control (TPC). Geofenced very low power devices operating in the 5.925-7.125 GHz bands shall employ a TPC mechanism. A very low power device is required to have the capability to operate at least 6 dB below the maximum EIRP PSD value of −5 dBm/MHz.
(o)
(2) Geofencing systems may be implemented using a centralized database or may be integrated into geofenced very low power access point devices.
(3) A geofenced very low power access point operating under paragraph (a)(7) of this section must access a geofencing system to obtain frequency-specific exclusion zones for the area in which it is operating or intends to operate (
(4) A geofenced very low power access point must determine its location and avoid transmitting on frequencies that are not available in accordance with the frequency specific exclusion zones. The geofenced very low power access point may not permit a client device operating under its control to transmit on frequencies that are not available in accordance with the frequency specific exclusion zones. The geofenced very low power access point must determine its location frequently enough that, based on its position and speed, it will not transmit on an unavailable frequency. The geofenced very low power access point must determine its location and speed at least once a minute.
(5) A geofenced very low power access point must incorporate adequate security measures to prevent it from accessing geofencing systems and geofencing methods not approved by the FCC and to ensure that unauthorized parties cannot modify the device to operate in a manner inconsistent with the rules and protection criteria set forth in this section and to ensure that communications between geofenced very low power access points and geofencing systems are secure to prevent corruption or unauthorized interception of data.
(6) A geofenced very low power access point must include an internal geo-location capability to automatically determine the geofenced very low power access point's geographic coordinates and location uncertainty (in meters), with a confidence level of 95%.
(i) The geofenced very low power access point must use such coordinates and location uncertainty when comparing the devices specific location to the exclusion zone boundaries.
(ii) The applicant for certification of a geofenced very low power access point
(7)(i) For centralized geofencing systems, geofencing system operators must provide continuous service to all very low power devices for which it has been designated to provide service. If a geofencing system ceases operation, the operator must provide at least 30-days' notice to the Commission and a description of any arrangements made for those devices to continue to receive exclusion zone update information.
(ii) For geofencing systems internal to the geofenced very low power device, the equipment certification responsible party must ensure that the device continues to be capable of receiving Commission database updates as required by this section.
(iii) As required by paragraph (o)(3) of this section, devices that do not receive timely geofencing update information or timely Commission database updates necessary to calculate up-to-date exclusion zones must cease operating.
(8) The geofencing system whether centralized or internal to the geofenced very low power device must ensure that all communications and interactions between the geofencing system and the geofenced very low power access point and/or all communications between the geofencing system and Commission databases are accurate and secure and that unauthorized parties cannot access or alter the database, the exclusion zones, or the list of excluded or available frequencies. Additionally, the geofencing system must incorporate security measures to protect against unauthorized data input or alteration of stored data, including establishing communications authentication procedures between client devices and geofenced very low power access points.
(9) A geofencing system must implement the terms of international agreements with Mexico and Canada.
(10) At the time that the geofenced very low power device receives equipment certification, the device must either have its geofencing system approved or specify an already approved geofencing system that it is using. The Commission may specify criteria for such approval, which could require test results to be submitted.
(11) Each geofencing system and operator thereof for centralized systems and the equipment certification responsible party for systems internal to the geofenced very low power device must:
(i) Ensure that a regularly updated geofencing system database that contains the information described in this section, including incumbent's information and geofenced very low power access points authorization parameters, is maintained.
(ii) Respond in a timely manner to verify, correct, or remove, as appropriate, data in the event that the Commission or a party presents a claim of inaccuracies in the geofencing system.
(iii) Establish and follow protocols to comply with enforcement instructions from the Commission, including discontinuance of geofenced very low power access point operations on specified frequencies in designated geographic areas and predetermined exclusion zones.
(iv) Comply with instructions from the Commission to adjust exclusion zones to more accurately reflect the potential for harmful interference.
(12) A geofencing system operator may charge fees for providing service. The Commission may, upon request, review the fees and can require changes to those fees if the Commission finds them to be unreasonable.
(p)
(1) Geofencing systems must use the following propagation models to determine exclusion zones for very low power access points. For a separation distance between geofenced very low power devices and fixed microwave receive sites, fixed Broadcast Auxiliary Service receive sites, or fixed Cable Television Relay Service receive sites.
(i) Up to 30 meters, the geofencing system must use the free space path-loss model.
(ii) More than 30 meters and up to and including one kilometer, the geofencing system must use the Wireless World Initiative New Radio phase II (WINNER II) model. The geofencing system must use site-specific information, including buildings and terrain data, for determining the line-of-sight/non-line-of-sight path component in the WINNER II model, where such data are available. For evaluating paths where such data are not available, the geofencing system must use a probabilistic model combining the line-of-sight path and non-line-of-sight path into a single path-loss as follows:
(iii) The WINNER II path loss models include a formula to determine P
(iv) In all cases, the geofencing system will use the correct WINNER II parameters to match the morphology of the path between a very low power access point and a fixed microwave receiver, fixed Broadcast Auxiliary Service receiver, or fixed Cable Television Relay Service receiver (
(v) More than one kilometer, the geofencing system must use Irregular Terrain Model (ITM) combined with the appropriate clutter model. To account for the effects of clutter, such as buildings and foliage, the geofencing system must combine the ITM with the ITU-R P.2108-0 (06/2017) clutter model for urban and suburban environments and the ITU-R P.452-16 (07/2015) clutter model for rural environments. The geofencing system should use the most appropriate clutter category for the local morphology when using ITU-R P.452-16. However, if detailed local information is not available, the “Village Centre” clutter category should be used. The geofencing system must use 1 arc-second digital elevation terrain data and, for locations where such data are not available, the most granular available digital elevation terrain data.
(vi) Geofencing systems may include up to 4 dB additional loss to account for losses due to scattering and absorption from a nearby body or object.
(vii) Geofencing systems may calculate exclusion zones based on a 1.5 meter very low power access point antenna height above ground level, regardless of the actual antenna height above ground level.
(2) The geofencing system must use −6 dB I/N as the interference protection criteria when calculating the exclusion zones where I (interference) is the co-
(q)
(2) The exclusion zone sizes are based on the radio line-of-sight and determined using 4/3 earth curvature and the following formula:
(3) Coordinate locations of the radio observatories are listed in § 2.106(c)(131), (c)(385) of this part.
(r)
(2) The exclusion zone sizes are based on the radio line-of-sight and determined using 4/3 earth curvature and the following formula:
Coordinate locations of the FSS sites are listed in the following table:
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Proposed rule; request for comments.
NMFS proposes a catch limit of 457 metric tons (t) for Western and Central North Pacific Ocean (WCNPO) striped marlin caught by U.S. fishing vessels in the Commission for the Conservation and Management of Highly Migratory Fish Stocks in the Western and Central Pacific Ocean (Commission or WCPFC) Convention area north of the Equator and west of 150° W longitude (the action area) and a retention limit of 443 t for U.S. fishing vessels with Hawaii longline limited entry permits. If the retention limit is projected to be reached, NMFS will prohibit retention of striped marlin caught in the WCNPO by Hawaii longline vessels for the calendar year. Action is required under Magnuson-Stevens Fishery Conservation and Management Act Section 304(i) to address U.S. fishing vessels' relative impact on this internationally managed stock, which is overfished and experiencing overfishing.
NMFS must receive comments by March 27, 2024.
You may submit comments on this proposed rule, identified by NOAA-NMFS-2022-0148, by either of the following methods:
•
•
The Western Pacific Fishery Management Council (Council) and NMFS prepared an environmental assessment (EA) that supports this proposed rule. The EA is available at
Savannah Lewis, PIRO Sustainable Fisheries, 808-725-5144.
NMFS and the Council manage U.S. commercial fishing for Pelagic Management Unit Species (PMUS) under the Fishery Ecosystem Plan for Pelagic Fisheries of the Western Pacific Region (FEP) and implementing Federal regulations. Although the FEP indicates that PMUS have statutory exemptions from annual catch limits (ACL), the Magnuson-Stevens Act authorizes the Council to determine ACLs or other catch limits for PMUS if such actions are deemed appropriate and consistent with the Magnuson-Stevens Act and other statutory mandates. Magnuson-Stevens
Striped marlin (
To address the Council's obligations under Section 304(i) of the Magnuson-Stevens Act, the Council took action at their 195th meeting in December 2022. The Council recommended and NMFS proposes domestic regulations to implement a 457 t U.S. catch limit for WCNPO striped marlin and a domestic retention limit of 443 t. The proposed 457 t domestic catch limit is consistent with the international catch limit for the United States based on the WCPFC Conservation and Management Measure (CMM) 2010-01, “Conservation and Management Measure for North Pacific Striped Marlin.” Following the terms of the CMM, the U.S. catch limit was determined by calculating 20 percent of the highest annual U.S. catch of striped marlin reported from 2000-2003; the highest reported catch was 571 t, so a 20 percent reduction is 456.8 t, or 457 t.
Hawaii-based longline fisheries catch 97 percent or more of the total U.S. striped marlin landings and are monitored in-season. Other U.S. fisheries that catch striped marlin, including Hawaii-based troll and handline fisheries, catch less than 3 percent of the total annual U.S. catch and lack real-time monitoring during the fishing season. To ensure that the proposed catch limit is not exceeded, the Council recommended and NMFS proposes a retention limit of 443 t, or 97 percent of the catch limit, for any U.S. fishing vessel with a Hawaii longline limited entry permit issued under 50 CFR 665.801(b). This limit ensures that when troll and handline catches are finalized after the season ends, the total U.S. catch of WCNPO striped marlin will not exceed the 457 t catch limit.
Under the proposed rule, striped marlin caught in the action area by a vessel holding a Hawaii limited entry longline permit issued under 50 CFR 665.801(b), including vessels that also hold an American Samoa longline limited entry permit or other permit, would be counted toward the proposed catch and retention limits. Currently, WCNPO striped marlin catch on the high seas (outside the 200 nautical miles (nm), or 370.4 km, exclusive economic zone adjacent to Hawaii) by fishing vessels with American Samoa longline limited entry permits are attributed to American Samoa.
With this proposed rule, all retained catch of WCNPO striped marlin in the action area by vessels with both Hawaii longline limited entry permits and American Samoa limited entry permits would be counted toward the proposed domestic 457 t catch and 443 t retention limit. NMFS proposes this change to ensure that all U.S. catch of this stock is managed under the proposed domestic catch limit, as no separate limit for American Samoa currently exists. By itself, this limit is not expected to end overfishing, which is primarily the result of international fishing pressure. Additional international measures through the WCPFC will be necessary to end overfishing and rebuild the stock.
If NMFS projects, based on vessel logbook, landing and other available information, that the retention limit will be reached, the retention of striped marlin caught by U.S. longline vessels holding a Hawaii limited entry longline permit issued under 50 CFR 665.801(b) in the action area will be prohibited for the remainder of the calendar year. A retention prohibition would go into effect no earlier than 7 days after NMFS publishes a no-retention date notice in the
As indicated above, this rule alone is not expected to end overfishing on WCNPO striped marlin, which must be addressed at the international level. To that end, Section 304(i) requires the Secretary of Commerce, in cooperation with the Secretary of State, to take immediate and appropriate action at the international level to end overfishing. The U.S. delegation has brought recommendations to the WCPFC and continues to pursue revised international measures. As these international negotiations continue, the U.S. domestic responsibility under Section 304(i) is to address the relative impact of U.S. fishing vessels on the stock.
Neither the Magnuson-Stevens Act nor its implementing regulations define relative impact. The regulations do, however, offer guidance on how to assess relative impacts in the international overfishing context. Specifically, the National Standard 1 (Optimal Yield) guidelines provide that the agency may consider such factors as domestic measures already in place, estimates of a nation's landings, estimates of a nation's mortality contributions, and management history of a nation, although these factors are not exhaustive. In evaluating the relative impacts of U.S. vessels to the striped marlin stock here, we recognize that no single nation's management actions can end the overfished status of this stock. We have taken into account the National Standard 1 factors in assessing the level of catch by U.S. vessels relative to the historical catch of other nations landing striped marlin along with other existing management measures expected to decrease striped marlin catch (
International negotiations at the WCPFC have resulted in adoption of a rebuilding plan for this stock which requires rebuilding to 20 percent of unfished biomass with at least 60 percent probability by 2034. The rebuilding plan currently does not contain catch limits, although it acknowledges that catch reductions by all member nations are required to achieve the rebuilding target. Disagreement over international conservation measures and delayed stock assessments have hindered progress at the international level. Ahead of negotiations on catch limits at WCPFC, we recognize that any substantial changes to the catch limits of U.S. fishermen could create a conservation burden on U.S. fishermen that fishermen from other nations may not face. Therefore, the agency is proposing a catch limit that complies with existing international guidance without imposing additional burdens on U.S. fishing interests.
NMFS will consider public comments on this proposed rule and will announce the final rule in the
Pursuant to section 304(b)(1)(A) of the Magnuson-Stevens Act, the NMFS Assistant Administrator has determined that this proposed rule is consistent with the FEP, Magnuson-Stevens Act Section 304(i) and other provisions of the Magnuson-Stevens Act, and other applicable law, subject to further consideration after public comment.
The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration that the attached proposed rule, issued under the authority of the Magnuson-Stevens Act, will not have a significant economic impact on a substantial number of small entities.
The WCNPO striped marlin stock is overfished and experiencing overfishing due to excessive international fishing pressure. NMFS proposes to implement an annual catch limit of 457 t and retention limit of 443 t for striped marlin caught in the action area. The 457 t catch limit would apply to vessels with Hawaii longline limited entry permits as well as to Hawaii troll and handline vessels catching striped marlin in the action area. The retention limit would only apply to vessels with Hawaii longline limited entry permits wherein retention of striped marlin by these vessels would be prohibited if the 443 t retention limit were projected to be reached. The troll and handline fisheries historically catch less than 3 percent of the total U.S. striped marlin catch and have a delay in reporting that makes it impossible to monitor catch in-season, so the retention limit would not apply to these troll and handline vessels. The retention limit on Hawaii longline catch is intended to prevent the three fisheries combined from reaching the catch limit. The proposed action is needed to address the Magnuson-Stevens Act section 304(i) requirement to develop recommendations for domestic regulations to address the relative impact of fishing vessels of the United States on this internationally managed, overfished stock lacking effective international management measures to end overfishing.
The proposed action would apply to up to 164 vessels with Hawaii longline limited entry permits. In 2021, 146 vessels participated in the Hawaii deep-set longline fishery, with annual fleet revenue of $108.5 million and average annual per-vessel revenues of $743,150. In 2021, 17 vessels participated in the Hawaii shallow-set fishery, with annual fleet revenue of $4.7 million and average annual per-vessel revenues of $276,470 (WPFMC, 2022). There are no anticipated upfront costs associated with the proposed action for Hawaii permitted longline fishery participants and no direct impacts to longline fisheries if longline catch of striped marlin does not reach the retention limit, as they would be able to retain their striped marlin catch. However, the proposed action may lead to a loss in revenue for these fishery participants if the retention limit is reached. The Hawaii-based longline fishery targets tuna (deep-set) and swordfish (shallow-set); striped marlin is a non-target species for this fishery. However, because striped marlin has market value, longline fishermen generally retain striped marlin catch. Using the 2021 average price per pound for striped marlin and average annual landings over the 2016-2020 time frame, NMFS expects that the value of striped marlin from the action area would be $2 million annually. Between 2014 and 2020, the Hawaii longline fleet has exceeded the 443 t retention limit only once with a catch of 447 t in 2019. Had the retention limit been in place that year, at $2.54 per pound, the associated revenue loss would be an estimated $22,400 fleetwide. With 147 active vessels as of August 2022, the estimated expected loss per vessel would have been $152 per vessel, which likely would have been less than 0.1 percent of annual landed value among most, if not all, vessels. For most years, NMFS anticipates that the longline fishery would not exceed the retention limit and therefore anticipates little to no economic impact from the proposed rule to this fishery overall. The proposed action would also apply to the hundreds of vessels that participate in the Hawaii handline and troll fisheries through the catch limit, but these fisheries would not be directly affected by the proposed action, as neither the retention limit nor retention prohibition would apply to them.
NMFS has established a small business size standard for businesses, including their affiliates, whose primary industry is commercial fishing (see 50 CFR 200.2). A business primarily engaged in commercial fishing, North American Industry Classification System (NAICS) code 11411, is classified as a small business if it is independently owned and operated, is not dominant in its field of operation (including its affiliates), and has combined annual receipts not in excess of $11 million for all its affiliated operations worldwide. Based on available information, NMFS has determined that all affected entities are small entities under the NMFS standard, as they are engaged in the business of fish harvesting, independently owned or operated, are not dominant in their field of operation, and have annual gross receipts not in excess of $11 million. Even though this proposed action may apply to a substantial number of vessels, the implementation of this action would not result in significant adverse economic impact to individual vessels.
NMFS anticipates no change in fishing activity from the proposed action, independent of the retention limit being reached (
For the reasons above, NMFS does not expect the proposed action to have a significant economic impact on a substantial number of small entities. As such, an initial regulatory flexibility analysis is not required and none has been prepared.
Fisheries, Fishing, Hawaii, Longline, Limited access permit, Pacific Islands, Western Pacific.
For the reasons set out in the preamble, NMFS proposes to amend 50 CFR part 665 as follows:
16 U.S.C. 1801
(p) Fail to immediately release any striped marlin captured after the non-retention date in the Pacific Ocean north of the Equator (0° lat.) and west of 150° W longitude by a vessel registered for use under a longline permit issued under § 665.801(b), in violation of § 665.813(k).
(k)
(2) NMFS will monitor striped marlin catch with respect to the limits established under paragraph (k)(1) of this section using longline landings, logbook, and other available information.
(3) When the retention limit is projected to be reached, based on analyses of available information in paragraph (k)(2) of this section, the Regional Administrator shall publish notification to that effect in the
(4) Once a notification is made pursuant to paragraph (k)(3) of this section, a fishing vessel registered for use under a longline permit issued under § 665.801(b) may not retain on board, transship, or land striped marlin captured by longline gear in the Pacific Ocean north the Equator (0° lat.) and west of 150° W longitude, except striped marlin retained prior to the non-retention date. Any striped marlin already on board upon the effective non-retention date may be retained on board, transshipped, and/or landed, to the extent authorized by applicable laws and regulations, provided that the striped marlin is landed within 14 days after the effective non-retention date.
The Department of Agriculture has submitted the following information collection requirement(s) to Office of Management and Budget (OMB) for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13. Comments are requested regarding: whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; ways to enhance the quality, utility and clarity of the information to be collected; ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.
Comments regarding this information collection received by March 27, 2024 will be considered. Written comments and recommendations for the proposed information collection should be submitted within 30 days of the publication of this notice on the following website
An agency may not conduct or sponsor a collection of information unless the collection of information displays a currently valid OMB control number and the agency informs potential persons who are to respond to the collection of information that such persons are not required to respond to the collection of information unless it displays a currently valid OMB control number.
The Department of Agriculture has submitted the following information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13. Comments are requested regarding; whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; ways to enhance the quality, utility and clarity of the information to be collected; and ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.
Comments regarding this information collection received by March 27, 2024 will be considered. Written comments and recommendations for the proposed information collection should be submitted within 30 days of the publication of this notice on the following website
An agency may not conduct or sponsor a collection of information unless the collection of information displays a currently valid OMB control number, and the agency informs potential persons who are to respond to the collection of information that such persons are not required to respond to the collection of information unless it displays a currently valid OMB control number.
The Department of Agriculture has submitted the following information collection requirement(s) to OMB for review and approval under the Paperwork Reduction Act of 1995, Public Law 104-13. Comments are requested regarding: whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; ways to enhance the quality, utility and clarity of the information to be collected; and ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology Comments regarding these information collections are best assured of having their full effect if received by March 27, 2024. Written comments and recommendations for the proposed information collection should be submitted within 30 days of the publication of this notice on the following website
An agency may not conduct or sponsor a collection of information unless the collection of information displays a currently valid OMB control number and the agency informs potential persons who are to respond to the collection of information that such persons are not required to respond to the collection of information unless it displays a currently valid OMB control number.
Section 10004 of the 2014 Farm Bill expanded the organic assessment exemption originally established by the FAIR Act. The 2014 Farm Bill allows all organic handlers to apply for an exemption from assessments on products certified as “organic” or “100 percent organic,” regardless of whether the handler also markets conventional or non-organic products. At the same time, the 2014 Farm bill reduced the per response time to complete the form from 30 minutes to 15 minutes.
Animal and Plant Health Inspection Service, USDA.
New 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 approval of a new information collection associated with a study to understand knowledge and beliefs about translocation and release of wild pigs.
We will consider all comments that we receive on or before April 26, 2024.
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 this wild pig study, contact Dr. Keith Carlisle, Supervisory Social Scientist/Human Dimensions Unit Leader, National Wildlife Research Center, WS, APHIS, USDA, 4101 La Porte Ave, Fort Collins, CO 80521; (970) 266-6047; email:
As part of WS, the mission of the National Feral Swine Damage Management Program is to protect agricultural and natural resources, property, animal health, and human health and safety by managing damage caused by wild pigs (
Through the APHIS WS National Wildlife Research Center, a Federal institution devoted to resolving human-wildlife conflict, APHIS would like to conduct an online survey of hunters and members of the public in five southeastern States that would measure knowledge and beliefs about the transportation and release of wild pigs. Current information on knowledge and beliefs about the transportation and release of wild pigs is critical to identify potential conflicts and barriers to future management efforts of wild pig populations. APHIS anticipates that, among other things, results of the study may inform State efforts to provide targeted information where needed about State law restrictions on the translocation of wild pigs.
The information collection activity associated with the study consists of a multi-item questionnaire administered to both hunters and members of the public with primary residence in the State of Mississippi, Missouri, North Carolina, Oklahoma, or Tennessee.
We are asking the Office of Management and Budget (OMB) to approve our use of this information collection activity for 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.
We are advising the public of our decision to authorize the importation of fresh Ugu leaves (
Imports may be authorized beginning February 26, 2024.
Ms. Gina Stiltner, Senior Regulatory Policy Specialist, Regulatory Coordination and Compliance, PPQ, APHIS, 4700 River Road, Unit 133, Riverdale, MD 20737-1231; (518) 760-2468;
Under the regulations in “Subpart L-Fruits and Vegetables” (7 CFR 319.56-1 through 319.56-12, referred to below as the regulations), the Animal and Plant Health Inspection Service (APHIS) prohibits or restricts the importation of fruits and vegetables into the United States from certain parts of the world to prevent plant pests from being introduced into or disseminated within the United States.
Section 319.56-4 contains a performance-based process for approving the importation of commodities that, based on the findings of a pest risk analysis, can be safely imported subject to one or more of the designated phytosanitary measures listed in paragraph (b) of that section. Under that process, APHIS proposes to authorize the importation of a fruit or vegetable into the United States if, based on findings of a pest risk analysis, we determine that the measures can mitigate the plant pest risk associated with the importation of that fruit or vegetable. APHIS then publishes a notice in the
In accordance with that process, we published a notice
We solicited comments on the notice for 60 days, ending on October 27, 2023. We received no comments by that date.
Therefore, in accordance with § 319.56-4(c)(3)(iii), we are announcing our decision to authorize the importation into the continental United States of fresh Ugu leaves from Nigeria subject to the phytosanitary measures identified in the RMD that accompanied the initial notice.
These conditions will be listed in the USDA, APHIS Agricultural Commodity Import Requirements (ACIR) database (
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
The Animal and Plant Health Inspection Service is committed to compliance with the E- Government Act to promote the use of the internet and other information technologies, to provide increased opportunities for citizen access to Government information and services, and for other purposes. For information pertinent to E-Government Act compliance related to this notice, please contact Mr. Joseph Moxey, APHIS' Paperwork Reduction Act Coordinator, at (301) 851-2483.
Pursuant to the Congressional Review Act (5 U.S.C. 801
Rural Utilities Service, USDA.
Notice, extension of submission deadline.
The Rural Utilities Service (RUS, Agency), a Rural Development (RD) agency of the United States Department of Agriculture (USDA), announced its acceptance of applications under the Rural eConnectivity (ReConnect) program for fiscal year (FY) 2024 in the
The deadline for submissions regarding the Notice of Funding Opportunity (NOFO) published February 21, 2024 at 89 FR 13035 is extended from April 21, 2024, to May 21, 2024. The application window still opens March 22, 2024.
Applications must be submitted electronically through the RUS Application Intake System located at
Laurel Leverrier, Assistant Administrator, Telecommunications Program, Rural Utilities Service, U.S. Department of Agriculture (USDA), email:
The Agency is extending the deadline for submissions regarding the NOFO for Rural eConnectivity (ReConnect) program for fiscal year (FY) 2024 published in the
Commission on the Social Status of Black Men and Boys (CSSBMB), U.S. Commission on Civil Rights.
Notice of CSSBMB public business meeting.
Thursday, February 22 11:00 a.m.-12:00 p.m. EDT.
Meeting to take place virtually and is open to the public via livestream on the Commission's YouTube page:
Diamond Newman, 202-339-2371,
In accordance with Public Law 116-156, 1134 Stat. 700 (2020), the Commission on the Social Status of Black Men and Boys (CSSBMB) will hold its Second Quarter Business Meeting exploring CSSBMB business items, operations, and next steps. This business meeting is open to the public via livestream on the Commission on Civil Rights' YouTube page at
Please note that CART is text-only translation that occurs in real time during the meeting and is not an exact transcript.
* Date and meeting details are subject to change. For more information on the CSSBMB or the upcoming public briefing, please visit
Dated: February 21, 2024.
On December 8, 2023, the Executive Secretary of the Foreign-Trade Zones (FTZ) Board docketed an application submitted by the Eastern Distribution Center, Inc., grantee of FTZ 24, requesting subzone status subject to the existing activation limit of FTZ 24, on behalf of GMA Accessories DBA Capelli New York, in Pittston, Pennsylvania.
The application was processed in accordance with the FTZ Act and Regulations, including notice in the
International Trade Administration, U.S. Department of Commerce.
Notice of Federal advisory committee meeting.
This notice sets forth the schedule and proposed agenda for a meeting of the Civil Nuclear Trade Advisory Committee (CINTAC).
The meeting is scheduled for Thursday, March 14, 2024, from 10 a.m. to 4 p.m. eastern standard time (EST). The deadline for members of the public to register, including requests to make comments during the meeting and for auxiliary aids, or to submit written comments for dissemination prior to the meeting, is 5 p.m. EST on Monday, March 11, 2024.
The meeting will be in-person at the Department of Commerce Herbert C. Hoover Building (1401 Constitution Ave. NW, Washington, DC 20230). Registered participants will be emailed instructions on accessing the designated meeting space. Requests to register (including to speak or for auxiliary aids) and any written comments should be submitted to Mr. Jonathan Chesebro, Office of Energy & Environmental Industries, International Trade Administration, (email:
Mr. Jonathan Chesebro, Office of Energy & Environmental Industries, International Trade Administration, Room 28018, 1401 Constitution Ave. NW, Washington, DC 20230. (Phone: 202-482-1297; email:
Members of the public wishing to attend the meeting must notify Mr. Jonathan Chesebro at the contact information above by 5 p.m. EST on Monday, March 11, 2024, in order to pre-register. Please specify any requests for reasonable accommodation at least five business days in advance of the meeting.
A limited amount of time will be available for brief oral comments from members of the public attending the meeting. To accommodate as many speakers as possible, the time for public comments will be limited to two (2) minutes per person, with a total public comment period of 20 minutes. Individuals wishing to reserve speaking time during the meeting must contact Mr. Jonathan Chesebro and submit a brief statement of the general nature of the comments and the name and address of the proposed participant by 5 p.m. EST on Monday, March 11, 2024. If the number of registrants requesting to make statements is greater than can be reasonably accommodated during the meeting, ITA may conduct a lottery to determine the speakers.
Any member of the public may submit written comments concerning the CINTAC's affairs at any time before and after the meeting. Comments may be submitted to Mr. Jonathan Chesebro in the International Trade Administration's Office of Energy & Environmental Industries. For consideration during the meeting, and to ensure transmission to the Committee prior to the meeting, comments must be received no later than 5 p.m. EST on Monday, March 11, 2024. Comments received after that date will be distributed to the members but may not be considered at the meeting.
Copies of CINTAC meeting minutes will be available within 90 days of the meeting.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
Applicable February 14, 2024.
Charles DeFilippo (the People's Republic of China (China)) at (202) 482-3979; Theodore Pearson (Thailand) at (202) 482-2631; and Bryan Hansen (the Socialist Republic of Vietnam (Vietnam)) at (202) 482-3683, AD/CVD Operations, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230.
On January 25, 2024, the U.S. Department of Commerce (Commerce) received antidumping duty (AD) petitions concerning imports of certain paper plates (paper plates) from China, Thailand, and Vietnam filed in proper form on behalf of the American Paper Plate Coalition (the petitioner).
Between January 29 and February 6, 2024, Commerce requested supplemental information pertaining to certain aspects of the Petitions in separate supplemental questionnaires.
In accordance with section 732(b) of the Tariff Act of 1930, as amended (the Act), the petitioner alleges that imports of paper plates from China, Thailand, and Vietnam are being, or are likely to be, sold in the United States at less than fair value (LTFV) within the meaning of section 731 of the Act, and that imports of such products are materially injuring, or threatening material injury to, the paper plates industry in the United States. Consistent with section 732(b)(1) of the Act, the Petitions were accompanied by information reasonably available to the petitioner supporting its allegations.
Commerce finds that the petitioner filed the Petitions on behalf of the domestic industry, because the petitioner is an interested party, as defined in section 771(9)(F) of the Act.
Because the Petitions were filed on January 25, 2024, pursuant to 19 CFR 351.204(b)(1), the period of investigation (POI) for the Thailand LTFV investigation is January 1, 2023, through December 31, 2023. Because China and Vietnam are non-market economy (NME) countries, pursuant to 19 CFR 351.204(b)(1), the POI for the China and Vietnam LTFV investigations is July 1, 2023, through December 31, 2023.
The products covered by these investigations are paper plates from China, Thailand, and Vietnam. For a full description of the scope of these investigations,
On January 29 and February 6, 2024, Commerce requested information and clarification from the petitioner regarding the proposed scope to ensure that the scope language in the Petitions is an accurate reflection of the products for which the domestic industry is seeking relief.
As discussed in the
Commerce requests that any factual information that parties consider relevant to the scope of these investigations be submitted during that period. However, if a party subsequently finds that additional factual information pertaining to the scope of the investigations may be relevant, the party must contact Commerce and request permission to submit the additional information. All scope comments must be filed simultaneously on the records of the concurrent LTFV and CVD investigations.
All submissions to Commerce must be filed electronically via Enforcement and Compliance's Antidumping Duty and Countervailing Duty Centralized Electronic Service System (ACCESS), unless an exception applies.
Commerce is providing interested parties an opportunity to comment on the appropriate physical characteristics of paper plates to be reported in response to Commerce's AD questionnaires. This information will be used to identify the key physical characteristics of the subject merchandise in order to report the relevant factors of production (FOP) or cost of production (COP) accurately, as well as to develop appropriate product comparison criteria.
Interested parties may provide any information or comments that they feel are relevant to the development of an accurate list of physical characteristics. Specifically, they may provide comments as to which characteristics are appropriate to use as: (1) general product characteristics; and (2) product comparison criteria. We note that it is not always appropriate to use all product characteristics as product comparison criteria. We base product comparison criteria on meaningful commercial differences among products. In other words, although there may be some physical product characteristics utilized by manufacturers to describe paper plates, it may be that only a select few product characteristics take into account commercially meaningful physical characteristics. In addition, interested parties may comment on the order in which the physical characteristics should be used in matching products. Generally, Commerce attempts to list the most important physical characteristics first and the least important characteristics last.
In order to consider the suggestions of interested parties in developing and issuing the AD questionnaires, all product characteristics comments must be filed by 5:00 p.m. ET on March 5, 2024, which is 20 calendar days from the signature date of this notice.
Section 732(b)(1) of the Act requires that a petition be filed on behalf of the domestic industry. Section 732(c)(4)(A) of the Act provides that a petition meets this requirement if the domestic producers or workers who support the petition account for: (i) at least 25 percent of the total production of the domestic like product; and (ii) more than 50 percent of the production of the domestic like product produced by that portion of the industry expressing support for, or opposition to, the petition. Moreover, section 732(c)(4)(D) of the Act provides that, if the petition does not establish support of domestic producers or workers accounting for more than 50 percent of the total production of the domestic like product, Commerce shall: (i) poll the industry or rely on other information in order to determine if there is support for the petition, as required by subparagraph (A); or (ii) determine industry support using a statistically valid sampling method to poll the “industry.”
Section 771(4)(A) of the Act defines the “industry” as the producers as a whole of a domestic like product. Thus, to determine whether a petition has the requisite industry support, the statute directs Commerce to look to producers and workers who produce the domestic like product. The U.S. International Trade Commission (ITC), which is responsible for determining whether “the domestic industry” has been injured, must also determine what constitutes a domestic like product in order to define the industry. While both Commerce and the ITC apply the same statutory definition regarding the domestic like product,
Section 771(10) of the Act defines the domestic like product as “a product which is like, or in the absence of like, most similar in characteristics and uses with, the article subject to an investigation under this title.” Thus, the reference point from which the domestic-like product analysis begins is “the article subject to an investigation” (
With regard to the domestic like product, the petitioner does not offer a definition of the domestic like product distinct from the scope of the investigations.
In determining whether the petitioner has standing under section 732(c)(4)(A) of the Act, we considered the industry support data contained in the Petitions with reference to the domestic like product as defined in the “Scope of the Investigations,” in the appendix to this notice. To establish industry support, the petitioner provided its own shipments of the domestic like product in 2023 and compared this to the estimated total 2023 shipments of the domestic like product for the entire domestic industry.
Our review of the data provided in the Petitions, the First General Issues Supplement, the Second General Issues Supplement, and other information readily available to Commerce indicates that the petitioner has established industry support for the Petitions.
The petitioner alleges that the U.S. industry producing the domestic like product is being materially injured, or is threatened with material injury, by reason of the imports of the subject merchandise sold at LTFV. In addition, the petitioner alleges that subject imports from China and Vietnam exceed the negligibility threshold provided for under section 771(24)(A) of the Act.
With regard to Thailand, while the allegedly dumped imports do not exceed the statutory requirements for negligibility,
The petitioner contends that the industry's injured condition is illustrated by the significant volume of subject imports; underselling and price depression and/or suppression; loss of market share; decrease in production volume and capacity utilization; and lost sales and revenues.
The following is a description of the allegations of sales at LTFV upon which Commerce based its decision to initiate LTFV investigations of imports of paper plates from China, Thailand, and Vietnam. The sources of data for the deductions and adjustments relating to U.S. price and normal value (NV) are discussed in greater detail in the Country-Specific AD Initiation Checklists.
For China, Thailand, and Vietnam, the petitioner based export price (EP) on pricing information for sales, or offers for sale, of paper plates produced in and exported from each country.
For Thailand, the petitioner stated that it was unable to obtain home market or third country pricing information for paper plates to use as a basis for NV.
Commerce considers China and Vietnam to be NME countries.
The petitioner claims that Malaysia is an appropriate surrogate country for China because it is a market economy that is at a level of economic development comparable to that of China and is a significant producer of comparable merchandise.
The petitioner claims that Indonesia is an appropriate surrogate country for Vietnam because it is a market economy that is at a level of economic development comparable to that of Vietnam and is a significant producer of comparable merchandise.
Interested parties will have the opportunity to submit comments regarding surrogate country selection and, pursuant to 19 CFR 351.301(c)(3)(i), will be provided an opportunity to submit publicly available information to value FOPs within 30 days before the scheduled date of the preliminary determination.
Because information regarding the volume of inputs consumed by Chinese and Vietnamese producers/exporters was not reasonably available, the petitioner used product-specific consumption rates from a U.S. producer of paper plates as a surrogate to value Chinese and Vietnamese manufacturers' FOPs.
As noted above for Thailand, the petitioner stated that it was unable to obtain home market or third-country prices for paper plates to use as a basis for NV. Therefore, for Thailand, the petitioner calculated NV based on CV.
Pursuant to section 773(e) of the Act, the petitioner calculated CV as the sum of the cost of manufacturing, SG&A, financial expenses, and profit.
Based on the data provided by the petitioner, there is reason to believe that imports of paper plates from China, Thailand, and Vietnam are being, or are likely to be, sold in the United States at LTFV. Based on comparisons of EP to NV in accordance with sections 772 and 773 of the Act, the estimated dumping margins for paper plates for each of the countries covered by this initiation are as follows: (1) China—154.57 to 178.80 percent; (2) Thailand—61.03 to 73.17 percent; and (3) Vietnam—153.09 to 165.27 percent.
Based upon the examination of the Petitions and supplemental responses, we find that they meet the requirements of section 732 of the Act. Therefore, we are initiating LTFV investigations to determine whether imports of paper plates from China, Thailand, and Vietnam are being, or are likely to be, sold in the United States at LTFV. In accordance with section 733(b)(1)(A) of the Act and 19 CFR 351.205(b)(1), unless postponed, we will make our preliminary determinations no later than 140 days after the date of these initiations.
In the Petitions, the petitioner identified nine companies in Thailand as producers/exporters of paper plates.
On February 9, 2024, Commerce released CBP data on imports of paper plates from Thailand under administrative protective order (APO) to all parties with access to information protected by APO and indicated that interested parties wishing to comment on CBP data and/or respondent selection must do so within three business days of the publication date of the notice of initiation of these investigations.
Interested parties must submit applications for disclosure under APO in accordance with 19 CFR 351.305(b). Instructions for filing such applications may be found on Commerce's website at
In the Petitions, the petitioner named 149 companies in China and nine companies in Vietnam as producers and/or exporters of paper plates.
Commerce will post the Q&V questionnaires along with filing instructions on Commerce's website at
Interested parties must submit applications for disclosure under APO in accordance with 19 CFR 351.305(b). As stated above, instructions for filing such applications may be found on Commerce's website at
In order to obtain separate rate status in an NME investigation, exporters and producers must submit a separate rate application. The specific requirements for submitting a separate rate
Commerce will calculate combination rates for certain respondents that are eligible for a separate rate in an NME investigation. The Separate Rates and Combination Rates Bulletin states:
In accordance with section 732(b)(3)(A) of the Act and 19 CFR 351.202(f), copies of the public version of the Petitions have been provided to the governments of China, Thailand, and Vietnam via ACCESS. To the extent practicable, we will attempt to provide a copy of the public version of the Petitions to each exporter named in the Petitions, as provided under 19 CFR 351.203(c)(2).
Commerce will notify the ITC of our initiation, as required by section 732(d) of the Act.
The ITC will preliminarily determine, within 45 days after the date on which the Petitions were filed, whether there is a reasonable indication that imports of paper plates from China, Thailand, and/or Vietnam are materially injuring, or threatening material injury to, a U.S. industry.
Factual information is defined in 19 CFR 351.102(b)(21) as: (i) evidence submitted in response to questionnaires; (ii) evidence submitted in support of allegations; (iii) publicly available information to value factors under 19 CFR 351.408(c) or to measure the adequacy of remuneration under 19 CFR 351.511(a)(2); (iv) evidence placed on the record by Commerce; and (v) evidence other than factual information described in (i)-(iv). Section 351.301(b) of Commerce's regulations requires any party, when submitting factual information, to specify under which subsection of 19 CFR 351.102(b)(21) the information is being submitted
Section 773(e) of the Act addresses the concept of particular market situation (PMS) for purposes of CV, stating that “if a particular market situation exists such that the cost of materials and fabrication or other processing of any kind does not accurately reflect the cost of production in the ordinary course of trade, the administering authority may use another calculation methodology under this subtitle or any other calculation methodology.” When an interested party submits a PMS allegation pursuant to section 773(e) of the Act, Commerce will respond to such a submission consistent with 19 CFR 351.301(c)(2)(v). If Commerce finds that a PMS exists under section 773(e) of the Act, then it will modify its dumping calculations appropriately.
Neither section 773(e) of the Act, nor 19 CFR 351.301(c)(2)(v), set a deadline for the submission of PMS allegations and supporting factual information. However, in order to administer section 773(e) of the Act, Commerce must receive PMS allegations and supporting factual information with enough time to consider the submission. Thus, should an interested party wish to submit a PMS allegation and supporting new factual information pursuant to section 773(e) of the Act, it must do so no later than 20 days after submission of a respondent's initial section D questionnaire response.
Parties may request an extension of time limits before the expiration of a time limit established under 19 CFR 351.301, or as otherwise specified by Commerce. In general, an extension request will be considered untimely if it is filed after the expiration of the time limit established under 19 CFR 351.301, or as otherwise specified by Commerce.
Any party submitting factual information in an AD or CVD proceeding must certify to the accuracy and completeness of that information.
Interested parties must submit applications for disclosure under APO in accordance with 19 CFR 351.305. Parties wishing to participate in these investigations should ensure that they meet the requirements of 19 CFR 351.103(d) (
This notice is issued and published pursuant to sections 732(c)(2) and 777(i) of the Act, and 19 CFR 351.203(c).
The merchandise subject to these investigations is certain paper plates. Paper plates subject to these investigations may be cut from rolls, sheets, or other pieces of paper and/or paper board. Paper plates subject to these investigations have a depth up to and including two (2.0) inches, as measured vertically from the base to the top of the lip, or the edge if the plate has no lip. Paper plates subject to these investigations may be uncolored, white, colored, or printed. Printed paper plates subject to these investigations may have any type of surface finish, and may be printed by any means with images, text and/or colors on one or both surfaces. Colored paper plates subject to this investigation may be colored by any method, including but not limited to printing, beater-dyeing, and dip-dyeing. Paper plates subject to these investigations may be produced from paper of any type (including, but not limited to, bamboo, straws, bagasse, hemp, kenaf, jute, sisal, abaca, cotton inters and reeds, or from non-plant sources, such as synthetic resin (petroleum)-based resins), may have any caliper or basis weight, may have any shape or size, may have one or more than one section, may be embossed, may have foil or other substances adhered to their surface, and/or may be uncoated or coated with any type of coating.
The paper plates subject to these investigations remain covered by the scope of these investigations whether imported alone, or in any combination of subject and non-subject merchandise. When paper plates subject to these investigations are imported in combination with non-subject merchandise, only the paper plates subject to these investigations are subject merchandise.
The paper plates subject to these investigations include paper plates matching the above description that have been finished, packaged, or otherwise processed in a third country by performing finishing, packaging, or processing that would not otherwise remove the merchandise from the scope of the investigations if performed in the country of manufacture of the paper plates. Examples of finishing, packaging, or other processing in a third country that would not otherwise remove the merchandise from the scope of the investigations if performed in the country of manufacture of the paper plates include, but are not limited to, printing, application of other surface treatments such as coatings, repackaging, embossing, and application of foil surface treatments.
Excluded from the scope of these investigations are paper plates molded or pressed directly from paper pulp (including but not limited to unfelted pulp), which are currently classifiable under subheading 4823.70.0020 of the Harmonized Tariff Schedule of the United States (HTSUS).
Also excluded from the scope of these investigations are articles that otherwise would be covered but which exhibit the following two physical characteristics: (a) depth (measured vertically from the base to the top of the lip, or edge if no lip) equal to or greater than 1.25 inches but less than two (2.0) inches, and (b) a base not exceeding five (5.0) inches in diameter if round, or not exceeding 20 square inches in area if any other shape.
Also excluded from the scope of these investigations are paper bowls, paper buckets, and paper food containers with closeable lids.
Paper plates subject to these investigations are currently classifiable under HTSUS subheading 4823.69.0040. Paper plates subject to these investigations also may be classified under HTSUS subheading 4823.61.0040. If packaged with other articles, the paper plates subject to these investigations also may be classified under HTSUS subheadings 9505.90.4000 and 9505.90.6000. While the HTSUS subheading(s) are provided for convenience and customs purposes, the written description of the subject merchandise is dispositive.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) is initiating changed circumstances reviews (CCRs) to determine if Borusan Birleşik Boru Fabrikalari Sanayi ve Ticaret A.S. (Borusan Boru) is the successor-in-interest to Borusan Mannesmann Boru Sanayi ve Ticaret A.S. (BMB) in the context of the antidumping duty (AD) and countervailing duty (CVD) orders on circular welded carbon steel standard pipe and tube products (standard pipe), welded line pipe (WLP), certain oil tubular goods (OCTG), and large diameter welded pipe (LDWP) from the Republic of Turkey (Turkey).
Applicable February 26, 2024.
Herawe Kebede, AD/CVD Operations, Office IX, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-4312.
On May 15, 1986, March 7, 1986, December 1, 2015, September 10, 2014, and May 2, 2019, respectively, Commerce published in the
The merchandise covered by these orders is standard pipe, WLP, OCTG, and LDWP from Turkey. For a complete description of the scope of each of these orders,
Pursuant to section 751(b)(1)(A) of the Act and 19 CFR 351.216(d), Commerce conducts a CCR upon receipt of information concerning, or a request from, an interested party for a review of an AD or CVD order which shows changed circumstances sufficient to warrant a review of the order. The information submitted by Borusan Boru regarding its claim that it is the successor-in-interest to BMB demonstrates changed circumstances sufficient to warrant the initiation of such reviews.
In making a successor-in-interest determination, Commerce examines several factors, including, but not limited to, changes in the following: (1) management; (2) production facilities; (3) supplier relationships; and (4) customer base.
Pursuant to 19 CFR 351.221(c)(3)(ii), Commerce may combine the notices of initiation and preliminary results of a CCR into a single notice if it concludes that expedited action is warranted. We have determined that it is appropriate to further consider, and potentially seek additional information regarding, certain factors noted above that Commerce examines in a successor-in-interest determination. Therefore, we find that expedited action is not warranted. Commerce intends to make its preliminary determinations and to publish in the
Unless extended, Commerce intends to issue the final results of this CCR within 270 days after the date of initiation, in accordance with 19 CFR 351.216(e).
We are issuing this notice in accordance with sections 751(b)(1) and 777(i) of the Act and 19 CFR 351.216(b) and 351.221(b)(1).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) preliminarily
Applicable February 26, 2024.
Jacqueline Arrowsmith, AD/CVD Operations, Office VII, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-5255.
On August 22, 2023, Commerce published the initiation of a changed circumstances review (CCR) on the AD order
The merchandise subject to the
In this CCR, pursuant to section 751(b) of the Tariff Act of 1930, as amended (the Act), Commerce conducted a successor-in-interest analysis. In determining whether one company is the successor-in-interest to another company as part of an AD proceeding, Commerce examines several factors including, but not limited to, changes in (1) management and ownership; (2) production facilities; (3) supplier relationships; and (4) customer base.
We preliminarily determine that Garware Hi-Tech is the successor-in-interest to Garware Polyester. Record evidence submitted by Garware Hi-Tech indicates that, based on the totality of the circumstances under Commerce's successor-in-interest criteria, Garware Hi-Tech operates as materially the same business entity as Garware Polyester with respect to the production and sale of subject merchandise. For a complete discussion of the information that Garware Hi-Tech provided and the complete successor-in-interest analysis,
Case briefs or other written comments may be submitted to the Assistant Secretary for Enforcement and Compliance no later than 30 days after the date of publication of this notice.
As provided under 19 CFR 351.309(c)(2) and (d)(2), in prior proceedings we have encouraged interested parties to provide an executive summary of their brief that should be limited to five pages total, including footnotes. In this review, we instead request that interested parties provide at the beginning of their briefs a public, executive summary for each issue raised in their briefs.
Pursuant to 19 CFR 351.310(c), interested parties who wish to request a hearing, limited to issues raised in the case and rebuttal briefs, must submit a written request to the Assistant Secretary for Enforcement and Compliance, filed electronically via ACCESS, within 30 days of publication of this notice. Requests should contain the following information: (1) the party's name, address, and telephone number; (2) the number of participants; and (3) a list of issues to be discussed. If a request for a hearing is made, Commerce will inform parties of the time and date for the hearing.
Consistent with 19 CFR 351.216(e), we intend to issue the final results of this CCR no later than 270 days after the date on which this review was initiated. If we continue to find that Garware Hi-Tech is the successor-in-interest to Garware Polyester, we will assign Garware Hi-Tech the cash deposit rate currently assigned to Garware Polyester (
We are issuing and publishing these preliminary results in accordance with sections 751(b)(1) and 777(i)(1) of the Act, and 19 CFR 351.221(b)(4).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) is expanding the period of review (POR) for the current antidumping duty (AD) and countervailing duty (CVD) administrative reviews of certain quartz surface products (quartz surface products) from the People's Republic of China (China) to include entries suspended by the final scope ruling on Malaysian processed quartz slab prior to the current POR of the instant reviews. Additionally, Commerce is providing a supplemental opportunity for interested parties to request a review of certain companies currently ineligible for the scope certification process with suspended entries during the expanded POR solely for the purposes of examining their certification status.
Supplemental requests for review must be submitted no later than March 11, 2024.
Ajay K. Menon, AD/CVD Operations, Office IX, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230, telephone: (202) 482-0208.
On October 21, 2022, Commerce published in the
On July 3, 2023, Commerce notified interested parties of the opportunity to request administrative reviews of the AD and CVD orders on quartz surface products from China for the periods: (1) July 1, 2022, through June 30, 2023 for the AD administrative review; and (2) January 1, 2022, through December 31, 2022 for the CVD administrative review.
As noted above, in the
In the
With this notice, in accordance with 19 CFR 351.213(b), we are affording interested parties, as defined by section 771(9) of the Tariff Act of 1930, as amended, with a supplemental opportunity to request in writing that the Secretary conduct an administrative review to review the certification eligibility of any of the following companies: Ever Stone; MSI; Principal Safwa; Resstone; SCLM; and Unique Stone. For both the AD and CVD administrative reviews, the requestor must specify for which of these companies it is requesting a review.
The deadline for parties to file a request for review of the certification status of these entities is not later than 14 days from the date of publication of this notice. If interested parties submit a request for review of any of these companies, Commerce's review will be limited to the company's eligibility to participate in the certification process. Moreover, Commerce will only include those companies in the AD and CVD administrative reviews which have suspended entries of subject merchandise during the expanded PORs (
All review requests must be filed electronically in Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS) at
Commerce intends to publish in the
Commerce previously issued instructions to CBP directing the assessment of antidumping or countervailing duties on entries not currently under review at a rate equal to the cash deposit of estimated antidumping or countervailing duties required on those entries at the time of entry, or withdrawal from warehouse, for consumption. In the event that Commerce receives additional review requests for the companies listed above, Commerce intends to amend these instructions to direct CBP to continue to suspend liquidation of any unliquidated entries made by companies subsequently under review until the completion of these administrative reviews.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of issuance of Letter of Authorization.
In accordance with the Marine Mammal Protection Act (MMPA), as amended, its implementing regulations, and NMFS' MMPA Regulations for Taking Marine Mammals Incidental to Geophysical Surveys Related to Oil and Gas Activities in the Gulf of Mexico (GOM), notification is hereby given that a Letter of Authorization (LOA) has been issued to LLOG Exploration Company (LLOG) for the take of marine mammals incidental to geophysical survey activity in the GOM.
The LOA is effective from March 1, 2024 through April 19, 2026.
The LOA, LOA request, and supporting documentation are available online at:
Jenna Harlacher, Office of Protected Resources, NMFS, (301) 427-8401.
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.
Except with respect to certain activities not pertinent here, the MMPA defines “harassment” as: any act of pursuit, torment, or annoyance which (i) has the potential to injure a marine mammal or marine mammal stock in the wild (Level A harassment); or (ii) has the potential to disturb a marine mammal or marine mammal stock in the wild by causing disruption of behavioral patterns, including, but not limited to, migration, breathing, nursing, breeding, feeding, or sheltering (Level B harassment).
On January 19, 2021, we issued a final rule with regulations to govern the unintentional taking of marine mammals incidental to geophysical survey activities conducted by oil and gas industry operators, and those persons authorized to conduct activities on their behalf (collectively “industry
Our regulations at 50 CFR 217.180
LLOG plans to conduct one of the following vertical seismic profile (VSP) survey types: Zero Offset, Offset, Walkaway, 3D, Salt Proximity Survey and/or Checkshot within Mississippi Canyon area Blocks 509, 629, and 589. The survey area has water depths of 914 to 1,981 meters (m). LLOG plans to use either a 12-element, 2,400 cubic inch (in
Consistent with the preamble to the final rule, the survey effort proposed by LLOG in its LOA request was used to develop LOA-specific take estimates based on the acoustic exposure modeling results described in the preamble (86 FR 5322, January 19, 2021). In order to generate the appropriate take number for authorization, the following information was considered: (1) survey type; (2) location (by modeling zone
No VSP surveys were included in the modeled survey types, and use of existing proxies (
For the planned survey, the seismic source array will be deployed in one of the following forms: Zero Offset VSP—deployed from a drilling rig at or near the borehole, with the seismic receivers (
In addition, all available acoustic exposure modeling results assume use of a 72 element, 8,000 in
The survey is planned to occur in Zone 5. The survey could take place in any season. Therefore, the take estimates for each species are based on the season that has the greater value for the species (
Additionally, for some species, take estimates based solely on the modeling yielded results that are not realistically likely to occur when considered in light of other relevant information available during the rulemaking process regarding marine mammal occurrence in the GOM. The approach used in the acoustic exposure modeling, in which seven modeling zones were defined over the U.S. GOM, necessarily averages fine-scale information about marine mammal distribution over the large area of each modeling zone. This can result in unrealistic projections regarding the likelihood of encountering particularly rare species and/or species not expected to occur outside particular habitats. Thus, although the modeling conducted for the rule is a natural starting point for estimating take, our rule acknowledged that other information could be considered (see,
NMFS' final rule described a “core habitat area” for Rice's whales (formerly known as GOM Bryde's whales)
Although Rice's whales may occur outside of the core habitat area, we expect that any such occurrence would be limited to the narrow band of suitable habitat described above (
Killer whales are the most rarely encountered species in the GOM, typically in deep waters of the central GOM (Roberts
NOAA surveys in the GOM from 1992-2009 reported only 16 sightings of killer whales, with an additional 3 encounters during more recent survey effort from 2017-2018 (Waring
The rarity of encounter during seismic surveys is not likely to be the product of high bias on the probability of detection. Unlike certain cryptic species with high detection bias, such as
In summary, killer whales are the most rarely encountered species in the GOM and typically occur only in particularly deep water. This survey would take place in deep waters that would overlap with depths in which killer whales typically occur. While this information is reflected through the density model informing the acoustic exposure modeling results, there is relatively high uncertainty associated with the model for this species, and the acoustic exposure modeling applies mean distribution data over areas where the species is in fact less likely to occur. In addition, as noted above in relation to the general take estimation methodology, the assumed proxy source (72-element, 8,000-in
In addition, in this case, use of the exposure modeling produces results that are smaller than average GOM group sizes for one species (Maze-Foley and Mullin, 2006). NMFS' typical practice in such a situation is to increase exposure estimates to the assumed average group size for a species in order to ensure that, if the species is encountered, exposures will not exceed the authorized take number. However, other relevant considerations here lead to a determination that increasing the estimated exposures to the average group size would likely lead to an overestimate of actual potential take. In this circumstance, the very short survey duration (maximum of 5 days) and relatively small Level B harassment isopleths produced through use of the (at most) 12-element, 2,400-in
Based on the results of our analysis, NMFS has determined that the level of taking expected for this survey and authorized through the LOA is consistent with the findings made for the total taking allowable under the regulations for the affected species or stocks of marine mammals. See table 1 in this notice and table 9 of the rule (86 FR 5322, January 19, 2021).
Under the GOM rule, NMFS may not authorize incidental take of marine mammals in an LOA if it will exceed “small numbers.” In short, when an
The take numbers for authorization, which are determined as described above, are used by NMFS in making the necessary small numbers determinations through comparison with the best available abundance estimates (see discussion at 86 FR 5322, 86 FR 5391, January 19, 2021). For this comparison, NMFS' approach is to use the maximum theoretical population, determined through review of current stock assessment reports (SAR;
Based on the analysis contained herein of LLOG's planned survey activity described in its LOA application and the anticipated take of marine mammals, NMFS finds that small numbers of marine mammals will be taken relative to the affected species or stock sizes (
NMFS has determined that the level of taking for this LOA request is consistent with the findings made for the total taking allowable under the incidental take regulations and that the amount of take authorized under the LOA is of no more than small numbers. Accordingly, we have issued an LOA to LLOG authorizing the take of marine mammals incidental to its geophysical survey activity, as described above.
National Telecommunications and Information Administration, Department of Commerce.
Notice; request for comment.
On October 30, 2023, President Biden issued an Executive order on “Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence,” which directed the Secretary of Commerce, acting through the Assistant Secretary of Commerce for Communications and Information, and in consultation with the Secretary of State, to conduct a public consultation process and issue a report on the potential risks, benefits, other implications, and appropriate policy and regulatory approaches to dual-use foundation models for which the model weights are widely available. Pursuant to that Executive order, the National Telecommunications and Information Administration (NTIA) hereby issues this Request for Comment on these issues. Responses received will be used to submit a report to the President on the potential benefits, risks, and implications of dual-use foundation
Written comments must be received on or before March 27, 2024.
All electronic public comments on this action, identified by
Please direct questions regarding this Request for Comment to Travis Hall at
Artificial intelligence (AI)
Dual use foundation models with widely available weights (referred to here as open foundation models) could play a key role in fostering growth among less resourced actors, helping to widely share access to AI's benefits.
Open foundation models have the potential to transform research, both within computer science
Open foundation models can allow for more transparency and enable broader access to allow greater oversight by technical experts, researchers, academics, and those from the security community.
While open foundation models potentially offer significant benefits, they may pose risks as well. Foundation models with widely-available model weights could engender substantial harms, such as risks to security, equity, civil rights, or other harms due to, for instance,
On October 30, 2023, President Biden signed the Executive order on “Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence.”
In particular, the Executive order asks NTIA to consider risks and benefits of dual-use foundation models with weights that are “widely available.”
NTIA also requests input on any potential regulatory models, either voluntary or mandatory, that could maintain and potentially increase the benefits and/or mitigate the risks of dual use foundation models with widely available model weights. We seek input as to different kinds of regulatory structures that could deal with not only the large scale of these foundation models, but also the declining level of computing resources needed to fine-tune and retrain them.
This Request for Comment uses the terms defined in sec. 3 of the Executive order. In addition, we use broader terms interchangeably for both ease of understanding and clarity, as set forth below. “Artificial intelligence” or “AI” refer to a machine-based system that can, for a given set of human-defined objectives, make predictions, recommendations, or decisions, influencing real or virtual environments.
Foundation models are typically defined as, “powerful models that can be fine-tuned and used for multiple purposes.”
“Generative AI can be understood as a form of AI model specifically intended to produce new digital material as an output (including text, images, audio, video, software code), including when such AI models are used in applications and their user interfaces.”
This Request for Comment is particularly focused on the wide availability, such as being publicly posted online, of foundation model weights. “Model weights” are “numerical parameter[s] within an AI model that help [. . .] determine the model's output in response to inputs.”
The Executive order directs NTIA to focus on dual-use foundation models that were trained on broad data; generally use self-supervision; contain at least tens of billions of parameters; are applicable across a wide range of contexts; and exhibit, or could be easily modified to exhibit, high levels of performance at tasks that pose a serious risk to security, national economic security, national public health or safety, or any combination of those matter.
Through this Request for Comment, we hope to gather information on the following questions. These are not exhaustive, and commenters are invited to provide input on relevant questions not asked below. Commenters are not required to respond to all questions. When responding to one or more of the questions below, please note in the text of your response the number of the question to which you are responding. Commenters should include a page number on each page of their submissions. Commenters are welcome to provide specific actionable proposals, rationales, and relevant facts.
Please do not include in your comments information of a confidential nature, such as sensitive personal information or proprietary information. All comments received are a part of the public record and will generally be posted to
1. How should NTIA define “open” or “widely available” when thinking about foundation models and model weights?
a. Is there evidence or historical examples suggesting that weights of models similar to currently-closed AI systems will, or will not, likely become widely available? If so, what are they?
b. Is it possible to generally estimate the timeframe between the deployment of a closed model and the deployment of an open foundation model of similar performance on relevant tasks? How do you expect that timeframe to change? Based on what variables? How do you expect those variables to change in the coming months and years?
c. Should “wide availability” of model weights be defined by level of distribution? If so, at what level of distribution (
d. Do certain forms of access to an open foundation model (web applications, Application Programming Interfaces (API), local hosting, edge deployment) provide more or less benefit or more or less risk than others? Are these risks dependent on other details of the system or application enabling access?
i. Are there promising
2. How do the risks associated with making model weights widely available compare to the risks associated with non-public model weights?
a. What, if any, are the risks associated with widely available model weights? How do these risks change, if at all, when the training data or source code associated with fine tuning, pretraining, or deploying a model is simultaneously widely available?
b. Could open foundation models reduce equity in rights and safety-impacting AI systems (
c. What, if any, risks related to privacy could result from the wide availability of model weights?
d. Are there novel ways that state or non-state actors could use widely available model weights to create or exacerbate security risks, including but not limited to threats to infrastructure, public health, human and civil rights, democracy, defense, and the economy?
i. How do these risks compare to those associated with closed models?
ii. How do these risks compare to those associated with other types of software systems and information resources?
e. What, if any, risks could result from differences in access to widely available models across different jurisdictions?
f. Which are the most severe, and which the most likely risks described in answering the questions above? How do these set of risks relate to each other, if at all?
3. What are the benefits of foundation models with model weights that are widely available as compared to fully closed models?
a. What benefits do open model weights offer for competition and innovation, both in the AI marketplace and in other areas of the economy? In what ways can open dual-use foundation models enable or enhance scientific research, as well as education/training in computer science and related fields?
b. How can making model weights widely available improve the safety, security, and trustworthiness of AI and the robustness of public preparedness against potential AI risks?
c. Could open model weights, and in particular the ability to retrain models, help advance equity in rights and safety-impacting AI systems (
d. How can the diffusion of AI models with widely available weights support the United States' national security interests? How could it interfere with, or further the enjoyment and protection of human rights within and outside of the United States?
e. How do these benefits change, if at all, when the training data or the associated source code of the model is simultaneously widely available?
4. Are there other relevant components of open foundation models that, if simultaneously widely available, would change the risks or benefits presented by widely available model weights? If so, please list them and explain their impact.
5. What are the safety-related or broader technical issues involved in managing risks and amplifying benefits of dual-use foundation models with widely available model weights?
a. What model evaluations, if any, can help determine the risks or benefits associated with making weights of a foundation model widely available?
b. Are there effective ways to create safeguards around foundation models,
c. What are the prospects for developing effective safeguards in the future?
d. Are there ways to regain control over and/or restrict access to and/or limit use of weights of an open foundation model that, either inadvertently or purposely, have already become widely available? What are the approximate costs of these methods today? How reliable are they?
e. What if any secure storage techniques or practices could be considered necessary to prevent unintentional distribution of model weights?
f. Which components of a foundation model need to be available, and to whom, in order to analyze, evaluate, certify, or red-team the model? To the extent possible, please identify specific evaluations or types of evaluations and the component(s) that need to be available for each.
g. Are there means by which to test or verify model weights? What methodology or methodologies exist to audit model weights and/or foundation models?
6. What are the legal or business issues or effects related to open foundation models?
a. In which ways is open-source software policy analogous (or not) to the availability of model weights? Are there lessons we can learn from the history and ecosystem of open-source software, open data, and other “open” initiatives for open foundation models, particularly the availability of model weights?
b. How, if at all, does the wide availability of model weights change the competition dynamics in the broader economy, specifically looking at industries such as but not limited to healthcare, marketing, and education?
c. How, if at all, do intellectual property-related issues—such as the license terms under which foundation model weights are made publicly available—influence competition, benefits, and risks? Which licenses are most prominent in the context of making model weights widely available? What are the tradeoffs associated with each of these licenses?
d. Are there concerns about potential barriers to interoperability stemming from different incompatible “open” licenses,
7. What are current or potential voluntary, domestic regulatory, and international mechanisms to manage the risks and maximize the benefits of foundation models with widely available weights? What kind of entities should take a leadership role across which features of governance?
a. What security, legal, or other measures can reasonably be employed to reliably prevent wide availability of access to a foundation model's weights, or limit their end use?
b. How might the wide availability of open foundation model weights facilitate, or else frustrate, government action in AI regulation?
c. When, if ever, should entities deploying AI disclose to users or the general public that they are using open foundation models either with or without widely available weights?
d. What role, if any, should the U.S. government take in setting metrics for risk, creating standards for best practices, and/or supporting or restricting the availability of foundation model weights?
i. Should other government or non-government bodies, currently existing or not, support the government in this role? Should this vary by sector?
e. What should the role of model hosting services (
f. Should there be different standards for government as opposed to private industry when it comes to sharing model weights of open foundation models or contracting with companies who use them?
g. What should the U.S. prioritize in working with other countries on this topic, and which countries are most important to work with?
h. What insights from other countries or other societal systems are most useful to consider?
i. Are there effective mechanisms or procedures that can be used by the government or companies to make decisions regarding an appropriate degree of availability of model weights in a dual-use foundation model or the dual-use foundation model ecosystem? Are there methods for making effective decisions about open AI deployment that balance both benefits and risks? This may include responsible capability scaling policies, preparedness frameworks, et cetera.
j. Are there particular individuals/entities who should or should not have access to open-weight foundation models? If so, why and under what circumstances?
8. In the face of continually changing technology, and given unforeseen risks and benefits, how can governments, companies, and individuals make decisions or plans today about open foundation models that will be useful in the future?
a. How should these potentially competing interests of innovation, competition, and security be addressed or balanced?
b. Noting that E.O. 14110 grants the Secretary of Commerce the capacity to adapt the threshold, is the amount of computational resources required to build a model, such as the cutoff of 10
c. Are there more robust risk metrics for foundation models with widely available weights that will stand the test of time? Should we look at models that fall outside of the dual-use foundation model definition?
9. What other issues, topics, or adjacent technological advancements should we consider when analyzing risks and benefits of dual-use foundation models with widely available model weights?
Defense Acquisition Regulations System; Department of Defense (DOD).
Notice and request for comments regarding a proposed
In compliance with the Paperwork Reduction Act of 1995, DoD announces the proposed extension of a public information collection requirement and seeks public comment on the provisions thereof. DoD invites comments on: whether the proposed collection of information is necessary for the proper performance of the functions of DoD, including whether the information will have practical utility; the accuracy of DoD's estimate of the burden of the proposed information collection; ways to enhance the quality, utility, and clarity of the information to be collected; and ways to minimize the burden of the information collection on respondents, including through the use of automated collection techniques or other forms of information technology. The Office of Management and Budget (OMB) has approved this information collection for use under Control Number 0750-0004 through June 30, 2024. DoD proposes that OMB approve an extension of the information collection requirement, to expire three years after the approval date.
DoD will consider all comments received by April 26, 2024.
You may submit comments, identified by OMB Control Number 0750-0004, using either of the following methods:
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Comments received generally will be posted without change to
Ms. Heather Kitchens, at 571-296-7152.
This requirement supports implementation of section 1648 of the National Defense Authorization Act for Fiscal Year 2020 (Pub. L. 116-92). Section 1648(c)(2) directs the Secretary of Defense to develop a risk-based cybersecurity framework for the DIB sector as the basis for a mandatory DoD standard.
This requirement is implemented in the Defense Federal Acquisition Regulation Supplement (DFARS) through the solicitation provision at 252.204-7019, Notice of NIST SP 800-171 DoD Assessment Requirement, and the contract clause at 252.204-7020, NIST SP 800-171 DoD Assessment Requirements.
This clearance covers the following requirements:
• DFARS 252.204-7019, Notice of NIST SP 800-171 DoD Assessment Requirement, is prescribed for use in all solicitations, including solicitations using FAR part 12 procedures for the acquisition of commercial products and commercial services, except for solicitations solely for the acquisition of commercially available off-the-shelf (COTS) items. Per the provision, if an offeror is required to have implemented NIST SP 800-171 per DFARS clause 252.204-7012, then the offeror shall have a current assessment for each covered contractor information system that is relevant to the offer, contract, task order, or delivery order in order to be considered for award.
• DFARS 252.204-7020, NIST SP 800-171 DoD Assessment Requirements, is prescribed for use in in all solicitations and contracts, including solicitations and contracts using FAR part 12 procedures for the acquisition of commercial products and commercial services, except for solicitations and contracts solely for the acquisition of COTS items. The clause requires the contractor to provide the Government access to its facilities, systems, and personnel in order to conduct a Medium Assessment or High Assessment, if necessary. Medium Assessments are assumed to be conducted by DoD Components, primarily by program management office cybersecurity personnel, in coordination with the Defense Contract Management Agency's DCMA's Defense Industrial Base Cybersecurity Assessment Center (DIBCAC), as part of a separately scheduled visit (
Institute of Education Sciences, Department of Education (ED).
Notice.
In accordance with the Paperwork Reduction Act (PRA) of 1995, the Department is proposing an extension without change of a currently approved information collection request (ICR).
Interested persons are invited to submit comments on or before March 27, 2024.
Written comments and recommendations for proposed information collection requests should be submitted within 30 days of publication of this notice. Click on this link
For specific questions related to collection activities, please contact Tracy Rimdzius, 202-453-7403.
The Department 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.
The Comprehensive Literacy State Development (CLSD) Program Evaluation was mandated by Congress. The CLSD evaluation includes an examination of implementation, a randomized trial to estimate the impact of CLSD funding on teacher and student outcomes, and a longitudinal comparison of trends in achievement in CLSD and similar, non-CLSD schools. With the exception of the state administrative data collection—for which this extension is being requested—all other data collection for the study previously approved (including state interviews, district, school leader, and teacher surveys) have been completed.
Office of Science, Department of Energy.
Notice of a partially-closed virtual meeting.
This notice announces a partially-closed virtual meeting of the President's Council of Advisors on Science and Technology (PCAST). The Federal Advisory Committee Act (FACA) requires that public notice of these meetings be announced in the
Information for viewing the livestream of the meeting can be found on the PCAST website closer to the meeting at:
Dr. Melissa A. Edwards, Designated Federal Officer, PCAST, email:
PCAST is an advisory group of the nation's leading scientists and engineers, appointed by the President to augment the science and technology advice available to him from the White House, cabinet departments, and other Federal agencies. See the Executive Order at
The public comment period for this meeting will take place on March 14, 2024, at times specified in the meeting agenda. This public comment period is designed only for substantive commentary on PCAST's work, not for business marketing purposes.
PCAST operates under the provisions of FACA, all public comments and/or presentations will be treated as public documents and will be made available for public inspection, including being posted on the PCAST website at:
This document of the Department of Energy was signed on February 21, 2024, by David Borak Deputy Committee Management Officer, pursuant to delegated authority from the Secretary of Energy. That document with the original signature and date is maintained by DOE. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DOE Federal Register Liaison Officer has been authorized to sign and submit the document in electronic format for publication, as an official document of the Department of Energy. This administrative process in no way alters the legal effect of this document upon publication in the
Office of Environmental Management, Department of Energy.
Notice of open meeting.
This notice announces a meeting of the Environmental Management Site-Specific Advisory Board (EM SSAB), Savannah River Site. The Federal Advisory Committee Act requires that public notice of this meeting be announced in the
Monday, March 25, 2024; 1 p.m.-4:30 p.m. EDT.
Center for African American History, Art, & Culture, 120 York Street NE, Aiken, South Carolina 29801.
The meeting will also be streamed on YouTube, no registration is necessary; links for the livestream can be found on the following website:
Amy Boyette, Office of External Affairs, U.S. Department of Energy (DOE), Savannah River Operations Office, P.O. Box A, Aiken, SC, 29802; Phone: (803) 952-6120; or Email:
Environmental Protection Agency (EPA).
Notice of public meeting.
The Environmental Protection Agency (EPA), Office of Research and Development (ORD), gives notice of a virtual meeting of the Board of Scientific Counselors' (BOSC) Climate Change (CC) and Social and Community Sciences (SCS) subcommittees to finalize their draft report.
The meeting will be held via videoconference on Thursday, March 7, 2024, from 2 p.m. to 5 p.m. All times noted are Eastern Time and approximate. The meeting may adjourn early if all business is finished. Attendees should register by March 1, 2024. Requests for making oral presentations at the meeting will be accepted through March 4, 2024. Written comments may be submitted through March 4, 2024.
Instructions on how to connect to the videoconference will be provided upon registration at:
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The Designated Federal Officer (DFO), Tom Tracy, via phone/voicemail at: 919-541-4334; or via email at:
Environmental Protection Agency (EPA).
Notice.
EPA has authorized its contractor Avanti Corporation (Avanti) of Alexandria, VA, to access information which has been submitted to EPA under all sections of the Toxic Substances Control Act (TSCA). Some of the information may be claimed or determined to be Confidential Business Information (CBI).
Access to the confidential data will occur no sooner than March 4, 2024.
Submit your comments, identified by docket identification (ID) number EPA-HQ-OPPT-2003-0004, through the
This action is directed to the public in general. This action may, however, be of interest to all who manufacture, process, or distribute industrial chemicals. Since other entities may also be interested, the Agency has not
The docket for this action, identified by docket identification (ID) number EPA-HQ-OPPT-2003-0004 is available at
Under contract number 47QRAA20D002D, task order number 68HERC24F0042, contractor Avanti of 5695 King Center Drive, Suite 301; Alexandria, VA 22301 will assist the Office of Pollution Prevention and Toxics (OPPT) by providing administrative and technical support to the TSCA New Chemicals Program utilizing EPA CBI databases and software to create documents, databases, attend meetings, previewing CBI claims, transferring sanitized documents from the CBI LAN to ADMIN and transfer non-CBI files to the CBI LAN for special projects.
In accordance with 40 CFR 2.306(j), EPA has determined that under EPA contract number 47QRAA20D002D, task order number 68HERC21F0042, Avanti will require access to CBI submitted under all sections of TSCA. EPA has determined that Avanti will need access to TSCA CBI submitted to EPA under Sections 5, 8 and 12 of TSCA to perform successfully the duties specified under the contract. Avanti's personnel will be given access to information claimed or determined to be CBI information submitted to EPA under all sections of TSCA.
EPA is issuing this notice to inform all submitters of information under all sections of TSCA that EPA will provide Avanti access to these CBI materials on a need-to-know basis only. All access to TSCA CBI under this contract will take place at EPA Headquarters, in accordance with EPA's
Access to TSCA data, including CBI, will continue until October 31, 2026. If the contract is extended, this access will also continue for the duration of the extended contract without further notice.
Avanti's personnel will be required to sign nondisclosure agreements and will be briefed on specific security procedures for TSCA CBI.
Thursday, February 29, 2024, at 10:00 a.m.
Hybrid meeting: 1050 First Street NE, Washington, DC (12th floor) and virtual.
For those attending the meeting in person, current COVID-19 safety protocols for visitors, which are based on the CDC COVID-19 hospital admission level in Washington, DC, will be updated on the Commission's contact page by the Monday before the meeting. See the contact page at
This meeting will be open to the public, subject to the above-referenced guidance regarding the COVID-19 hospital admission level and corresponding health and safety procedures. To access the meeting virtually, go to the Commission's website
Judith Ingram, Press Officer, Telephone: (202) 694-1220.
Individuals who plan to attend in person and who require special assistance, such as sign language interpretation or other reasonable accommodations, should contact Laura E. Sinram, Secretary and Clerk, at (202) 694-1040 or
The companies listed in this notice have applied to the Board for approval, pursuant to the Bank Holding Company Act of 1956 (12 U.S.C. 1841
The public portions of the applications listed below, as well as other related filings required by the Board, if any, are available for immediate inspection at the Federal Reserve Bank(s) indicated below and at the offices of the Board of Governors. This information may also be obtained on an expedited basis, upon request, by contacting the appropriate Federal Reserve Bank and from the Board's Freedom of Information Office at
Comments regarding each of these applications must be received at the Reserve Bank indicated or the offices of the Board of Governors, Ann E. Misback, Secretary of the Board, 20th Street and Constitution Avenue NW, Washington, DC 20551-0001, not later than March 27, 2024.
1.
Board of Governors of the Federal Reserve System.
Department of Defense (DOD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).
Notice.
Under the provisions of the Paperwork Reduction Act, the Regulatory Secretariat Division has submitted to the Office of Management and Budget (OMB) a request to review and approve an extension of a previously approved information collection requirement regarding certified cost or pricing data and data other than certified cost or pricing data.
Submit comments on or before March 27, 2024.
Written comments and recommendations for this information collection should be sent within 30 days of publication of this notice to
Zenaida Delgado, Procurement Analyst, at telephone 202-969-7207, or
OMB Control No. 9000-0013, Certified Cost or Pricing Data and Data Other Than Certified Cost or Pricing Data.
The Truth in Negotiations Act, 10 U.S.C. chapter 271 and 41 U.S.C. chapter 35, requires the Government to obtain certified cost or pricing data from contractors prior to the award of certain contract actions. Contractors may be exempt from this requirement under certain conditions. This clearance covers the information that offerors or contractors must submit to comply with the following FAR requirements:
• FAR 52.214-28, Subcontractor Certified Cost or Pricing Data-Modifications-Sealed Bidding. When contracting by sealed bidding, this clause requires contractors to require subcontractors to submit certified cost or pricing data for a modification involving aggregate increases and/or decreases in costs, plus applicable profits, expected to exceed the threshold for submission of certified cost or pricing data at FAR 15.403-4(a)(1).
• FAR 52.215-12, Subcontractor Certified Cost or Pricing Data. When contracting by negotiation, this clause requires contractors to require subcontractors to submit certified cost or pricing data.
• FAR 52.215-13, Subcontractor Certified Cost or Pricing Data—Modifications. When contracting by negotiation, this clause requires contractors to require subcontractors to submit certified cost or pricing data for a modification involving a pricing adjustment expected to exceed the threshold for submission of certified cost or pricing data at FAR 15.403-4(a)(1).
• FAR 52.215-20, Requirements for Certified Cost or Pricing Data and Data Other Than Certified Cost or Pricing Data. When contracting by negotiation, this provision requires offerors, if not granted an exception, to prepare and submit certified cost or pricing data, data other than certified cost or pricing data, and supporting attachments in accordance with the instructions contained in Table 15-2 of FAR 15.408, unless the contracting officer and the contractor agree to a different format.
• FAR 52.215-21, Requirements for Certified Cost or Pricing Data and Data Other Than Certified Cost or Pricing Data—Modifications. When contracting by negotiation, this clause requires contractors, if not granted an exception, to submit, for a modification or price adjustment expected to exceed the threshold set forth at FAR 15.403-4(a)(1), certified cost or pricing data, data other than certified cost or pricing data, and supporting attachments in accordance with the instructions contained in Table 15-2 of FAR 15.408, unless the contracting officer and the contractor agree to a different format.
Certified cost or pricing data is used by agencies to assure that contract prices and any subsequent contract modifications are fair and reasonable.
A 60-day notice was published in the
Office of the Administrator; General Services Administration, (GSA).
Meeting notice.
GSA is hosting a Tribal Consultation at the National Center for American Indian Enterprise Development (NCAIED) Reservation Economic Summit to discuss interests and concerns surrounding GSA's support of Tribes through its
March 13, 2024; 2 to 4:20 p.m. Pacific standard time (PST).
Caesars Palace, 3570 S Las Vegas Blvd., Las Vegas, NV 89109.
Mrs. Julie Ramey, GSA Office of the Administrator, GSA Tribal Liaison, (202) 969-7282,
On behalf of the U.S. General Services Administration, I would like to invite you to a government-to-government consultation to discuss your interests, concerns, and suggestions surrounding GSA's support of Tribes through its
GSA leadership understands that some members of Tribal communities have experienced challenges with the entity registration and renewal process using
As stated in the Executive order, the Biden-Harris Administration is “committed to protecting and supporting Tribal sovereignty and self-determination, and to honoring our trust and treaty obligations to Tribal Nations.” In order to increase the accessibility, equity, flexibility, and utility of Federal funding and support programs for Tribal Nations, GSA is committed to working on ways to streamline a Tribe's ability to both receive funds from Government agencies and procure Government goods and services.
In addition to participating in the in-person consultation opportunity, GSA asks that you fill out a short, 10-question survey to help inform our Tribal User Specific strategic plan. This survey is also an opportunity to provide additional context in the comments section to any issues, concerns, or suggestions. Our goals are to:
1. Understand the needs of Tribal Nations with respect to
2. Learn about the challenges that some Tribal Nations and Tribal Entities have faced when registering on
3. Learn about challenges that Tribal Nations face when procuring goods or services and/or receiving funds through
While registration for the RES 2024 event is not required to participate, we do ask that you register for the consultation through our website, or onsite, so that we can accurately identify the Tribal representatives attending the meeting. Tribes can register for the consultation and access the survey link on our website at
These resources are intended to help Tribal leaders anticipate discussion items for consultation and consider Tribal interests related to the topics. The official comment period for this consultation will remain open for 30 days after the in-person consultation session occurs; however, our partnership with Tribal leadership will carry on.
Additional comments outside of the survey can be submitted via email at
I am committed to transparency and collaboration with Tribal Governments, and I believe we can achieve positive outcomes for all stakeholders through a government-to-government relationship that is rooted in respect and earned trust.
Public Buildings Service, General Services Administration (GSA).
Notice of availability; announcement of public hearing.
Pursuant to the requirements of the National Environmental Policy Act of 1969 (NEPA), GSA has prepared a Draft Environmental Impact Statement (DEIS) to analyze the potential environmental effects of the proposed expansion and modernization of the existing Alcan LPOE. The Alcan LPOE is located at Milepost 1221.8 on the Alaska Highway, 0.43 miles from the U.S./Canada Border. U.S. Customs and Border Protection (CBP) operates this facility year-round in sub-arctic weather conditions. The Alcan LPOE is the only 24-hour port serving privately-owned vehicles (POVs) and commercial traffic between the Yukon Territory, Canada, and mainland Alaska. GSA proposes to build an expanded and modernized LPOE and new housing units at Alcan, Alaska, to replace the existing facilities. The DEIS describes the purpose and need for the proposed project, the alternatives considered, the existing environment that could be affected, the potential impacts resulting from each of the alternatives, and proposed best management practices and mitigation measures.
Public Comment Period—Interested parties are invited to provide comments on the DEIS. The public comment period begins with the publication of this NOA in the
Hearing Date—GSA will host a hybrid public hearing for the DEIS on Tuesday, March 12, 2024, starting at 6 p.m. Alaska Daylight Saving Time (AKDT). Interested parties are invited to attend the hearing in person at the Northway Community Center, Main Hall at 183 Circle Drive, Northway, AK 99764 or participate online via the Zoom platform. Refer to the
The DEIS can be viewed or downloaded from the GSA website at
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Comments sent by any other method, to any other address or individual, or received after the end of the comment period may not be considered by GSA. All comments received are part of the public record. All personal identifying information (
Aaron Evanson, Capital Project Manager, (206) 445-5876,
GSA identified one action alternative that meets the stated purpose and need of the proposed project and thus has been analyzed in detail in the DEIS. GSA also analyzed a “No Action” alternative, which evaluates the effects that would occur if GSA continued to operate the LPOE under current conditions (
Alternative 1 consists of expanding and modernizing the existing Alcan LPOE. Alternative 1 would include: land acquisition; site preparation and grading; construction of a new Main LPOE Building, enclosed inspection vehicle spaces, new housing units with improved security measures, a firing range, and a helipad; and demolition of the existing LPOE structures. Land acquisition under Alternative 1 would expand the port to include up to 2.5 acres of land south of and across the Alaska Highway from the existing LPOE.
All facility and infrastructure improvements proposed under Alternative 1 would incorporate a sustainable, climate-resilient, cyber-secure, and operationally efficient design. GSA would seek to meet or exceed energy and sustainability goals established by federal guidelines and policies, along with industry standard building codes and best practices.
Based on CBP and GSA design standards, the total enclosed building area required for the modernized Alcan LPOE and housing would be 129,145 square feet (sf) with an additional 3,820 sf of booths and canopies and 3,600 sf of outdoor parking and hard surfaces. Alternative 1 would provide dual-purpose inspection lanes to allow for flexibility of inspection operations as well as enclosed spaces for secondary inspection of POVs and commercial vehicles. A modernized Main LPOE Building would also enhance the holding and interview capabilities of the Alcan LPOE to meet current CBP security standards.
There would be approximately 15 acres of temporary ground disturbance and 5 acres of permanent ground disturbance under Alternative 1. Approximately 5 acres would be used as a staging area during construction. There are currently 8 acres of impermeable surfaces at the LPOE; expansion and modernization would add an estimated 4 additional acres of impervious surfaces.
GSA and CBP are considering an option under Alternative 1 to pursue joint operation of the Alcan LPOE with the Canada Border Services Agency (CBSA). CBSA and CBP officers would jointly operate the facility to conduct inspections of U.S. commercial vehicles and POVs entering Canada; however, no housing would be provided for CBSA officers at Alcan. This option would not affect the design or CBP staffing of the expanded and modernized Alcan LPOE, nor contribute additional environmental impacts under the action alternative, and hence is not analyzed further in the DEIS.
GSA also evaluated a No Action alternative, which assumes that expansion or modernization of the LPOE would not occur and that port operations would continue under current conditions. The No Action alternative does not meet the stated purpose and need of the proposed project.
Office of Government Ethics (OGE).
Notice and request for comments.
After this first round notice and public comment period, the Office of Government Ethics (OGE) plans to request that the Office of Management and Budget (OMB) renew its approval under the Paperwork Reduction Act for a modified version of an existing information collection, entitled the OGE Form 278e Executive Branch Personnel Public Financial Disclosure Report.
Written comments by the public and agencies on the proposed modification and extension are invited and must be received by April 26, 2024.
Comments may be submitted to OGE by any of the following methods:
Jennifer Matis at the U.S. Office of Government Ethics; telephone: 202-
OGE has approval for five versions of the Form 278e: a PDF version, an Excel version, an electronic version called
OGE seeks renewal of the OGE Form 278e with several modifications. OGE sought and received input from a variety of stakeholders before proposing these modifications. Comments submitted by the public in response to the
OGE considered each comment submitted. The proposed modifications discussed below incorporate the suggested changes that OGE believes will provide added clarity and value to the financial disclosure process. OGE is declining to make other suggested changes at this time due to OGE's lack of regulatory authority to make such changes, lack of interest by the affected agencies, and/or the associated costs to
The proposed modifications are described below. These changes apply to the English language versions of the form only; OGE will update its Spanish and Chinese instructional versions at a later date.
OGE proposes to add a question for all filers regarding their type of appointment. The options offered are “PAS,” “Non-Career,” and “Career.” The information may be provided by the filer or by their agency. This information will appear on the cover page. This change was requested by a good government group in order to help the public understand the filer's potential conflicts. One of the primary purposes of the public financial disclosure report is to allow the public to understand any potential conflicts of interest the filer might have. Knowing the filer's type of appointment is important to this understanding because different types of officials have different ethics requirements.
OGE also proposes to identify the date of appointment on the cover page of reports for all filers other than nominees (who have not yet been appointed at the time they complete the form).
Lastly, OGE proposes to add a link to its online Public Financial Disclosure Guide, the most widely used resource for completing and reviewing public financial disclosure reports.
OGE proposes instructional changes to the Excel and PDF versions to provide better guidance to those filers who do not use the
OGE proposes two changes to the initial instructions page to improve clarity: (1) changing the topic headings to plain language questions (
In the rest of the instructions, OGE proposes to add clarifying guidance on reporting requirements, exceptions to reporting requirements, and definitions. OGE also proposes to add specific instructions to avoid reporting unnecessary personal information. Finally, OGE proposes to add a note indicating that the reporting thresholds for gifts are applicable for calendar years 2023-2025 and that the amounts are adjusted every three years.
Office of Government Ethics (OGE).
Notice and request for comments.
After this first round notice and public comment period, the Office of Government Ethics (OGE) plans to request that the Office of Management and Budget (OMB) renew its approval under the Paperwork Reduction Act for a modified version of an existing information collection, entitled the OGE Form 450 Executive Branch Confidential Financial Disclosure Report.
Written comments by the public and agencies on this proposed modification and extension are invited and must be received by April 26, 2024.
Comments may be submitted to OGE by any of the following methods:
Jennifer Matis at the U.S. Office of Government Ethics; telephone: 202-482-9216; TTY: 800-877-8339; Email:
OGE seeks renewal of the OGE Form 450 with several modifications. OGE sought and received input from a variety of stakeholders before proposing these modifications. Comments submitted by the public in response to the
OGE considered each comment submitted. The proposed modifications discussed below incorporate the suggested changes that OGE believes will provide added clarity and value to the financial disclosure process. OGE is declining to make other suggested changes at this time due to OGE's lack of regulatory authority to make such changes, lack of interest by the affected agencies, and/or the associated costs to agencies' electronic financial disclosure filing systems.
The proposed modifications are described below:
On the instruction page, OGE simplified the navigation to OGEs website for filers who need instructions on completing the form and added a hyperlink.
On the cover page, OGE proposes to delete the field for mailing address and to add a question regarding whether the filer has a spouse who has paid employment outside the federal government. The yes/no question would be added to the current list of yes/no questions. Filers are required by regulation to report their spouses' employment income. In OGE's listening sessions with agency ethics officials, they felt strongly that the addition of this yes/no question would permit agency reviewers to better identify potential inadvertent omissions elsewhere on the form. OGE believes that the minor impact to the filers of answering this additional yes/no question is outweighed by the benefit to the efficiency and effectiveness of the financial disclosure review process. OGE also clarified the definition of “special government employee” on the cover page based on feedback regarding the current explanatory language.
In the main body of the form, OGE proposes to make a number of changes to the instructions to increase their clarity. Guidance would be added to make it clearer what is and is not reportable. A note would be added indicating that the reporting thresholds for gifts are applicable for calendar years 2023-2025 and that the amounts are adjusted every three years. Additional examples would be added to the Examples page and each section, further demonstrating how particular information should be reported, and some definitions would be removed to make room for additional examples and other clarifying changes. The information that had been provided in the removed definitions is more clearly addressed on other parts of the form.
These changes would not modify the confidential financial disclosure reporting requirements in any way. They are intended to help ensure that filers report all required information in the proper manner, without overreporting unnecessary personally identifiable information.
Finally, OGE plans to discontinue use of the PDF version of the form that is not accessible to users who use screen readers (
Centers for Disease Control and Prevention (CDC), Department of Health and Human Services (HHS).
Notice with comment period.
The Centers for Disease Control and Prevention (CDC) in the Department of Health and Human Services (HHS) announces the opening of a docket to obtain comment on
Written comments must be received on or before April 26, 2024.
You may submit comments, identified by Docket No. CDC-2024-0015 by either of the methods listed below.
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Laura Wells, Division of Healthcare Quality Promotion, Centers for Disease Control and Prevention, 1600 Clifton Road NE, Mailstop H16-2, Atlanta, Georgia 30329; Telephone: (404) 639-4000.
Interested persons or organizations are invited to participate by submitting written views, recommendations, and data related to
Please note that comments received, including attachments and other supporting materials, are part of the public record and are subject to public disclosure. Comments will be posted on
The
The updated recommendations in
CDC is seeking comments on the
Centers for Disease Control and Prevention (CDC), Department of Health and Human Services (HHS).
Notice with comment period.
The Centers for Disease Control and Prevention (CDC), in the Department of Health and Human Services (HHS), announces the opening of a docket to obtain comment on the
Written comments must be received on or before April 26, 2024.
You may submit comments, identified by Docket No. CDC-2024-0014 by either of the methods listed below. Do not submit comments by email. CDC does not accept comments by email.
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Laura Wells, Division of Healthcare Quality Promotion, Centers for Disease Control and Prevention, 1600 Clifton Road NE, Mailstop H16-2, Atlanta, Georgia 30329; Telephone: (404) 639-4000.
Interested persons or organizations are invited to participate by submitting written views, recommendations, and data related to the
Please note that comments received, including attachments and other supporting materials, are part of the public record and are subject to public disclosure. Comments will be posted on
The
As described in the Executive Summary of this guideline (
This
Since 2015, the Healthcare Infection Control Practices Advisory Committee (HICPAC) has worked with national partners, academicians, public health professionals, healthcare providers, and other partners to develop
The updated draft recommendations in
Centers for Medicare & Medicaid Services (CMS), HHS.
Notice with comment.
This notice acknowledges the receipt of an application from the Joint Commission for continued recognition as a national accrediting organization for Ambulatory Surgical Centers that wish to participate in the Medicare or Medicaid programs.
To be assured consideration, comments must be received at one of the addresses provided below, by March 27, 2024.
In commenting, refer to file code CMS-3456-PN.
Comments, including mass comment submissions, must be submitted in one of the following three ways (please choose only one of the ways listed):
1.
2.
Please allow sufficient time for mailed comments to be received before the close of the comment period.
3.
For information on viewing public comments, see the beginning of the
Caecilia Andrews, (410) 786-2190.
Erin Imhoff, (410) 786-2337.
Ambulatory Surgical Centers (ASCs) are distinct entities that operate exclusively for the purpose of furnishing outpatient surgical services to patients. Under the Medicare program, eligible beneficiaries may receive covered services from an ASC provided certain requirements are met. Section 1832(a)(2)(F)(i) of the Social Security Act (the Act) establishes distinct criteria for a facility seeking designation as an ASC. Regulations concerning provider agreements are at 42 CFR part 489 and those pertaining to activities relating to the survey and certification of facilities are at 42 CFR part 488. The regulations at 42 CFR part 416 specify the conditions that an ASC must meet in order to participate in the Medicare program, the scope of covered services, and the conditions for Medicare payment for ASCs.
Generally, to enter into an agreement, an ASC must first be certified by a state survey agency (SA) as complying with the conditions or requirements set forth in part 416 of our Medicare regulations. Thereafter, the ASC is subject to regular surveys by an SA to determine whether it continues to meet these requirements.
Section 1865(a)(1) of the Act provides that, if a provider entity demonstrates through accreditation by a Centers for Medicare & Medicaid Services (CMS) approved national accrediting organization (AO) that all applicable Medicare conditions are met or exceeded, we may deem that provider entity as having met the requirements. Accreditation by an AO is voluntary and is not required for Medicare participation.
If an AO is recognized by the Secretary of the Department of Health and Human Services as having standards for accreditation that meet or exceed Medicare requirements, any provider entity accredited by the national accrediting body's approved program may be deemed to meet the Medicare conditions. The AO applying for approval of its accreditation program under part 488, subpart A, must provide CMS with reasonable assurance that the AO requires the accredited provider entities to meet requirements that are at least as stringent as the Medicare conditions. Our regulations concerning the approval of AOs are set forth at § 488.5.
The Joint Commission's (TJC's) current term of approval for its ASC program expires December 20, 2024.
Section 1865(a)(2) of the Act and our regulations at § 488.5 require that our findings concerning review and approval of an AO's requirements consider, among other factors, the applying AO's requirements for accreditation; survey procedures; resources for conducting required surveys; capacity to furnish information for use in enforcement activities; monitoring procedures for provider entities found not in compliance with the conditions or requirements; and ability to provide CMS with the necessary data for validation.
Section 1865(a)(3)(A) of the Act further requires that we publish, within 60 days of receipt of an organization's complete application, a notice that identifies the national accrediting body making the request, describes the nature of the request, and provides at least a 30-day public comment period. We have 210 days from the receipt of a complete application to publish notice of approval or denial of the application.
The purpose of this proposed notice is to inform the public of TJC's request for continued CMS-approval of its ASC accreditation program. This notice also solicits public comment on whether TJC's requirements meet or exceed the Medicare conditions for coverage (CfCs) for ASCs.
TJC submitted all the necessary materials to enable us to make a determination concerning its request for continued CMS-approval of its ASC accreditation program. This application was determined to be complete on January 19, 2024. Under section 1865(a)(2) of the Act and § 488.5, our review and evaluation of TJC will be conducted in accordance with, but not necessarily limited to, the following factors:
• The equivalency of TJC's standards for ASCs as compared with Medicare's CfCs for ASCs.
• TJC's survey process to determine the following:
++ The composition of the survey team, surveyor qualifications, and the ability of the organization to provide continuing surveyor training.
++ The comparability of TJC's processes to those of State agencies, including survey frequency, and the ability to investigate and respond appropriately to complaints against accredited facilities.
++ TJC's processes and procedures for monitoring an ASC found out of compliance with TJC's program requirements. These monitoring procedures are used only when TJC identifies noncompliance. If noncompliance is identified through validation reviews or complaint surveys, the State survey agency monitors corrections as specified at § 488.9(c)(1).
++ TJC's capacity to report deficiencies to the surveyed facilities and respond to the facility's plan of correction in a timely manner.
++ TJC's capacity to provide CMS with electronic data and reports necessary for the effective validation and assessment of the organization's survey process.
++ The adequacy of TJC's staff and other resources, and its financial viability.
++ TJC's capacity to adequately fund required surveys.
++ TJC's policies with respect to whether surveys are announced or unannounced, to ensure that surveys are unannounced.
++ TJC's policies and procedures to avoid conflicts of interest, including the appearance of conflicts of interest, involving individuals who conduct surveys or participate in accreditation decisions.
++ TJC's agreement to provide CMS with a copy of the most current accreditation survey together with any other information related to the survey as CMS may require (including corrective action plans).
This document does not impose information collection requirements, that is, reporting, recordkeeping or third-party disclosure requirements. Consequently, there is no need for review by the Office of Management and Budget under the authority of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Because of the large number of public comments we normally receive on
The Administrator of the Centers for Medicare & Medicaid Services (CMS), Chiquita Brooks-LaSure, having reviewed and approved this document, authorizes Vanessa Garcia, who is the Federal Register Liaison, to electronically sign this document for purposes of publication in the
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 March 27, 2024.
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, please access the CMS PRA website by copying and pasting the following web address into your web browser:
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
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HOPDs and ASCs contract with a CMS-approved, independent third-party survey vendor to implement the survey on their behalf and to submit the OAS CAHPS data to CMS. CMS publicly reports comparative results from OAS CAHPS after each facility has conducted data collection for 4 quarters. Data from OAS CAHPS enable consumers to make more informed decisions when choosing an outpatient surgery facility, aid facilities in their quality improvement efforts, and help CMS monitor the performance of outpatient surgery facilities. Considering the increasing Medicare expenditures for outpatient surgical services from HOPDs and ASCs, the implementation of OAS CAHPS provides CMS with much-needed statistically valid data from the patient perspective to inform quality improvement and comparative consumer information about specific facilities. The information collected in the OAS CAHPS survey will be used for the following purposes: To provide a source of information from which patient experience of care measures can be publicly reported to beneficiaries to help them make informed decisions for
Office of Family Violence Prevention and Services; Administration for Children and Families; U.S. Department of Health and Human Services.
Request for public comments.
The Family Violence Prevention and Services Act (FVPSA) program within the Office of Family Violence Prevention and Services (OFVPS) plans to extend data collection for the Family Violence Prevention and Services Grants to States; Native American Tribes and Alaskan Native Villages; and State Domestic Violence Coalitions (Office of Management and Budget (OMB) #0970-0280; Expiration Date: May 31, 2024). Minor changes are proposed to the existing information collection.
You can obtain copies of the proposed collection of information and submit comments by emailing
Health Resources and Services Administration (HRSA), Department of Health and Human Services.
Notice; correction.
HRSA published a notice in the
Pita Gomez, Principal Staff Liaison, Division of Injury Compensation Programs, HRSA, 5600 Fishers Lane, 8W-25A, Rockville, Maryland, 20857; 800-338-2382; or
In the
• March 7, 2024, 1 p.m. eastern time (ET)-4 p.m. ET;
• March 8, 2024, 1 p.m. ET-4 p.m. ET;
• September 5, 2024, 1 p.m. ET-4 p.m. ET;
• September 6, 2024, 1 p.m. ET-4 p.m. ET.”
Health Resources and Services Administration (HRSA), Department of Health and Human Services.
Notice.
In accordance with the Federal Advisory Committee Act, this notice announces that the Secretary's National Advisory Committee on Rural Health and Human Services (NACRHHS) has scheduled a public meeting. Information about NACRHHS and the agenda for this meeting can be found on the NACRHHS website at:
Tuesday, April 9, 2024, 9 a.m.-5 p.m. central time (CT); Wednesday, April 10, 2024, 9 a.m.-5 p.m. CT; Thursday, April 11, 2024, 9 a.m.-12 p.m. CT.
This meeting will be held at the Hyatt House, 901 Neches Street, Austin, Texas 78701. The meeting will also be accessible to the public via Zoom. Please use the following information to join the meeting:
Or One tap mobile:
Or Telephone:
Dial (for higher quality, dial a number based on your current location):
Webinar ID: 831 1937 7601
International numbers available:
Sahira Rafiullah, Executive Secretary of NACRHHS, 5600 Fishers Lane, Rockville, Maryland 20857; 240-316-5874; or
NACRHHS provides advice and recommendations to the Secretary of Health and Human Services on policy, program development, and other matters of significance concerning both rural health and rural human services. At this meeting, NACRHHS will discuss two topics: technology and innovation in rural health and quality reporting by rural health clinics. Members of the public will have the opportunity to provide comments.
Public participants wishing to provide oral comments must submit a written version of their statement at least 3 business days in advance of the scheduled meeting. Oral comments will be honored in the order they are requested and may be limited as time permits. Public participants wishing to offer a written statement should send it to Sahira Rafiullah, using the contact information above, at least 3 business days prior to the meeting. Individuals who plan to attend in person and need special assistance or another reasonable accommodation should notify Sahira Rafiullah at the address and phone number listed above at least 10 business days prior to the meeting.
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 1009 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.
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 1009 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.
Pursuant to section 1009 of the Federal Advisory Committee Act, as
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 contract proposals and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the contract proposals, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
U.S. Customs and Border Protection (CBP), Department of Homeland Security.
60-Day notice and request for comments
The Department of Homeland Security, U.S. Customs and Border Protection (CBP) will be submitting the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995 (PRA). The information collection is published in the
Comments are encouraged and must be submitted (no later than April 26, 2024) to be assured of consideration.
Written comments and/or suggestions regarding the item(s) contained in this notice must include the OMB Control Number 1651-0111 in the subject line and the agency name. Please submit written comments and/or suggestions in English. Please use the following method to submit comments:
Requests for additional PRA information should be directed to Seth Renkema, Chief, Economic Impact Analysis Branch, U.S. Customs and Border Protection, Office of Trade, Regulations and Rulings, 90 K Street NE, 10th Floor, Washington, DC 20229-1177, Telephone number 202-325-0056 or via email
CBP invites the general public and other Federal agencies to comment on the proposed and/or continuing information collections pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Certain nonimmigrants subject to I-94 requirements may voluntarily submit their facial images using the CBP One
Nonimmigrants may use the app to voluntarily submit their biographic information from their passports, or other traveler documents after they have exited the United States.
Nonimmigrants will then use the app to take a “selfie” picture. CBP will utilize geolocation services to confirm that the nonimmigrant is outside the United States as well as run “liveness detection” software to determine that the selfie photo is a live photo, as opposed to a previously uploaded photo. The app will then compare the live photo to facial images for that person already retained by CBP to confirm the exit biometrically.
CBP will utilize this information to help reconcile a nonimmigrant's exit with that person's last arrival. The report of exit will be recorded as a biometrically confirmed departure in
As it pertains to the land environment, there is no requirement for nonimmigrants leaving the United States to report their departure to CBP. However, as described further below, CBP encourages nonimmigrants to report their departure to CBP when they exit, so that CBP can record their exit from the United States.
Although CBP routinely collects biometric data from nonimmigrants entering the United States, there currently is no comprehensive system in place to collect biometrics from nonimmigrants departing the country. Collecting biometrics at both arrival and departure will thus enable CBP and DHS to know with better accuracy whether nonimmigrants are departing the country when they are required to depart. Further, collecting biometric data will help to reduce visa or travel document fraud and improve CBP's ability to identify criminals and known or suspected terrorists. CBP has been testing various options to collect biometrics at departure in the land and air environments since 2004.
At the same time, CBP is also now working to fully automate all I-94 processes. Currently CBP issues electronic I-94s to most nonimmigrants entering the United States at land border ports of entry.
Currently CBP does not routinely staff exit lanes at land border ports of entry, nor does CBP possess a single process for nonimmigrants subject to I-94 requirements to voluntarily report their departure. Nonimmigrants can currently report their departure by any one of the following means: (1) stopping at a land border port of entry and presenting a printed copy of their electronic I-94 to a CBP officer; (2) stopping at a land border port of entry and placing a printed copy of their electronic I-94 in a drop box provided by the port where available; (3) if exiting by land on the northern U.S. border, by turning in a paper copy of their electronic I-94 to the Canadian Border Services Agency (CBSA) when entering Canada (CBSA will then return the form to CBP); or (4) mailing a copy of their electronic I-94 and other proof of departure to CBP.
The current options are burdensome and, in many cases, impractical or inconvenient due to the location and design of the ports. They also lead to haphazard record keeping and inaccurate data collection with respect to the nonimmigrants leaving the country. Most land border ports of entry provide limited access to the port for vehicles exiting the United States and have minimal parking available to the public. For this reason, most nonimmigrants do not report their departure when exiting at land border ports of entry. In those cases, CBP has no way to confirm that a nonimmigrant has exited the United States at the time of departure. CBP often discovers that a nonimmigrant has previously left the United States at a later date, when that same nonimmigrants attempts to re-enter the United States. Having proof of an exit via the CBP One
In additonal, CBP intends to update the ESTA application website to require applicants to provide a photograph of their face, or “selfie”, in addition to the photo of the passport biographical page. These photos would be used to better ensure that the applicant is the rightful possessor of the document being used to obtain an ESTA authorization.
Currently, applicants are allowed to have a third party apply for ESTA on their behalf. While this update would not remove that option, third parties, such as travel agents or family members, would be required to provide a photograph of the ESTA applicant.
The ESTA Mobile application currently requires applicants to take a live photograph of their face, which is compared to the passport photo collected during the ESTA Mobile application process. This change will better align the application processes and requirements of ESTA website and ESTA Mobile applicants.
Fish and Wildlife Service, Interior.
Notice.
The U.S. Department of the Interior and U.S. Department of Agriculture are re-establishing the Hunting and Wildlife Conservation Council (Council). The Council provides recommendations to the Federal Government, through the Secretaries,
Comments regarding the re-establishment of the Council charter must be submitted no later than March 12, 2024.
You may submit comments via email to
Douglas Hobbs, U.S. Fish and Wildlife Service, Designated Federal Officer, by telephone at (703) 358-2336, or by email at
The Hunting and Wildlife Conservation Council (Council) is re-established under the authority of the Secretary of the Interior and regulated by the Federal Advisory Committee Act, as amended (FACA; 5 U.S.C. Ch. 10). The Council's duties are strictly advisory and consist of, but are not limited to, providing recommendations for implementation of Executive Order (E.O.) 13443, Facilitation of Hunting Heritage and Wildlife Conservation; E.O. 14008, Tackling the Climate Crisis at Home and Abroad; and Secretarial Order 3362, Improving Habitat Quality in Western Big Game Winter Range and Migration Corridors. Duties include, but are not limited to:
A. Assessing and quantifying implementation of E.O. 13443, E.O. 14008, and Secretarial Order 3362 across relevant departments, agencies, and offices and making recommendations to enhance and expand their implementation as identified;
B. Making recommendations regarding policies and programs that accomplish the following objectives:
1. Conserve and restore wetlands, grasslands, forests, and other important wildlife habitats, and improve management of rangelands and agricultural lands to benefit wildlife;
2. Promote opportunities for fair chase hunting and safe recreational shooting sports and wildlife-associated recreation on public and private lands; encourage hunting and recreational shooting sports safety, including by developing sighting-in ranges on public lands; recruit and retain hunters; and increase public awareness of the importance of wildlife conservation and the social and economic benefits of fair chase hunting, safe recreational shooting sports, and wildlife-associated recreation; and
3. Encourage coordination among the public; the hunting and shooting sports communities; wildlife conservation groups; wildlife-associated recreation interests; and Federal, State, Tribal, and territorial governments.
The Council will meet at least two times per year.
Fish and Wildlife Service, Interior.
Notice of receipt of permit applications; request for comments.
We, the U.S. Fish and Wildlife Service, invite the public to comment on applications to conduct certain activities with foreign species that are listed as endangered under the Endangered Species Act (ESA). With some exceptions, the ESA prohibits activities with listed species unless Federal authorization is issued that allows such activities. The ESA also requires that we invite public comment before issuing permits for any activity otherwise prohibited by the ESA with respect to any endangered species.
We must receive comments by March 27, 2024.
•
•
For more information, see Public Comment Procedures under
Timothy MacDonald, by phone at 703-358-2185 or via email at
We invite the public and local, State, Tribal, and Federal agencies to comment on applications. Before issuing any of the requested permits, we will take into consideration any information that we receive during the public comment period.
You may submit your comments and materials by one of the methods in
When submitting comments, please specify the name of the applicant and the permit number at the beginning of your comment. Provide sufficient information to allow us to authenticate any scientific or commercial data you include. The comments and recommendations that will be most useful and likely to influence agency decisions are: (1) Those supported by quantitative information or studies; and (2) those that include citations to, and analyses of, the applicable laws and regulations.
You may view and comment on others' public comments at
If you submit a comment at
To help us carry out our conservation responsibilities for affected species, and in consideration of section 10(c) of the Endangered Species Act of 1973, as amended (ESA; 16 U.S.C. 1531
The applicant requests a permit to import a specimen derived from a rhinoceros species (
The applicant requests a permit to re-export two live, captive-born horned guans (
The applicant requests authorization to import biological samples from wild or captive-born populations of cheetah (
After the comment period closes, we will make decisions regarding permit issuance. If we issue permits to any of the applicants listed in this notice, we will publish a notice in the
We issue this notice under the authority of the Endangered Species Act of 1973, as amended (16 U.S.C. 1531
U.S. Geological Survey, Department of the Interior
Notice.
In accordance with the Federal Advisory Committee Act (FACA) of 1972, the U.S. Geological Survey (USGS) is establishing and seeking nominations for the Advisory Committee for Science Quality and Integrity (Committee). The Committee will advise the Secretary of the Interior and the Director of the USGS on matters related to the responsibilities of the USGS Office of Science Quality and Integrity (OSQI) including monitoring and enhancing the integrity, quality, and health of all USGS science through
Comments regarding the establishment of this Committee must be submitted no later than March 12, 2024. Nominations for the Committee must be submitted by April 11, 2024.
You may submit comments and/or nominations by any of the following methods: Mail comments and/or nominations to Joanne C. Taylor, U.S. Geological Survey, Office of Science Quality and Integrity, 12201 Sunrise Valley Drive, Mailstop 911, Reston, VA 20192; or email comments and/or nominations to
Joanne C. Taylor, Designated Federal Officer (DFO), by U.S. mail at the U.S. Geological Survey, 12201 Sunrise Valley Drive, Mailstop 911, Reston, VA 20192; by telephone at 703-648-6837; or by email at
The Committee is established under the authority of the Secretary of the Interior (Secretary) and regulated by the Federal Advisory Committee Act, as amended (5 U.S.C. ch. 10). The Committee's duties are strictly advisory and will include advising on: (a) Identification of key scientific quality and integrity processes to advance the USGS mission. (b) Effective mechanisms for engaging the next-generation USGS workforce and others through the YES program and with other Federal agencies in STEM and underserved communities. (c) The nature and effectiveness of mechanisms to provide oversight of science quality within USGS laboratories. (d) Mechanisms that may be employed by the USGS to ensure high standards of science quality and integrity in its programs and products.
The Committee will meet approximately one to two times per year. The Committee will consist of no more than 15 members appointed by the Secretary who represent the diversity of this nation's constituencies, and include the following interests:
• Local and State governments;
• Non-governmental organizations;
• Native American, Native Alaskan, and Native Hawaiian organizations, including representatives from Tribal governments and Tribal colleges;
• Academia; and
• Other stakeholders and sectors, including private industry, that make use of USGS science including, but not limited to, areas including laboratory sciences, natural resource managers, natural hazards protections, and wildlife organizations.
The Committee may include scientific experts and will include rotating representation from one or more local, Tribal, State, regional, and/or national organizations.
Nominations should include a resume providing an adequate description of the nominee's qualifications, including information that would enable the Department of the Interior (DOI) to make an informed decision regarding meeting the membership requirements of the Committee and to permit a potential member to be contacted.
Members of the Committee serve without compensation. However, while away from their homes or regular places of business, Committee and subcommittee members engaged in Committee or subcommittee business that the DFO approves may be allowed travel expenses, including per diem in lieu of subsistence, as authorized by 5 U.S.C. 5703, in the same manner as persons employed intermittently in Federal Government service.
Office of the Secretary, Interior.
Notice of proposed policy revisions.
This notice announces the intent to revise the Bureau of Land Management's (BLM) policies and procedures for compliance with the National Environmental Policy Act (NEPA), as amended, various Executive Orders, and the Council on Environmental Quality's NEPA Implementing Regulations by proposing to remove four administratively established categorical exclusions (CXs) and to incorporate two CXs established by Congress.
Comments must be postmarked no later than March 27, 2024.
The public can review the proposed changes to the Departmental Manual (DM) online BLM's ePlanning site:
Heather Bernier, Division Chief, Decision Support, Planning, and NEPA, at (303) 239-3635, or
The BLM is proposing to revise its NEPA procedures. Specifically, BLM is proposing to revise the list of BLM actions that are normally categorically excluded from the requirement to
The BLM proposes to remove four administrative CXs from its NEPA procedures. Given the complexity of land management, legal frameworks, and other factors, the BLM is considering the removal of the CXs described in 516 DM 11.C(10) regarding the salvaging of dead and dying trees; 516 DM 11.D(10) regarding vegetation management activities; 516 DM 11.D(11) regarding issuance of livestock grazing permits or leases; and 516 DM 11.J(1) regarding certain activities within sagebrush and sagebrush-steppe plant communities to manage pinyon pine and juniper trees for the benefit of mule deer or sage-grouse habitats. Removing these CXs would require the BLM to assess whether another CX applies or prepare an EA or EIS when proposing actions that would have previously been covered by these CXs. BLM previously discontinued use of these CXs through instruction memoranda (IM) (available online at
Additionally, the BLM proposes to incorporate two CXs established by Congress in the Infrastructure Investment and Jobs Act (Pub. L. 117-58). Section 11318 established a CX for sundry notices or rights-of-way for gathering lines and associated field compression or pumping units on Federal land servicing oil and gas wells under the conditions described therein. Section 40806 excludes forest management activities for the establishment of fuel breaks in forests and other wildland vegetation from preparation of an EA or EIS under NEPA, as described therein.
Below outlines the proposed changes to the text of 516 DM Chapter 11, reflecting the addition of the statutorily established CXs and deletion of the administrative CXs proposed. Because the new CXs were established by Congress, the BLM does not have the discretion to change their terms. A redline version is available for review at the website identified in the
C.
(10) Reserved
D.
(10) Reserved
(11) Reserved
J.
D. Section 11318 of the Infrastructure Investment and Jobs Act (Pub. L. 117-58) established a CX as defined in 40 CFR part 1508 for sundry notices or rights-of-way for gathering lines and associated field compression or pumping units on Federal land servicing oil and gas wells under the conditions described below. Application of this CX requires extraordinary circumstances review consistent with 43 CFR 46.215.
Section 11318. CERTAIN GATHERING LINES LOCATED ON FEDERAL LAND AND INDIAN LAND of the Infrastructure Investment and Jobs Act provides:
(a) Definitions.—In this section:
(1) Federal land.—
(A) In general.—The term ”Federal land” means land the title to which is held by the United States.
(B) Exclusions.—The term ”Federal land” does not include—
(i) a unit of the National Park System;
(ii) a unit of the National Wildlife Refuge System;
(iii) a component of the National Wilderness Preservation System;
(iv) a wilderness study area within the National Forest System; or
(v) Indian land
(2) Gathering line and associated field compression or pumping unit.—
(A) In general.—The term ”gathering line and associated field compression or pumping unit” means—
(i) a pipeline that is installed to transport oil, natural gas and related constituents, or produced water from 1 or more wells drilled and completed to produce oil or gas;
(ii) if necessary, 1 or more compressors or pumps to raise the pressure of the transported oil, natural gas and related constituents, or produced water to higher pressures necessary to enable the oil, natural gas and related constituents, or produced water to flow into pipelines and other facilities; and
(iii) if necessary, cathodic protection ancillary to the line.
(B) Inclusions.—The term ”gathering line and associated field compression or pumping unit” includes a pipeline and its cathodic protection as needed, or associated compression or pumping unit that is installed to transport oil or natural gas from a processing plant to a common carrier pipeline or facility.
(C) Exclusions.—The term ”gathering line and associated field compression or pumping unit” does not include a common carrier pipeline.
(3) Indian land.—The term ”Indian land” means land the title to which is held by—
(A) the United States in trust for an Indian Tribe or an individual Indian; or
(B) an Indian Tribe or an individual Indian subject to a restriction by the United States against alienation.
(4) Produced water.—The term “produced water” means water produced from an oil or gas well bore that is not a fluid prepared at, or transported to, the well site to resolve a specific oil or gas well bore or reservoir condition.
(5) Secretary.—The term ”Secretary” means the Secretary of the Interior.
(b) Certain Gathering Lines.—
(1) In general.—Subject to paragraph (2), the issuance of a sundry notice or right-of-way for a gathering line and associated field compression or pumping unit that is located on Federal land or Indian land and that services any oil or gas well may be considered by the Secretary to be an action that is categorically excluded (as defined in section 1508.1 of title 40, Code of Federal Regulations (as in effect on the date of enactment of this Act)) for purposes of the National Environmental Policy Act of 1969 (42 U.S.C. 4321
(A) are within a field or unit for which an approved land use plan or an environmental document prepared pursuant to the National Environmental Policy Act of 1969 (42 U.S.C. 4321
(B) are located adjacent to or within—
(i) any existing disturbed area; or
(ii) an existing corridor for a right-of-way; and
(C) would reduce—
(i) in the case of a gathering line and associated field compression or pumping unit transporting methane, the total quantity of methane that would otherwise be vented, flared, or unintentionally emitted from the field or unit; or
(ii) in the case of a gathering line and associated field compression or pumping unit not transporting methane, the vehicular traffic that would otherwise service the field or unit.
(2) Applicability.—Paragraph (1) shall apply to Indian land, or a portion of Indian land—
(A) to which the National Environmental Policy Act of 1969 (42 U.S.C. 4321
(B) for which the Indian Tribe with jurisdiction over the Indian land submits to the Secretary a written request that paragraph (1) apply to that Indian land (or portion of Indian land).
(c) Effect on Other Law.—Nothing in this section—
(1) affects or alters any requirement—
(A) relating to prior consent under—
(i) section 2 of the Act of February 5, 1948 (62 Stat.18, chapter 45; 25 U.S.C. 324); or
(ii) section 16(e) of the Act of June 18, 1934 (48 Stat. 987, chapter 576; 102 Stat. 2939; 114 Stat. 47; 25 U.S.C. 5123(e)) (commonly known as the “Indian Reorganization Act”);
(B) under section 306108 of title 54, United States Code; or
(C) under any other Federal law (including regulations) relating to Tribal consent for rights-of-way across Indian land; or
(2) makes the National Environmental Policy Act of 1969 (42 U.S.C. 4321
E. Section 40806 of the Infrastructure Investment and Jobs Act (Pub. L. 117-58) excludes forest management activities for the establishment of fuel breaks in forests and other wildland vegetation from preparation of an EA or EIS under NEPA, as described below.
Section 40806. ESTABLISHMENT OF FUEL BREAKS IN FORESTS AND OTHER WILDLAND VEGETATION of the Infrastructure Investment and Jobs Act provides:
(a) DEFINITION OF SECRETARY CONCERNED.—In this section, the term “Secretary concerned” means—
(1) the Secretary of Agriculture, with respect to National Forest System land; and
(2) the Secretary of the Interior, with respect to public lands (as defined in section 103 of the Federal Land Policy and Management Act of 1976 (43 U.S.C. 1702)) administered by the Bureau of Land Management.
(b) CATEGORICAL EXCLUSION ESTABLISHED.—Forest management activities described in subsection (c) are a category of actions designated as being categorically excluded from the preparation of an environmental assessment or an environmental impact statement under the National Environmental Policy Act of 1969 (42 U.S.C. 4321
(c) FOREST MANAGEMENT ACTIVITIES DESIGNATED FOR CATEGORICAL EXCLUSION.—
(1) IN GENERAL.—The category of forest management activities designated under subsection (b) for a categorical exclusion are forest management activities described in paragraph (2) that are carried out by the Secretary concerned on public lands (as defined in section 103 of the Federal Land Policy and Management Act of 1976 (43 U.S.C. 1702)) administered by the Bureau of Land Management or National Forest System land the primary purpose of which is to establish and maintain linear fuel breaks that are—
(A) up to 1,000 feet in width contiguous with or incorporating existing linear features, such as roads, water infrastructure, transmission and distribution lines, and pipelines of any length on Federal land; and
(B) intended to reduce the risk of uncharacteristic wildfire on Federal land or catastrophic wildfire for an adjacent at-risk community.
(2) ACTIVITIES.—Subject to paragraph (3), the forest management activities that may be carried out pursuant to the categorical exclusion established under subsection (b) are—
(A) mowing or masticating;
(B) thinning by manual and mechanical cutting;
(C) piling, yarding, and removal of slash or hazardous fuels;
(D) selling of vegetation products, including timber, firewood, biomass, slash, and fenceposts;
(E) targeted grazing;
(F) application of—
(i) pesticide;
(ii) biopesticide; or
(iii) herbicide;
(G) seeding of native species;
(H) controlled burns and broadcast burning; and
(I) burning of piles, including jackpot piles.
(3) EXCLUDED ACTIVITIES.—A forest management activity described in paragraph (2) may not be carried out pursuant to the categorical exclusion established under subsection (b) if the activity is conducted—
(A) in a component of the National Wilderness Preservation System;
(B) on Federal land on which the removal of vegetation is prohibited or restricted by Act of Congress, Presidential proclamation (including the applicable implementation plan), or regulation;
(C) in a wilderness study area; or
(D) in an area in which carrying out the activity would be inconsistent with the applicable land management plan or resource management plan.
(4) EXTRAORDINARY CIRCUMSTANCES.—The Secretary concerned shall apply the extraordinary circumstances procedures under section 220.6 of title 36, Code of Federal Regulations (or a successor regulation), in determining whether to use a categorical exclusion under subsection (b).
(d) ACREAGE AND LOCATION LIMITATIONS.—Treatments of vegetation in linear fuel breaks covered by the categorical exclusion established under subsection (b)—
(1) may not contain treatment units in excess of 3,000 acres;
(2) shall be located primarily in—
(A) the wildland-urban interface or a public drinking water source area;
(B) if located outside the wildland-urban interface or a public drinking water source area, an area within Condition Class 2 or 3 in Fire Regime Group I, II, or III that contains very high wildfire hazard potential; or
(C) an insect or disease area designated by the Secretary concerned as of the date of enactment of this Act; and
(3) shall consider the best available scientific information.
(e) ROADS.—
(1) PERMANENT ROADS.—A project under this section shall not include the establishment of permanent roads.
(2) EXISTING ROADS.—The Secretary concerned may carry out necessary maintenance and repairs on existing permanent roads for the purposes of this section.
(3) TEMPORARY ROADS.—The Secretary concerned shall decommission any temporary road constructed under a project under this section not later than 3 years after the date on which the project is completed.
(f) PUBLIC COLLABORATION.—To encourage meaningful public participation during the preparation of a project under this section, the Secretary concerned shall facilitate, during the preparation of each project—
(1) collaboration among State and local governments and Indian Tribes; and
(2) participation of interested persons.
Bureau of Land Management, Interior.
Notice of availability.
The Bureau of Land Management (BLM) announces the availability of the Record of Decision (ROD) for the Approved Resource Management Plan (RMP) Amendment for the Southeastern Oregon RMP, located in the BLM's Vale District. The State Director, Oregon/Washington signed the ROD on February 16, 2024, which constitutes the decision of the BLM and makes the Approved RMP Amendment effective immediately.
The State Director, Oregon/Washington signed the ROD/Approved RMP Amendment on February 16, 2024.
The ROD/Approved RMP Amendment is available online at the BLM National NEPA Register at
A copy of the Protest Resolution Report is available at:
Caryn Burri, Planning and Environmental Coordinator, Vale District Office; telephone: (541) 473-3144; email:
The Approved RMP Amendment amends the existing 2002 Southeastern Oregon RMP. The Southeastern Oregon planning area covers approximately 4.6 million acres of public lands in Malheur, Grant, Harney, and Baker Counties. The Approved RMP Amendment provides management direction for lands with wilderness characteristics; makes planning-area-wide travel and transportation/off-highway vehicle (OHV) allocations of open, limited, and closed; and provides management direction for livestock grazing in areas that fail to meet the BLM's Standards for Rangeland Health and for processing voluntary livestock grazing permit relinquishments.
The Approved RMP Amendment prioritizes the protection of 33 of the 76 areas the BLM identifies as having wilderness characteristics. The 33 protected areas will be managed as: Visual Resource Management Class II public lands, which only allows for low levels of change to the landscapes' visual character; Land Tenure Zone 1, where the BLM retains the lands in public ownership for the life of the RMP; OHV limited; and exclusion areas for major rights-of-way and commercial renewable energy projects. No surface occupancy for the development and extraction of leasable and saleable minerals, including new mineral material sites, within the protected areas is allowed. Where roads form the boundary of a protected wilderness characteristic unit, a 250-foot management setback is established. The setback areas total 9,247 acres.
Under the Approved RMP Amendment, two areas totaling 40,368 acres near the city of Vale, Oregon, will be managed as open to OHV use; 319,501 acres currently classified as open will be designated as limited to existing routes, resulting in a total 4.5 million acres of limited OHV classification in the planning area; and 15,829 acres closed to OHV use will remain closed.
The Approved RMP Amendment: (1) requires the BLM to consider taking action in areas that are not meeting Standards for Rangeland Health even if existing livestock grazing is not a causal factor for non-attainment of the standard; (2) clarifies that the BLM will not permit increases to animal unit months if analysis finds that doing so could cause negative impacts to other resources in an area where there is either no rangeland health assessment and evaluation or if the evaluation no longer represents the existing resource conditions; and (3) requires the BLM to review the suitability and compatibility of livestock grazing use with other existing resources in the permitted area when a voluntary permit relinquishment is received. If livestock grazing is found to be unsuitable and/or incompatible, the area will become unavailable to grazing and the forage allocation will be made to another resource. If grazing is found to be suitable and/or compatible, then the allocation of forage to livestock grazing use would remain in place. The BLM could authorize grazing use for the area under a grazing permit or designate the area as a reserve common allotment.
The BLM provided the Proposed RMP Amendment/Final Environmental Impact Statement (PRMPA/FEIS) for a 30-day public protest period starting on June 16, 2023, and received two valid protests. The BLM Assistant Director for Resources and Planning resolved both protests. Responses to protest issues were compiled and documented in a Protest Resolution Report (see
The BLM provided the PRMPA/FEIS to the Governor of Oregon for a 60-day Governor's consistency review on June 16, 2023. The Governor's Office identified some concerns and potential inconsistencies between the PRMPA and State and local plans, policies, and programs. The BLM discussed the concerns with the Governor's Office and, in response, made minor clarifications in the Approved RMP Amendment regarding how lands with wilderness characteristics that are not prioritized for protection will be managed and the way in which BLM manages Wilderness Study Areas that are released from consideration for Wilderness designation by Congress. The clarifications made to the Approved RMP Amendment in response to both the issues raised in one of the protests received and the Oregon Governor's consistency review were minor and did not represent a change requiring the BLM to provide the public with an opportunity to comment as discussed in 43 CFR 1610.2(f)(5) and 1610.5-1.
National Indian Gaming Commission, Interior.
Second Notice of New Information Collection; request for comments.
In accordance with the Paperwork Reduction Act of 1995 (PRA), the National Indian Gaming Commission (NIGC or Commission) is providing notice that it is requesting, concurrently with the publication of this notice or soon thereafter, for the Office of Management and Budget (OMB) to review and approve a new information collection.
The OMB has up to 60 days to approve or disapprove information collection requests, but may respond after 30 days. Therefore, public comments should be submitted to OMB by no later than March 27, 2024, in order to be assured of consideration.
Submit comments directly to OMB's Office of Information and Regulatory Affairs, Attn: Policy Analyst/Desk Officer for the National Indian Gaming Commission. Comments can also be emailed to <
For further information, including copies of the proposed collections of information and supporting documentation, contact Tim Osumi by email at
The Indian Gaming Regulatory Act (IGRA), Public Law 100-497, 25 U.S.C. 2701,
Although CHRI checks are integral to the tribal KE/PMO applicant licensing process, tribes do not possess the necessary statutory authority to directly access FBI CHRI for this purpose. The NIGC, as a Federal agency empowered under the IGRA to access CHRI (§§ 2706(b)(3) & (7), 2708), accepts tribal fingerprint submissions and transmits them to the FBI for this purpose. In return, the FBI provides CHRI check results to the NIGC and the NIGC shares these results with the requesting tribe. In this process, the NIGC assumes the role of a CJIS (Criminal Justice Information Services) Systems Agency (CSA), a duly authorized agency on the CJIS network that provides service to criminal justice users with respect to the criminal justice information (from the various systems managed by the Federal Bureau of Investigations (FBI) CJIS Division.
The roles and responsibilities under which the NIGC, FBI, and tribes process CHRI checks are memorialized in Memoranda of Understanding between the FBI and the NIGC and between the NIGC and each requesting tribe. One such responsibility is to monitor the dissemination of CHRI to ensure FBI-compliant privacy and security standards are followed. This responsibility is detailed in FBI CJIS Security Policy, Policy Area 11 (CJISSECPOL 5.11.2) which specifies that the NIGC, as a CSA, is required to establish a process to periodically audit tribes that receive CHRI to ensure compliance with applicable statutes, regulations and policies. To fulfill this obligation, the NIGC has established a CJIS Audit Unit (CAU), which is tasked with coordinating with tribal authorities to ensure that NIGC-disseminated CHRI is handled and managed in accordance with applicable statutes, regulations, and policies.
In performing its oversight duties, the CAU will deploy questionnaires to gather information. This information will be used to assess and document tribal compliance with privacy and security standards and will enable the CAU to identify information management risk factors that may require remediation. Responding to this information collection is voluntary, however, failure to collect this information may impair the NIGC's ability to fulfill its obligations under its MOUs with the FBI and its tribal partners. Indeed, this information collection is a vital tool for the NIGC CAU to perform its function and helps to ensure that the NIGC can continue to support the successful tribal operation of tribal gaming under the IGRA.
The collection involves questions that seek information about tribal security and privacy protections governing the processing, handling, and storing of NIGC-disseminated CHRI. The questions closely track the FBI's standard CJIS compliance questionnaires but have been streamlined and adapted to tribal specific standards. The information collected is related to information policies, procedures, and system configurations and includes some type and amount of measurable evidence that confirms their proper implementation.
National Park Service, Interior.
Notice.
In accordance with the Native American Graves Protection and Repatriation Act (NAGPRA), the U.S. Department of Agriculture, Forest Service, Allegheny National Forest intends to repatriate certain cultural items that meet the definition of objects of cultural patrimony and that have a cultural affiliation with the Indian Tribes or Native Hawaiian organizations in this notice.
Repatriation of the cultural items in this notice may occur on or after March 27, 2024.
Jamie Davidson, United States Forest Service, Allegheny National Forest, 4 Farm Colony Drive, Warren, PA 16365, telephone (814) 728-6299, email
This notice is published as part of the National Park Service's administrative responsibilities under NAGPRA. The determinations in this notice are the sole responsibility of the Allegheny National Forest. The National Park Service is not responsible for the determinations in this notice. Additional information on the determinations in this notice, including the results of consultation, can be found in the summary or related records held by the Allegheny National Forest.
The three cultural items were gifted to the Allegheny National Forest at an unknown date for display in the Bradford Ranger District office by a contemporary artist enrolled with the Seneca Nation of Indians and named on an accompanying plaque. The cultural items were displayed for an unknown period of time and later removed from display and placed in storage. This occurred at an unknown time but prior to 2018. The three items are carved false-face masks. They were carved from white pine and each one is approximately one foot wide and two feet in height.
The cultural items in this notice are connected to one or more identifiable earlier groups, tribes, peoples, or cultures. There is a relationship of shared group identity between the identifiable earlier groups, tribes, peoples, or cultures and one or more Indian Tribes or Native Hawaiian organizations. The following types of information were used to reasonably trace the relationship: other relevant information.
Pursuant to NAGPRA and its implementing regulations, and after consultation with the appropriate Indian Tribes and Native Hawaiian organizations, the Allegheny National Forest has determined that:
• The three cultural items described above have ongoing historical, traditional, or cultural importance central to the Native American group or culture itself, rather than property owned by an individual.
• There is a relationship of shared group identity that can be reasonably traced between the cultural items and the Seneca Nation of Indians.
Additional, written requests for repatriation of the cultural items in this notice must be sent to the Responsible Official identified in
Repatriation of the cultural items in this notice to a requestor may occur on or after March 27, 2024. If competing requests for repatriation are received, the Allegheny National Forest must determine the most appropriate requestor prior to repatriation. Requests for joint repatriation of the cultural items are considered a single request and not competing requests. The Allegheny National Forest is responsible for sending a copy of this notice to the Indian Tribes and Native Hawaiian organizations identified in this notice.
This notice was submitted before the effective date of the revised regulations (88 FR 86452, December 13, 2023, effective January 12, 2024). As the notice conforms to the mandatory format of the
National Park Service, Interior.
Notice.
In accordance with the Native American Graves Protection and Repatriation Act (NAGPRA), SUNY Broome Community College has completed an inventory of human remains and associated funerary objects and has determined that there is a cultural affiliation between the human remains and associated funerary objects and Indian Tribes or Native Hawaiian organizations in this notice. The human remains and associated funerary objects were removed from the region of Fort Ancient archeological culture (the Upper Ohio River drainage) including parts of the current states of Ohio, Indiana, West Virginia, and Kentucky.
Repatriation of the human remains and associated funerary objects in this notice may occur on or after March 27, 2024.
Harold Koster, Ph.D., SUNY Broome Community College, Professor Emeritus, NAGPRA Coordinator, SUNY Broome Community College, 907 Front Street, Binghamton, NY 13905, telephone (607) 692-4232, email
This notice is published as part of the National Park Service's administrative responsibilities under NAGPRA. The determinations in this notice are the sole responsibility of SUNY Broome Community College. The National Park Service is not responsible for the determinations in this notice. Additional information on the determinations in this notice, including the results of consultation, can be found in the inventory or related records held by SUNY Broome Community College.
Human remains representing, at minimum two individuals, were
The collection was donated to the Susquehanna River Archaeological Center (SRAC), Waverly, New York in 2012. The collection was subsequently donated to SUNY Broome Community College by SRAC to be used as a teaching collection. Deb Twigg, the co-founder, and executive director of SRAC, identified the human remains as being a donation collected in the 20th century in the Ohio, Indiana, Kentucky, or West Virginia region. The collection, which was referred to as the Les Rolfe/Libold Collection, was reportedly donated to SRAC by the family of unidentified deceased collectors. No provenience or location information was provided with the collection, nor was any notice included of any human remains present in the collection. The collection was received in 31 buckets with slips of paper marked “Lee” or “Davis.”
The collection includes, at minimum, the human remains of two Ancestors, a juvenile of undetermined sex, aged 7-10 years, based on dentition, and an adult of undetermined sex. No known individuals were identified. There are 13 teeth, one foot, and two hand phalanges associated with the juvenile. There are five teeth, a maxillary fragment, one foot, and three hand phalanges associated with the adult. Identifications were made by professional anthropologists at SUNY Broome Community College and by a professional osteologist at Binghamton University.
The 3,514 associated funerary objects are 949 pottery sherds and assorted ceramics; 964 lithic tools, flakes, cores and assorted stone; three unidentified minerals; 683 freshwater bivalve shells; six shell hoes with drilled holes; five modified bones/shells; 19 turtle carapaces/fragments; one elk cranium; 775 large and small mammal bones; 76 fish bones; nine bird bones; three pieces of charcoal; 10 lots of carbonized maize cobs, seeds, nuts and wood; one nut; one piece of unidentified wood; three pieces of glass; one metal buckle; two broken metal spoons; one large metal nail; one metal spike; and one unidentified metal fragment.
The human remains and associated funerary objects in this notice are connected to one or more identifiable earlier groups, tribes, peoples, or cultures. There is a relationship of shared group identity between the identifiable earlier groups, tribes, peoples, or cultures and one or more Indian Tribes or Native Hawaiian organizations. The following types of information were used to reasonably trace the relationship: anthropological information, archeological information, geographical information, biological information, historical information, and oral tradition.
Pursuant to NAGPRA and its implementing regulations, and after consultation with the appropriate Indian Tribes and Native Hawaiian organizations, SUNY Broome Community College has determined that:
• The human remains described in this notice represent the physical remains of two individuals of Native American ancestry.
• The 3,514 objects described in this notice are reasonably believed to have been placed with or near individual human remains at the time of death or later as part of the death rite or ceremony.
• There is a relationship of shared group identity that can be reasonably traced between the human remains and associated funerary objects described in this notice and the Delaware Nation, Oklahoma; Forest County Potawatomi Community, Wisconsin; Little Traverse Bay Bands of Odawa Indians, Michigan; Match-e-be-nash-she-wish Band of Pottawatomi Indians of Michigan; Miami Tribe of Oklahoma; Prairie Band Potawatomi Nation; Pokagon Band of Potawatomi Indians, Michigan and Indiana; Saginaw Chippewa Indian Tribe of Michigan; and the Shawnee Tribe.
Written requests for repatriation of the human remains and associated funerary objects in this notice must be sent to the Responsible Official identified in
1. Any one or more of the Indian Tribes or Native Hawaiian organizations identified in this notice.
2. Any lineal descendant, Indian Tribe, or Native Hawaiian organization not identified in this notice who shows, by a preponderance of the evidence, that the requestor is a lineal descendant or a culturally affiliated Indian Tribe or Native Hawaiian organization.
Repatriation of the human remains and associated funerary objects in this notice to a requestor may occur on or after March 27, 2024. If competing requests for repatriation are received, SUNY Broome Community College must determine the most appropriate requestor prior to repatriation. Requests for joint repatriation of the human remains and associated funerary objects are considered a single request and not competing requests. SUNY Broome Community College is responsible for sending a copy of this notice to the Indian Tribes and Native Hawaiian organizations identified in this notice.
This notice was submitted before the effective date of the revised regulations (88 FR 86452, December 13, 2023, effective January 12, 2024). As the notice conforms to the mandatory format of the
National Park Service, Interior.
Notice.
In accordance with the Native American Graves Protection and Repatriation Act (NAGPRA), the James B. and Rosalyn L. Pick Museum of Anthropology at Northern Illinois University (Pick Museum) intends to repatriate a cultural item that meets the definition of a sacred object and that has a cultural affiliation with the Indian Tribes or Native Hawaiian organizations in this notice.
Repatriation of the cultural item in this notice may occur on or after March 27, 2024.
Dr. Christy DeLair, Museum Director, James B. and Rosalyn L. Pick Museum of Anthropology at Northern Illinois University, 1425 W Lincoln Hwy., DeKalb, IL 60015, telephone (815) 753-0230, email
This notice is published as part of the
In 1969, the Pick Museum purchased a medicine face mask (catalog no. 69-27-50) from Kohlberg's in Denver, CO. The Pick Museum records identify the medicine face as Seneca. The medicine face mask is a sacred object.
The cultural item in this notice is connected to one or more identifiable earlier groups, tribes, peoples, or cultures. There is a relationship of shared group identity between the identifiable earlier groups, tribes, peoples, or cultures and one or more Indian Tribes or Native Hawaiian organizations. The following types of information were used to reasonably trace the relationship: anthropological information, historical information, oral tradition, and expert opinion.
Pursuant to NAGPRA and its implementing regulations, and after consultation with the appropriate Indian Tribes and Native Hawaiian organizations, the Pick Museum has determined that:
• The one cultural item described above is a specific ceremonial object needed by traditional Native American religious leaders for the practice of traditional Native American religions by their present-day adherents.
• There is a relationship of shared group identity that can be reasonably traced between the cultural item and the Tonawanda Band of Seneca.
Additional, written requests for repatriation of the cultural item in this notice must be sent to the Responsible Official identified in
Repatriation of the cultural item in this notice to a requestor may occur on or after March 27, 2024. If competing requests for repatriation are received, the Pick Museum must determine the most appropriate requestor prior to repatriation. Requests for joint repatriation of the cultural item are considered a single request and not competing requests. The Pick Museum is responsible for sending a copy of this notice to the Indian Tribe identified in this notice.
This notice was submitted before the effective date of the revised regulations (88 FR 86452, December 13, 2023, effective January 12, 2024). As the notice conforms to the mandatory format of the
National Park Service, Interior.
Notice.
In accordance with the Native American Graves Protection and Repatriation Act (NAGPRA), the Peabody Museum of Archaeology and Ethnology, Harvard University (PMAE) has completed an inventory of human remains and associated funerary objects and has determined that there is a cultural affiliation between the human remains and associated funerary objects and Indian Tribes or Native Hawaiian organizations in this notice. The human remains and associated funerary objects were removed from Cross and Poinsett Counties, AR.
Repatriation of the human remains and associated funerary objects in this notice may occur on or after March 27, 2024.
Patricia Capone, PMAE, Harvard University, 11 Divinity Avenue, Cambridge, MA 02138, telephone (617) 496-3702, email
This notice is published as part of the National Park Service's administrative responsibilities under NAGPRA. The determinations in this notice are the sole responsibility of the PMAE. The National Park Service is not responsible for the determinations in this notice. Additional information on the determinations in this notice, including the results of consultation, can be found in the inventory or related records held by the PMAE.
Human remains representing, at minimum, seven individuals were removed from Stanley Mounds, also known as the Parkin Site (state site number 3CS29; Parkin Phase) in Cross County, AR in 1879 as part of a Peabody Museum of Archaeology and Ethnology expedition led by Edwin Curtiss. The 42 associated funerary objects include: 39 lots consisting of ceramic vessel or vessel fragments and three lots consisting of faunal items.
Human remains representing, at minimum, 10 individuals were removed from Fortune Mounds (state site number 3CS71; Parkin Phase) in Cross County, AR in 1880 as part of a Peabody Museum of Archaeology and Ethnology expedition led by Edwin Curtiss. The 16 associated funerary objects include 11 lots consisting of ceramic vessel or vessel fragments; one lot consisting of copper items; and four lots consisting of faunal items.
Human remains representing, at minimum, three individuals were removed from Halcomb's Mounds (state site number 3CS28; Parkin Phase) in Cross County, AR in 1880 as part of a Peabody Museum of Archaeology and Ethnology expedition led by Edwin Curtiss. The two associated funerary objects include one lot consisting of ceramic vessel or vessel fragments, and one lot consisting of a copper item.
Human remains representing, at minimum, 54 individuals were removed from Neeley's Ferry Mounds (state site number 3CS24; Parkin Phase) in Cross County, AR in 1880 as part of a Peabody Museum of Archaeology and Ethnology expedition led by Edwin Curtiss. The 66 associated funerary objects include: one lot consisting of ceramic items; 53 lots consisting of ceramic vessel or vessel fragments; eight lots consisting of faunal items; one lot consisting of red pigment; two lots consisting of stone items; and one lot consisting of stone or coal fragment.
Human remains representing, at minimum, two individuals were
Human remains representing, at minimum, 52 individuals were removed from Rose Mound (state site number 3CS27; Parkin Phase) in Cross County, AR in 1880 as part of a Peabody Museum of Archaeology and Ethnology expedition led by Edwin Curtiss. The 73 associated funerary objects include: one lot consisting of a ceramic item(s); 51 lots consisting of ceramic vessel or vessel fragments; one lot consisting of a clay item; one lot consisting of a copper item; 13 lots consisting of faunal items; and six lots consisting of stone items.
Human remains representing, at minimum, one individual was removed from Hazel (state site number 3PO6) in Poinsett County, AR in 1970 by Jeffry P. Brain and Stephen Williams as part of the Lower Mississippi Survey Expedition. At that time, the Survey Expedition was a project of Harvard University. No associated funerary objects are present.
The human remains and associated funerary objects in this notice are connected to one or more identifiable earlier groups, tribes, peoples, or cultures. There is a relationship of shared group identity between the identifiable earlier groups, tribes, peoples, or cultures and one or more Indian Tribes or Native Hawaiian organizations. The following types of information were used to reasonably trace the relationship: anthropological information, archeological information, biological information, folklore, geographical information, historical information, kinship, linguistics, oral tradition, other relevant information, or expert opinion.
Pursuant to NAGPRA and its implementing regulations, and after consultation with the appropriate Indian Tribes and Native Hawaiian organizations, the PMAE has determined that:
• The human remains described in this notice represent the physical remains of 129 individuals of Native American ancestry.
• The 201 objects described in this notice are reasonably believed to have been placed with or near individual human remains at the time of death or later as part of the death rite or ceremony.
• There is a relationship of shared group identity that can be reasonably traced between the human remains and associated funerary objects described in this notice and the Quapaw Nation.
Written requests for repatriation of the human remains and associated funerary objects in this notice must be sent to the Responsible Official identified in
1. Any one or more of the Indian Tribes or Native Hawaiian organizations identified in this notice.
2. Any lineal descendant, Indian Tribe, or Native Hawaiian organization not identified in this notice who shows, by a preponderance of the evidence, that the requestor is a lineal descendant or a culturally affiliated Indian Tribe or Native Hawaiian organization.
Repatriation of the human remains and associated funerary objects in this notice to a requestor may occur on or after March 27, 2024. If competing requests for repatriation are received, the PMAE must determine the most appropriate requestor prior to repatriation. Requests for joint repatriation of the human remains and associated funerary objects are considered a single request and not competing requests. The PMAE is responsible for sending a copy of this notice to the Indian Tribes and Native Hawaiian organizations identified in this notice.
This notice was submitted before the effective date of the revised regulations (88 FR 86452, December 13, 2023, effective January 12, 2024). As the notice conforms to the mandatory format of the
National Park Service, Interior.
Notice.
In accordance with the Native American Graves Protection and Repatriation Act (NAGPRA), the Ohio History Connection has completed an inventory of human remains and associated funerary objects and has determined that there is a cultural affiliation between the human remains and associated funerary objects and Indian Tribes or Native Hawaiian organizations in this notice. The human remains and associated funerary objects were removed from the Neilson Site (20-MR-501) in Monroe County, Michigan.
Repatriation of the human remains and associated funerary objects in this notice may occur on or after March 27, 2024.
Nekole Alligood, NAGPRA Specialist, Ohio History Connection, 800 E. 17th Avenue, Columbus, OH 43211, telephone (614) 297-2300, email
This notice is published as part of the National Park Service's administrative responsibilities under NAGPRA. The determinations in this notice are the sole responsibility of the Ohio History Connection. The National Park Service is not responsible for the determinations in this notice. Additional information on the determinations in this notice, including the results of consultation, can be found in the inventory or related records held by the Ohio History Connection.
On an unknown date the 20 individuals were removed from the Neilson Site by a private collector and put on temporary loan to the University of Toledo for “study and analysis.” The University of Toledo described them as Culturally Unidentifiable Inventory in 1995. At some point, the individuals were returned to the private collector and on an unknown date, the individuals were transferred to the Firelands Archaeological Research Center (FARC). In 2021 FARC transferred the 20 individuals to Ohio History Connection. It was determined by the University of Toledo and Ohio
The human remains and associated funerary objects in this notice are connected to one or more identifiable earlier groups, tribes, peoples, or cultures. There is a relationship of shared group identity between the identifiable earlier groups, tribes, peoples, or cultures and one or more Indian Tribes or Native Hawaiian organizations. The following types of information were used to reasonably trace the relationship: archeological information, geographical information, and indigenous knowledge from the consulting Tribes.
Pursuant to NAGPRA and its implementing regulations, and after consultation with the appropriate Indian Tribes and Native Hawaiian organizations, the Ohio History Connection has determined that:
• The human remains described in this notice represent the physical remains of 20 individuals of Native American ancestry.
• The 96 objects describe in this notice are reasonably believed to have been placed with or near individual human remains at the time of death or later as part of the death rite or ceremony.
• There is a relationship of shared group identity that can be reasonably traced between the human remains and associated funerary objects described in this notice and the Absentee-Shawnee Tribe of Indians of Oklahoma; Bad River Band of the Lake Superior Tribe of Chippewa Indians of the Bad River Reservation, Wisconsin; Bay Mills Indian Community, Michigan; Chippewa Cree Indians of the Rocky Boy's Reservation, Montana; Citizen Potawatomi Nation, Oklahoma; Eastern Shawnee Tribe of Oklahoma; Forest County Potawatomi Community, Wisconsin; Grand Traverse Band of Ottawa and Chippewa Indians, Michigan; Hannahville Indian Community, Michigan; Keweenaw Bay Indian Community, Michigan; Lac Courte Oreilles Band of Lake Superior Chippewa Indians of Michigan; Lac du Flambeau Band of Lake Superior Chippewa Indians of the Lac du Flambeau Reservation of Wisconsin; Lac Vieux Desert Band of Lake Superior Chippewa Indians of Michigan; Little River Band of Ottawa Indians, Michigan; Little Shell Tribe of Chippewa Indians of Montana; Little Traverse Bay Bands of Odawa Indians, Michigan; Match-e-be-nash-she-wish Band of Pottawatomi Indians of Michigan; Miami Tribe of Oklahoma; Minnesota Chippewa Tribe, Minnesota (Six component reservations: Bois Forte Band (Nett Lake); Fond du Lac Band; Grand Portage Band; Leech Lake Band; Mille Lacs Band; White Earth Band); Nottawaseppi Huron Band of the Potawatomi, Michigan; Ottawa Tribe of Oklahoma; Pokagon Band of Potawatomi Indians; Michigan and Indiana; Prairie Band Potawatomi Nation; Red Cliff Band of Lake Superior Chippewa Indians of Wisconsin; Red Lake Band of Chippewa Indians, Minnesota; Sac & Fox Nation of Missouri in Kansas and Nebraska; Sac & Fox Nation, Oklahoma; Sac & Fox Tribe of the Mississippi in Iowa; Saginaw Chippewa Indian Tribe of Michigan; Sault Ste. Marie Tribe of Chippewa Indians, Michigan; Seneca Nation of Indians; Seneca-Cayuga Nation; Shawnee Tribe; Sokaogon Chippewa Community, Wisconsin; St. Croix Chippewa Indians of Wisconsin; Tonawanda Band of Seneca; Turtle Mountain Band of Chippewa Indians of North Dakota; and the Wyandotte Nation.
Written requests for repatriation of the human remains and associated funerary objects in this notice must be sent to the Responsible Official identified in
1. Any one or more of the Indian Tribes or Native Hawaiian organizations identified in this notice.
2. Any lineal descendant, Indian Tribe, or Native Hawaiian organization not identified in this notice who shows, by a preponderance of the evidence, that the requestor is a lineal descendant or a culturally affiliated Indian Tribe or Native Hawaiian organization.
Repatriation of the human remains and associated funerary objects in this notice to a requestor may occur on or after March 27, 2024. If competing requests for repatriation are received, the Ohio History Connection must determine the most appropriate requestor prior to repatriation. Requests for joint repatriation of the human remains and associated funerary objects are considered a single request and not competing requests. The Ohio History Connection is responsible for sending a copy of this notice to the Indian Tribes and Native Hawaiian organizations identified in this notice.
This notice was submitted after the effective date of the revised regulations (88 FR 86452, December 13, 2023, effective January 12, 2024) but in the older format. As the notice conforms to the mandatory format of the
National Park Service, Interior.
Notice.
In accordance with the Native American Graves Protection and Repatriation Act (NAGPRA), the Office of the State Archaeologist Bioarchaeology Program (OSA-BP) has completed an inventory of human remains and associated funerary objects and has determined that there is a cultural affiliation between the human remains and associated funerary objects and Indian Tribes or Native Hawaiian organizations in this notice. The human remains and associated funerary objects were removed from Adams, Allamakee, Clay, Lyon, Polk, and Warren Counties, IA.
Repatriation of the human remains and associated funerary objects in this notice may occur on or after March 27, 2024.
Dr. Lara Noldner, Office of the State Archaeologist Bioarchaeology Program, University of Iowa, 700 S Clinton Street, Iowa City, IA 52242, telephone (319) 384-0740, email
This notice is published as part of the National Park Service's administrative responsibilities under NAGPRA. The determinations in this notice are the sole responsibility of the OSA-BP. The National Park Service is not responsible for the determinations in this notice.
In 1965 and 1966, human remains representing, at minimum, 43 individuals were removed from the Howard Goodhue Site (13PK1) in Polk County, IA. The human remains were recovered during excavations conducted by the Iowa State University Archaeology Laboratory (ISUAL) under contract with the National Park Service in the area of the Red Rock Reservoir. In 1991, the ISUAL transferred the human remains to the OSA-BP. Additional human remains were later discovered in the ISUAL collections and were transferred to the OSA-BP in 1996, 1997, and 2005. The transferred human remains were labeled with the following ISUAL catalog numbers: 16a, 1715, 2383, 2925, 3518, 5712, 6318, 6534, 9225, 10209, 13118, 13120, 13154-5, 13344-5, 13701, 14601, 16804, 16342, 16797, 20489, 20737-9, 21659-64, 21723-46, 21753-7, 21758-65, 23060a, 23106-12, 23539-40, 23545-60, 23562-4, 23566-9, 23577-9, 23585, 23638-9, 23641-4, 23893-23914, 23970-2, 23975-6, 24048-59. Among the 43 individuals, 24 adults and 18 juveniles were identified. The adults include four possible males and eight possible females. Young and middle-aged adults are represented, as well as one old adult. Four of the juveniles are infants ranging from newborn to 2.5 years. Two juveniles fall in the two- to four-year-old range, and two in the four- to six-year-old range. Two juveniles fall in the six- to ten-year-old range, and five were aged somewhere between 10 and 16 years. The remaining three juveniles were roughly estimated to be between eight and 21 years old (Burial Project 521, 990, 1141, 1825). The associated funerary objects were transferred to the OSA-BP in 1996 (Catalog #s 23640, 23645a, 23892). The 27 associated funerary objects are 16 small copper beads, eight cylindrical copper beads and fragments, one portion of a reconstructed vessel, and two ceramic sherds.
In 1966, human remains representing, at minimum, one individual were removed from the Clarkson Site (13WA2) in Warren County, IA. The human remains were recovered during excavations conducted by the ISUAL under contract with the National Park Service as part of the interagency river basin salvage program at the Red Rock Reservoir. In 1991, the human remains were transferred from the ISUAL to the OSA-BP. The transferred human remains were labeled with the following ISUAL catalog numbers: 3837-3952, 3954-3967, 3969-3997. A child aged 2.5 to 3.5 years is represented by the human remains (Burial Project 519). No associated funerary objects are present.
In 1968, human remains representing, at minimum, three individuals were removed from site 13WA105 in Warren County, IA. The human remains were recovered during salvage excavations conducted by the ISUAL after the land was acquired by the U.S. Army Corps of Engineers. The ISUAL transferred the human remains to the OSA-BP in 1991. The transferred human remains were labeled with the following ISUAL catalog numbers: 2013, 2275, 3980, 4937a. Two young to middle-aged adults are represented by the human remains, as well as a child approximately three months to one year old (Burial Project 520). No associated funerary objects are present.
In 2008, human remains representing, at minimum, one individual were removed from Adams County, IA. The culturally modified human cranium was discovered on a sand bar (find spot 13AA106) in the East Nodoway River by a private citizen. No Native American habitation or burial sites have been recorded in the vicinity of the findspot, so the original location of the cranium is unknown. The human remains were transferred to the Iowa OSA-BP. A young adult female is represented by the cranial remains, which exhibit pictorial incising including a “birdman” figure and a four-pointed star (Burial Project 2300). The design motifs have been documented on other culturally modified cranial fragments from other archaeologically defined Oneota sites. No associated funerary objects are present.
At an unknown time, human remains representing, at minimum, one individual were removed from the Blood Run Site (13LO2) in Lyon County, IA. The human remains were collected from the site by a private citizen before being transferred to the OSA with faunal remains from the site in April 2022. The human remains were initially thought to be faunal before being properly identified by OSA staff. The human remains are a single fragmented ilium representing a single juvenile individual aged between 8 and 10 years. The fragment exhibits green staining from contact with copper (Burial Project 3685). No associated funerary objects are present.
At an unknown time, human remains representing, at minimum, two individuals were removed from Blood Run Site (13LO2) in Lyon County, IA. The human remains were collected by a private citizen before being transferred to the OSA with other artifacts collected from the site in July of 2023. The human remains are a single fragmented adult right ulna and a right mandible fragment from a juvenile individual aged between 8 and 11 years old (BP3812). No associated funerary objects are present.
In May of 2023, human remains representing, at minimum, one individual were removed from the Fort Des Moines site (13PK61) in Polk County, IA. The human remains were excavated by Wapsi Valley Archaeology Inc. during a Phase III excavation for a new watermain. Tribal monitors were contacted to observe the rest of the Phase III, and the human remains were transferred to the OSA. They represent one adult individual of unknown sex and age (BP3798). No associated funerary objects are present.
At an unknown time, human remains representing, at minimum, one individual were removed from site 13CY2 in Clay County IA. The human remains were collected by a private collector and then donated to the OSA. In July of 2023 the human remains were identified in the donated materials by OSA staff. The human remains are a left second mandibular molar from an adult individual (BP 3817). No associated funerary objects are present.
The human remains and associated funerary objects in this notice are connected to one or more identifiable earlier groups, tribes, peoples, or cultures. There is a relationship of shared group identity between the identifiable earlier groups, tribes, peoples, or cultures and one or more Indian Tribes or Native Hawaiian organizations. The following types of information were used to reasonably trace the relationship: anthropological information, archeological information, geographical information, historical information, linguistics, and oral tradition.
Pursuant to NAGPRA and its implementing regulations, and after consultation with the appropriate Indian Tribes and Native Hawaiian organizations, the OSA-BP has determined that:
• The human remains described in this notice represent the physical remains of 53 individuals of Native American ancestry.
• The 27 objects described in this notice are reasonably believed to have been placed with or near individual human remains at the time of death or
• There is a relationship of shared group identity that can be reasonably traced between the human remains and associated funerary objects described in this notice and the Ho-Chunk Nation of Wisconsin; Iowa Tribe of Kansas and Nebraska; Iowa Tribe of Oklahoma; Omaha Tribe of Nebraska; Otoe-Missouria Tribe of Indians, Oklahoma; Ponca Tribe of Indians of Oklahoma; Ponca Tribe of Nebraska; Three Affiliated Tribes of the Fort Berthold Reservation, North Dakota; and the Winnebago Tribe of Nebraska.
Written requests for repatriation of the human remains and associated funerary objects in this notice must be sent to the Responsible Official identified in
1. Any one or more of the Indian Tribes or Native Hawaiian organizations identified in this notice.
2. Any lineal descendant, Indian Tribe, or Native Hawaiian organization not identified in this notice who shows, by a preponderance of the evidence, that the requestor is a lineal descendant or a culturally affiliated Indian Tribe or Native Hawaiian organization.
Repatriation of the human remains and associated funerary objects in this notice to a requestor may occur on or after March 27, 2024. If competing requests for repatriation are received, the OSA-BP must determine the most appropriate requestor prior to repatriation. Requests for joint repatriation of the human remains and associated funerary objects are considered a single request and not competing requests. The OSA-BP is responsible for sending a copy of this notice to the Indian Tribes and Native Hawaiian organizations identified in this notice.
This notice was submitted before the effective date of the revised regulations (88 FR 86452, December 13, 2023, effective January 12, 2024). As the notice conforms to the mandatory format of the
National Park Service, Interior.
Notice.
In accordance with the Native American Graves Protection and Repatriation Act (NAGPRA), the Department of Anthropology at Northern Illinois University (NIU Department of Anthropology) has completed an inventory of human remains and associated funerary objects and has determined that there is a cultural affiliation between the human remains and associated funerary objects and Indian Tribes or Native Hawaiian organizations in this notice. The human remains and associated funerary objects were removed from an unknown county, IL, and Marshall County, IL.
Repatriation of the human remains and associated funerary objects in this notice may occur on or after March 27, 2024.
Dr. Leila Porter, Chair, Department of Anthropology at Northern Illinois University, 1425 W Lincoln Hwy., DeKalb, IL 60115, telephone (815) 753-5669, email
This notice is published as part of the National Park Service's administrative responsibilities under NAGPRA. The determinations in this notice are the sole responsibility of the NIU Department of Anthropology. The National Park Service is not responsible for the determinations in this notice. Additional information on the determinations in this notice, including the results of consultation, can be found in the inventory or related records held by the NIU Department of Anthropology.
In 1976, human remains representing, at minimum, one individual were donated to the NIU Department of Anthropology and were identified by the donor as being from an unknown county, IL. It is not known how or when the donor acquired the human remains, but the donor was the owner of antique stores in Aurora, IL, and Geneva, IL. No associated funerary objects are present.
In fall 1975, human remains representing, at minimum, one individual were removed from Hopewell Estates in Marshall County, IL. A 2010 collections inventory by NIU Department of Anthropology staff noted these human remains and associated funerary objects in an envelope marked with collection date and site information, but there is no earlier record or information on how they came to be in the NIU Department of Anthropology collections or who originally collected them. The six associated funerary objects are one red ceramic sherd and five lithic fragments.
The human remains and associated funerary objects in this notice are connected to one or more identifiable earlier groups, tribes, peoples, or cultures. There is a relationship of shared group identity between the identifiable earlier groups, tribes, peoples, or cultures and one or more Indian Tribes or Native Hawaiian organizations. The following types of information were used to reasonably trace the relationship: anthropological, archeological, geographical, historical information, and oral tradition.
Pursuant to NAGPRA and its implementing regulations, and after consultation with the appropriate Indian Tribes and Native Hawaiian organizations, the NIU Department of Anthropology has determined that:
• The human remains described in this notice represent the physical remains of two individuals of Native American ancestry.
• The six objects described in this notice are reasonably believed to have been placed with or near individual human remains at the time of death or later as part of the death rite or ceremony.
• There is a relationship of shared group identity that can be reasonably traced between the human remains and associated funerary objects described in this notice and the Citizen Potawatomi Nation, Oklahoma; Delaware Nation, Oklahoma; Forest County Potawatomi Community, Wisconsin; Ho-Chunk Nation of Wisconsin; Iowa Tribe of Kansas and Nebraska; Lac Vieux Desert Band of Lake Superior Chippewa Indians of Michigan; Match-e-be-nash-she-wish Band of Pottawatomi Indians of Michigan; Miami Tribe of Oklahoma; Minnesota Chippewa Tribe, Minnesota (Fond du Lac Band); Omaha Tribe of Nebraska; Pokagon Band of Potawatomi Indians, Michigan and Indiana; Ponca Tribe of Indians of Oklahoma; Prairie Band Potawatomi Nation; Saginaw Chippewa Indian Tribe of Michigan;
Written requests for repatriation of the human remains and associated funerary objects in this notice must be sent to the Responsible Official identified in
1. Any one or more of the Indian Tribes or Native Hawaiian organizations identified in this notice.
2. Any lineal descendant, Indian Tribe, or Native Hawaiian organization not identified in this notice who shows, by a preponderance of the evidence, that the requestor is a lineal descendant or a culturally affiliated Indian Tribe or Native Hawaiian organization.
Repatriation of the human remains and associated funerary objects in this notice to a requestor may occur on or after March 27, 2024. If competing requests for repatriation are received, the NIU Department of Anthropology must determine the most appropriate requestor prior to repatriation. Requests for joint repatriation of the human remains and associated funerary objects are considered a single request and not competing requests. The NIU Department of Anthropology is responsible for sending a copy of this notice to the Indian Tribes and Native Hawaiian organizations identified in this notice.
This notice was submitted before the effective date of the revised regulations (88 FR 86452, December 13, 2023, effective January 12, 2024). As the notice conforms to the mandatory format of the
National Park Service, Interior.
Notice.
In accordance with the Native American Graves Protection and Repatriation Act (NAGPRA), the Illinois State Museum has completed an inventory of human remains and associated funerary objects and has determined that there is a cultural affiliation between the human remains and associated funerary objects and Indian Tribes or Native Hawaiian organizations in this notice. The human remains and associated funerary objects were removed from the Dickson Mounds site (11F10/11Fo34), Dickson Camp site (11F10/11Fv35), and a Middle Woodland mound site (11F10/11Fo36), in Fulton County, IL.
Repatriation of the human remains and associated funerary objects in this notice may occur on or after March 27, 2024.
Brooke M. Morgan, Illinois State Museum Research & Collections Center, 1011 East Ash Street, Springfield, IL 62703, telephone (217) 785-8930, email
This notice is published as part of the National Park Service's administrative responsibilities under NAGPRA. The determinations in this notice are the sole responsibility of the Illinois State Museum. The National Park Service is not responsible for the determinations in this notice. Additional information on the determinations in this notice, including the results of consultation, can be found in the inventory or related records held by the Illinois State Museum.
Between 1927 and 1929, Dr. Don F. Dickson exposed and left in situ human remains representing, at minimum, 286 individuals in Mounds 10(I) and 2(E) at the Dickson Mounds site (11F10/11Fo34), Fulton County, IL. These burials date to the Spoon River focus of the Mississippian period (ca. A.D. 1150-1300). Associated funerary objects were often left with their burial of origin, but some were removed and placed with a different burial or displayed in what would become the Museum. The in situ former burial exhibit was known as the “Dickson Excavation” and was on display from 1927 until its closure in 1992. Dickson Mounds State Park was transferred from the Department of Conservation to the Illinois State Museum in 1965, which is when the “Dickson Excavation” was accessioned into the Museum's collection. In 1993, human remains representing, at minimum, one individual were removed from this same location prior to the entombment of the former Dickson Mounds burial exhibit by the Illinois State Museum.
The 773 associated funerary objects are nine antler flakers, two polished antler rings, 274 shell beads, one fluorspar bead, four bone bracelets, one bone weaving tool, two fishhook blanks, three bone fishhooks, one bone awl, three bone pins, seven chipped stone drills, two chert hoes, 49 chert flakes, 20 flake knives, 24 triangular projectile points, 45 chipped stone scrapers, one galena cube, one groundstone celt, one flotation sample, five sandstone abraders, five unmodified deer phalanges, one ceramic trowel, 17 bone needles, 10 shell pendants, one groundstone pipe, 65 ceramic vessels, three lots of ceramic sherds, 45 shell rattles or clackers, three shell hoes, 26 shell spoons, 11 unmodified mussel shells, 123 terrestrial snail shells, two lots of burial fill, and six unmodified stones.
Between 1966 and 1968, human remains representing, at minimum, 830 individuals were removed from the Dickson Mounds site (11F10/11Fo34), Fulton County, IL, when the Illinois State Museum performed salvage excavations prior to construction of the current building, which opened to the public in 1972. These 830 individuals were removed from four precontact cemeteries and 11 mounds constructed during the Late Woodland and Mississippian periods and are comprised of 136 individuals dating to the Late Woodland period (A.D. 700-1100), 440 individuals dating to the Mississippian period (A.D. 1150-1300), and 254 individuals dating to an undetermined precontact archeological period. Precontact period individuals for which time period was unable to be determined were generally removed from indeterminate mounds or from the disturbed upper levels of the mounds that were subject to extensive looting prior to the 1927 Dickson excavation. Archeologists determined these human remains had been historically disassociated from their original positions within the mounds and, as a result, were often commingled and unable to be separated by individual.
The 2,024 associated funerary objects belonging to the Late Woodland period individuals are two antler flakers, one antler hairpin, 1,678 shell beads, 11 lots of faunal remains, one bone pin, one bone fishhook, 18 chert flakes, three flake knives, 18 projectile points, 12 chipped stone scrapers, one sandstone file, one discoidal, one grinding stone, three copper ear spools, seven lots of
The 3,646 associated funerary objects belonging to the Mississippian period individuals are seven antler flakers, two antler hair rings, 2,689 shell beads, two beaver incisor chisels, one bird wing fan, two bone bipointed objects, five bone bracelets, one bone comb, two cut bird bones, 15 lots of faunal remains, eight bone scarifier needles, nine bone awls, 13 bone pins, one biface fragment, one chert drill, three chert gravers, 122 chert flakes, 10 flake knives, 57 projectile points, 32 chipped stone scrapers, two sandstone abraders, two groundstone celts, one discoidal, three grinding stones, two groundstone paint palettes, four polishing stones, one hematite plummet, four copper ear spools, one copper gorget, one galena cube bead, one lot of sand tempering material, seven lots of charcoal, two lots of burned clay, 115 lots of burial fill, 25 flotation samples, two lots of preserved woven fabric, three pieces of hematite, 183 quartz pebbles from rattles, one sandstone elbow pipe, two puma canine ear pendants, 16 shell pendants, 58 ceramic vessels, 92 lots of ceramic sherds, four ceramic trowels, 58 shell rattles, one worked marine shell, 49 shell spoons, 22 lots of unmodified mussel shells, and two unmodified stones.
The 681 associated funerary objects belonging to the Precontact period individuals are 571 shell beads, two elk astragali, four lots of faunal remains, one modified bird bone, one turtle carapace plaque, one chert biface, 14 chert flakes, two flake knives, three projectile points, three chert scrapers, one groundstone anvil, one lot of charcoal, 25 lots of burial fill, two flotation samples, 10 shell pendants, three ceramic vessels, 20 lots of ceramic sherds, two mussel shell hoes, 11 shell spoons, and four lots of unmodified mussel shell.
The 2,046 associated funerary objects belonging to multiple individuals or mounds are two worked antler artifacts, 63 shell beads, two beaver incisors, three bone bracelets, one bone hair ring, two bone shuttles, 16 lots of faunal remains, three turtle carapace fragments, 11 bone pins or awls, 18 chert bifaces, 220 chert flakes, three flake knives, 36 projectile points, 47 chert scrapers, five sandstone abraders, three groundstone celts, two galena cubes, 21 lots of burial fill, 28 lots of charcoal, 26 lots of soil, four soil core samples, seven flotation samples, 18 shell pendants, four lots of hematite, 618 lots of ceramic sherds, 31 ceramic vessels, five worked shells, 49 shell spoons, 248 lots of unmodified shell, and 550 lots of unmodified stone.
Prior to 1967, human remains representing, at minimum, 143 individuals were removed from the Dickson Mounds site (11F10/11Fo34), Fulton County, IL, by Dr. Don F. Dickson or his colleagues. These were used primarily for exhibits at the Dickson Mounds Museum between 1945-1978 and were known as the Dickson Osteology Collection. The human remains were purchased by the Illinois State Museum in 1967 as the Dickson Pathology Collection. No associated funerary objects are present.
Prior to 1985, human remains representing, at minimum, 14 individuals were removed from the Dickson Mounds site (11F10/11Fo34), Fulton County, IL, by a private collector. The human remains were donated to the Illinois State Museum in 1985 as part of the Dan Morse Pathology Collection. No associated funerary objects are present.
Prior to 1923, human remains representing, at minimum, one individual were removed from the Dickson Mounds site (11F10/11Fo34), Fulton County, IL, by an unknown person, and recovered by the Riverside County (California) Sheriff's Department in 1985. The remains were transferred to the Illinois State Museum in 1986. No associated funerary objects are present.
Prior to 1954, human remains representing, at minimum, one individual were removed from the Dickson Mounds site (11F10/11Fo34), Fulton County, IL, by Dr. Don F. Dickson and given to a private citizen. The remains were donated to the Illinois State Museum in 1991. No associated funerary objects are present.
Prior to the 1930s, human remains representing, at minimum, one individual were removed from the Dickson Mounds site (11F10/11Fo34), Fulton County, IL, by Dr. Don F. Dickson and given to a private citizen. The remains were donated to the Illinois State Museum in 2004. No associated funerary objects are present.
In 1967, human remains representing, at minimum, one individual were removed from the Dickson Mounds site (11F10/11Fo34), Fulton County, IL, by Marion Dickson and given to a person working on the Dickson Mounds excavation team. The remains were donated to the Illinois State Museum in 2016 by a private citizen. No associated funerary objects are present.
Prior to 1968, human remains representing, at minimum, 10 individuals were removed from the Dickson Mounds site (11F10/11Fo34), Fulton County, IL, by an unknown person and later donated to the Florida State University Department of Anthropology. Circumstances surrounding the recovery and donation are unknown. The remains and associated funerary objects were transferred to the Illinois State Museum in 2022. The 18 associated funerary objects include three mussel shell fragments, one terrestrial gastropod shell, two groundstone tools, four rocks, one projectile point tip fragment, three chert flakes, two pieces of burned botanical material, one bone awl, and one lot of unidentified faunal bone.
Prior to the 1980s, human remains representing, at minimum, 15 individuals were removed from the Dickson Mounds site (11F10/11Fo34), Fulton County, IL, and later donated to the Iowa Office of the State Archaeologist by a private citizen. The remains and associated funerary objects were transferred to the Illinois State Museum in 2022. The 21 associated funerary objects include four mussel shell fragments, one chert flake, and 16 limestone fragments.
In 1931, human remains representing, at minimum, four individuals were removed from the Dickson Mounds site (11F10/11Fo34), Fulton County, IL, by Dr. Don F. Dickson and donated to the Field Museum of Natural History in Chicago. The remains and associated funerary objects were transferred to the Illinois State Museum in 2023. The 22 associated funerary objects include six chert flakes, one groundstone abrader, two mussel shell spoons, one marine shell pendant, one marine shell pendant or bead, two chert knives, four projectile points, one shell tempered ceramic beaker with a handle, one shell tempered undecorated ceramic jar with loop handles, one shell tempered undecorated ceramic water bottle, one shell tempered decorated ceramic jar, and one groundstone celt.
On an unknown date, human remains representing, at minimum, 13 individuals were removed from the Dickson Mounds site (11F10/11Fo34), Fulton County, IL, and donated or otherwise acquired by the Illinois State Museum on an unknown date. No associated funerary objects are present.
Prior to 1945, human remains representing, at minimum, one individual were removed from the Dickson Mounds site (11F10/11Fo34), Fulton County, IL, and given to a private citizen. The remains were donated to the Illinois State Museum in 2002. No associated funerary objects are present.
In 1965, human remains representing, at minimum, two individuals were removed from the Dickson Camp site (11F10/11Fv35), Fulton County, IL, during professional excavation by the Illinois State Museum. The Dickson Camp site dates to the Early Havana Tradition or Early Middle Woodland period (150-50 BC). The 24 associated funerary objects include one unmodified rock, 13 pieces of chert debitage, one piece of sandstone, one lamellar flake blade of Cobden-Dongola chert, three fire-cracked rocks, one piece of ochre, one drumfish tooth, one mussel shell, one cordmarked ceramic vessel, and one mussel shell spoon.
In 1966, human remains representing, at minimum, one individual were removed from the Dickson Camp site (11F10/11Fv35), Fulton County, IL, during salvage excavation by the Illinois State Museum. The 11 associated funerary objects include one projectile point, four chert flakes, and six ceramic sherds.
In 1961, human remains representing, at minimum, one individual were removed from a Middle Woodland (Hopewell) mound (11F10/11Fo36), Fulton County, IL, by the Illinois State Museum. In 1981, associated funerary objects from this mound collected on an unknown date were transferred from the Iowa Office of the State Archaeologist to the Illinois State Museum. The mound dates between 50 BC-A.D. 400. The 81 associated funerary objects include 31 lots of chert flakes, one lot of chert, one lot of clay pieces, one grinding stone, one grooved sandstone abrader, one hammerstone, 12 lots of ceramic sherds, two projectile points, 13 lots of rock, eight lots of soil, six lots of shell, one ash sample, one bark sample, and two sets of bark impressions in sediment matrix.
The human remains and associated funerary objects in this notice are connected to one or more identifiable earlier groups, tribes, peoples, or cultures. There is a relationship of shared group identity between the identifiable earlier groups, tribes, peoples, or cultures and one or more Indian Tribes or Native Hawaiian organizations. The following types of information were used to reasonably trace the relationship: anthropological, archeological, biological, geographical, linguistic, and oral tradition information.
Pursuant to NAGPRA and its implementing regulations, and after consultation with the appropriate Indian Tribes and Native Hawaiian organizations, the Illinois State Museum has determined that:
• The human remains described in this notice represent the physical remains of 1,325 individuals of Native American ancestry.
• The 9,347 objects described in this notice are reasonably believed to have been placed with or near individual human remains at the time of death or later as part of the death rite or ceremony.
• There is a relationship of shared group identity that can be reasonably traced between the human remains and associated funerary objects described in this notice and the Forest County Potawatomi Community, Wisconsin; Ho-Chunk Nation of Wisconsin; Iowa Tribe of Kansas and Nebraska; Match-e-be-nash-she-wish Band of Pottawatomi Indians of Michigan; Miami Tribe of Oklahoma; Nottawaseppi Huron Band of the Potawatomi, Michigan; Otoe-Missouria Tribe of Indians, Oklahoma; Peoria Tribe of Indians of Oklahoma; Pokagon Band of Potawatomi Indians, Michigan and Indiana; Prairie Band Potawatomi Nation; The Osage Nation; and the Winnebago Tribe of Nebraska.
Written requests for repatriation of the human remains and associated funerary objects in this notice must be sent to the Responsible Official identified in
1. Any one or more of the Indian Tribes or Native Hawaiian organizations identified in this notice.
2. Any lineal descendant, Indian Tribe, or Native Hawaiian organization not identified in this notice who shows, by a preponderance of the evidence, that the requestor is a lineal descendant or a culturally affiliated Indian Tribe or Native Hawaiian organization.
Repatriation of the human remains and associated funerary objects in this notice to a requestor may occur on or after March 27, 2024. If competing requests for repatriation are received, the Illinois State Museum must determine the most appropriate requestor prior to repatriation. Requests for joint repatriation of the human remains and associated funerary objects are considered a single request and not competing requests. The Illinois State Museum is responsible for sending a copy of this notice to the Indian Tribes and Native Hawaiian organizations identified in this notice.
This notice was submitted before the effective date of the revised regulations (88 FR 86452, December 13, 2023, effective January 12, 2024). As the notice conforms to the mandatory format of the
National Park Service, Interior.
Notice.
In accordance with the Native American Graves Protection and Repatriation Act (NAGPRA), the Peabody Museum of Archaeology and Ethnology, Harvard University (PMAE) intends to repatriate certain cultural items that meet the definition of unassociated funerary objects that have a cultural affiliation with the Indian Tribes or Native Hawaiian organizations in this notice. The cultural items were removed from Cross County, AR.
Repatriation of the cultural items in this notice may occur on or after March 27, 2024.
Patricia Capone, PMAE, Harvard University, 11 Divinity Avenue, Cambridge, MA 02138, telephone (617) 496-3702, email
This notice is published as part of the National Park Service's administrative responsibilities under NAGPRA. The determinations in this notice are the sole responsibility of the PMAE. The National Park Service is not responsible for the determinations in this notice. Additional information on the determinations in this notice, including the results of consultation, can be found in the summary or related records held by the PMAE.
The 531 cultural items were removed from Cross County, Arkansas between 1879 and 1880 as part of Peabody
The 95 unassociated funerary objects at Halcomb's Mounds (state site number 3CS28; Parkin Phase) include 94 objects that are present at the PMAE and one object that is not currently located. The 94 objects present are two lots consisting of ceramic items, 79 lots consisting of ceramic vessel or vessel fragments, five lots consisting of faunal items, five lots consisting of stone items, one lot consisting of clay items, one lot consisting of floral items, one lot consisting of an unidentified organic item. The one object not present is one lot consisting of ceramic vessel or vessel fragments.
The 156 unassociated funerary objects at Neeley's Ferry Mounds (state site number 3CS24; Parkin Phase) include 154 objects that are present at the PMAE and two objects that are not currently located. The 154 objects present at the PMAE are: six lots consisting of ceramic items, 116 lots consisting of ceramic vessel or vessel fragments, 22 lots consisting of faunal items, seven lots consisting of stone items, one lot consisting of floral items, and two lots consisting of charcoal items. The two objects not present are one lot consisting of ceramic vessel or vessel fragments, and one lot consisting of faunal remains.
The 14 unassociated funerary objects at Robinson's Mound (Parkin Phase) are one lot consisting of ceramic items, 11 lots consisting of ceramic vessel or vessel fragments, one lot consisting of faunal items, and one lot consisting of clay items.
The 161 unassociated funerary objects at Rose Mound (state site number 3CS27; Parkin Phase) are four lots consisting of ceramic items, 129 lots consisting of ceramic vessel or vessel fragments, 13 lots consisting of faunal items, eight lots consisting of stone items, four lots consisting of clay items, one lot consisting of floral items, and two lots consisting of metal items.
The 39 unassociated funerary objects at Stanley Mounds, also known as Parkin Site (state site number 3CS29; Parkin Phase) are one lot consisting of ceramic items, 33 lots consisting of ceramic vessel or vessel fragments, four lots consisting of faunal items, and one lot consisting of copper items.
The cultural items in this notice are connected to one or more identifiable earlier groups, tribes, peoples, or cultures. There is a relationship of shared group identity between the identifiable earlier groups, tribes, peoples, or cultures and one or more Indian Tribes or Native Hawaiian organizations. The following types of information were used to reasonably trace the relationship: anthropological information, archeological information, biological information, folklore, geographical information, historical information, kinship, linguistics, oral tradition, other relevant information, or expert opinion.
Pursuant to NAGPRA and its implementing regulations, and after consultation with the appropriate Indian Tribes and Native Hawaiian organizations, the PMAE has determined that:
• The 531 cultural items described above are reasonably believed to have been placed with or near individual human remains at the time of death or later as part of the death rite or ceremony and are believed, by a preponderance of the evidence, to have been removed from a specific burial site of a Native American individual.
• There is a relationship of shared group identity that can be reasonably traced between the cultural items and the Quapaw Nation.
Additional, written requests for repatriation of the cultural items in this notice must be sent to the Responsible Official identified in
Repatriation of the cultural items in this notice to a requestor may occur on or after March 27, 2024. If competing requests for repatriation are received, the PMAE must determine the most appropriate requestor prior to repatriation. Requests for joint repatriation of the cultural items are considered a single request and not competing requests. The PMAE is responsible for sending a copy of this notice to the Indian Tribes and Native Hawaiian organizations identified in this notice.
This notice was submitted before the effective date of the revised regulations (88 FR 86452, December 13, 2023, effective January 12, 2024). As the notice conforms to the mandatory format of the
National Park Service, Interior.
Notice.
In accordance with the Native American Graves Protection and Repatriation Act (NAGPRA), the Office of the State Archaeologist Bioarchaeology Program (OSA-BP) has completed an inventory of human remains and associated funerary objects and has determined that there is a cultural affiliation between the human remains and associated funerary objects and Indian Tribes or Native Hawaiian organizations in this notice. The human remains and associated funerary objects were removed from Buena Vista, Cherokee, Mills, O'Brien, Plymouth, and Polk Counties, IA.
Repatriation of the human remains and associated funerary objects in this notice may occur on or after March 27, 2024.
Dr. Lara Noldner, Office of the State Archaeologist Bioarchaeology Program, University of Iowa, 700 S Clinton Street, Iowa City, IA 52242, telephone (319) 384-0740, email
This notice is published as part of the National Park Service's administrative
In 2019, human remains representing, at minimum, six individuals were removed from the Joy Creek Major site (13PM7) in Plymouth County, IA. Flood-related breaches in a levee near the site caused the erosion of a mortuary feature and the scattering of human remains across an agricultural field. The human remains were collected by personnel from the Sanford Museum in Cherokee, IA, and the OSA-BP. An older adolescent or young adult male, a middle to older adult possible male, and three adults of unknown age and sex are represented by the human remains. A child 10-to-12 years old is represented by a naturally-shed deciduous tooth (BP3443). No associated funerary objects are present.
In 1959 and 1963, human remains representing, at minimum, three individuals were removed from the Wittrock Site (13OB4) in O'Brien County, IA. Archeological excavations of this Mill Creek village were conducted by the University of Iowa in 1959 and 1965, and by the University of Wisconsin-Madison in 1963. Human skeletal remains identified during the 1959 and 1965 excavations were previously reported and reburied in 1978. In 2010, a human patella from the 1963 excavation of 13OB4 was transferred from the Department of Anthropology at the University of Wisconsin-Madison to the Iowa Office of the State Archaeologist (OSA). Two teeth from the 1963 excavation were transferred from the Sanford Museum in Cherokee, Iowa, to the OSA-BP in 2014. Additional human elements from the 1959 excavation were identified in the OSA Repository in 2014-2015 and transferred to the OSA-BP (Burial Projects 3017, 3068, 3095). No associated funerary objects are present.
In 1955, human remains representing, at minimum, one individual was removed from the Phipps Site (13CK21) in Cherokee County, IA. Archeological excavations of this Mill Creek village were conducted by Reynold Ruppé and sponsored by the Northwest Chapter of the Iowa Archaeological Society, the Sanford Museum, and the University of Iowa from 1952-1956. Faunal remains from the 1955 field season were housed at the Sanford Museum before being transferred to the OSA-BP in 2018. During processing of these faunal remains, a single human tooth was identified and transferred to the OSA-BP. The tooth, bearing the catalog number CK4042, represents an older adult (Burial Project 3394). No associated funerary objects are present.
At an unknown date, human remains representing, at minimum, four individuals were removed from the Phipps Site (13CK21), the Bultman Site (13BV2) and site 13CK1. An archeologist from the Sanford Museum in Cherokee County, Iowa, noted the human remains on display at Jim's History Barn in Peterson, IA. The human remains were confiscated by the OSA-BP in 2019. At a minimum, four individuals, one juvenile and three adults, are represented by a phalanx, three isolated teeth and a partial mandible (Burial Project 3478). No associated funerary objects are present.
In 1969, human remains representing, at minimum, one individual was removed from the Broken Kettle West Site (13PM25) in Plymouth County, IA. The site was excavated in 1969 by the University of Nebraska. At an unknown date, these human remains were transferred to the OSA and rediscovered in the OSA repository in 2019 (Burial Project 3482). Two mandibular fragments represent one young adult (20-35 years old) of indeterminate sex. No associated funerary objects are present.
In 1966, human remains representing, at minimum, four individuals were removed from sites 13PM32, 13PM33, and possibly 13PM25 in Plymouth County, IA. The original location was indicated as being on the Blue Diamond Ranch, site numbers 13PM32 and 13PM33, where the University of Wisconsin excavated in 1966. At an unknown date cremated human remains from these sites were transferred to the University of Missouri. A bag with the remains was also labeled 13PM25. In January of 2023, the American Archaeology Division of the University of Missouri transferred the human remains to the OSA-BP (Burial Project 3747). Fragmentary cremated human remains represent four adults of indeterminate age and sex. The one associated funerary object is one lot of charcoal.
In 1963, human remains representing, at minimum, 26 individuals were removed from site 13PK38, also called the West Des Moines Burial Site, in Polk County, IA. The burial site was impacted by construction in 1963 and subsequently excavated by the State Department of History and Archives, now the State Historical Society of Iowa. Human remains excavated were transferred to the OSA in 1983 and then temporarily loaned to Doug Owsley while at Louisiana State University in 1985. Owsley then took the collection with him upon his transition to the Smithsonian Institution's National Museum of Natural History. The human remains were transferred back to the OSA-BP in November of 2021 (Burial Project 3641). Mostly complete but commingled human remains represent at least 21 adult individuals, two infants, and three juveniles ranging in age from 2-17 years old. No associated funerary objects are present.
In 1971 and 1972, human remains representing, at minimum, one individual were removed from 13ML130 in Mills County, IA. Excavations were conducted at 13ML130 in 1971 and 1972 in a series of salvage archeology efforts in association with the Iowa Highway Program. Archeological material from the excavation was housed at the OSA repository. In 2014, a partial mandible and an isolated tooth were transferred to the OSA-BP after being discovered in the faunal material from 13ML130. The human remains represent one individual of indeterminate age and sex (BP 3066). No associated funerary objects are present.
In 1971 and 1972, human remains representing, at minimum, one individual were removed from 13ML135 in Mills County, IA. Excavations were conducted at 13ML135 in 1971 and 1972 in a series of salvage archeology efforts in association with the Iowa Highway Program. Archeological material from the excavation was housed at the OSA repository. In 2014, a foot phalanx was transferred to the OSA-BP after being discovered in the faunal material from 13ML135. Thin sections of human long bones were also found among the artifacts. The human remains represent one individual of indeterminate age and sex (BP 3067). The 90 associated funerary objects are 17 potsherds, three rim sherds, one bone fish hook, one knife fragment, one celt tip, three worked flakes, 10 unworked flakes, 26 faunal bone fragments, two charcoal samples, one nutshell, one wood sample, one piece of daub, five pieces of limestone, and 18 unmodified rocks.
In 1971 and 1972 human remains representing, at minimum, one individual were removed from 13ML139 in Mills County, IA, during a series of salvage archeology efforts in association with the Iowa Highway Program. Archeological material from the excavation were subsequently housed in the OSA repository. In 2017, a
In 1969 and 1970, human remains representing, at minimum, two individuals were removed from a Nebraska Phase earthlodge site (13ML124) in Mills County, IA. The human remains were excavated from the site between 1969 and 1970 and were stored in the OSA repository. In 2003, the human remains were discovered in the OSA repository (OSA accession #312) and transferred to the OSA-BP. An older juvenile and a young adult are represented by a femur and a single tooth (Burial Project 1724). No associated funerary objects are present.
In 1995, human remains representing, at minimum, one individual were removed from site 13ML175 in Mills County, IA. The human remains were excavated from 13ML175 during a Phase III archeological project conducted by the OSA in advance of road construction. The human remains were transferred to the OSA-BP. A child between the ages of 10 and 12 years is represented by the naturally shed deciduous tooth (Burial Project 849). No associated funerary objects are present.
The human remains and associated funerary objects in this notice are connected to one or more identifiable earlier groups, tribes, peoples, or cultures. There is a relationship of shared group identity between the identifiable earlier groups, tribes, peoples, or cultures and one or more Indian Tribes or Native Hawaiian organizations. The following types of information were used to reasonably trace the relationship: anthropological information, archeological information, biological information, geographical information, historical information, linguistics, and oral tradition.
Pursuant to NAGPRA and its implementing regulations, and after consultation with the appropriate Indian Tribes and Native Hawaiian organizations, the OSA-BP has determined that:
• The human remains described in this notice represent the physical remains of 51 individuals of Native American ancestry.
• The 91 objects described in this notice are reasonably believed to have been placed with or near individual human remains at the time of death or later as part of the death rite or ceremony.
• There is a relationship of shared group identity that can be reasonably traced between the human remains and associated funerary objects described in this notice and the Pawnee Nation of Oklahoma and the Three Affiliated Tribes of the Fort Berthold Reservation, North Dakota.
Written requests for repatriation of the human remains and associated funerary objects in this notice must be sent to the Responsible Official identified in
1. Any one or more of the Indian Tribes or Native Hawaiian organizations identified in this notice.
2. Any lineal descendant, Indian Tribe, or Native Hawaiian organization not identified in this notice who shows, by a preponderance of the evidence, that the requestor is a lineal descendant or a culturally affiliated Indian Tribe or Native Hawaiian organization.
Repatriation of the human remains and associated funerary objects in this notice to a requestor may occur on or after March 27, 2024. If competing requests for repatriation are received, the Office of the State Archaeologist Bioarchaeology Program must determine the most appropriate requestor prior to repatriation. Requests for joint repatriation of the human remains and associated funerary objects are considered a single request and not competing requests. The Office of the State Archaeologist Bioarchaeology Program is responsible for sending a copy of this notice to the Indian Tribes and Native Hawaiian organizations identified in this notice.
This notice was submitted before the effective date of the revised regulations (88 FR 86452, December 13, 2023, effective January 12, 2024). As the notice conforms to the mandatory format of the
Office of Surface Mining Reclamation and Enforcement, Interior.
Notice of information collection; request for comment.
In accordance with the Paperwork Reduction Act of 1995, we, the Office of Surface Mining Reclamation and Enforcement (OSMRE), are proposing to renew an information collection.
Interested persons are invited to submit comments on or before March 27, 2024.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
To request additional information about this ICR, contact Mark Gehlhar by email at
In accordance with the Paperwork Reduction Act of 1995 (PRA; 44 U.S.C. 3501
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As part of our continuing effort to reduce paperwork and respondent burdens, we are again soliciting comments from the public and other Federal agencies on the proposed ICR that is described below. We are especially interested in public comment addressing the following:
(1) Whether or not the collection of information is necessary for the proper performance of the functions of the agency, including whether or not the information will have practical utility;
(2) The accuracy of our estimate of the burden for this collection of information, including the validity of the methodology and assumptions used;
(3) Ways to enhance the quality, utility, and clarity of the information to be collected; and
(4) How might the agency minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
Comments that you submit in response to this notice are a matter of public record. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
An agency may not conduct or sponsor and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number.
The authority for this action is the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
U.S. International Trade Commission.
Notice.
Notice is hereby given that on February 5, 2024, the presiding administrative law judge (“ALJ”) issued the Final Initial Determination on Violation of Section 337 in this investigation. On February 20, 2024, the ALJ issued the Recommended Determination on Remedy and Bond (“RD”). The Commission is soliciting submissions on public interest issues raised by the recommended relief, should the Commission find a violation. This notice is soliciting comments from the public only.
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 system (“EDIS”) at
Section 337 of the Tariff Act of 1930 provides that, if the Commission finds a violation, it shall exclude the articles concerned from the United States unless, after considering the effect of such exclusion upon the public health and welfare, competitive conditions in the United States economy, the production of like or directly competitive articles in the United States, and United States consumers, it finds that such articles should not be excluded from entry. 19 U.S.C. 1337(d)(1). A similar provision applies to cease and desist orders. 19 U.S.C. 1337(f)(1).
The Commission is soliciting submissions on public interest issues raised by the recommended relief should the Commission find a violation, specifically: (1) a limited exclusion order excluding importation of certain video processing devices and products containing same that are sold for importation into the United States or sold in the United States after importation by respondent HP Inc. (“HP”); and (2) a cease and desist order directed to respondent HP. Parties are to file public interest submissions pursuant to 19 CFR 210.50(a)(4).
The Commission is interested in further development of the record on the public interest in this investigation. Accordingly, members of the public are invited to file submissions of no more than five (5) pages, inclusive of attachments, concerning the public interest in light of the ALJ's RD issued in this investigation on February 20, 2024. Comments should address whether issuance of the recommended remedial orders in this investigation, should the Commission find a violation, 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 recommended remedial orders are used in the United States;
(ii) identify any public health, safety, or welfare concerns in the United States relating to the recommended 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 recommended orders within a commercially reasonable time; and
(v) explain how the recommended orders would impact consumers in the United States.
Written submissions must be filed no later than by close of business on March 15, 2024.
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 (Mar. 19, 2020). Submissions should refer to the investigation number (“Inv. No. 337-TA-1341”) 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 by marking each document with a header indicating that the document contains confidential information. This marking will be deemed to satisfy the request procedure set forth in Rules 201.6(b) and 210.5(e)(2) (19 CFR 201.6(b) & 210.5(e)(2)). Documents for which confidential treatment by the Commission is properly sought will be treated accordingly. Any non-party wishing to submit comments containing confidential information must serve those comments on the parties to the investigation pursuant to the applicable Administrative Protective Order. A redacted non-confidential version of the document must also be filed simultaneously with any confidential filing and must be served in accordance with Commission Rule 210.4(f)(7)(ii)(A) (19 CFR 210.4(f)(7)(ii)(A)). All information, including confidential business information and documents for which confidential treatment is properly sought, submitted to the Commission for purposes of this investigation may be disclosed to and used: (i) by the Commission, its employees and Offices, and contract personnel (a) for developing or maintaining the records of this or a related proceeding, or (b) in internal investigations, audits, reviews, and evaluations relating to the programs, personnel, and operations of the Commission including under 5 U.S.C. Appendix 3; or (ii) by U.S. government employees and contract personnel, solely for cybersecurity purposes. All contract personnel will sign appropriate nondisclosure agreements. All nonconfidential written submissions will be available for public inspection on EDIS.
This action is taken under the authority of 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.
Drug Enforcement Administration, Department of Justice.
30-Day notice.
The Drug Enforcement Administration, Department of Justice (DOJ), will be submitting the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995. This proposed information collection was previously published in the
Comments are encouraged and will be accepted for 30 days until March 27, 2024.
If you have comments especially on the estimated public burden or associated response time, suggestions, or need a copy of the proposed information collection instrument with instructions or additional information, please contact Scott A. Brinks, Regulatory Drafting and Policy Support Section, Drug Enforcement Administration; Mailing Address: 8701 Morrissette Drive, Springfield, Virginia 22152; Telephone: (571) 362-3261, email:
Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address one or more of the following four points:
Written comments and recommendations for this information collection should be submitted within 30 days of the publication of this notice on the following website
DOJ seeks PRA authorization for this information collection for three (3) years. OMB authorization for an ICR cannot be for more than three (3) years without renewal. The DOJ notes that information collection requirements submitted to the OMB for existing ICRs receive a month-to-month extension while they undergo review.
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If additional information is required, contact: Darwin Arceo, Department Clearance Officer, Policy and Planning Staff, Justice Management Division, United States Department of Justice, Two Constitution Square, 145 N Street NE, 4W-218 Washington, DC 20530.
Drug Enforcement Administration, Department of Justice.
30-Day notice.
The Drug Enforcement Administration, Department of Justice (DOJ), will be submitting the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995. This proposed information collection was previously published in the
Comments are encouraged and will be accepted for 30 days until March 27, 2024.
If you have comments especially on the estimated public burden or associated response time, suggestions, or need a copy of the proposed information collection instrument with instructions or additional information, please contact Scott A. Brinks, Regulatory Drafting and Policy Support Section, Drug Enforcement Administration; Mailing Address: 8701 Morrissette Drive, Springfield, Virginia 22152; Telephone: (571) 362-3261, email:
Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address one or more of the following four points:
Written comments and recommendations for this information collection should be submitted within 30 days of the publication of this notice on the following website
DOJ seeks PRA authorization for this information collection for three (3) years. OMB authorization for an ICR cannot be for more than three (3) years without renewal. The DOJ notes that information collection requirements submitted to the OMB for existing ICRs receive a month-to-month extension while they undergo review.
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If additional information is required, contact: Darwin Arceo, Department Clearance Officer, Policy and Planning Staff, Justice Management Division, United States Department of Justice, Two Constitution Square, 145 N Street NE, 4W-218 Washington, DC 20530.
Bureau of Justice Statistics, Department of Justice.
30-Day notice.
The Bureau of Justice Statistics (BJS), Department of Justice (DOJ), will be submitting the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995. The proposed information was published in the
Comments are encouraged and will be accepted for 30 days until April 26, 2024.
If you have comments especially on the estimated public burden or associated response time, suggestions, or need a copy of the proposed information collection instrument with instructions or additional information, please contact Zhen Zeng, Bureau of Justice Statistics, 810 Seventh Street NW, Washington, DC 20531, (email:
Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address one or more of the following four points:
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It takes 150 minutes to complete the 2024 COJ form. About 70% of the respondents (2,030) will be contacted for data quality follow-up and each follow-up will take 10 minutes. The total burden for the 2024 COJ is 7,588 hours. The 2025 and 2026 COJ forms are shorter than the 2024 form and take 80 minutes per response. The estimated time and number of respondents for data quality follow-up remain the same. In addition, it takes 5 minutes to verify jail status and point-of-contact per jail for the 2025 and 2026 COJ. The burden for the 2025 and 2026 COJ is 4,447 hours for each collection. Jail verification takes 10 minutes per jail for the 2024 COJ. This burden is covered by BJS's generic clearance agreement (OMB Control Number 1121-0339) and excluded from the current OMB application.
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If additional information is required contact: Darwin Arceo, Department Clearance Officer, United States Department of Justice, Justice Management Division, Policy and Planning Staff, Two Constitution Square, 145 N Street NE, 4W-218, Washington, DC.
Notice.
The Department of Labor (DOL), 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 of 1995. The program helps 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 Office of Federal Contract Compliance Programs (OFCCP) is soliciting comments concerning its proposal to obtain approval from the Office of Management and Budget (OMB) for renewal of the information collection for its construction program which includes the recordkeeping and reporting requirements associated with the program. This request includes two information collection instruments: the construction compliance review scheduling letter and itemized listing (collectively referred to as the “construction scheduling letter”) and the Construction Contract Award Notification Requirement Form (CC-314). OFCCP proposes changes to the currently authorized construction scheduling letter and CC-314. The current OMB approval for the construction scheduling letter and CC-314 expires on July 31, 2024. A copy of the proposed information collection request can be obtained by contacting the office listed below in the
Written comments must be submitted to the office listed in the addresses section below on or before April 26, 2024.
You may submit comments by any of the following methods:
Tina T. Williams, Acting Deputy Director of OFCCP and Director of Policy & Program Development, Office of Federal
OFCCP administers and enforces the three equal employment opportunity authorities listed below:
• Executive Order 11246, as amended (E.O. 11246);
• Section 503 of the Rehabilitation Act of 1973, as amended (section 503); and
• Vietnam Era Veterans' Readjustment Assistance Act of 1974, as amended (VEVRAA).
These authorities prohibit employment discrimination by Federal contractors and subcontractors and require them to take affirmative action to ensure that equal employment opportunities are available regardless of race, color, religion, sex, sexual orientation, gender identity, national origin, disability, or status as a protected veteran. Additionally, Federal contractors and subcontractors are prohibited from discriminating against applicants and employees for asking about, discussing, or sharing information about their pay or, in certain circumstances, the pay of their co-workers.
E.O. 11246 applies to Federal contractors and subcontractors and to federally assisted construction contractors holding a Government contract in excess of $10,000, or Government contracts that have, or can reasonably be expected to have, an aggregate total value exceeding $10,000 in a 12-month period. E.O. 11246 also applies to government bills of lading, depositories of Federal funds in any amount, and to financial institutions that are issuing and paying agents for U.S. savings bonds.
Section 503 prohibits Federal contractors and subcontractors from discriminating in employment against individuals with disabilities. It also requires Federal contractors and subcontractors to take affirmative action to ensure equal employment opportunity for individuals with disabilities. The Section 503 requirements apply to businesses with a direct Federal construction contract of more than $15,000. If the construction contractor has at least 50 employees and a single contract of $50,000 or more, then it must also develop a section 503 affirmative action program (AAP), as described in 41 CFR 60-741, subpart C.
VEVRAA prohibits Federal contractors and subcontractors from discriminating in employment against protected veterans. It also requires Federal contractors and subcontractors to take affirmative action to ensure equal employment opportunity for protected veterans. The VEVRAA requirements apply to businesses with a direct Federal construction contract of $150,000 or more. If the construction contractor has at least 50 employees and a single contract of $150,000 or more, then it must also develop a VEVRAA AAP, as described in 41 CFR 60-300, subpart C.
This information collection request (ICR) seeks to renew the recordkeeping, reporting, third party disclosure, and other requirements for construction contractors. OFCCP seeks to renew its existing construction scheduling letter. This is the document contractors receive notifying them that they have been selected to undergo a construction compliance evaluation. OFCCP proposes changes to the construction scheduling letter to strengthen OFCCP's construction program and increase the effectiveness of OFCCP's construction compliance evaluations.
OFCCP also seeks to renew the CC-314 form. The CC-314 is the form that covered construction contractors submit to OFCCP notifying the agency of new contract awards that exceed $10,000. OFCCP proposes adding additional information to the form which will increase the utility of the collection. OFCCP also proposes updating our help line call in information and other minor language changes on the CC-314 for clarity.
OFCCP is particularly interested in comments that:
• Evaluate the proposed changes to the construction scheduling letter and CC-314;
• 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.
OFCCP seeks the approval of this information collection in order to carry out its responsibility to enforce the nondiscrimination and affirmative action provisions of the three authorities it administers.
Comments submitted in response to this notice will be summarized and/or included in the request for OMB approval of the information collection request; they will also become a matter of public record.
Notice of availability; request for comments.
The Department of Labor (DOL) is submitting this Bureau of Labor Statistics (BLS)-sponsored information collection request (ICR) to the Office of
The OMB will consider all written comments that the agency receives on or before March 27, 2024.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Comments are invited on: (1) whether the collection of information is necessary for the proper performance of the functions of the Department, including whether the information will have practical utility; (2) the accuracy of the agency's estimates of the burden and cost of the collection of information, including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility and clarity of the information collection; and (4) ways to minimize the burden of the collection of information on those who are to respond, including the use of automated collection techniques or other forms of information technology.
Nicole Bouchet by telephone at 202-693-0213, or by email at
The CPS Disability Supplement will provide information on labor force participation rates for people with disabilities; the use of and satisfaction with programs that prepare people with disabilities for employment; the work history, barriers to employment, and workplace accommodations reported by persons with a disability; and the effect of financial assistance programs on the likelihood of working. Because the Disability Supplement is part of the CPS, the same detailed demographic information collected in the CPS will be available about respondents to the supplement. For additional substantive information about this ICR, see the related notice published in the
This information collection is subject to the PRA. A Federal agency generally cannot conduct or sponsor a collection of information, and the public is generally not required to respond to an information collection, unless the OMB approves it and displays a currently valid OMB Control Number. In addition, notwithstanding any other provisions of law, no person shall generally be subject to penalty for failing to comply with a collection of information that does not display a valid OMB Control Number.
Occupational Safety and Health Administration (OSHA), Labor.
Request for public comments.
OSHA solicits public comments concerning the proposal to extend the Office of Management and Budget's (OMB) approval of the information collection requirements specified in the Standard on Material Hoists, Personnel Hoists, and Elevators.
Comments must be submitted (postmarked, sent, or received) by April 26, 2024.
For further information on submitting comments, see the “Public Participation” heading in the section of this notice titled
Seleda Perryman, Directorate of Standards and Guidance, OSHA, U.S. Department of Labor; telephone (202) 693-2222.
The Department of Labor, as part of the continuing effort to reduce paperwork and respondent (
The following sections describe who uses the information collected under
These posting requirements are used by the operator and crew of the material and personnel hoists to determine how to use the specific machine and how much it will be able to lift as assembled in one or a number of particular configurations. If not properly used, the machine would be subject to failures, endangering the workers in the immediate vicinity.
Paragraph (c)(15) requires that a test and inspection of all functions and safety devices be made following the assembly and erection of hoists. The test and inspection are to be conducted under the supervision of a competent person. A similar inspection and test is required following major alteration of an existing installation. All hoists shall be inspected and tested at three-month intervals. A certification record (the most recent) of the test and inspection must be kept on file, including the date the test and inspection was completed, the identification of the equipment and the signature of the person who performed the test and inspection. This certification ensures that the equipment has been tested and is in safe operating condition. The most recent certification record will be disclosed to a Compliance Safety and Health Officer during an OSHA inspection.
OSHA has a particular interest in comments on the following issues:
• Whether the proposed information collection requirements are necessary for the proper performance of the agency's functions to protect workers, including whether the information is useful;
• The accuracy of OSHA's estimate of the burden (time and costs) of the information collection requirements, including the validity of the methodology and assumptions used;
• The quality, utility, and clarity of the information collected; and
• Ways to minimize the burden on employers who must comply; for example, by using automated or other technological information, and transmission techniques.
OSHA is requesting that OMB extend the approval of the information collection requirements contained in the Standard on Material Hoists, Personnel Hoists, and Elevators. The agency is requesting an adjustment increase in the burden hour amount from 10,047 hours to 11,957 hours, a difference of 1,910 hours. This increase is due to the increase in the number of hoists and elevators from 8,304 to 9,882.
OSHA will summarize the comments submitted in response to this notice and will include this summary in the request to OMB to extend the approval of the information collection requirements.
You may submit comments in response to this document as follows: (1) electronically at
Comments and submissions are posted without change at
James S. Frederick, Deputy Assistant Secretary of Labor for Occupational Safety and Health, directed the preparation of this notice. The authority for this notice is the Paperwork Reduction Act of 1995 (44 U.S.C. 3506
National Aeronautics and Space Administration (NASA).
Notice of information collection.
The National Aeronautics and Space Administration, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections.
Comments are due by March 27, 2024.
Written comments and recommendations for this information collection should be sent within 30 days of publication of this notice to
Requests for additional information or
The Evelyn Johnson Scholarship Program (EJSP) recognizes the academic achievement of, and provides financial assistance to, the dependents of NASA Kennedy Space Center (KSC) civil service and NASA KSC Exchange employees. The scholarship honors the dedication and commitment of the late Evelyn Johnson, a Deputy Director, Equal Opportunity Program Office at KSC. Applicants are evaluated on the basis of academic achievement, involvement in school and community activities, and education and career goals. The scholarship winners may pursue any course of study leading to an undergraduate degree at any accredited college in the country. The scholarship is intended to be used only for tuition, fees, books and supplies associated with attending college.
Electronically available form.
Comments are invited on: (1) Whether the proposed collection of information is necessary for the proper performance of the functions of NASA, including whether the information collected has practical utility; (2) the accuracy of NASA's estimate of the burden (including hours and cost) of the proposed collection of information; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on respondents, including automated collection techniques or the use of other forms of information technology.
Comments submitted in response to this notice will be summarized and included in the request for OMB approval of this information collection. They will also become a matter of public record.
National Credit Union Administration (NCUA).
Final interpretive ruling and policy statement.
The NCUA Board is issuing revisions to Interpretive Ruling and Policy Statement (IRPS) 13-1, regarding the Minority Depository Institution Preservation Program for credit unions.
The revised IRPS is effective March 27, 2024.
Supervisory Program Manager Kristi Kubista-Hovis or Program Manager Pamela Williams, Office of Credit Union Resources and Expansion, 703-518-6610 or
Congress enacted the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) in response to the savings and loan industry crisis.
• Preserving the number of minority depository institutions;
• Preserving the minority character of a minority depository institution involved in a merger or acquisition;
• Providing technical assistance to prevent the insolvency of minority depository institutions;
• Encouraging the formation of new minority depository institutions; and
• Providing training, technical assistance, and educational programs to minority depository institutions.
Those agencies developed various initiatives aimed at preserving federally insured banks and savings institutions that meet FIRREA's definition of a minority depository institution.
In 2010, Congress enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).
In 2013, the NCUA Board (Board) proposed Interpretive Ruling and Policy Statement (IRPS) 13-1 to establish a Minority Depository Institution Preservation Program to encourage the preservation of minority depository institutions and the establishment of new ones.
The Board restructured the agency in 2018. Among other changes, the restructuring created the Office of Credit Union Resources and Expansion (CURE). At that time, CURE assumed administration of the NCUA's Minority Depository Institution Preservation Program from OMWI.
In June 2023, the Board invited comment on proposed revisions to IRPS 13-1.
• Updating the administering office to CURE to reflect the agency's current structure;
• Clarifying that the meaning of “community it services,” means a credit union's field of membership;
• Adding a reference to agency guidance to examiners regarding supervision of minority depository institutions;
• Clarifying the process for reviewing a minority depository institution's designation status; and
• Adding new subsection headings and expanding the discussion of agency actions and policies in the areas of minority depository institution engagement, technical assistance, examinations of minority depository institutions, grants and loans, and training.
The Board invited comment on all aspects of the IRPS, including suggestions for any other information or resources the agency could provide to assist credit unions that are minority depository institutions.
The NCUA received five comments on the proposed changes. All commenters were broadly supportive of minority depository institutions and the NCUA's Minority Depository Institution Preservation Program. Commenters noted that minority depository institution credit unions provide important benefits to their communities, including by offering services to those excluded from the mainstream financial system, providing safe and affordable alternatives to predatory lenders, and stimulating economic growth in the communities they serve. Most of the commenters also had suggestions for changes to the IRPS and ways in which the NCUA can better support minority depository institutions. After considering the comments, as discussed below, the Board is adopting the IRPS substantially as proposed.
One commenter requested that the NCUA extend or reopen the comment period, stating that some stakeholders may have been unaware of the proposed IRPS due to current industry and economic challenges. The Board is not extending or reopening the comment period. The original IRPS includes outdated references and the Board provided the standard 60 days for comments under NCUA rulemaking procedures.
Another commenter requested that the NCUA amend the eligibility standards so that credit unions that meet as few as one of the three required criteria could become minority depository institutions, instead of the requirement in the existing and proposed IRPS that all three criteria be met. This commenter noted challenges in establishing that a majority of “the community it services” is made up of minorities. This change is not supported by the statute, which requires that a mutual institution meet all three standards to become a minority depository institution. The statute specifically requires that for a mutual institution to qualify as a minority depository institution, a majority of the board of directors, a majority of the account holders, and a majority of “the community which it services” are minorities.
Similarly, another commenter requested an expansion of the minority depository institution criteria to include all credit unions that commit to minority depository institution principles, that have some minority depository institution characteristics, or that have a minority depository institution credit union merge into them. The Board reiterates that the statute establishes the requirements for minority depository institution designation and permitting differing eligibility requirements would not comply with the statute.
Another commenter commended the NCUA for recognizing the uniqueness of minority depository institutions and the need for a tailored approach to examination and supervision of them. This commenter recommended that the NCUA increase efforts to promote and support the minority depository institution mentorship program and be proactive in providing more resources to minority depository institutions, such as regulatory updates, best practices, and opportunities for training. Through CURE, the NCUA communicates opportunities and resources to minority depository institution credit unions, such as through social media and direct email. The NCUA offered a Minority Depository Institution Mentoring Program from 2020-2022 in conjunction with the then Minority Depository Institution Mentoring grant initiative. Feedback from participating mentees and mentors was overall positive, yet there was not sufficient participation to sustain the program. The agency will continue to seek opportunities to support minority depository institution credit unions and increase their awareness of opportunities.
One commenter suggested the NCUA consider offering technical assistance
Another commenter opined that it would be helpful if the agency provided additional transparency around examination standards for minority depository institution credit unions and explained how these examination standards differ from standard procedures. While examination standards for MDIs and non-MDI credit unions are the same, the Board notes that the NCUA provides guidance for examiners to consider the MDI's mission, unique characteristics, and tailored strategies during an examination. This same commenter suggested creating a group of examiners focused on small minority depository institution credit unions and extending regulatory flexibility to all small minority depository institution credit unions. These suggestions go beyond the scope of the proposed revisions to the IRPS and were provided to applicable NCUA offices to consider. During 2023, the NCUA developed peer metrics in order for examiners to compare minority depository institutions with minority depository institutions. The agency also issued customized guidance to examiners to provide insights into minority depository institutions' unique business models and members' needs. The guidance assists examiners in understanding minority depository institutions' distinct business model compared to other mainstream financial institutions by providing instruction on how to use minority depository institution peer metrics instead of traditional peer metrics.
Commenters also requested the NCUA provide resources to minority depository institution credit unions for specific purposes, such as travel support to enable participation in the NCUA's in-person events, access to an interactive analysis tool that would simplify the process of determining whether an area meets the concentration of facilities test, and additional information about how to track and store member demographic data for purposes of minority depository institution certification. These suggestions were provided to applicable NCUA offices to consider.
Finally, one commenter requested that the NCUA consider supporting the establishment of a fund similar to the Mission-Driven Bank Fund.
In summary, the Board appreciates the various suggestions from commenters and, as noted above, will consider whether and how to implement some of the suggestions. The final paragraph of the IRPS also states that the NCUA's annual report to Congress will include a discussion of the feedback it has solicited and received from minority depository institution credit unions on the effectiveness of the agency's minority depository institution support and preservation activities. The Board believes that, should it determine to adopt some of the suggestions, further changes to the IRPS would not be necessary.
After carefully considering the alternatives offered by these commenters, the Board adopts the revisions to IRPS 13-1 as proposed, with a few minor grammatical and stylistic changes and one correction. The stylistic changes are that the final IRPS consistently uses the phrase “field of membership,” (FOM) instead of the phrase “potential members” that the proposed IRPS had carried over from the prior version. This change makes the language of the entire IRPS consistent with the clarification that “community it services” means FOM.
Additionally, the proposed IRPS mischaracterized the agency's practice in stating that technical assistance is offered annually to each minority depository institution credit union, and the final version of the IRPS deletes this sentence. The Board emphasizes that the change in the language of the IRPS does not change the availability of technical assistance resources for minority depository institution credit unions, including through the Community Development Revolving Loan Fund's grants and loans and through the Small Credit Union and Minority Depository Institution Support Program.
The text of IRPS 13-1 follows:
Minority depository institutions play an important and unique role in promoting the economic viability of minority and underserved communities. Through its Minority Depository Institution Preservation Program, the NCUA engages in a range of efforts to preserve minority depository institutions and foster their success. The Minority Depository Institution Preservation Program is designed to comply with section 308 of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA), which requires the NCUA to submit an annual report to Congress summarizing
• Preserve the present number of minority depository institutions;
• Preserve the minority character of minority depository institutions involved in mergers and acquisitions;
• Provide technical assistance to prevent insolvency of minority depository institutions that are not now insolvent;
• Promote and encourage the creation of new minority depository institutions; and
• Provide training, technical assistance, and educational programs for minority depository institutions.
The NCUA's Minority Depository Institution Preservation Program consists of proactive steps and outreach efforts to promote and preserve minority depository institutions in the credit union system. The NCUA's Office of Credit Union Resources and Expansion (CURE) administers the agency's Minority Depository Institution Preservation Program and will meet periodically with state regulators, other federal regulators, and other stakeholders to discuss outreach efforts, share ideas, and identify areas to work together to assist minority depository institutions.
The NCUA offers minority depository institution-designated credit unions a variety of initiatives to assist in preserving the economic viability of their institutions. The initiatives include technical assistance, educational opportunities, and funding. Examples of such initiatives include the following:
• Consulting and support programs;
• Trainings; and
• Grants and loans through the NCUA's Community Development Revolving Loan Fund (CDRLF), subject to eligibility.
Examples of broad-based and individualized technical assistance include the following:
• Providing guidance in resolving examination concerns;
• Helping minority depository institutions locate new sponsors, mentors, or merger partners;
• Assisting with field of membership expansions;
• Supporting management in setting up new programs and services;
• Attempting to preserve the minority character of failing institutions during the resolution process; and
• Aiding groups that are interested in chartering a new minority depository institution.
The NCUA's Minority Depository Institution Preservation Program will provide periodic engagement with minority depository institutions through interaction with headquarters and field staff. This interaction includes:
• sharing information and expertise on supervisory topics;
• using various venues to engage in an open dialogue between the NCUA, minority depository institutions, and related organizations;
• seeking feedback on the NCUA's efforts under the Minority Depository Institution Preservation Program; and
• providing a variety of training opportunities hosted or sponsored by the NCUA.
The NCUA's outreach also includes seeking out, working with, and supporting groups interested in applying for a new federal or state charter with a minority depository institution designation and aiding existing credit unions interested in receiving the minority depository institution designation.
The NCUA will provide technical assistance to a minority depository institution upon request. A minority depository institution should contact its assigned NCUA regional office, supervisory examiner, or district examiner to request technical assistance.
Technical assistance is not an examination or supervisory activity and will be provided separately from examination and supervision contacts. Technical assistance includes, but is not limited to, assistance in understanding applicable laws and regulations, agency processes, reporting requirements, supervisory guidance, accounting standards, supervisory findings and conclusions (only after the conclusion of the applicable examination or supervision contact), applications or requests for agency approval or action (such as field of membership, bidding on a failing institution, regulatory waivers), and assistance in designating as a minority depository institution. In providing technical assistance, agency staff will not perform tasks expected of an institution's management or employees. And while they may help the institution understand how to apply or bid, agency staff will not assist or guide the institution in developing the substance of such application or bid.
Minority depository institution-designated credit unions have a unique role in promoting the economic viability of minority and underserved communities, at times necessitating distinct approaches to taking and managing the related financial and operational risks. The NCUA expects examiners to recognize the distinctive characteristics and differences in core objectives of each financial institution and consider these when evaluating the institution's financial and operational condition and related management practices. Examiners will evaluate a minority depository institution using, among other things, peer metrics such as through the Financial Performance Report.
The NCUA provides examiners guidance to educate them about the unique challenges faced by minority depository institutions and the support and services the NCUA offers to help minority depository institutions address such challenges. The guidance acknowledges, at times, some minority depository institutions may need more or different support from the NCUA than other credit unions. The guidance also lists specific types of technical assistance a minority depository institution may request of the NCUA. It also advises that minority depository institutions often have unique memberships and provide financial services to consumers and businesses in communities that might not otherwise have access to another federally insured financial institution. Therefore, the policies, processes, risks, and practices of minority depository institutions may vary and comparison to other credit unions based solely on similar size may have limited value. Instead, examiners are instructed to assess each minority depository institution based on its unique strategy and membership.
The CDRLF provides loans and grants to low-income designated credit unions, some of which are also designated as minority depository institutions, to expand outreach to underserved populations, improve digital services and cybersecurity, provide staff training, and support capacity-building programs, as examples. The
The NCUA offers training to credit unions including minority depository institutions, through various formats such as webinars, online courses, videos, and in-person events. Through the NCUA Learning Management System, the agency offers training and educational resources to credit union board members, management, employees, and volunteers online and at no charge. Examples of the content provided include guidance on credit union operations, compliance, community partnerships, and strategic planning.
With regard to a potentially failing minority depository institution or the need for an assisted merger of a minority depository institution, as with any insured credit union, the Board will consider providing section 208 assistance under the Federal Credit Union Act to reduce the risk or avert a threatened loss to the National Credit Union Share Insurance Fund (NCUSIF), facilitate a merger or consolidation, or to prevent the closing of a credit union that the Board determines is in danger of closing.
The NCUA will make every effort to preserve the minority character of failing minority depository institutions during the resolution process. In the event of the potential failure of an minority depository institution, the agency will contact minority depository institutions in the NCUA's merger registry that qualify to bid on a particular failing institution. Agency staff will solicit interest in bidding on the failing minority depository institution and offer technical assistance to any minority depository institution desiring to bid. The NCUA will also provide minority depository institutions interested in submitting a bid with an additional two weeks to submit a bid whenever possible. Except in the cases of conservatorships, liquidations, or assisted mergers, the minority depository institution's board of directors is generally the decision-maker on a merger partner provided the selection is consistent with regulatory and safety and soundness standards. For conservatorships, liquidations, or assisted mergers, in the selection process, the NCUA will consider all the requirements applicable to a merger or purchase and assumption, including FIRREA's general preference guidelines.
The agency adopted the definition of a minority depository institution in FIRREA section 308 that applies to a mutual institution.
• A majority of its current members are from any of the eligible minority groups;
• A majority of the members of its board of directors are from any of the eligible minority groups; and
• A majority of the community it services, as designated in its field of membership, are from any of the eligible minority groups.
For minority representation to be a “majority,” it must be greater than 50 percent.
The NCUA relies on the FIRREA section 308 “minority” definition to identify an eligible minority as any Black American, Asian American, Hispanic American, or Native American.
A credit union that meets the eligibility requirements can self-designate as a minority depository institution by following the guidelines as specified on the NCUA's website. The instructions to the NCUA's
A credit union defined as a “small credit union” by the NCUA under the Regulatory Flexibility Act (RFA) may self-designate greater than 50 percent representation among its current members, and within the community it services (field of membership), based solely on knowledge of those members. Under the RFA, the NCUA currently defines a small credit union as a credit union with total assets of less than $100 million.
A credit union not defined as a small credit union by the NCUA may rely on one of the following methods, as applicable, to determine the minority composition of its current membership exclusively and of the community it services. The credit union must maintain documentation supporting its minority depository institution self-designation.
1. The credit union may ascertain the minority representation using demographic data from the U.S. Census Bureau website, based on the area(s) where the current membership or field of membership resides, such as a township, borough, city, county, or Metropolitan Statistical Area. If the U.S. Census data—for example, census tracts, zip codes, townships, boroughs, cities, or counties—shows the area's population comprises mostly eligible minorities, the credit union may assume that its current membership and the community it services each have the same minority composition as the Census data indicates.
2. The credit union may use Home Mortgage Disclosure Act (HMDA) data to calculate the reported number of minority mortgage applicants divided by the total number of mortgage applicants within the credit union's membership. If the share of minority
3. The credit union may elect to collect data from members who voluntarily choose to participate in such collection about their racial identity and use the data to determine minority representation among the credit union's membership. The credit union should consider using an unbiased third party to conduct such a collection. For example, data can be collected through a survey of members assessing the services they desire, or by mailed electoral ballots for official positions. Once collected, it is essential to maintain the confidentiality of the data; it should not be retained in the members' files or with any personal identifiers, such as, names, accounts, or Social Security numbers. If a majority of its current members are minorities, it is likely the majority of the community the credit union services (its field of membership) will consist of minorities.
4. The credit union may use any other reasonable form of data, such as membership address list analyses or an employer's demographic analysis of employees.
A minority depository institution credit union must assess whether it continues to meet the required definition of a minority depository institution whenever there is a change in its board of directors, or it makes a significant change to its field of membership, and update its designation, if necessary, in the NCUA
The NCUA will monitor minority depository institutions and report to Congress annually on the number and overall financial condition of minority depository institutions, along with actions taken by the agency to preserve and strengthen them and to encourage the chartering of new ones.
The RFA generally requires that when an agency issues a proposed rule or a final rule pursuant to the Administrative Procedure Act or another law, the agency must prepare a regulatory flexibility analysis that meets the requirements of the RFA and publish such analysis in the
The Board fully considered the potential economic impact of the changes during the development of the revised IRPS. The revised IRPS would clarify the NCUA's current policy on minority depository institution preservation and provide additional services to minority depository institutions. The revised IRPS would not impose any new significant burden on credit unions designated as minority depository institutions and may provide some additional resources. The resources gained, however, are unlikely to result in a significant economic impact for affected credit unions. Small credit unions are also not obligated to participate in the minority depository institution program. Accordingly, the NCUA certifies that the revised IRPS would not have a significant economic impact on a substantial number of small federally insured credit unions.
The Paperwork Reduction Act of 1995 (PRA) applies to rulemakings in which an agency creates a new information collection or amends existing information collection requirements.
This revision to IRPS 13-1 does not alter the information collection described under OMB control number 3133-0195, and the NCUA does not anticipate an increase in the burden based on the revisions. There are no additional information collections resulting from these changes.
Executive Order 13132 encourages independent regulatory agencies to consider the impact of their actions on state and local interests. The NCUA, an independent regulatory agency as defined in 44 U.S.C. 3502(5), voluntarily complies with the Executive order to adhere to fundamental federalism principles. This revised IRPS will not have a substantial direct effect on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government. Although state-chartered credit unions are eligible to obtain the minority depository institution designation and receive assistance based on it, the NCUA does not believe this designation affects state governments generally or state credit union regulators in particular. The NCUA will continue to work cooperatively with state credit union regulators to examine federally insured, state-chartered credit unions and does not expect the revised IRPS to alter these relationships or allocation of responsibilities. The decision about whether to designate as a minority depository institution or seek minority depository institution program benefits will be an individual business decision for each credit union's board. The NCUA has determined that this revised IRPS does not constitute a policy that has federalism implications for purposes of the executive order.
The NCUA has determined that these revisions to IRPS 13-1 will not affect family well-being within the meaning of section 654 of the Treasury and General Government Appropriations Act, 1999.
The Congressional Review chapter of the Small Business Regulatory Enforcement Fairness Act of 1996 generally provides for congressional review of agency rules.
Institute of Museum and Library Services, National Foundation on the Arts and the Humanities.
Submission for OMB review, request for comments, collection of information.
The Institute of Museum and Library Services (IMLS) announces that 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 Museums for All Program Evaluation. 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
Written comments and recommendations for proposed information collection requests should be sent within 30 days of publication of this Notice to
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 (
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: 202-653-4779, or by email at
IMLS 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. To learn more, visit
The 60-day Notice was published in the
Postal Regulatory Commission.
Notice.
The Commission is noticing a recent Postal Service filing for the Commission's consideration concerning a negotiated service agreement. This notice informs the public of the filing, invites public comment, and takes other administrative steps.
Submit comments electronically via the Commission's Filing Online system at
David A. Trissell, General Counsel, at 202-789-6820.
The Commission gives notice that the Postal Service filed request(s) for the Commission to consider matters related to negotiated service agreement(s). The request(s) may propose the addition or removal of a negotiated service agreement from the Market Dominant or the Competitive product list, or the modification of an existing product currently appearing on the Market Dominant or the Competitive product list.
Section II identifies the docket number(s) associated with each Postal Service request, the title of each Postal Service request, the request's acceptance date, and the authority cited by the Postal Service for each request. For each request, the Commission appoints an officer of the Commission to represent the interests of the general public in the proceeding, pursuant to 39 U.S.C. 505 (Public Representative). Section II also establishes comment deadline(s) pertaining to each request.
The public portions of the Postal Service's request(s) can be accessed via the Commission's website (
The Commission invites comments on whether the Postal Service's request(s) in the captioned docket(s) are consistent with the policies of title 39. For request(s) that the Postal Service states concern Market Dominant product(s), applicable statutory and regulatory requirements include 39 U.S.C. 3622, 39 U.S.C. 3642, 39 CFR part 3030, and 39 CFR part 3040, subpart B. For request(s) that the Postal Service states concern Competitive product(s), applicable statutory and regulatory requirements include 39 U.S.C. 3632, 39 U.S.C. 3633, 39 U.S.C. 3642, 39 CFR part 3035, and 39 CFR part 3040, subpart B. Comment deadline(s) for each request appear in section II.
1.
This Notice will be published in the
1:00 p.m. on Thursday, February 29, 2024.
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 her designee, has certified that, in her 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 examinations and 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.
Notice is hereby given that pursuant to the Paperwork Reduction Act of 1995 (“PRA”) (44 U.S.C. 3501
On January 27, 1976, the Commission adopted Rule 11a1-1(T)—Transactions Yielding Priority, Parity, and Precedence (17 CFR 240.11a1-1(T)) under the Exchange Act (15 U.S.C. 78a
Without these requirements, it would not be possible for the Commission to monitor its mandate under the Exchange Act to promote fair and orderly markets and ensure that exchange members have, as the principal purpose of their exchange memberships, the conduct of a public securities business.
There are approximately 531 respondents that require an aggregate total of approximately 15 hours per year to comply with this Rule. Each of these approximately 531 respondents makes an estimated 20 annual responses, for an aggregate of 10,620 responses per year. Each response takes approximately 5 seconds to complete. Thus, the total time burden per year is approximately 15 hours (10,620 × 5 seconds/60 seconds per minute/60 minutes per hour = 14.7618 hours rounded up to 15 hours). The approximate internal cost of compliance per hour is approximately $405, resulting in a total internal cost of compliance of approximately $6,075 per year (15 hours @$405).
Written comments are invited on: (a) whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information will have practical utility; (b) the accuracy of the Commission's estimates of the burden of the proposed 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 by April 26, 2024.
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information under the PRA unless it displays a currently valid OMB control number.
Please direct your written comments to: David Bottom, Director/Chief Information Officer, Securities and Exchange Commission, c/o John Pezzullo, 100 F Street NE, Washington, DC 20549, or send an email to:
On August 10, 2023, the Options Clearing Corporation (“OCC”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change SR-OCC-2023-007 (“Proposed Rule Change”) pursuant to section 19(b) of the Securities Exchange Act of 1934 (“Exchange Act”)
On September 25, 2023, pursuant to section 19(b)(2) of the Exchange Act,
Section 19(b)(2) of the Exchange Act
The Commission is extending the period for Commission action on the Proposed Rule Change, as modified by Partial Amendment No. 1 and Amendment No. 2 (hereinafter, the “Proposed Rule Change”). The Commission finds that it is appropriate to designate a longer period within which to take action on the Proposed Rule Change so that the Commission has sufficient time to consider the issues raised by the Proposed Rule Change and to take action on the Proposed Rule Change. Accordingly, pursuant to section 19(b)(2)(B)(ii)(II) of the Exchange Act,
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On August 10, 2023, National Securities Clearing Corporation (“NSCC”) filed with the Securities and Exchange Commission (“Commission”) proposed rule change SR-NSCC-2023-007 (“Proposed Rule Change”) pursuant to Section 19(b) of the Securities Exchange Act of 1934 (“Exchange Act”)
On September 25, 2023, pursuant to section 19(b)(2) of the Exchange Act,
Section 19(b)(2) of the Exchange Act
The Commission is extending the period for Commission action on the Proposed Rule Change, as modified by Partial Amendment No. 1 and Amendment No. 2 (hereinafter, the “Proposed Rule Change”). The Commission finds that it is appropriate to designate a longer period within which to take action on the Proposed Rule Change so that the Commission has sufficient time to consider the issues raised by the Proposed Rule Change and to take action on the Proposed Rule Change. Accordingly, pursuant to section 19(b)(2)(B)(ii)(II) of the Exchange Act,
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1)
The Exchange proposes to amend Rule 7.31E(a)(2)(B) regarding Limit Order Price Protection. The proposed rule change is available on the Exchange's website at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
The Exchange proposes to amend Rule 7.31E(a)(2)(B) (“Limit Order Price Protection”) to provide for the application of Limit Order Price Protection during the Core Trading Session even where a contra-side NBB (NBO) has not been established.
Currently, Rule 7.31E(a)(2)(B) provides that a Limit Order to buy (sell) will be rejected if it is priced at or above (below) the greater of $0.15 or a specified percentage away from the National Best Offer (National Best Bid) (“NBO” and “NBB,” respectively),
The Exchange has recently received requests from market participants to modify this rule so that during the Core Trading Session, Limit Order Price Protection would apply even when no contra-side NBB or NBO has been established. In such cases, market participants have suggested that the Limit Order Price Protection calculation should use an alternate reference price, such as the last consolidated round-lot price of the trading day or the prior trading day's official closing price. That way, even if no contra-side NBB or NBO has been established, the Exchange would still apply Limit Order Price Protection using the best-available alternate reference price, thereby offering market participants greater protections against the execution of Limit Orders with aberrant prices during the Core Trading Session. The Exchange is aware that the Limit Order Price Protection rule on the MIAX Pearl equities exchange (“MIAX Pearl”) currently features such a hierarchy of reference prices, so that Limit Order Price Protection is applied to all Limit Orders, even where no contra-side NBB or NBO has been established.
In light of these requests from market participants, the Exchange now proposes to amend Rule 7.31E(a)(2)(B) to provide a hierarchy of reference prices against which Limit Order Price Protection would apply during the Core Trading Session. As in the current rule, during the Core Trading Session, a Limit Order to buy (sell) would be rejected if it is priced at or above (below) the greater of $0.15 or a specified percentage (as set forth in the accompanying table) away from the NBO (NBB). But if such NBO (NBB) has not yet been established, the Exchange would use as the reference price the last consolidated round-lot price of that trading day, or, if none, the prior trading day's Official Closing Price.
The Exchange does not propose for this change to apply during the Early and Late Trading Sessions. This is because with respect to both the Early and Late Trading Sessions, there is a higher likelihood that overnight news developments may move the market more than the percentages specified in the Limit Order Price Protection rule. If, in the absence of an NBO (NBB), such percentages were applied to the prior trading day's Official Closing Price, this might lead the Exchange to reject orders that are appropriately trying to establish a quote at the new market level. For this reason, the Exchange believes the current rule should continue to govern during the Early and Late Trading Sessions, such that if there is no contra-side NBO (NBB), Limit Order Price Protection will not be applied.
Accordingly, the Exchange proposes to amend and reorganize Rule 7.31E(a)(2)(B) into three sub-sections, with sub-section (i) describing the relevant reference prices during the Core Trading Session, sub-section (ii) describing the relevant reference price during the Early and Late Trading Sessions, and sub-section (iii) describing the balance of the current rule.
Specifically, the Exchange proposes that new sub-section (i) of Rule 7.31E(a)(2)(B) would provide that during the Core Trading Session, a Limit Order to buy (sell) will be rejected if it is priced at or above (below) the greater of $0.15 or a specified percentage (as set forth in the accompanying table) away from “(a) the NBO (NBB), or, if none, (b) the last consolidated round-lot price of that trading day, or, if none, (c) the prior trading day's Official Closing Price.”
The Exchange proposes that new sub-section (ii) of the rule would provide that during the Early and Late Trading Sessions, a Limit Order to buy (sell) will be rejected if it is priced at or above (below) the greater of $0.15 or a specified percentage (as set forth in the accompanying table) away from the NBO (NBB), and that Limit Order Price Protection will not be applied to an incoming Limit Order to buy (sell) if there is no NBO (NBB).
Finally, the Exchange proposes that the balance of the current rule be moved to new sub-section (iii) after the new subtitle “Applicability.”
The Exchange does not propose to make any other changes to the rule, nor does it propose any changes to the $0.15 or specified percentages used in the calculation of Limit Order Price Protection.
The Exchange anticipates implementing the proposed change in the first quarter of 2024 and, in any event, will implement the proposed rule change no later than the end of June 2024. The Exchange will announce the timing of such changes by Trader Update.
The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,
The Exchange believes that the proposed change would remove impediments to and perfect the mechanism of a free and open market and a national market system, and in general, protect investors and the public interest, because the use a substantially similar hierarchy of reference prices for the application of Limit Order Price Protection when no contra-side NBO or NBB has been established is currently in effect on MIAX Pearl and therefore is not novel.
The Exchange also believes that it would protect investors and the public interest for the Exchange to maintain the current Limit Order Price Protection rule for the Early and Late Trading Sessions. With respect to both the Early and Late Trading Sessions, there is a higher likelihood that overnight news developments may move the market more than the percentages specified in the Limit Order Price Protection rule. If, in the absence of an NBO (NBB), such percentages were applied to the prior trading day's Official Closing Price, this might lead the Exchange to reject orders that are appropriately trying to establish a quote at the new market level. For this reason, the Exchange believes that, for the protection of investors and the public interest, the current rule should continue to govern during the Early and Late Trading Sessions, such that if there is no contra-side NBO (NBB), Limit Order Price Protection will not be applied.
The Exchange believes that the proposed rule change will not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed rule change would not address competitive issues but rather would enhance the Exchange's Limit Order Price Protection mechanism, to further protect market participants from aberrant prices and improve continuous trading and price discovery.
No written comments were solicited or received with respect to the proposed rule change.
The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act
At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B)
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to file number SR-NYSEAMER-2024-11. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's internet website (
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
U.S. Small Business Administration.
Notice.
This is a Notice of the Presidential declaration of a major disaster for the State of Washington (FEMA-4759-DR), dated 02/15/2024.
Issued on 02/15/2024.
Alan Escobar, Office of Disaster Recovery & Resilience, 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 02/15/2024, applications for disaster loans may be submitted online using the MySBA Loan Portal
The following areas have been determined to be adversely affected by the disaster:
The Interest Rates are:
The number assigned to this disaster for physical damage is 202055 and for economic injury is 202060.
Federal Aviation Administration (FAA), DOT.
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995, FAA invites public comments about our intention to request the Office of Management and Budget (OMB) approval to renew an information collection. The
Written comments should be submitted by March 27, 2024.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Sandra Fox by email at:
Federal Motor Carrier Safety Administration (FMCSA), Department of Transportation (DOT).
Notice of provisional renewal of exemption; correction.
In a notice of provisional renewal of exemption published in the
This correction is effective February 26, 2024. Comments on the notice of provisional renewal of exemption must still be received on or before March 22, 2024.
David Sutula, Vehicle and Roadside Operations Division, Office of Carrier, Driver, and Vehicle Safety, FMCSA, 1200 New Jersey Avenue SE, Washington, DC 20590-0001; (202) 366-9209;
In FR Doc. 2024-03446 on page 13135, in the third column, in the
“The exemption is renewed for 6 months, unless revoked earlier.” Issued under authority delegated in 49 CFR 1.87.
Federal Railroad Administration (FRA), Department of Transportation (DOT).
Notice of availability and request for comments.
This document provides the public with notice that, on February 15, 2024, the Central Florida Rail Corridor (CFRC) submitted a request for amendment (RFA) to its FRA-certified positive train control (PTC) system in order to temporarily disable its PTC system between Milepost (MP) 749.60 and MP 755.4 to perform infrastructure upgrades to better facilitate vehicular travel across a crossing. As this RFA may involve a request for FRA's approval of proposed material modifications to an FRA-certified PTC system, FRA is publishing this notice and inviting public comment on CFRC's RFA to its PTC system.
FRA will consider comments received by March 18, 2024. FRA may consider comments received after that date to the extent practicable and without delaying implementation of valuable or necessary modifications to a PTC system.
Gabe Neal, Staff Director, Signal, Train Control, and Crossings Division, telephone: 816-516-7168, email:
In general, title 49 United States Code (U.S.C.) section 20157(h) requires FRA to certify that a host railroad's PTC system complies with title 49 Code of Federal Regulations (CFR) part 236, subpart I, before the technology may be operated in revenue service. Before making certain changes to an FRA-certified PTC system or the associated FRA-approved PTC Safety Plan (PTCSP), a host railroad must submit, and obtain FRA's approval of, an RFA to its PTC system or PTCSP under 49 CFR 236.1021.
Under 49 CFR 236.1021(e), FRA's regulations provide that FRA will publish a notice in the
Interested parties are invited to comment on CFRC's RFA by submitting written comments or data. During FRA's review of CFRC's RFA, FRA will consider any comments or data submitted within the timeline specified in this notice and to the extent practicable, without delaying implementation of valuable or necessary modifications to a PTC system.
In accordance with 49 CFR 211.3, FRA solicits comments from the public to better inform its decisions. DOT posts these comments, without edit, including any personal information the commenter provides, to
Issued in Washington, DC.
1. Qualified Issuer Applications submitted with Guarantee Applications will have priority for review over Qualified Issuer Applications submitted without Guarantee Applications. With the exception of the aforementioned prioritized review, all Qualified Issuer Applications and Guarantee Applications will be reviewed by the CDFI Fund on an ongoing basis, in the order in which they are received, or by such other criteria that the CDFI Fund may establish in its sole discretion.
2. Guarantee Applications that are incomplete or require the CDFI Fund to request additional or clarifying information may delay the ability of the CDFI Fund to move the Guarantee Application to the next phase of review. Submitting an incomplete Guarantee Application earlier than other applicants does not ensure first approval.
3. Qualified Issuer Applications and Guarantee Applications that were received in FY 2023 and that were neither withdrawn nor declined in FY 2023 will be considered under FY 2024 authority.
4. Pursuant to the Regulations at 12 CFR 1808.504(c), the Guarantor may limit the number of Guarantees issued per year or the number of Guarantee Applications accepted to ensure that a sufficient examination of Guarantee Applications is conducted.
1. Guarantee Program Regulations. The regulations that govern the CDFI Bond Guarantee Program were published on February 5, 2013 (78 FR 8296; 12 CFR part 1808) (the Regulations), and provide the regulatory requirements and parameters for CDFI Bond Guarantee Program implementation and administration including general provisions, eligibility, eligible activities, applications for Guarantee and Qualified Issuer, evaluation and selection, terms and conditions of the Guarantee, Bonds, Bond Loans, and Secondary Loans.
2. Application materials. Details regarding Qualified Issuer Application and Guarantee Application content requirements are found in this NOGA and the respective application materials. Interested parties should review the template Bond Documents and Bond Loan documents that will be used in connection with each Guarantee. The template documents are posted on the CDFI Fund's website for review. Such documents include, among others:
a. The Secondary Loan Requirements, which contain the minimum required criteria (in addition to the Eligible CDFI's underwriting criteria) for a loan to be accepted as a Secondary Loan or Other Pledged Loan. The Secondary Loan Requirements include the General Requirements and the Underwriting Review Checklist;
b. The Agreement to Guarantee, which describes the roles and responsibilities of the Qualified Issuer, will be signed by the Qualified Issuer and the Guarantor, and will include term sheets as exhibits that will be signed by each individual Eligible CDFI;
c. The Term Sheet(s), which describe the material terms and conditions of the Bond Loan from the Qualified Issuer to the Eligible CDFI. The CDFI Fund website includes template term sheets for the General Recourse Structure (GRS), the Alternative Financial Structure (AFS), and for the CDFI to Financing Entity Asset Class utilizing pooled tertiary loans;
d. The Bond Trust Indenture, which describes the responsibilities of the Master Servicer/Trustee in overseeing the Trust Estate and the servicing of the Bonds, which will be entered into by the Qualified Issuer and the Master Servicer/Trustee;
e. The Bond Loan Agreement, which describes the terms and conditions of Bond Loans, and will be entered into by the Qualified Issuer and each Eligible CDFI that receives a Bond Loan;
f. The Bond Purchase Agreement, which describes the terms and conditions under which the Bond Purchaser will purchase the Bonds issued by the Qualified Issuer, and will be signed by the Bond Purchaser, the Qualified Issuer, the Guarantor and the CDFI Fund; and
g. The Future Advance Promissory Bond, which will be signed by the Qualified Issuer as its promise to repay the Bond Purchaser. The template documents may be updated periodically, as needed, and will be tailored, as appropriate, to the terms and conditions of a particular Bond, Bond Loan, and Guarantee. Additionally, the CDFI Fund may impose terms and conditions that address risks unique to the Eligible CDFI's business model and target market, which may include items such as concentration risk of a specific Eligible CDFI, geography or Secondary Borrower.
The Bond Documents and the Bond Loan documents reflect the terms and conditions of the CDFI Bond Guarantee Program and will not be substantially revised or negotiated prior to execution.
1. Award funds received under any other CDFI Fund Program cannot be used by any participant, including Qualified Issuers, Eligible CDFIs, and Secondary Borrowers, to pay principal, interest, fees, administrative costs, or issuance costs (including Bond Issuance Fees) related to the CDFI Bond Guarantee Program, or to fund the Risk-Share Pool for a Bond Issue.
2. Bond Proceeds may not be used to refinance any projects financed and/or supported with proceeds from the Capital Magnet Fund (CMF). This restriction remains in place so long as the property or project is financed or supported by a CMF award, until the end of the defined CMF award investment period, or when the loan funded by the CMF award has been replaced by a newer loan for a different phase of the project (for instance a permanent loan to replace a construction loan).
3. Bond Proceeds may not be used to refinance a leveraged loan during the seven-year NMTC compliance period. However, Bond Proceeds may be used to refinance a QLICI after the seven-year NMTC compliance period has ended, so long as all other programmatic requirements are met.
4. The terms Qualified Equity Investment, Community Development Entity, and QLICI are defined in the NMTC Program's authorizing statute, 26 U.S.C. 45D.
1. The CDFI Bond Guarantee Program underwriting process will include a comprehensive review of the Eligible CDFI's concentration of sources of funds available for debt service, including the concentration of sources from other Federal programs and level of reliance on said sources, to determine the Eligible CDFI's ability to service the additional debt. The review of the CDFI's debt concentration could lead to covenants limiting the amount of the applicant's bond loan debt concentration in their portfolio.
2. In the event that the Eligible CDFI proposes to use other Federal funds to service Bond Loan debt or as a Credit Enhancement for Secondary Loans, the CDFI Fund may require, in its sole discretion, that the Eligible CDFI provide written assurance from such other Federal program in a form that is acceptable to the CDFI Fund and that the CDFI Fund may rely upon, that said use is permissible.
The following requirements apply to all Qualified Issuer Applications and Guarantee Applications submitted under this NOGA, as well as any Qualified Issuer Applications and Guarantee Applications submitted under the FY 2023 NOGA that were neither withdrawn nor declined in FY 2023.
1. In general. By statute and regulation, the Qualified Issuer applicant must be either a Certified CDFI (an entity that the CDFI Fund has officially notified that it meets all CDFI certification requirements as set forth in 12 CFR 1805.201) or an entity designated by a Certified CDFI to issue Bonds on its behalf. An Eligible CDFI must be a Certified CDFI as of the Bond Issue Date and must maintain its CDFI certification throughout the term of the corresponding Bond.
2. CDFI Certification requirements. Pursuant to the regulations that govern CDFI certification (12 CFR 1805.201), an entity may be certified if it is a legal entity (meaning, that it has properly filed articles of incorporation or other organizing documents with the State or other appropriate body in the jurisdiction in which it was legally established, as of the date the CDFI Certification Application is submitted) and meets the following requirements:
a. Primary Mission requirement (12 CFR 1805.201(b)(1)): To be a Certified CDFI, an entity must have a primary mission of promoting community development. In general, the entity will be found to meet the primary mission requirement if its incorporating documents or board-approved narrative statement (
b. Financing Entity requirement (12 CFR 1805.201(b)(2)): To be a Certified CDFI, an entity must demonstrate that its predominant business activity is the provision, in arms-length transactions, of Financial Products and/or Financial Services. On April 10, 2015, the CDFI Fund published a revision of 12 CFR 1805.201(b)(2), the section of the CDFI certification regulation that governs the “financing entity” requirement. The regulatory change creates a means for the CDFI Fund, in its discretion, to deem an Affiliate (meaning, in this case, an entity that is Controlled by a certified CDFI; see 12 CFR 1805.104) to have met the financing entity requirement based on the financing activity or track record of the Controlling CDFI (Control is defined in 12 CFR 1805.104), solely for the purpose of participating in the CDFI Bond Guarantee Program as an Eligible CDFI. This change is key to the creation of an AFS for the Bond Guarantee Program (see Section II(B)(2) of this NOGA for more information on the AFS). In order for the Affiliate to rely on the Controlling CDFI's financing track record, (A) the Controlling CDFI must be a Certified CDFI; (B) there must be an operating agreement that includes management and ownership provisions in effect between the two entities (prior to the submission of a CDFI Certification Application and in form and substance that is acceptable to the CDFI Fund). If applicable, CDFI Certification Applications must be received by the CDFI Fund by 11:59 p.m. ET on March 23, 2024. An applicant for an Affiliate certification must have submitted a CDFI Certification Application for an Affiliate by March 23, 2024 in order for it to be considered for CDFI certification and participation in the FY 2024 application round of the CDFI Bond Guarantee Program. This regulatory provision affects only the Affiliate's ability to meet the financing entity requirement for purposes of CDFI certification; said Affiliate must meet the other certification criteria in accordance with the existing regulations governing CDFI certification.
i. The regulation also states that, solely for the purpose of participating in the CDFI Bond Guarantee Program, the Affiliate's provision of Financial Products and Financial Services, Development Services, and/or other similar financing transactions does not need to be arms-length in nature if such transaction is by and between the Affiliate and Controlling CDFI, pursuant to an operating agreement that (a) includes management and ownership provisions, (b) is effective prior to the submission of a CDFI Certification Application, and (c) is in form and substance that is acceptable to the CDFI Fund.
ii. An Affiliate whose CDFI certification is based on the financing activity or track record of a Controlling CDFI is not eligible to receive financial or technical assistance awards or tax credit allocations under any other CDFI Fund program until such time that the Affiliate meets the financing entity requirement based on its own activity or track record.
iii. If an Affiliate elects to satisfy the financing entity requirement based on the financing activity or track record of a Controlling CDFI, and if the CDFI Fund approves such Affiliate as an Eligible CDFI for the sole purpose of participation in the CDFI Bond Guarantee Program, said Affiliate's CDFI certification will terminate if: (A) it does not enter into Bond Loan documents with its Qualified Issuer within one (1) year of the date that it signs the term sheet (which is an exhibit to the Agreement to Guarantee); (B) it ceases to be an Affiliate of the Controlling CDFI; or (C) it ceases to adhere to CDFI certification requirements.
iv. An Affiliate electing to satisfy the financing entity requirement based on the financing activity or track record of a Controlling CDFI does not need to have completed any financing activities prior to the date the CDFI Certification Application is submitted or approved. However, the Affiliate and the Controlling CDFI must have entered into the operating agreement described in (b)(i)(B) above, prior to such date, in form and substance that is acceptable to the CDFI Fund.
c. Target Market requirement (12 CFR 1805.201(b)(3)): To be a Certified CDFI, an entity must serve at least one eligible Target Market (either an Investment Area or a Targeted Population) by directing at least 60.00% of all of its Financial Product activities (in both number and dollar volume of transactions) to one or more eligible Target Markets.
i. Solely for the purpose of participation as an Eligible CDFI in the FY 2024 application round of the CDFI Bond Guarantee Program, an Affiliate of a Controlling CDFI may be deemed to meet the Target Market requirement by virtue of serving either:
(A) an Investment Area through “borrowers or investees” that serve the Investment Area or provide significant benefits to its residents (pursuant to 12 CFR 1805.201(b)(3)(ii)(F)). For purposes of this NOGA, the term “borrower” or “investee” includes a borrower of a loan originated by the Controlling CDFI that has been transferred to the Affiliate as lender (which loan must meet Secondary Loan Requirements), pursuant to an operating agreement with the Affiliate that includes ownership/investment and management provisions, which agreement must be in effect prior to the submission of a CDFI Certification Application and in form and substance that is acceptable to the CDFI Fund. Loans originated by the Controlling CDFI do not need to be transferred prior to application submission; however, such loans must be transferred before certification of the Affiliate is effective. If an Affiliate has more than one Controlling CDFI, it may meet this Investment Area requirement through one or more of such Controlling CDFIs' Investment Areas; or
(B) a Targeted Population, which shall mean the individuals, who are Low Income persons or lack adequate access to Financial Products or Financial Services in the entity's Target Market meeting the requirements of 12 CFR 1805.201(b)(3)(iii) of the CDFI Program Regulations as designated in the Recipient's most recently approved CDFI certification documentation. Pursuant to 12 CFR 1805.201(b)(3)(iii)(B) if a loan originated by the Controlling CDFI has been transferred to the Affiliate as lender (which loan must meet Secondary Loan Requirements) and the Controlling CDFI's financing entity activities serve the Affiliate's Targeted Population pursuant to an operating agreement that includes ownership/investment and management provisions by and between the Affiliate and the Controlling CDFI, which agreement must be in effect prior to the submission of a CDFI Certification Application and in form and substance that is acceptable to the CDFI Fund. Loans originated by the Controlling CDFI do not need to be transferred prior to application submission; however, such loans must be transferred before certification of the Affiliate is effective. If an Affiliate has more than one Controlling CDFI, it may meet this Targeted Population requirement through one or more of such Controlling CDFIs' Targeted Populations.
An Affiliate that meets the Target Market requirement through paragraphs (ii) (A) or (B) above, is not eligible to receive financial or technical assistance awards or tax credit allocations under any other CDFI Fund program until such time that the Affiliate meets the Target Market requirements based on its own activity or track record.
ii. If an Affiliate elects to satisfy the target market requirement based on paragraphs (c)(ii)(A) or (B) above, the Affiliate and the Controlling CDFI must
d. Development Services requirement (12 CFR 1805.201(b)(4)): To be a Certified CDFI, an entity must provide Development Services in conjunction with its Financial Products and/or Financial Services. Solely for the purpose of participation as an Eligible CDFI in the FY 2024 application round of the CDFI Bond Guarantee Program, an Affiliate of a Controlling CDFI may be deemed to meet this requirement if: (i) its Development Services are provided by the Controlling CDFI pursuant to an operating agreement that includes management and ownership provisions with the Controlling CDFI that is effective prior to the submission of a CDFI Certification Application and in form and substance that is acceptable to the CDFI Fund and (ii) the Controlling CDFI must have provided Development Services in conjunction with the transactions that the Affiliate is likely to purchase, prior to the date of submission of the CDFI Certification Application.
e. Accountability requirement (12 CFR 1805.201(b)(5)): To be a Certified CDFI, an entity must maintain accountability to residents of its Investment Area or Targeted Population through representation on its governing board and/or advisory board(s). Solely for the purpose of participation as an Eligible CDFI in the FY 2024 application round of the CDFI Bond Guarantee Program, an Affiliate of a Controlling CDFI may be deemed to meet this requirement only if it has a governing board and/or advisory board that has the same composition as the Controlling CDFI and such governing board or advisory board has convened and/or conducted Affiliate business prior to the date of submission of the CDFI Certification Application. If an Affiliate has multiple Controlling CDFIs, the governing board and/or advisory board may have a mixture of representatives from each Controlling CDFI so long as there is at least one representative from each Controlling CDFI.
f. Non-government Entity requirement (12 CFR 1805.201(b)(6)): To be a Certified CDFI, an entity can neither be a government entity nor be Controlled by one or more governmental entities.
g. for the FY 2024 application round of the CDFI Bond Guarantee Program, only one Affiliate per Controlling CDFI may participate as an Eligible CDFI. However, there may be more than one Affiliate participating as an Eligible CDFI in any given Bond Issue.
3. Operating agreement: An operating agreement between an Affiliate and its Controlling CDFI, as described above, must provide, in addition to the elements set forth above, among other items: (i) conclusory evidence that the Controlling CDFI Controls the Affiliate, through investment and/or ownership; (ii) explanation of all roles, responsibilities and activities to be performed by the Controlling CDFI including, but not limited to, governance, financial management, loan underwriting and origination, record- keeping, insurance, treasury services, human resources and staffing, legal counsel, dispositions, marketing, general administration, and financial reporting; (iii) compensation arrangements; (iv) the term and termination provisions; (v) indemnification provisions, if applicable; (vi) management and ownership provisions; and (vii) default and recourse provisions.
4. For more detailed information on CDFI certification requirements, please review the CDFI certification regulation (12 CFR 1805.201) and CDFI Certification Application materials/guidance posted on the CDFI Fund's website. Interested parties should note that there are specific regulations and requirements that apply to Depository Institution Holding Companies, Insured Depository Institutions, Insured Credit Unions, and State-Insured Credit Unions. The above certification requirements may be revised or further explained by guidance published by the CDFI Fund. The applicant should refer to such materials to ensure it meets certification requirements that are in effect when it applies.
5. For the 2024 application round only, uncertified entities, including an Affiliate of a Controlling CDFI, that wish to apply to be certified and designated as an Eligible CDFI in the FY 2024 application round of the CDFI Bond Guarantee Program must have submitted a CDFI Certification Application to the CDFI Fund by 11:59 p.m. ET on March 23, 2024. Any CDFI Certification Application received after such date and time, as well as incomplete applications, will not be considered for the FY 2024 application round of the CDFI Bond Guarantee Program.
6. In no event will the Secretary approve a Guarantee for a Bond from which a Bond Loan will be made to an entity that is not an Eligible CDFI. The Secretary must make FY 2024 Guarantee Application decisions prior to the end of FY 2024 (September 30, 2024), and the CDFI Fund must close the corresponding Bonds and Bond Loans, prior to the end of Calendar Year 2024 (December 31, 2024). Accordingly, it is essential that CDFI Certification Applications are submitted timely and in complete form, with all materials and information needed for the CDFI Fund to make a certification decision. Information on CDFI certification, the CDFI Certification Application, and application submission instructions may be found on the CDFI Fund's website at
1. General Recourse Structure (GRS). Under the GRS, the Bond is a nonrecourse obligation to the Qualified Issuer, and the Bond Loan is a full general recourse obligation to the Eligible CDFI.
2. Alternative Financial Structure (AFS). An AFS can be used as a limited recourse option to a Controlling CDFI or group of Controlling CDFIs. The AFS is an Affiliate of a Controlling CDFI(s) that is created for the sole purpose of participation as an Eligible CDFI in the CDFI Bond Guarantee Program. The AFS must be an Affiliate of a Controlling CDFI(s) and must be certified as a CDFI in accordance with the requirements set forth in Section II(A) of this NOGA. The AFS, as the Eligible CDFI, provides a general full recourse obligation to repay the Bond Loan, and the Bond Loan is on the balance sheet of the AFS. The requirements for the AFS are delineated in the template term sheet located on the CDFI Fund website at
1. Electronic submission. All Qualified Issuer Applications and Guarantee Applications must be submitted through the CDFI Fund's Awards Management Information System (AMIS). Applications sent by mail, fax, or other form will not be permitted, except in circumstances that the CDFI Fund, in its sole discretion, deems acceptable. Please note that Applications will not be accepted through
2. Applicant identifier numbers. Please note that, pursuant to Office of Management and Budget (OMB) guidance (68 FR 38402), each Qualified Issuer applicant and Guarantee applicant must provide, as part of its Application, its Unique Entity Identifier (UEI), if applicable, as well as UEI numbers for its proposed Program
3. System for Award Management (SAM). Registration with SAM is required for each Qualified Issuer applicant, its proposed Program Administrator, its proposed Servicer, and each Certified CDFI that is included in any Application. The CDFI Fund will not consider any Applications that do not meet the requirement that each entity must be properly registered before the date of Application submission. The SAM registration process may take one month or longer to complete. A signed notarized letter identifying the SAM authorized entity administrator for the entity associated with the UEI number is required. This requirement is applicable to new entities registering in SAM, as well as to existing entities with registrations being updated or renewed in SAM. Applicants without UEI and/or EIN numbers should allow for additional time as an applicant cannot register in SAM without those required numbers. Applicants that have previously completed the SAM registration process must verify that their SAM accounts are current and active. Each applicant must continue to maintain an active SAM registration with current information at all times during which it has an active Federal award or an Application under consideration by a Federal awarding agency. The CDFI Fund will not consider any applicant that fails to properly register or activate its SAM account and these restrictions also apply to organizations that have not yet received a UEI or EIN number. Applicants must contact SAM directly with questions related to registration or SAM account changes as the CDFI Fund does not maintain this system and has no ability to make changes or correct errors of any kind. For more information about SAM, visit
4. AMIS accounts. Each Qualified Issuer applicant, its proposed Program Administrator, its proposed Servicer, and each Certified CDFI that is included in the Qualified Issuer Application or Guarantee Application must register User and Organization accounts in AMIS. Each such entity must be registered as an Organization and register at least one User Account in AMIS. As AMIS is the CDFI Fund's primary means of communication with applicants with regard to its programs, each such entity must make sure that it updates the contact information in its AMIS account before any Application is submitted. For more information on AMIS, please visit the AMIS Landing Page at
1. As of the date of this NOGA, the Qualified Issuer Application, the Guarantee Application, and related application instructions for this round may be found on the CDFI Bond Guarantee Program's page on the CDFI Fund's website at
2. Paperwork Reduction Act. Under the Paperwork Reduction Act (44 U.S.C. chapter 35), an agency may not conduct or sponsor a collection of information, and an individual is not required to respond to a collection of information, unless it displays a valid OMB control number. Pursuant to the Paperwork Reduction Act, the Qualified Issuer Application, the Guarantee Application, and the Secondary Loan Requirements have been assigned the following control number: 1559-0044.
3. Application deadlines. In order to be considered for the issuance of a Guarantee under FY 2024 program authority, Qualified Issuer Applications must be submitted by 11:59 p.m. ET on April 16, 2024, and Guarantee Applications must be submitted by 11:59 p.m. ET on April 23, 2024. Qualified Issuer Applications and Guarantee Applications received in FY 2023 that were neither withdrawn nor declined will be considered under FY 2024 authority. If applicable, CDFI Certification Applications must be received by the CDFI Fund by 11:59 p.m. ET on March 23, 2024. Format. Detailed Qualified Issuer Application and Guarantee Application content requirements are found in the Applications and application guidance. The CDFI Fund will read only information requested in the Application and reserves the right not to read attachments or supplemental materials that have not been specifically requested in this NOGA, the Qualified Issuer, or the Guarantee Application. Supplemental materials or attachments such as letters of public support or other statements that are meant to bias or influence the Application review process will not be read.
5. Application revisions. After submitting a Qualified Issuer Application or a Guarantee Application, the applicant will not be permitted to revise or modify the Application in any way unless authorized or requested by the CDFI Fund.
6. Material changes.
a. In the event that there are material changes after the submission of a Qualified Issuer Application prior to the designation as a Qualified Issuer, the applicant must notify the CDFI Fund of such material changes information in a timely and complete manner. The CDFI Fund will evaluate such material changes, along with the Qualified Issuer Application, to approve or deny the designation of the Qualified Issuer.
b. In the event that there are material changes after the submission of a Guarantee Application (including, but not limited to, a revision of the Capital Distribution Plan or a change in the Eligible CDFIs that are included in the Application) prior to or after the designation as a Qualified Issuer or approval of a Guarantee Application or Guarantee, the applicant must notify the CDFI Fund of such material changes information in a timely and complete manner. The Guarantor will evaluate such material changes, along with the Guarantee Application, to approve or deny the Guarantee Application and/or determine whether to modify the terms and conditions of the Agreement to Guarantee. This evaluation may result in a delay of the approval or denial of a Guarantee Application.
1. Pending resolution of default or noncompliance. If a Qualified Issuer applicant, its proposed Program Administrator, its proposed Servicer, or any of the Certified CDFIs included in the Qualified Issuer Application or Guarantee Application is a prior recipient or allocatee under any CDFI Fund program and (i) it has submitted reports to the CDFI Fund that demonstrate default or noncompliance with a previously executed agreement with the CDFI Fund, and (ii) the CDFI Fund has yet to make a final determination as to whether the entity is in default or noncompliant with its previously executed agreement, the CDFI Fund will consider the Qualified Issuer Application or Guarantee Application pending full resolution, in the sole determination of the CDFI Fund, of the default or noncompliance.
2. Previous findings of default or noncompliance. If a Qualified Issuer applicant, its proposed Program Administrator, its proposed Servicer, or any of the Certified CDFIs included in the Qualified Issuer Application or Guarantee Application is a prior recipient or allocatee under any CDFI Fund program and the CDFI Fund has made a final determination that the entity is in default or noncompliant with a previously executed agreement with the CDFI Fund, but has not notified the entity that it is ineligible to apply for future CDFI Fund program awards or allocations, the CDFI Fund will consider the Qualified Issuer Application or Guarantee Application. However, it is strongly advised that the entity take action to address such default or noncompliance finding, as repeat findings of default or noncompliance may result in the CDFI Fund determining the entity ineligible to participate in future CDFI Fund program rounds, which could result in any pending applications being deemed ineligible for further review. The CDFI Bond Guarantee Program staff cannot resolve compliance matters; instead, please contact the CDFI Fund's Office of Compliance Monitoring and Evaluation Unit (OCME) by AMIS Service Request if your organization has questions about its current compliance status or has been found not in compliance with a previously executed agreement with the CDFI Fund.
3. Ineligibility due to default or noncompliance. The CDFI Fund will not consider a Qualified Issuer Application or Guarantee Application if the applicant, its proposed Program Administrator, its proposed Servicer, or any of the Certified CDFIs included in the Qualified Issuer Application or Guarantee Application, is a prior recipient or allocatee under any CDFI Fund program and if, as of the date of Qualified Issuer Application or Guarantee Application submission, (i) the CDFI Fund has made a determination that such entity is in default or noncompliant with a previously executed agreement and (ii) the CDFI Fund has provided written notification that such entity is ineligible to apply for any future CDFI Fund program awards or allocations. Such entities will be ineligible to submit a Qualified Issuer or Guarantee Application, or be included in such submission, as the case may be, for such time period as specified by the CDFI Fund in writing.
All outstanding reporting and compliance questions should be directed to the Office of Compliance Monitoring and Evaluation help desk by AMIS Service Requests. The CDFI Fund will respond to applicants' reporting, compliance, or disbursement questions between the hours of 9:00 a.m. and 5:00 p.m. ET, starting on the date of the publication of this NOGA.
The CDFI Fund may also bar from consideration any such entity that has, in any proceeding instituted against it in, by, or before any court, governmental, or administrative body or agency, received a final determination within the three years prior to the date of publication of this NOGA indicating that the entity violated any federal civil rights laws or regulations, including, but not limited, to discrimination under (i) Title VI of the Civil Rights Act of 1964, as amended (42 U.S.C. 2000d
(iv) the Age Discrimination Act of 1975, as amended (42 U.S.C. 6101-6107), which prohibits discrimination on the basis of age; (v) the Drug Abuse Office and Treatment Act of 1972 (Pub. L. 92-255), as amended, relating to nondiscrimination on the basis of drug abuse; (vi) the Comprehensive Alcohol Abuse and Alcoholism Prevention, Treatment and Rehabilitation Act of 1970 (Pub. L. 91-616), as amended, relating to nondiscrimination on the basis of alcohol abuse or alcoholism; (vii) Sections 523 and 527 of the Public Health Service Act of 1912 (42 U.S.C. 290dd-3 and 290ee-3), as amended, relating to confidentiality of alcohol and drug abuse patient records; or (viii) Title VIII of the Civil Rights Act of 1968 (42 U.S.C. 3601
1. Qualified Issuer. The Qualified Issuer is a Certified CDFI, or an entity designated by a Certified CDFI to issue Bonds on its behalf, that meets the requirements of the Regulations and this NOGA, and that has been approved by the CDFI Fund pursuant to review and evaluation of its Qualified Issuer Application. The Qualified Issuer will, among other duties: (i) organize the Eligible CDFIs that have designated it to serve as their Qualified Issuer; (ii) prepare and submit a complete and timely Qualified Issuer and Guarantee Application to the CDFI Fund; (iii) if the Qualified Issuer Application is approved by the CDFI Fund and the Guarantee Application is approved by the Guarantor, prepare the Bond Issue; (iv) manage all Bond Issue servicing, administration, and reporting functions; (v) make Bond Loans; (vi) oversee the financing or refinancing of Secondary Loans; (vii) ensure compliance throughout the duration of the Bond with all provisions of the Regulations, and Bond Documents and Bond Loan Documents entered into between the Guarantor, the Qualified Issuer, and the Eligible CDFI; and (viii) ensure that the Master Servicer/Trustee complies with the Bond Trust Indenture and all other applicable regulations. Further, the role of the Qualified Issuer also is to ensure that its proposed Eligible CDFI applicants possess adequate and well performing assets to support the debt service of the proposed Bond Loan.
2. Qualified Issuer Application. The Qualified Issuer Application is the document that an entity seeking to serve as a Qualified Issuer submits to the CDFI Fund to apply to be approved as a Qualified Issuer prior to consideration of a Guarantee Application.
3. Qualified Issuer Application evaluation, general. Each Qualified Issuer Application will be evaluated by the CDFI Fund and, if acceptable, the applicant will be approved as a Qualified Issuer, in the sole discretion of the CDFI Fund. The CDFI Fund's Qualified Issuer Application review and evaluation process is based on established procedures, which may include interviews of applicants and/or site visits to applicants conducted by the CDFI Fund. Through the Application review process, the CDFI Fund will evaluate Qualified Issuer applicants on a merit basis and in a fair and consistent manner. Each Qualified Issuer applicant will be reviewed on its ability to successfully carry out the responsibilities of a Qualified Issuer throughout the life of the Bond. The Applicant must currently meet the criteria established in the Regulations to be deemed a Qualified Issuer. Qualified Issuer Applications that are forward-looking or speculate as to the eventual acquisition of the required capabilities and criteria are unlikely to be approved. Qualified Issuer Application processing will be initiated in chronological order by date of receipt; however, Qualified Issuer Applications that are incomplete or require the CDFI Fund to request additional or clarifying information may delay the ability of the CDFI Fund to deem the Qualified Issuer Application complete and move it to the next phase of review. Submitting a substantially incomplete application earlier than other applicants does not ensure first approval.
1. CDFI certification requirements. The Qualified Issuer applicant must be a Certified CDFI or an entity designated by a Certified CDFI to issue Bonds on its behalf.
2. Designation and attestation by Certified CDFIs. An entity seeking to be approved by the CDFI Fund as a Qualified Issuer must be designated as a Qualified Issuer by at least one Certified CDFI. A Qualified Issuer may not designate itself. The Qualified Issuer applicant will prepare and submit a complete and timely Qualified Issuer Application to the CDFI Fund in accordance with the requirements of the Regulations, this NOGA, and the Application. A Certified CDFI must attest in the Qualified Issuer Application that it has designated the Qualified Issuer to act on its behalf and that the information in the Qualified Issuer Application regarding it is true, accurate, and complete.
1. Substantive review.
a. If the CDFI Fund determines that the Qualified Issuer Application is complete and eligible, the CDFI Fund will undertake a substantive review in accordance with the criteria and procedures described in the Regulations, this NOGA, the Qualified Issuer Application, and CDFI Bond Guarantee Program policies.
b. As part of the substantive evaluation process, the CDFI Fund reserves the right to contact the Qualified Issuer applicant (as well as its proposed Program Administrator, its proposed Servicer, and each designating Certified CDFI in the Qualified Issuer Application) by telephone, email, mail, or through on-site visits for the purpose of obtaining additional, clarifying, confirming, or supplemental application information. The CDFI Fund reserves the right to collect such additional, clarifying, confirming, or supplemental information from said entities as it deems appropriate. If contacted for additional, clarifying, confirming, or supplemental information, said entities must respond within the time parameters set by the CDFI Fund or the Qualified Issuer Application will be rejected.
2. Qualified Issuer criteria. All materials provided in the Qualified Issuer Application will be used to evaluate the applicant. Qualified Issuer determinations will be made based on Qualified Issuer applicants' experience and expertise, in accordance with the following criteria:
a. Organizational capability.
i. The Qualified Issuer applicant must demonstrate that it has the appropriate expertise, capacity, experience, and qualifications to issue Bonds for Eligible Purposes, or is otherwise qualified to serve as Qualified Issuer, as well as manage the Bond Issue on the terms and conditions set forth in the Regulations, this NOGA, and the Bond Documents, satisfactory to the CDFI Fund.
ii. The Qualified Issuer applicant must demonstrate that it has the appropriate expertise, capacity, experience, and qualifications to originate, underwrite, service and monitor Bond Loans for Eligible Purposes, targeted to Low-Income Areas and Underserved Rural Areas.
iii. The Qualified Issuer applicant must demonstrate that it has the appropriate expertise, capacity, experience, and qualifications to manage the disbursement process set forth in the Regulations at 12 CFR 1808.302 and 1808.307.
b. Servicer. The Qualified Issuer applicant must demonstrate that it has (either directly or contractually through another designated entity) the appropriate expertise, capacity, experience, and qualifications, or is otherwise qualified to serve as Servicer. The Qualified Issuer Application must provide information that demonstrates that the Qualified Issuer's Servicer has the expertise, capacity, experience, and qualifications necessary to perform certain required administrative duties (including, but not limited to, Bond Loan servicing functions).
c. Program Administrator. The Qualified Issuer applicant must demonstrate that it has (either directly or contractually through another designated entity) the appropriate expertise, capacity, experience, and qualifications, or is otherwise qualified to serve as Program Administrator. The Qualified Issuer Application must provide information that demonstrates that the Qualified Issuer's Program Administrator has the expertise, capacity, experience, and qualifications necessary to perform certain required administrative duties (including, but not limited to, compliance monitoring and reporting functions).
d. Strategic alignment. The Qualified Issuer applicant will be evaluated on its strategic alignment with the CDFI Bond Guarantee Program on factors that include, but are not limited to: (i) its mission's strategic alignment with community and economic development objectives set forth in the Riegle Act at 12 U.S.C. 4701; (ii) its strategy for deploying the entirety of funds that may become available to the Qualified Issuer through the proposed Bond Issue; (iii) its experience providing up to 30-year capital to CDFIs or other borrowers in Low-Income Areas or Underserved Rural Areas as such terms are defined in the Regulations at 12 CFR 1808.102; (iv) its track record of activities relevant to its stated strategy; and (v) other factors relevant to the Qualified Issuer's strategic alignment with the program.
e. Experience. The Qualified Issuer applicant will be evaluated on factors that demonstrate that it has previous experience: (i) performing the duties of a Qualified Issuer including issuing bonds, loan servicing, program administration, underwriting, financial reporting, and loan administration; (ii) lending in Low-Income Areas and Underserved Rural Areas; and (iii) indicating that the Qualified Issuer's current principals and team members have successfully performed the required duties, and that previous experience is applicable to the current principals and team members.
f. Management and staffing. The Qualified Issuer applicant must demonstrate that it has sufficiently strong management and staffing capacity to undertake the duties of Qualified Issuer. The applicant must also demonstrate that its proposed Program Administrator and its proposed Servicer have sufficiently strong management and staffing capacity to undertake their respective requirements under the CDFI Bond Guarantee Program. Strong management and staffing capacity is evidenced by factors that include, but are not limited to: (i) a sound track record of delivering on past performance; (ii) a documented succession plan; (iii) organizational stability including staff retention; and (iv) a clearly articulated, reasonable, and well- documented staffing plan.
g. Financial strength. The Qualified Issuer applicant must demonstrate the strength of its financial capacity and activities including, among other items, financially sound business practices relative to the industry norm for bond issuers, as evidenced by reports of Appropriate Federal Banking Agencies, Appropriate State Agencies, or auditors. Such financially sound business practices will demonstrate: (i) the financial wherewithal to perform activities related to the Bond Issue such as administration and servicing; (ii) the ability to originate, underwrite, close, and disburse loans in a prudent manner; (iii) whether the applicant is depending on external funding sources and the reliability of long-term access to such funding; (iv) whether there are foreseeable counterparty issues or credit concerns that are likely to affect the applicant's financial stability; and (v) a
h. Systems and information technology. The Qualified Issuer applicant must demonstrate that it (as well as its proposed Program Administrator and its proposed Servicer) has, among other things: (i) a strong information technology capacity and the ability to manage loan servicing, administration, management, and document retention; (ii) appropriate office infrastructure and related technology to carry out the CDFI Bond Guarantee Program activities; and (iii) sufficient backup and disaster recovery systems to maintain uninterrupted business operations.
i. Pricing structure. The Qualified Issuer applicant must provide its proposed pricing structure for performing the duties of Qualified Issuer, including the pricing for the roles of Program Administrator and Servicer. Although the pricing structure and fees shall be decided by negotiation between market participants without interference or approval by the CDFI Fund, the CDFI Fund will evaluate whether the Qualified Issuer applicant's proposed pricing structure is feasible to carry out the responsibilities of a Qualified Issuer over the life of the Bond to help ensure sound implementation of the program.
j. Other criteria. The Qualified Issuer applicant must meet such other criteria as may be required by the CDFI Fund, as set forth in the Qualified Issuer Application or required by the CDFI Fund in its sole discretion, for the purposes of evaluating the merits of a Qualified Issuer Application. The CDFI Fund may request an on-site review of Qualified Issuer applicant to confirm materials provided in the written application, as well as to gather additional due diligence information. The on-site reviews are a critical component of the application review process and will generally be conducted for all applicants not regulated by an Appropriate Federal Banking Agency or Appropriate State Agency. The CDFI Fund reserves the right to conduct a site visit of regulated entities, in its sole discretion.
k. Third-party data sources. The CDFI Fund, in its sole discretion, may consider information from third-party sources including, but not limited to, periodicals or publications, publicly available data sources, or subscriptions services for additional information about the Qualified Issuer applicant, the proposed Program Administrator, the proposed Servicer, and each Certified CDFI that is included in the Qualified Issuer Application. Any additional information received from such third- party sources will be reviewed and evaluated through a systematic and formalized process.
1. Guarantee Application.
a. The Guarantee Application is the application document that a Qualified Issuer (in collaboration with the Eligible CDFI(s) that seek to be included in the proposed Bond Issue) must submit to the CDFI Fund in order to apply for a Guarantee. The Qualified Issuer shall provide all required information in its Guarantee Application to establish that it meets all criteria set forth in the Regulations at 12 CFR 1808.501 and this NOGA and can carry out all CDFI Bond Guarantee Program requirements including, but not limited to, information that demonstrates that the Qualified Issuer has the appropriate expertise, capacity, and experience and is qualified to make, administer and service Bond Loans for Eligible Purposes. An Eligible CDFI may be an existing certified or certifiable CDFI (the GRS), or the Eligible CDFI may be an Affiliate of a Controlling CDFI(s) that is created for the sole purpose of participation as an Eligible CDFI in the CDFI Fund Bond Guarantee Program (the AFS; see Section II(B) of this NOGA for Recourse and Collateral Requirements and Section II(A) of this NOGA for certification requirements for certifiable CDFIs and Affiliates of Controlling CDFIs).
b. The Guarantee Application comprises a Capital Distribution Plan and at least one Secondary Capital Distribution Plan, as well as all other requirements set forth in this NOGA or as may be required by the Guarantor and the CDFI Fund in their sole discretion, for the evaluation and selection of Guarantee applicants.
2. Guarantee Application evaluation, general. The Guarantee Application review and evaluation process will be based on established standard procedures, which may include interviews of applicants and/or site visits to applicants conducted by the CDFI Fund. Through the Application review process, the CDFI Fund will evaluate Guarantee applicants on a merit basis and in a fair and consistent manner. Each Guarantee applicant will be reviewed on its ability to successfully implement and carry out the activities proposed in its Guarantee Application throughout the life of the Bond. Eligible CDFIs must currently meet the criteria established in the Regulations to participate in the CDFI Bond Guarantee Program. Guarantee Applications that are forward-looking or speculate as to the eventual acquisition of the required capabilities and criteria by the Eligible CDFI(s) are unlikely to be approved. Guarantee Application processing will be initiated in chronological order by date of receipt; however, Guarantee Applications that are incomplete or require the CDFI Fund to request additional or clarifying information may delay the ability of the CDFI Fund to deem the Guarantee Application complete and move it to the next phase of review. Submitting a substantially incomplete application earlier than other applicants does not ensure first approval.
1. Eligibility; CDFI certification requirements. If approved for a Guarantee, each Eligible CDFI must be a Certified CDFI as of the Bond Issue Date and must maintain its respective CDFI certification throughout the term of the corresponding Bond. For more information on CDFI Certification and the certification of affiliated entities, including the deadlines for submission
2. Qualified Issuer as Eligible CDFI. A Qualified Issuer may not participate as an Eligible CDFI within its own Bond Issue, but may participate as an Eligible CDFI in a Bond Issue managed by another Qualified Issuer.
3. Attestation by proposed Eligible CDFIs. Each proposed Eligible CDFI must attest in the Guarantee Application that it has designated the Qualified Issuer to act on its behalf and that the information pertaining to the Eligible CDFI in the Guarantee Application is true, accurate and complete. Each proposed Eligible CDFI must also attest in the Guarantee Application that it will use Bond Loan proceeds for Eligible Purposes and that Secondary Loans will be financed or refinanced in accordance with the applicable Secondary Loan Requirements.
1. Substantive review.
a. If the CDFI Fund determines that the Guarantee Application is complete and eligible, the CDFI Fund will undertake a substantive review in accordance with the criteria and procedures described in the Regulations at 12 CFR 1808.501, this NOGA, and the Guarantee Application. The substantive review of the Guarantee Application will include due diligence, underwriting, credit risk review, and Federal credit subsidy calculation, in order to determine the feasibility and risk of the proposed Bond Issue, as well as the strength and capacity of the Qualified Issuer and each proposed Eligible CDFI. Each proposed Eligible CDFI will be evaluated independently of the other proposed Eligible CDFIs within the proposed Bond Issue; however, the Bond Issue must then cumulatively meet all requirements for Guarantee approval. In general, applicants are advised that proposed Bond Issues that include a large number of proposed Eligible CDFIs are likely to substantially increase the review period.
b. As part of the substantive review process, the CDFI Fund may contact the Qualified Issuer (as well as the proposed Eligible CDFIs included in the Guarantee Application) by telephone, email, mail, or through an on-site visit for the sole purpose of obtaining additional, clarifying, confirming, or supplemental application information. The CDFI Fund reserves the right to collect such additional, clarifying, confirming or supplemental information as it deems appropriate. If contacted for additional, clarifying, confirming, or supplemental information, said entities must respond within the time parameters set by the CDFI Fund or the Guarantee Application will be rejected.
2. Guarantee Application criteria.
a. In general, a Guarantee Application will be evaluated based on the strength and feasibility of the proposed Bond Issue, as well as the creditworthiness and performance of the Qualified Issuer and the proposed Eligible CDFIs. Guarantee Applications must demonstrate that each proposed Eligible CDFI has the capacity for its respective Bond Loan to be a secured, general recourse obligation of the proposed Eligible CDFI and to deploy the Bond Loan proceeds within the required disbursement timeframe as described in the Regulations. Unless receiving significant support from a Controlling CDFI, or Credit Enhancements, Eligible CDFIs should not request Bond Loans greater than their current total asset size or which would otherwise significantly impair their net asset or net equity position. In general, an applicant requesting a Bond Loan more than 50% of its total asset size should be prepared to clearly demonstrate that it has a reasonable plan to scale its operations prudently and in a manner that does not impair its net asset or net equity position. Further, an entity with a limited operating history or a history of operating losses is unlikely to meet the strength and feasibility requirements of the CDFI Bond Guarantee Program, unless it receives significant support from a Controlling CDFI, or Credit Enhancements.
b. The Capital Distribution Plan must demonstrate the Qualified Issuer's comprehensive plan for lending, disbursing, servicing and monitoring each Bond Loan in the Bond Issue. It includes, among other information, the following components:
i.
ii.
iii.
iv.
v.
vi.
(A)
(B)
(C)
(D)
(E)
(F)
(G)
vii. Assurances and certifications that not less than 100% of the principal amount of Bonds will be used to make Bond Loans for Eligible Purposes beginning on the Bond Issue Date, and that Secondary Loans shall be made as set forth in subsection 1808.307(b); and
viii. Such other information that the Guarantor, the CDFI Fund and/or the Bond Purchaser may deem necessary and appropriate.
c. The CDFI Fund will use the information described in the Capital Distribution Plan and Secondary Capital Distribution Plan(s) to evaluate the feasibility of the proposed Bond Issue,
i.
ii.
(A)
(B)
(C)
(D)
(E)
(F)
iii.
(B)
(C)
(D)
(E)
3. Credit subsidy cost. The credit subsidy cost is the net present value of the estimated long- term cost of the Guarantee to the Federal Government as determined under the applicable provisions of the Federal Credit Reform Act of 1990, as amended (FCRA). Treasury has not received appropriated amounts from Congress to cover the credit subsidy costs associated with Guarantees issued pursuant to this NOGA. In accordance with FCRA, Treasury must consult with, and obtain the approval of, OMB for Treasury's calculation of the credit subsidy cost of each Guarantee prior to entering into any Agreement to Guarantee.
1. The Guarantor, in the Guarantor's sole discretion, may approve a Guarantee, after consideration of the recommendation from the CDFI Bond Guarantee Program's Credit Review Board and/or based on the merits of the Guarantee Application.
2. The Guarantor reserves the right to approve Guarantees, in whole or in part, in response to any, all, or none of the Guarantee Applications submitted in response to this NOGA. The Guarantor also reserves the right to approve any Guarantees in an amount that is less than requested in the corresponding Guarantee Application. Pursuant to the
3. The CDFI Fund will notify the Qualified Issuer in writing of the Guarantor's approval or disapproval of a Guarantee Application. Bond Documents and Bond Loan documents must be executed, and Guarantees will be provided, in the order in which Guarantee Applications are approved or by such other criteria that the CDFI Fund may establish, in its sole discretion, and in any event by September 30, 2024.
4. Please note that the most recently dated templates of Bond Documents and Bond Loan documents that are posted on the CDFI Fund's website will not be substantially revised or negotiated prior to closing of the Bond and Bond Loan and issuance of the corresponding Guarantee. If a Qualified Issuer or a proposed Eligible CDFI does not understand the terms and conditions of the Bond Documents or Bond Loan documents (including those listed in Section II.H., above), it should ask questions or seek technical assistance from the CDFI Fund. However, if a Qualified Issuer or a proposed Eligible CDFI disagrees or is uncomfortable with any term/condition, or if legal counsel cannot provide a legal opinion in substantially the same form and content of the required legal opinion, it should not apply for a Guarantee.
5. The Guarantee shall not be effective until the Guarantor signs and delivers the Guarantee.
Further, if the Guarantor determines that any portion of the Guarantee Application is incorrect in any material respect, the Guarantor reserves the right, in the Guarantor's sole discretion, to deny the Application.
1. The Regulations state that Secondary Loans must be secured by a first lien of the Eligible CDFI on pledged collateral, in accordance with the Regulations (at 12 CFR 1808.307(f)) and within certain parameters. Examples of acceptable forms of collateral may include, but are not limited to: real property (including land and structures), leasehold interests, machinery, equipment and movables, cash and cash equivalents, accounts receivable, letters of credit, inventory, fixtures, contracted revenue streams from non-Federal counterparties, provided the Secondary Borrower pledges all assets, rights and interests necessary to generate such revenue stream, and a Principal Loss Collateral Provision. Intangible assets, such as customer relationships and intellectual property rights, are not acceptable forms of collateral. Loans secured by real property that are still in a construction phase will only be permitted when backed by a letter of credit issued by a bank deemed acceptable by the CDFI Bond Guarantee Program, in a format deemed acceptable to the CDFI Bond Guarantee Program, that guarantees the full value of the pledged collateral until at minimum completion of the construction and stabilization phases.
2. The Regulations require that Bond Loans must be secured by a first lien on a collateral assignment of Secondary Loans, and further that the Secondary Loans must be secured by a first lien or parity lien on acceptable collateral.
3. Valuation of the collateral pledged by the Secondary Borrower must be based on the Eligible CDFI's credit policy guidelines and must conform to the standards set forth in the Uniform Standards of Professional Appraisal Practice (USPAP) and the Secondary Loan Requirements.
4. Independent third-party appraisals are required for the following collateral: real estate, leasehold interests, fixtures, machinery and equipment, movables stock valued in excess of $250,000, and contracted revenue stream from non-Federal creditworthy counterparties. Secondary Loan collateral shall be valued using the cost approach, net of depreciation and shall be required for the following: accounts receivable, machinery, equipment and movables, and fixtures.
1. In order to achieve the statutory zero-credit subsidy constraint of the CDFI Bond Guarantee Program and to avoid a call on the Guarantee, Eligible CDFIs are encouraged to include Credit Enhancements and Principal Loss Collateral Provisions structured to protect the financial interests of the Federal Government. Any Credit Enhancement or Principal Loss Collateral Provision must be pledged, as part of the Trust Estate, to the Master Servicer/Trustee for the benefit of the Federal Financing Bank.
2. Credit Enhancements may include, but are not limited to, payment guarantees from third parties or Affiliate(s), non-Federal capital, lines or letters of credit, or other pledges of financial resources that enhance the Eligible CDFI's ability to make timely interest and principal payments under the Bond Loan.
3. As distinct from Credit Enhancements, Principal Loss Collateral Provisions may be provided in lieu of pledged collateral and/or in addition to pledged collateral. A Principal Loss Collateral Provision shall be in the form of cash or cash equivalent guarantees from non-Federal capital in amounts necessary to secure the Eligible CDFI's obligations under the Bond Loan after exercising other remedies for default. For example, a Principal Loss Collateral Provision may include a deficiency guarantee whereby another entity assumes liability after other default remedies have been exercised, and covers the deficiency incurred by the creditor. The Principal Loss Collateral Provision shall, at a minimum, provide for the provision of cash or cash equivalents in an amount that is not less than the difference between the value of the collateral and the amount of the accelerated Bond Loan outstanding.
4. In all cases, acceptable Credit Enhancements or Principal Loss Collateral Provisions shall be proffered by creditworthy providers and shall provide information about the adequacy of the facility in protecting the financial interests of the Federal Government, either directly or indirectly through supporting the financial strength of the
5. For Secondary Loans benefitting from a Principal Loss Collateral Provision (
6. If the Principal Loss Collateral Provision is provided by a financial institution that is regulated by an Appropriate Federal Banking Agency or an Appropriate State Agency, the guaranteeing institution must demonstrate performance of financially sound business practices relative to the industry norm for providers of collateral enhancements as evidenced by reports of Appropriate Federal Banking Agencies, Appropriate State Agencies, and auditors, as appropriate.
7. In the event that the Eligible CDFI proposes to use other Federal funds to service Bond Loan debt or as a Credit Enhancement, the CDFI Fund may require, in its sole discretion, that the Eligible CDFI provide written assurance from such other Federal program, in a form that is acceptable to the CDFI Fund and that the CDFI Fund may rely upon, that said use is permissible.
H. Reporting Requirements:
1. Reports.
a. General. As required pursuant to the Regulations at 12 CFR 1808.619, and as set forth in the Bond Documents and the Bond Loan documents, the CDFI Fund will collect information from each Qualified Issuer which may include, but will not be limited to: (i) quarterly and annual financial reports and data (including an OMB single audit per 2 CFR 200 Subpart F, as applicable) for the purpose of monitoring the financial health, ratios and covenants of Eligible CDFIs that include asset quality (nonperforming assets, loan loss reserves, and net charge-off ratios), liquidity (current ratio, working capital, and operating liquidity ratio), solvency (capital ratio, self-sufficiency, fixed charge, leverage, and debt service coverage ratios); (ii) annual reports as to the compliance of the Qualified Issuer and Eligible CDFIs with the Regulations and specific requirements of the Bond Documents and Bond Loan documents; (iii) Master Servicer/Trustee summary of program accounts and transactions for each Bond Issue; (iv) Secondary Loan Certifications describing Eligible CDFI lending, collateral valuation, and eligibility; (v) financial data on Secondary Loans to monitor underlying collateral, gauge overall risk exposure across asset classes, and assess loan performance, quality, and payment history; (vi) annual certifications of compliance with program requirements; (vii) material event disclosures including any reports of Eligible CDFI management and/or organizational changes; (viii) annual updates to the Capital Distribution Plan (as described below); (ix) supplements and/or clarifications to correct reporting errors (as applicable); (x) project level reports to understand overall program impact and the manner in which Bond Proceeds are deployed for Eligible Community or Economic Development Purposes; and (xi) such other information that the CDFI Fund and/or the Bond Purchaser may require, including but not limited to demographic information of the beneficiaries of the CDFI Bond Guarantee Program, to the extent permissible by law.
b. Additional reporting by Qualified Issuers. A Qualified Issuer receiving a Guarantee shall submit annual updates to the approved Capital Distribution Plan, including an updated Proposed Sources and Uses of Funds for each Eligible CDFI, noting any deviation from the original baseline with regards to both timing and allocation of funding among Secondary Loan asset classes. The Qualified Issuer shall also submit a narrative, no more than five (5) pages in length for each Eligible CDFI, describing the Eligible CDFI's capacity to manage its Bond Loan. The narrative shall address any Notification of Material Events and relevant information concerning the Eligible CDFI's management information systems, personnel, executive leadership or board members, as well as financial capacity. The narrative shall also describe how such changes affect the Eligible CDFI's ability to generate impacts in Low-Income or Underserved Rural Areas.
c. Change of Secondary Loan asset classes. Any Eligible CDFI seeking to expand the allowable Secondary Loan asset classes beyond what was approved by the CDFI Bond Guarantee Program's Credit Review Board or make other deviations that could potentially result in a modification, as that term is defined in OMB Circulars A-11 and A-129, must receive approval from the CDFI Fund before the Eligible CDFI can begin to enact the proposed changes. The CDFI Fund will consider whether the Eligible CDFI possesses or has acquired the appropriate systems, personnel, leadership, and financial capacity to implement the revised Capital Distribution Plan. The CDFI Fund will also consider whether these changes assist the Eligible CDFI in generating impacts in Low-Income or Underserved Rural Areas. Such changes will be reviewed by the CDFI Bond Guarantee Program and presented to the Credit Review Board for approval, and, if required, appropriate consultation will be made with OMB to ensure compliance with OMB Circulars A-11 and A-129, prior to notifying the Eligible CDFI if such changes are acceptable under the terms of the Bond Loan Agreement.
d. Reporting by Affiliates and Controlling CDFIs. In the case of an Eligible CDFI relying, for CDFI certification purposes, on the financing entity activity of a Controlling CDFI, the CDFI Fund will require that the Affiliate and Controlling CDFI provide certain joint reports, including but not limited to those listed in subparagraph 1(a) above.
e. Detailed information on specific reporting requirements and the format, frequency, and methods by which this information will be transmitted to the CDFI Fund will be provided to Qualified Issuers, Program Administrators, Servicers, and Eligible CDFIs through the Bond Loan Agreement, correspondence, and webinar trainings, and/or scheduled outreach sessions.
f. Reporting requirements will be enforced through the Agreement to Guarantee and the Bond Loan Agreement, and will contain a valid OMB control number pursuant to the Paperwork Reduction Act, as applicable.
g. Each Qualified Issuer will be responsible for the timely and complete submission of the annual reporting documents, including such information that must be provided by other entities such as Eligible CDFIs, Secondary Borrowers or Credit Enhancement providers. If such other entities are required to provide annual report information or documentation, or other documentation that the CDFI Fund may require, the Qualified Issuer will be responsible for ensuring that the information is submitted timely and complete. Notwithstanding the foregoing, the CDFI Fund reserves the right to contact such entities and require that additional information and documentation be provided directly to the CDFI Fund.
h. Annual Assessments. Each Qualified Issuer and Eligible CDFI will
i. The CDFI Fund reserves the right, in its sole discretion, to modify its reporting requirements if it determines it to be appropriate and necessary; however, such reporting requirements will be modified only after notice to Qualified Issuers. Additional information about reporting requirements pursuant to this NOGA, the Bond Documents and the Bond Loan documents will be subject to the Paperwork Reduction Act, as applicable.
2. Accounting.
a. In general, the CDFI Fund will require each Qualified Issuer and Eligible CDFI to account for and track the use of Bond Proceeds and Bond Loan proceeds. This means that for every dollar of Bond Proceeds received from the Bond Purchaser, the Qualified Issuer is required to inform the CDFI Fund of its uses, including Bond Loan proceeds. This will require Qualified Issuers and Eligible CDFIs to establish separate administrative and accounting controls, subject to the applicable OMB Circulars.
b. The CDFI Fund will provide guidance to Qualified Issuers outlining the format and content of the information that is to be provided on an annual basis, outlining and describing how the Bond Proceeds and Bond Loan proceeds were used.
B. The CDFI Fund's contact information is as follows:
The CDFI Fund may conduct webcasts, webinars, or information sessions for organizations that are considering applying to, or are interested in learning about, the CDFI Bond Guarantee Program. The CDFI Fund intends to provide targeted outreach to both Qualified Issuer and Eligible CDFI participants to clarify the roles and requirements under the CDFI Bond Guarantee Program. For further information, or to sign up for alerts, please visit the CDFI Fund's website at
Office of the Comptroller of the Currency (OCC), Treasury.
Notice and request for comment.
The OCC, as part of its continuing effort to reduce paperwork and respondent burden, invites comment on a continuing information collection, as required by the Paperwork Reduction Act of 1995 (PRA). In accordance with the requirements of the PRA, the OCC may not conduct or sponsor, and the respondent is not required to respond to, an information collection unless it displays a currently valid Office of Management and Budget (OMB) control number. The OCC is soliciting comment concerning a revision to its information collection titled, “Fair Housing Home Loan Data System Regulation.”
Comments must be received by March 27, 2024.
Commenters are encouraged to submit comments by email, if possible. You may submit comments by any of the following methods:
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Written comments and recommendations for the proposed information collection should also be sent within 30 days of publication of this notice to
You may review comments and other related materials that pertain to this information collection following the close of the 30-day comment period for this notice by the method set forth in the next bullet.
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• For assistance in navigating
Shaquita Merritt, Clearance Officer, (202) 649-5490, Chief Counsel's Office, Office of the Comptroller of the Currency, 400 7th Street SW, Washington, DC 20219. If you are deaf, hard of hearing, or have a speech disability, please dial 7-1-1 to access telecommunications relay services.
Under the PRA (44 U.S.C. 3501
The requirements in part 27 are as follows:
Section 27.3(a)(1) requires provision of the data that national banks are required to collect on home loans pursuant to Regulation C.
Sections 27.3(a)(2) and (3) require national banks that receive more than 50 applications but are not HMDA reporters to collect certain information quarterly.
Section 27.3(a) also lists exceptions to the HMDA-LAR recordkeeping requirements.
Section 27.3(b) lists the information national banks must attempt to obtain from an applicant as part of a home loan application and sets forth the information that banks must disclose to an applicant.
Section 27.3(c) sets forth additional information national banks must maintain in each of their home loan files.
Section 27.4 states that the OCC may require a national bank to maintain a Fair Housing Inquiry/Application Log found in Appendix III to part 27 including if: (1) there is reason to believe that the bank is prescreening, or otherwise engaging in discriminatory practices on a prohibited basis, (2) complaints filed with the Comptroller or letters in the Community Reinvestment Act file are found to be substantive in nature, indicating that the bank's home lending practices are, or may be, discriminatory, or (3) analysis of the data compiled by the bank under HMDA and Regulation C indicates a pattern of significant variation in the number of home loans between census tracts with similar incomes and home ownership levels differentiated only by race or national origin.
Section 27.5 requires a national bank to maintain the information required by § 27.3 for 25 months after the bank notifies the applicant of action taken on an application or after withdrawal of an application.
Section 27.7 requires a national bank to submit to the OCC, upon request prior to a scheduled examination, the information required by §§ 27.3(a) and 27.4. Non-HMDA reporters with more than 50 applications are required to
Section 27.7(d) provides that if there is cause to believe that a national bank is in noncompliance with fair housing laws, the Comptroller may require submission of additional Home Loan Data Submission Forms. The Comptroller may also require submission of the information maintained under § 27.3(a) and Home Loan Data Submission Forms at more frequent intervals than specified.
Comments continue to be invited on:
(a) Whether the collection of information is necessary for the proper performance of the functions of the OCC, including whether the information has practical utility;
(b) The accuracy of the OCC's estimate of the burden of the collection of information;
(c) Ways to enhance the quality, utility, and clarity of the information to be collected;
(d) Ways to minimize the burden of the collection on respondents, including through the use of automated collection techniques or other forms of information technology; and
(e) Estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information.
Office of the Comptroller of the Currency (OCC), Treasury.
Notice and request for comment.
The OCC, as part of its continuing effort to reduce paperwork and respondent burden, invites comment on a continuing information collection, as required by the Paperwork Reduction Act of 1995 (PRA). In accordance with the requirements of the PRA, the OCC may not conduct or sponsor, and the respondent is not required to respond to, an information collection unless it displays a currently valid Office of Management and Budget (OMB) control number. The OCC is soliciting comment concerning the renewal of its information collection titled, “OCC Guidelines Establishing Heightened Standards for Certain Large Insured National Banks, Insured Federal Savings Associations, and Insured Federal Branches.” The OCC also is giving notice that it has sent the collection to OMB for review.
Comments must be received by March 27, 2024.
Commenters are encouraged to submit comments by email, if possible. You may submit comments by any of the following methods:
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Written comments and recommendations for the proposed information collection should also be sent within 30 days of publication of this notice to
You may review comments and other related materials that pertain to this information collection following the close of the 30-day comment period for this notice by the method set forth in the next bullet.
•
• For assistance in navigating
Shaquita Merritt, Clearance Officer, (202) 649-5490, Chief Counsel's Office, Office of the Comptroller of the Currency, 400 7th Street SW, Washington, DC 20219. If you are deaf, hard of hearing, or have a speech disability, please dial 7-1-1 to access telecommunications relay services.
Under the PRA (44 U.S.C. 3501
The guidelines formalize the OCC's heightened expectations program. The guidelines also further the goal of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 to strengthen the financial system by focusing management and boards of directors on improving and strengthening risk management practices and governance, thereby minimizing the probability and impact of future financial crises. The standards for the design and implementation of the risk governance framework, which contain collections of information, are as follows:
Covered banks should establish and adhere to a formal, written risk governance framework designed by independent risk management. The framework should include delegations of authority from the board of directors to management committees and executive officers and risk limits for material activities. The framework should be approved by the board of directors or the board's risk committee, and it should be reviewed and updated, at least annually, by independent risk management.
Front line units should take responsibility and be held accountable by the chief executive officer (CEO) and the board of directors for appropriately assessing and effectively managing the risks associated with their activities. In fulfilling this responsibility, each front line unit should, either alone or in conjunction with another organizational unit that has the purpose of assisting a front line unit: (i) assess, on an ongoing basis, the material risks associated with its activities and use such risk assessments as the basis for fulfilling its responsibilities and for determining if actions need to be taken to strengthen risk management or reduce risk given changes in the unit's risk profile or other conditions; and (ii) establish and adhere to a set of written policies that include front line unit risk limits. Such policies should ensure that risks associated with the front line unit's activities are effectively identified, measured, monitored, and controlled, consistent with the covered bank's risk appetite statement, concentration risk limits, and all policies established within the risk governance framework. Front line units should also establish and adhere to procedures and processes, as necessary to maintain compliance with the policies described in (ii). Furthermore, front line units should adhere to all applicable policies, procedures, and processes established by independent risk management. Front line units should also develop, attract, and retain talent and maintain staffing levels required to carry out the unit's role and responsibilities effectively; establish and adhere to talent management processes; and establish and adhere to compensation and performance management programs.
Independent risk management should oversee the covered bank's risk-taking activities and assess risks and issues independent of the front line units. In fulfilling these responsibilities, independent risk management should: (i) take responsibility and be held responsible by the CEO and the board of directors for designing a comprehensive written risk governance framework that meets the guidelines and is commensurate with the size, complexity, and risk profile of the covered bank; (ii) identify and assess, on an ongoing basis, the covered bank's material aggregate risks and use such risk assessments as the basis for fulfilling its responsibilities and for determining if actions need to be taken to strengthen risk management or reduce risk given changes in the covered bank's risk profile or other conditions; (iii) establish and adhere to enterprise policies that include concentration risk limits that state how aggregate risks within the covered bank are effectively identified, measured, monitored, and controlled, consistent with the covered bank's risk appetite statement and all policies and processes established within the risk governance framework; (iv) establish and adhere to procedures and processes, as necessary, to ensure compliance with policies in (iii); (v) identify and communicate to the CEO and either the board of directors or the board's risk committee any material risks and significant instances where the independent risk management's assessment of risk differs from that of a front line unit and any significant instances where a front line unit is not adhering to the risk governance framework; (vi) identify and communicate to the board of directors or the board's risk committee material risks and significant instances where independent risk management's assessment of risk differs from that of the CEO and significant instances where the CEO is not adhering to, or not holding front line units accountable for adhering to, the risk governance framework; and (vii) develop, attract, and retain talent and maintain the staffing levels required to carry out the unit's role and responsibilities effectively while establishing and adhering to talent management processes and compensation and performance management programs.
Internal audit should ensure that the covered bank's risk governance framework complies with the guidelines and is appropriate for the size,
The CEO, with input from front line units, independent risk management, and internal audit, should be responsible for the development of a written strategic plan that covers, at a minimum, a three-year period. The board of directors should evaluate and approve the plan and monitor management's efforts to implement the strategic plan at least annually. The plan should: (i) include a comprehensive assessment of risks that currently impact the covered bank or that could have an impact on the covered bank during the period covered by the strategic plan; (ii) articulate an overall mission statement and strategic objectives for the covered bank with an explanation of how the covered bank will update the risk governance framework to account for changes to its risk profile projected under the strategic plan; and (iii) be reviewed, updated, and approved due to changes in the covered bank's risk profile or operating environment that were not contemplated when the plan was developed.
A covered bank should have a comprehensive written statement that articulates its risk appetite and serves as the basis for the risk governance framework. The statement should contain both qualitative components that describe a safe and sound risk culture and how the covered bank will assess and accept risks and quantitative limits that include sound stress testing processes and address earnings, capital, and liquidity.
A covered bank should establish and adhere to processes that require front line units and independent risk management to: (i) identify breaches of the risk appetite statement, concentration risk limits, and front line unit risk limits; (ii) distinguish breaches based on the severity of their impact; (iii) establish protocols for when and how to inform the board of directors, front line unit management, independent risk management, internal audit, and the OCC regarding a breach; (iv) provide a written description of the breach resolution; and (v) establish accountability for reporting and resolving breaches that include consequences for risk limit breaches that take into account the magnitude, frequency, and recurrence of breaches.
The risk governance framework should include policies and supporting processes appropriate for the covered bank's size, complexity, and risk profile for effectively identifying, measuring, monitoring, and controlling the covered bank's concentrations of risk.
The risk governance framework should include a set of policies, supported by appropriate procedures and processes, designed to provide risk data aggregation and reporting capabilities appropriate for the covered bank's size, complexity, and risk profile and to support supervisory reporting requirements. Collectively, these policies, procedures, and processes should provide for: (i) the design, implementation, and maintenance of a data architecture and information technology infrastructure that support the covered bank's risk aggregation and reporting needs during normal times and during times of stress; (ii) the capturing and aggregating of risk data and reporting of material risks, concentrations, and emerging risks in a timely manner to the board of directors and the OCC; and (iii) the distribution of risk reports to all relevant parties at a frequency that meets their needs for decision-making purposes.
A covered bank should establish and adhere to processes for talent development, recruitment, and succession planning. The board of directors or appropriate committee should review and approve a written talent management program. A covered bank should also establish and adhere to compensation and performance management programs that comply with any applicable statute or regulation.
The board of directors of a covered bank should establish and adhere to a formal, ongoing training program for all directors. The board of directors should also conduct an annual self-assessment.
Comments continue to be invited on:
(a) Whether the collection of information is necessary for the proper performance of the functions of the OCC, including whether the information has practical utility;
(b) The accuracy of the OCC's estimate of the burden of the collection of information;
(c) Ways to enhance the quality, utility, and clarity of the information to be collected;
(d) Ways to minimize the burden of the collection on respondents, including through the use of automated collection techniques or other forms of information technology; and
(e) Estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information.
Financial Crimes Enforcement Network (FinCEN), Treasury.
Notice and request for comments.
As part of its continuing effort to reduce paperwork and respondent burden, FinCEN invites comment on a renewal, without change, of existing information collection requirements related to beneficial ownership requirements for legal entity customers. Under Bank Secrecy Act regulations, covered financial institutions are required to collect, and to maintain records of, the information used to identify and verify the identity of each beneficial owner of their legal entity customers, subject to certain exclusions and exemptions. This request for comment is made pursuant to the Paperwork Reduction Act of 1995 (PRA).
Written comments are welcome and must be received on or before April 26, 2024.
Comments may be submitted by any of the following methods:
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Please submit comments by one method only. Comments will be reviewed consistent with the PRA and applicable OMB regulations and guidance. All comments submitted in response to this notice will become a matter of public record. Therefore, you should submit only information that you wish to make publicly available.
FinCEN's Regulatory Support Section at 1-800-767-2825 or electronically at
The legislative framework generally referred to as the Bank Secrecy Act (BSA) consists of the Currency and Foreign Transactions Reporting Act of 1970, as amended by the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act)
The BSA authorizes the Secretary of the Treasury (Secretary) to,
Subject to certain exclusions and exemptions, 31 CFR 1010.230 requires covered financial institutions
Covered financial institutions must also maintain a record of the identifying information obtained, and a description of any document relied on for verification, including a description of any non-documentary methods and results of any measures undertaken, and the resolutions of substantive discrepancies. Covered financial institutions must retain records used to identify each beneficial owner for five years after the date the account is closed and must also retain records used to verify the identity of each beneficial owner for five years after the record is made.
As required by section 6403(d) of the Corporate Transparency Act (CTA), which was enacted as part of the AML Act, FinCEN intends to revise the requirements of 31 CFR 1010.230 to bring them into conformance with the
a. Update and maintain beneficial ownership identification procedures: 20 minutes.
b. Customer identification, verification, and review and recordkeeping of the beneficial ownership information: 80 minutes. A range of 40 to 120 minutes per legal entity customer (an average of 80 minutes per legal entity customer).
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid OMB control number. Records required to be retained under the BSA must be retained for five years.
Internal Revenue Service (IRS), Treasury.
Solicitation of grant applications.
This document contains a notice that the IRS has provided a supplemental grant opportunity in
All applications for funding pursuant to this supplemental funding notice must be filed electronically by 11:59 p.m. (eastern time) on April 10, 2024. All organizations must use the funding number of TREAS-GRANTS-052024-002, and the Catalog of Federal Domestic Assistance program number is 21.008, see
Karen Tober at (202) 317-9590 or by email at
Pursuant to 26 U.S.C. 7526, the IRS will annually award up to $6,000,000 (unless otherwise provided by specific Congressional appropriation) to qualified organizations, subject to the limitations in the statute. Grants are for the development, expansion, or continuation of an LITC.
For FY 2023, pursuant to the Consolidated Appropriations Act, 2023, Congress doubled both the overall LITC grant funding level from $13 million in fiscal year (FY) 2022 to $26 million and the maximum amount that may be awarded to any clinic from $100,000 to $200,000. See Public Law 117-328, Division E. For FY 2024, the IRS is currently operating under a Continuing Resolution that expires on March 8, 2024. The President's 2024 budget request includes a continuation of the overall LITC grant funding level at $26 million and the increased funding cap of $200,00 per clinic. Thus, the IRS remains hopeful that the funding will remain at $26 million when an appropriation for FY 2024 is enacted, and that the increased per clinic cap of $200,000 will also continue. Consequently, the IRS is allowing applicants to request up to $200,000 for the 2024 supplemental grant period. The IRS will also continue the ESL Education Pilot Program that was rolled out as part of the February 2023 supplemental funding opportunity. See 88 FR 13864-13866 (March 6, 2023). If Congress ultimately does not continue the LITC Program's funding at $26 million and/or the increased per-clinic funding cap of $200,000, the IRS will adjust each supplemental grant recipient's award to reflect any limitations in the appropriation for FY 2024.
At least 90 percent of the taxpayers represented by the clinic must have incomes which do not exceed 250 percent of the Federal poverty level as determined under criteria established by the Department of Health and Human Services. See 89 FR 2961-63 (Jan. 17, 2024). In addition, the amount in controversy for the tax year to which the controversy relates generally cannot exceed the amount specified in Internal Revenue Code (IRC) section 7463 ($50,000) for eligibility for special small tax case procedures in the United States Tax Court. IRC section 7526(c)(5) requires clinics to provide dollar-for-dollar matching funds, which may consist of funds from other non-Federal sources or contributions of volunteer time. See IRS Pub. 3319 for additional details.
Low Income Taxpayer Clinics ensure the fairness and integrity of the tax system for taxpayers who are low-income or ESL by providing
IRC section 7526(b)(1)(A) authorizes the IRS to award grants to organizations that represent low-income taxpayers in controversies before the IRS and/or provide education to ESL taxpayers regarding their taxpayer rights and responsibilities.
To achieve maximum access to justice for low-income and ESL taxpayers, the IRS has expanded the eligibility criteria for a grant by removing the requirement for eligible organizations to provide direct controversy representation. In addition, pursuant to the new ESL Education Pilot Program started in 2023 and continuing for 2024, a supplemental grant may be awarded to an organization to operate a program to inform ESL taxpayers about their taxpayer rights and responsibilities under the IRC without the requirement to also provide tax controversy representation to low-income taxpayers. See IRS Pub. 3319 for examples of what constitutes a “clinic.”
Despite the IRS's efforts to foster parity in availability and accessibility in choosing organizations receiving LITC matching grants and the continued increase in clinic services nationwide, there remain communities that are underserved by clinics. The states of Hawaii, Kansas, Nevada, North Dakota, South Dakota, and West Virginia, and the territory of Puerto Rico currently do not have an LITC.
Although each application for the 2024 supplemental grant will be given due consideration, the IRS is especially interested in receiving applications from organizations providing services in these underserved geographic areas. For organizations that intend to refer low-income taxpayers in controversies with the IRS to other qualified representatives rather than providing representation directly to low-income taxpayers, priority will be given to established organizations that can help provide coverage to underserved geographic areas. For the ESL Education Pilot Program, special consideration will be given to established organizations with existing community partnerships that can swiftly implement and deliver services to the target audiences.
As in prior years, the IRS will consider a variety of factors in determining whether to award a supplemental grant, including: (1) the number of taxpayers who will be assisted by the organization, including the number of ESL taxpayers in that geographic area; (2) the existence of other LITCs assisting the same population of low-income and ESL taxpayers; (3) the quality of the program offered by the organization, including the qualifications of its administrators and qualified representatives, and its record in providing services to low-income taxpayers; (4) the quality of the organization, including the reasonableness of the proposed budget; (5) the organization's compliance with all Federal tax obligations (filing and payment); (6) the organization's compliance with all Federal nontax obligations (filing and payment); (7) whether debarment or suspension (31 CFR part 19) applies or whether the organization is otherwise excluded from or ineligible for a Federal award; and (8) alternative funding sources available to the organization, including amounts received from other grants and contributors and the endowment and resources of the institution sponsoring the organization.
For programs where all or the majority of cases will be placed with volunteers, we will also consider the following: (1) the qualifications of the representatives (attorneys, certified public accountants, or enrolled agents) who have agreed to accept taxpayer case referrals from an LITC and provide representation or consultation services free of charge; and (2) the ability of the organization to monitor referrals and ensure that the
The final funding decisions are made by the National Taxpayer Advocate, unless recused. The costs of preparing and applying for the grant are the responsibility of each applicant. Applications may be released in response to Freedom of Information Act requests after any necessary redactions are made. Therefore, applicants must not include any individual taxpayer information. The IRS will notify each applicant in writing once funding decisions have been made.
Departmental Offices, U.S. Department of the Treasury.
Notice.
The Department of the Treasury will submit the following information collection request to the Office of Management and Budget (OMB) for review and clearance in accordance with the Paperwork Reduction Act of 1995, on or after the date of publication of this notice. The public is invited to submit comments on these requests.
Written comments must be received on or before March 27, 2024 to be assured of consideration.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Copies of the submissions may be obtained from Spencer W. Clark by emailing
February 29, 2024, 12:00 p.m. to 3:00 p.m., Eastern Time.
This meeting will be accessible via conference call and via Zoom Meeting and Screenshare. Any interested person may call (i) 1-929-205-6099 (US Toll) or 1-669-900-6833 (US Toll), Meeting ID: 997 0103 4622, to listen and participate in this meeting. The website to participate via Zoom Meeting and Screenshare is
This meeting will be open to the public.
The Unified Carrier Registration Plan Board of Directors (the “Board”) will continue its work in developing and implementing the Unified Carrier Registration Plan and Agreement. The subject matter of this meeting will include:
The UCR Board Chair will welcome attendees, call the meeting to order, call roll for the Board, confirm the presence of a quorum, and facilitate self-introductions.
The UCR Executive Director will verify publication of the meeting notice on the UCR website and distribution to the UCR contact list via email, followed by subsequent publication of the notice in the
The proposed Agenda will be reviewed. The Board will consider action to adopt.
➢ Board actions taken only in designated areas on the agenda.
Draft Minutes from the January 18, 2024, UCR Board meeting will be reviewed. The Board will consider action to approve.
Draft Minutes from the February 1, 2024, UCR Board meeting will be reviewed. The Board will consider action to approve.
The Federal Motor Carrier Safety Administration (FMCSA) will provide a report on any relevant agency activity, including the status of the FMCSA's Notice of Proposed Rulemaking concerning the 2025 UCR Fee Rulemaking and its publication in the
An engagement letter between the UCR Plan and the Bradley Arant law firm will be presented to the Board for consideration and approval covering legal services provided by the Bradley Arant law firm in representing the UCR Plan before the United States Patent and Trademark Office in the trademark cancellation proceeding filed by the Small Business in Transportation Coalition. The Board may take action to approve the engagement letter on the terms outlined in the engagement letter.
UCR Plan Legal Counsel will report on his activities as UCR Plan Legal Counsel since the last Board of Directors meeting including, the issuance of trademark licenses to participating states, developing a procedure to amend the UCR Agreement and responding to comments received by the FMCSA in connection with the 2025 UCR Fee Rule making.
The UCR Audit Subcommittee Chair and Vice Chair will lead a discussion on steps to update the UCR Handbook in order to reduce confusion and eliminate conflicting guidance in the Handbook. The proposed amendments relate to the following sections of the Handbook:
The Board may take action to amend the UCR Handbook in the sections listed above.
The UCR Depository Manager will provide an update on the financial status of the administrative fund. An update on fees collected for the 2024 registration year will also be provided.
The UCR Finance Subcommittee Vice-Chair and the UCR Depository Manager
No significant action to report.
No significant action to report.
The UCR Enforcement Subcommittee Chair will provide an update on current and planned initiatives to include a review of enforcement rates, enforcement as against under-registered carriers, how enforcement can support and contribute to inspection audits, presentation on reports available through the NRS to enforcement staff, an update on PowerPoint training, creation of standards for annual UCR enforcement awards, and conducting biannual enforcement blitzes.
The UCR Dispute Resolution Subcommittee Chair and UCR Plan Counsel will discuss the status of the three pending complaints before the Dispute Resolution Subcommittee Filed by the Small Business in Transportation Coalition (“SBTC”).
The UCR Dispute Resolution Subcommittee Chair and UCR Executive Director will present the motion passed by the Dispute Resolution Subcommittee to amend the Policy for Resolving Disputes Under the Unified Carrier Registration Agreement, under Section IV, “Public Notice”, to make clear that a notice of hearing before the Board is now submitted directly to the
The UCR Executive Director will provide a report covering his recent activity for the UCR Plan including any changes in the dates of UCR meetings in 2024.
The UCR Chief of Staff will provide a management update covering recent activity for the Depository, Operations, and Communications.
DSL Transportation Services, Inc. will report on the latest data from the FARs program, Tier 5 and 6 unregistered motor carriers, and other matters.
Seikosoft will provide an update on its recent/new activity related to the UCR's National Registration System.
The UCR Board Chair will call for any other business, old or new, from the floor.
The UCR Board Chair will adjourn the meeting.
The agenda will be available no later than 5:00 p.m. Eastern time, February 21, 2024, at:
Elizabeth Leaman, Chair, Unified Carrier Registration Plan Board of Directors, (617) 305-3783,
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
Veterans Benefits Administration, Department of Veterans Affairs (VA), is announcing an opportunity for public comment on the proposed collection of certain information by the agency. Under the Paperwork Reduction Act (PRA) of 1995, Federal agencies are required to publish notice in the
Written comments and recommendations on the proposed collection of information should be received on or before April 26, 2024.
Submit written comments on the collection of information through Federal Docket Management System (FDMS) at
Maribel Aponte, Office of Enterprise and Integration, Data Governance Analytics (008), 810 Vermont Ave. NW, Washington, DC 20420, (202) 266-4688 or email
Under the PRA of 1995, Federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. This request for comment is being made pursuant to Section 3506(c)(2)(A) of the PRA.
With respect to the following collection of information, VBA invites comments on: (1) whether the proposed collection of information is necessary for the proper performance of VBA's functions, including whether the information will have practical utility;
By direction of the Secretary.
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
Veterans Benefits Administration, Department of Veterans Affairs (VA), is announcing an opportunity for public comment on the proposed collection of certain information by the agency. Under the Paperwork Reduction Act (PRA) of 1995, Federal agencies are required to publish notice in the
Written comments and recommendations on the proposed collection of information should be received on or before April 26, 2024.
Submit written comments on the collection of information through Federal Docket Management System (FDMS) at
Maribel Aponte, Office of Enterprise and Integration, Data Governance Analytics (008), 810 Vermont Ave. NW, Washington, DC 20420, (202) 266-4688 or email
Under the PRA of 1995, Federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. This request for comment is being made pursuant to Section 3506(c)(2)(A) of the PRA.
With respect to the following collection of information, VBA invites comments on: (1) whether the proposed collection of information is necessary for the proper performance of VBA's functions, including whether the information will have practical utility; (2) the accuracy of VBA's estimate of the burden of the proposed collection of information; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or the use of other forms of information technology.
By direction of the Secretary.
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
Veterans Benefits Administration, Department of Veterans Affairs (VA), is announcing an opportunity for public comment on the proposed collection of certain information by the agency. Under the Paperwork Reduction Act (PRA) of 1995, Federal agencies are required to publish notice in the
Written comments and recommendations on the proposed collection of information should be received on or before April 26, 2024.
Submit written comments on the collection of information through Federal Docket Management System (FDMS) at
Maribel Aponte, Office of Enterprise and Integration, Data Governance Analytics (008), 810 Vermont Ave. NW, Washington, DC 20420, (202) 266-4688 or email
Under the PRA of 1995, Federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. This request for comment is being made pursuant to Section 3506(c)(2)(A) of the PRA.
With respect to the following collection of information, VBA invites comments on: (1) whether the proposed collection of information is necessary for the proper performance of VBA's functions, including whether the information will have practical utility; (2) the accuracy of VBA's estimate of the burden of the proposed collection of information; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or the use of other forms of information technology.
By direction of the Secretary.
Veterans Health Administration, Department of Veterans Affairs.
Notice.
In compliance with the Paperwork Reduction Act (PRA) of 1995, this notice announces that the Veterans Health Administration, Department of Veterans Affairs, will submit the collection of information abstracted below to the Office of Management and Budget (OMB) for review and comment. The PRA submission describes the nature of the information collection and its expected cost and burden and it includes the actual data collection instrument.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Maribel Aponte, Office of Enterprise and Integration, Data Governance Analytics (008), 810 Vermont Avenue NW, Washington, DC 20420, (202) 266-4688 or email
VA Form 10-0137,
VA Form 10-0137 (both English and Spanish-English language versions) has a current OMB Paperwork Reduction Act (PRA) clearance under OMB Control
An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The
By direction of the Secretary.
The Department of Veterans Affairs (VA) gives notice under the Federal Advisory Committee Act, 5 U.S.C. ch. 10., that the Advisory Committee on the Readjustment of Veterans will hold a meeting virtually. The meeting will begin, and end as follows:
The meeting is open to the public.
The purpose of the Committee is to advise the Department of Veterans Affairs (VA) regarding the provision by VA of benefits and services to assist Veterans in the readjustment to civilian life. In carrying out this duty, the Committee shall take into account the needs of Veterans who served in combat theaters of operation. The Committee assembles, reviews, and assesses information relating to the needs of Veterans readjusting to civilian life and the effectiveness of VA services in assisting Veterans in that readjustment.
The Committee, comprised of 14 subject matter experts, advises the Secretary, through the VA Readjustment Counseling Service, on the provision by VA of benefits and services to assist Veterans in the readjustment to civilian life. In carrying out this duty, the Committee assembles, reviews, and assesses information relating to the needs of Veterans readjusting to civilian life and the effectiveness of VA services in assisting Veterans in that readjustment, specifically taking into account the needs of Veterans who served in combat theaters of operation.
On March 5, 2024, the agenda will include review of the 24th report, a calendar forecast and discussion over subject matter experts to consider presenting at the next full Committee meeting. The Committee will meet from 2:30 p.m.-3 p.m. EST, for public members wishing to provide oral comments or join the meeting, please use the following Microsoft Teams link:
The Committee will also accept written comments from interested parties on issues outlined in the meeting agenda or other issues regarding the readjustment of Veterans. Parties should contact Mr. Richard Barbato via email at
(a) Amending section 6.01-3 to read as follows:
(b) Amending section 6.01-5 to read as follows:
(c) Adding after the existing section 6.01-6 the following new section:
(d) Adding after the new section 6.01-7 the following new section:
(e) Amending section 6.04-5 to read as follows:
(f) Amending section 6.04-6 to read as follows:
(g) Amending section 6.04-7 to read as follows:
(h) Amending section 6.04-8 to read as follows:
(i) Amending section 6.10-7 to read as follows:
(j) Amending section 6.14-1 to read as follows:
(k) Amending section 6.14-2 to read as follows:
(l) Amending section 6.16-1 to read as follows:
(m) Amending section 6.16-3 to read as follows:
(n) Amending section 6.19-1 to read as follows:
(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.
Securities and Exchange Commission.
Final rules; guidance.
The Securities and Exchange Commission (“Commission”) is adopting rules intended to enhance investor protections in initial public offerings by special purpose acquisition companies (commonly known as SPACs) and in subsequent business combination transactions between SPACs and private operating companies (commonly known as de-SPAC transactions). Specifically, we are adopting disclosure requirements with respect to, among other things, compensation paid to sponsors, conflicts of interest, dilution, and the determination, if any, of the board of directors (or similar governing body) of a SPAC regarding whether a de-SPAC transaction is advisable and in the best interests of the SPAC and its security holders. We are adopting rules that require a minimum dissemination period for the distribution of security holder communication materials in connection with de-SPAC transactions. We are adopting rules that require the re-determination of smaller reporting company (“SRC”) status in connection with de-SPAC transactions. We are also adopting rules that address the scope of the safe harbor for forward-looking statements under the Private Securities Litigation Reform Act of 1995. Further, we are adopting a rule that would deem any business combination transaction involving a reporting shell company, including a SPAC, to be a sale of securities to the reporting shell company's shareholders and are adopting amendments to a number of financial statement requirements applicable to transactions involving shell companies. In addition, we are providing guidance on the status of potential underwriters in de-SPAC transactions and adopting updates to our guidance regarding the use of projections in Commission filings as well as requiring additional disclosure regarding projections when used in connection with business combination transactions involving SPACs. Finally, we are providing guidance for SPACs to consider when analyzing their status under the Investment Company Act of 1940.
Mark Saltzburg, Office of Rulemaking, Division of Corporation Finance, at (202) 551-3430; with respect to 17 CFR 230.145a (Rule 145a under the Securities Act of 1933), the Office of Chief Counsel, Division of Corporation Finance, at (202) 551-3500; with respect to 17 CFR 210.15-01 (Rule 15-01 of Regulation S-X), Ryan Milne, Office of Chief Accountant, Division of Corporation Finance, at (202) 551-3400; with respect to amendments relating to projections disclosure and tender offer rules, Daniel Duchovny, Office of Mergers & Acquisitions, Division of Corporation Finance, at (202) 551-3440; and with respect to guidance under the Investment Company Act of 1940, Rochelle Kauffman Plesset, Seth Davis, or Taylor Evenson, Senior Counsels; or Lisa Reid Ragen, Branch Chief, Chief Counsel's Office, Division of Investment Management, at (202) 551-6825; U.S. Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549.
The Commission is adopting new 17 CFR 210.15-01, new 17 CFR 229.1601 through 229.1610 (Item 1600 series of Regulation S-K), and new 17 CFR 230.145a. We are also adopting amendments to:
Special purpose acquisition companies, or SPACs, first began to emerge in the 1990s as an alternative to blank check companies after blank check companies began to be regulated more strictly pursuant to 17 CFR 230.419 (“Rule 419”
To have the necessary context for the concerns unique to SPACs and de-SPAC transactions, it is critical to understand the structure and lifecycle of a SPAC. Once formed, a SPAC will conduct its IPO in the form of a firm commitment underwritten IPO of $5 million or more in units consisting of redeemable shares and of warrants. The underwriting fees for a SPAC IPO typically approximate 5% to 5.5% of the offering proceeds, and a significant portion of those fees (around 3% of the IPO proceeds) are conditioned on the completion of a de-SPAC transaction.
Following its IPO, a SPAC places all or substantially all of the IPO proceeds into a trust or escrow account. The SPAC typically registers its shares and warrants under section 12(b) of the Securities Exchange Act of 1934 (“Exchange Act”)
Next, the SPAC seeks to identify a target company for a de-SPAC transaction within the time frame specified in its governing documents.
Regardless of its form, a de-SPAC transaction often is accompanied by the need to attain shareholder approval for certain items (
Finally, after the completion of the de-SPAC transaction, the combined company must file a Form 8-K within four business days that includes information about the target company equivalent to the information that a new reporting company would be required to provide when filing a Form 10 under the Exchange Act.
In recent years, the U.S. securities market experienced a significant increase in the number of SPAC IPOs, as shown in Table 1
As shown above in Table 1, SPAC IPOs represent a significant share of the U.S. IPO market in recent years. While we recognize that, like overall IPO activity, the SPAC IPO market has declined recently, SPAC IPOs nonetheless constituted over half of all U.S. IPOs respectively in 2020, 2021, and 2022, and constituted 43% of all U.S. IPOs in 2023.
A similar trend has occurred when considering total proceeds for SPAC IPOs as a percentage of total proceeds raised in all U.S. IPOs over this period. SPAC IPO proceeds represented 46%, 49%, and 59% of total proceeds raised in all U.S. IPOs respectively in 2020, 2021, and 2022. This percentage declined to 15% in 2023.
During the years of increase in SPAC IPOs, many market observers raised concerns about various aspects of the SPAC structure and the hybrid nature of the de-SPAC transaction.
Some commentators have expressed concerns regarding the adequacy of the disclosures provided to investors in SPAC IPOs and de-SPAC transactions
There are also additional disclosure and liability concerns that stem from the hybrid nature of the de-SPAC transaction. For example, some commentators have criticized the use of projections in de-SPAC transactions that, in their view, have appeared to be unreasonable, unfounded, or potentially misleading, particularly where the target company is an early stage company with no or limited sales, products, and/or operations and have expressed concern that some SPACs have taken the
In response to a number of these and other concerns, the Commission staff provided guidance relating to SPACs on five occasions between December 2020 and April 2021.
While we recognize that the number of SPAC IPOs has declined since 2021, the investor protection concerns regarding SPACs and the hybrid nature of the de-SPAC transaction identified in the Proposing Release do not depend on market fluctuations. In addition, as noted above, notwithstanding the recent decline, SPAC transactions have become a much larger part of the U.S. securities markets over the last decade and could continue to grow as macroeconomic and other factors change. Accordingly, after considering comments received on the proposal, we are adopting final rules that will provide for greater transparency and more robust investor protections in SPAC IPOs and de-SPAC transactions. The final rules will enhance the completeness, usefulness, and comparability of the disclosures provided by SPACs and target companies at the SPAC IPO and de-SPAC transaction stages and will provide other important protections for investors in this market, all of which may promote market efficiency. Further, given that the de-SPAC transaction essentially is an IPO of the target company in the form of an M&A transaction, the final rules also will ensure that investors receive similar information about the target company and similar protections as in a traditional IPO in connection with the de-SPAC transaction. The final rules also will provide investors with information about, and protections with respect to, the M&A elements of de-SPAC transactions, particularly regarding the transaction approval process and conflicts of interest.
To these ends, we are adopting new subpart 229.1600 of 17 CFR part 229 (“subpart 1600” of Regulation S-K) that sets forth specialized disclosure requirements for SPAC IPOs and de-SPAC transactions. New subpart 1600 contains provisions that, among other things:
• Require additional disclosures about the SPAC sponsor, potential conflicts of interest, and dilution;
• Require certain disclosures on the prospectus outside front cover page and in the prospectus summary of registration statements filed in connection with SPAC IPOs and de-SPAC transactions; and
• Require additional disclosures regarding de-SPAC transactions, including (1) if the law of the jurisdiction in which the SPAC is organized requires its board of directors (or similar governing body) to determine whether the de-SPAC transaction is advisable and in the best interests of the SPAC and its shareholders, or otherwise make any comparable determination, disclosure of that determination, and (2) if the SPAC or SPAC sponsor has received any outside report, opinion, or appraisal materially relating to the de-SPAC transaction, certain disclosures concerning the report, opinion, or appraisal.
In addition, we are adopting amendments to provide procedural protections and to align the disclosures provided to investors, as well as the legal obligations of companies, in de-SPAC transactions more closely with those in traditional IPOs. Specifically, we are adopting final rules that:
• Amend the registration statement forms and schedules filed in connection with de-SPAC transactions to require additional disclosures about the target company;
• Provide that a target company in a registered de-SPAC transaction is a co-registrant on the registration statement used for the de-SPAC transaction such that the target company will be subject to liability under section 11 of the Securities Act;
• Make the PSLRA safe harbor unavailable to SPACs (including with respect to projections of target companies seeking to access the public markets through a de-SPAC transaction), by defining “blank check company” to encompass SPACs (and other companies that would be blank check companies but for the fact that they do not sell penny stock); and
• Require re-determination of SRC status following a de-SPAC transaction.
In addition, to provide reporting shell company shareholders, including SPAC shareholders, with more consistent Securities Act liability protections regardless of transaction structure, we are adopting new Rule 145a that specifies that any business combination of a reporting shell company, other than a business combination related shell company, involving another entity that is not a shell company involves a sale of securities to the reporting shell company's shareholders.
With respect to effectiveness and compliance with the final rules, in response to commenters,
We are also issuing guidance regarding the status of SPACs under the Investment Company Act of 1940 (“Investment Company Act”).
The Commission is adopting final rules to add new subpart 1600 to Regulation S-K. The new subpart sets forth disclosure requirements applicable to SPACs regarding, among other things, the sponsor, potential conflicts of interest, and dilution and requires certain disclosures on the prospectus cover page and in the prospectus summary.
The Commission proposed to define the term “de-SPAC transaction” as a business combination such as a merger, consolidation, exchange of securities, acquisition of assets, or similar transaction involving a SPAC and one or more target companies (contemporaneously, in the case of more than one target company).
One commenter recommended we add the term “reorganization” to the non-exhaustive list of transactions set out in the proposed definition of de-SPAC transaction.
One commenter recommended the definition of de-SPAC transaction refer to “initial business combination” not “business combination.”
In response to a request for comment,
After considering the comments received, we are adopting the definition of de-SPAC transaction as proposed with a modification discussed below.
We agree with one commenter's recommendation
A few commenters suggested the definition of de-SPAC transaction should use the phrase “initial business combination.”
We agree with the commenter who said there was no need to tie the definition of de-SPAC transaction to transactions that are permitted under exchange listing standards, particularly if the definition of SPAC includes non-listed shell companies.
The Commission proposed Item 1601 to define the term “special purpose acquisition company (SPAC)” to mean a company that has indicated that its business plan is to (1) register a primary offering of securities that is not subject to the requirements of Rule 419;
One commenter indicated they saw no need for a definition of the term “SPAC,” as the commenter saw “no reason why the Proposed Rules should not apply to all shell companies, other than business combination shell companies, inclusive of blank check companies” and also indicated the proposed definitions of “SPAC” and “de-SPAC transaction” were circular, stating, “The proposed definition of `de-SPAC transaction' should be revised to eliminate the reference to `a special purpose acquisition company' in order to eliminate circularity.”
A few commenters did not support including the requirement that a SPAC “return all remaining proceeds from the registered offering and any concurrent offerings to its shareholders” in the proposed SPAC definition.
One commenter recommended we narrow the definition of SPAC to only “a blank check company as defined in § 230.419(a)(2).”
In response to requests for comment,
After considering the comments received, we are adopting the definition of special purpose acquisition company (or SPAC) as proposed, with certain modifications discussed below.
One commenter did not see a need for a new defined term “SPAC,”
This commenter further observed there was circularity in the proposed definitions of “SPAC” and “de-SPAC transaction.”
Several comments focused on the aspect of the proposed SPAC definition regarding the return of proceeds and suggested that special purpose acquisition companies may not return “all remaining proceeds.”
We do not believe it is necessary to revise the definition to refer only to the plan to return proceeds from the primary offering, rather than the primary offering and any concurrent offering. We understand SPACs typically place proceeds of concurrent offerings in trust and return these proceeds if the SPAC does not complete a de-SPAC transaction within the specified time frame.
We are not adopting the recommendation that we should replace the terms related to the return of proceeds with alternative terms related to the redemption of equity securities. We continue to believe, as the Commission indicated in the Proposing Release, that the definition should not include certain criteria, including the issuance of redeemable securities, that
One commenter recommended we narrow the definition of SPAC to only “a blank check company as defined in § 230.419(a)(2).”
Another commenter indicated the SPAC definition should draw a distinction based on exchange listing, which would exclude shell companies traded in over-the-counter markets. In the commenter's view, shell companies traded in over-the-counter markets are not generally considered to be SPACs.
Furthermore, we are adding a new clause to the definition that provides that the term special purpose acquisition company also includes a company that has represented it pursues or will pursue a special purpose acquisition company strategy.
Similarly, to avoid the risk that certain varieties of SPACs may fall outside the definition because of minor technical distinctions from the prongs of the definition, we have changed the proposed term “register a primary offering” to “conduct a primary offering” to account for evolving SPAC structures that may not conduct a registered offering. We do not believe it would be appropriate for companies in de-SPAC transactions to avoid the disclosure (or any other) requirements of these final rules only because the initial SPAC transaction was not registered. As noted in the Proposing Release,
One commenter recommended we clarify that a company ceases to be a SPAC upon consummation of a de-SPAC transaction.
We are not requiring a check box on form cover pages indicating SPAC status as the enhanced disclosure provided by registrants pursuant to the Item 1600 series of Regulation S-K will make clear the registrant is a SPAC.
The Commission proposed to define the term “SPAC sponsor” as the entity and/or person(s) primarily responsible
One commenter said the proposal “should be revised to eliminate the need for a defined term `SPAC sponsor' ” and, “[i]nstead, the rules should require disclosure regarding the SPAC's directors, officers and affiliates.”
Another commenter recommended an alternative definition of “SPAC sponsor”: “the entity and/or person(s) that (1) own all or a portion of the privately placed common equity securities of the special purpose acquisition company and (2) are primarily responsible for directing and managing the business and affairs of a special purpose acquisition company other than in their capacities as (i) directors or officers of the special purpose acquisition company or (ii) third-party service providers to the special purpose acquisition company, as applicable.”
After considering the comments received, we are adopting the definition of SPAC sponsor as proposed with certain modifications discussed below.
The definition is designed to be sufficiently broad that appropriate entities or persons will be subject to the enhanced disclosure requirements applicable to SPAC sponsors.
We do not believe it would provide investors with adequate information to tie the SPAC sponsor definition to persons with particular titles, because the definition and corresponding disclosure requirements are intended to capture all parties who perform certain activities that result in such parties having key substantive influence over the SPAC. The suggestion to replace “SPAC sponsor” with “directors, officers, and affiliates of the SPAC” would require disclosure from directors and officers not commonly considered to be sponsors today and, as indicated by the Commission in the Proposing Release, would overlap unnecessarily with current required disclosure concerning directors and officers.
One commenter recommended an alternative definition of SPAC sponsor that featured, among other things, carve-outs from that alternative definition for directors and officers of the SPAC and for third-party service providers.
We are not adopting the suggestion to exclude “third-party service providers” from the definition of SPAC sponsor.
The Commission proposed to define the term “target company” as an operating company, business, or assets.
One commenter asserted that “the concept of `assets' being a `target company' yields anomalous results under certain proposed rules (such as requiring assets to sign a registration statement) and the concept of a `business' may be vague (as a business may be a product line, rather than an entity that could sign a registration statement).”
After considering the comments received, we are adopting the definition of target company as proposed.
To address commenters' concerns about the use of the terms “assets” and “business” in the definition of target company,
The Commission proposed Item 1603(a) to require additional disclosure about the SPAC sponsor, its affiliates, and promoters
• The experience, material roles, and responsibilities of these parties, as well as any agreement, arrangement, or understanding (1) between the SPAC sponsor and the SPAC, its executive officers, directors, or affiliates, with respect to determining whether to proceed with a de-SPAC transaction and (2) between the SPAC sponsor and unaffiliated security holders of the SPAC regarding the redemption of outstanding securities;
• The controlling persons of the SPAC sponsor and any persons who have direct and indirect material interests in the SPAC sponsor and the nature and amount of their interests, as well as an organizational chart that shows the relationship between the SPAC, the SPAC sponsor, and the SPAC sponsor's affiliates;
• Tabular disclosure of the material terms of any lock-up agreements with the SPAC sponsor and its affiliates; and
• The nature and amounts of all compensation that has or will be awarded to, earned by, or paid to the SPAC sponsor, its affiliates, and any promoters for all services rendered in all capacities to the SPAC and its affiliates, as well as the nature and amounts of any reimbursements to be paid to the SPAC sponsor, its affiliates, and any promoters upon the completion of a de-SPAC transaction.
Broadly categorized, commenters on proposed Item 1603(a) or generally on the types of SPAC sponsor issues covered by proposed Item 1603(a) focused on six areas: (1) general comments that expressed support for the proposals, (2) promoter requirements, (3) compensation, (4) transfers of SPAC ownership, (5) interests in the SPAC sponsor and the organizational chart requirement, and (6) agreements.
A number of commenters generally supported the proposed enhanced disclosure requirements regarding SPAC sponsors.
Also, several commenters suggested that proposed Item 1603(a) would codify, to an extent, existing disclosure practices.
Some commenters said Item 1603 should not apply to “promoters.”
A number of commenters suggested that the proposed disclosure requirements regarding sponsor compensation would provide useful information to investors.
One commenter said the SPAC sponsor “20 percent promote is fully and fairly disclosed and has been for decades.”
One commenter that did not support the additional proposed disclosure requirements stated that, if the Commission were nonetheless to impose new requirements, “the reference to `compensation' should be revised to refer instead to all equity and rights to cash held by the SPAC directors and officers and their affiliates, as certain equity interests may be purchased for value (
Another commenter said that, “in addressing non-equity compensation and reimbursements, proposed Item 1603(a)(6) should explain its requirement to identify other compensation and reimbursements that are material, individually or in the aggregate and that the required disclosure may be qualitative and not quantitative, except where amounts are above a specified de minimis threshold, similar to the approach taken in certain respects under the existing compensation disclosure framework in Item 402 of Regulation S-K [17 CFR 229.402].”
Several commenters recommended we adopt requirements to disclose transfers of SPAC securities by the SPAC sponsor and others. One commenter recommended, in response to request for comment,
One commenter said that the proposed approach departs from the traditional approach to beneficial ownership reporting and recommended that this item should clarify that “an indirect economic interest in less than 10% of a SPAC's founder shares or warrants through ownership of equity interests in a [SPAC] [s]ponsor should not, in and of itself and absent other factors, be considered a direct or indirect material interest in the [SPAC] [s]ponsor.”
One commenter recommended that the Commission should revise proposed Item 1603(a)(8) to “specify that if a SPAC, the SPAC sponsor, or any affiliated party enters into an agreement regarding the redemption of outstanding securities of the SPAC after the date of the merger registration statement or proxy, that the SPAC be required to issue a proxy amendment or similar
Another commenter said the material terms of lock-up agreements are already disclosed as a matter of industry practice and that requiring additional disclosure would “go beyond the disclosure requirements applicable to lock-up agreements that are entered into in connection with a traditional IPO.”
After considering the comments received, we are adopting Item 1603(a) as proposed with certain modifications we discuss below. Additionally, for clarity and consistency throughout Item 1603, we have replaced the term “executive officers” with the term “officers.”
Item 1603(a)'s disclosure requirements will provide a SPAC's prospective investors and existing shareholders with detailed information relating to the SPAC sponsor that could be important in understanding and analyzing a SPAC, including how the rights and interests of the SPAC sponsor, its affiliates, and any promoters may differ from, or may conflict with, those of public shareholders.
Several commenters suggested that proposed Item 1603(a) would codify, to an extent, existing disclosure practices.
We are retaining the applicability of Item 1603 to promoters.
Additionally, in the final rules, we have made technical changes to ensure consistent reference to “SPAC sponsor, its affiliates, and promoters” among disclosure requirements relating to the cover page, summary, and body sections of the prospectus.
We are adopting the SPAC sponsor compensation disclosure largely as proposed with certain modifications in response to comments. We disagree with the commenter who suggested that—because sponsor compensation and reimbursement are already disclosed under existing disclosure requirements and current market practice provides for similar disclosure as to the material terms of lock-up agreements—the proposed additional disclosure requirements should not be
We agree with comments that returns based on the price appreciation from the “promote” stake owned by the SPAC sponsor may be a significant source of potential remuneration to the SPAC sponsor that investors would want to know about in making their investment and voting decisions.
Pursuant to these changes, any mechanisms, such as an anti-dilution provision,
Regarding the comments concerning reimbursement of advances and repayment of loans,
We are not adopting another commenter's recommendation that required disclosure be qualitative rather than quantitative unless the amounts are above a specified de minimis threshold.
In response to several commenters' recommendation to disclose transfers of SPAC securities by the SPAC sponsor and others, we are modifying Item 1603(a)(6) to require such disclosure.
At this time, we are not making any changes to add requirements to disclose transfers after the de-SPAC transaction occurs, because we believe, for most SPACs, SPAC sponsors will already have Form 3 and 4 reporting obligations.
We are adopting Item 1603(a)(7) as proposed except that we are not adopting the proposal to provide an organizational chart.
One commenter said that “proposed Item 1603(a)(7) should clarify that . . . an indirect economic interest in less than 10% of a SPAC's founder shares or warrants through ownership of equity interests in a Sponsor should not, in and of itself and absent other factors, be considered a direct or indirect material
Related to our consideration of this comment, however, we have determined not to adopt the proposed organizational chart requirement in Item 1603(a)(7). The proposed organizational chart requirement would have required graphical display of levels of ownership that are above the level of direct ownership of the SPAC sponsor (
Another commenter said the identity of natural persons controlling the sponsor is already disclosed in response to existing Item 403 of Regulation S-K.
We are adopting Item 1603(a)(8) and (9), concerning agreements, as proposed. Final Item 1603(a)(8) provides that the registrant must describe any agreement, arrangement, or understanding, including any payments, between the SPAC sponsor and unaffiliated security holders of the special purpose acquisition company regarding the redemption of outstanding securities of the special purpose acquisition company. One commenter recommended that the Commission should revise proposed Item 1603(a)(8) to “specify that if a SPAC, the SPAC sponsor, or any affiliated party enters into an agreement regarding the redemption of outstanding securities of the SPAC after the date of the merger registration statement or proxy, that the SPAC be required to issue a proxy amendment or similar filing prior to the redemption deadline to inform SPAC shareholders of the new agreement.”
Final Item 1603(a)(9) provides that the registrant must disclose, in a tabular format to the extent practicable, the material terms of any agreement, arrangement, or understanding regarding restrictions on whether and when the SPAC sponsor and its affiliates may sell securities of the special purpose acquisition company, including: the date(s) on which the agreement, arrangement, or understanding may expire; the natural persons and entities subject to such an agreement, arrangement, or understanding; any exceptions under such an agreement, arrangement, or understanding; and any terms that would result in an earlier expiration of such an agreement, arrangement, or understanding.
In response to the commenter who stated that the required additional disclosure would go beyond the disclosure requirements applicable to lock-up agreements entered into in connection with a traditional IPO,
With respect to the suggestion to exclude from this disclosure customary exceptions to lock-up agreements,
In addition, we believe each such exception to a lock-up agreement is important to investors because exceptions to restrictions on transfer in lock-up agreements can result in the sale of a significant amount of shares that could affect the trading price of the SPAC or of the post-de-SPAC transaction combined company.
While one commenter suggested that current market practice is for transferees who receive shares pursuant to an exception from a lock-up to agree to the lock-up as a condition of the transfer,
SPAC sponsors and others may have material potential or actual conflicts with the interests of investors that could have adverse effects on those investors. The Commission proposed conflicts of interest disclosure requirements in certain items in proposed Item 1602, 1603, 1604, and 1605 in connection with SPAC registered offerings other than de-SPAC transactions, such as IPO transactions, and in connection with de-SPAC transactions, described in more detail below.
The Commission proposed Item 1602(a)(5) and (b)(7), which apply to registered offerings other than de-SPAC transactions, to require that some of these conflicts of interest disclosure requirements appear on the prospectus front cover page and in the prospectus summary, respectively.
The Commission proposed that Item 1603 (including 1603(b) regarding conflicts of interest) apply to de-SPAC transactions, as well as other registered offerings, including SPAC IPOs.
Furthermore, in connection with de-SPAC transactions, the Commission proposed Item 1605(d) to require disclosure of any material interests in the de-SPAC transaction or any related financing transaction held by the SPAC sponsor and the SPAC's officers and directors, including fiduciary or contractual obligations to other entities
Broadly categorized, commenters on the conflicts of interest proposals focused on five areas: (1) general comments, including those with general expressions of support for or opposition to the proposals, (2) SPAC and target company officer and director conflicts of interest, (3) de-SPAC conflicts of interest, (4) addition of disclosure of “break-even” thresholds, and (5) additional responses to Commission requests for comment.
A number of commenters generally supported the proposed enhanced disclosure requirements in regard to conflicts of interest and fiduciary duties.
Several commenters suggested that the proposed disclosure requirements would codify, to an extent, existing disclosure practices.
One commenter said that “in requiring disclosure of known actual or potential material conflicts of interest, proposed Item 1603(b) should clarify that a knowledge-based standard is the appropriate standard in determining whether disclosure is required under this item.”
Another commenter recommended “that disclosures should include the names of all sponsors and their financial arrangements with SPACs” and “information on the nature of the claims the investors have on the SPAC if no de-SPAC transaction takes place” during the applicable period or they choose to exit before the de-SPAC is completed.
A few commenters discussed issues related to potential SPAC and target company officer and director conflicts of interest.
Some commenters viewed proposed Item 1605, including proposed Item 1605(d) concerning conflicts of interest in connection with de-SPAC transactions, as redundant with current rules.
Some commenters recommended that certain additional disclosures should be required. One commenter on the proposal said that registrants “should also provide, in an easily understandable, tabular format. . .the break-even points for non-redeeming investors under different scenarios, the break-even point for the sponsor, the ownership distribution for non-redeeming investors, the effects of outstanding warrants and sponsor shares, and the resulting ownership of the target company for non-redeeming shareholders and alternative investors.”
A few commenters responded to requests for comment in the proposal related to whether we should also require a description of any policies and procedures used to minimize potential or actual conflicts of interest.
One commenter responded to requests for comment related to whether SPACs should be required to provide additional disclosure regarding material conflicts of interest in Exchange Act reports following their IPOs.
We are adopting Items 1602(a)(5) and (b)(7), 1603(b), 1604(a)(4) and (b)(3), and 1605(d) substantially as proposed, except for the changes discussed below. Having considered comments received, we are adopting the final rules to provide information to investors about the material potential or actual conflicts
There are numerous situations that could give rise to these potential conflicts. For example, SPAC sponsors or their affiliates may have a potential conflict of interest stemming from the nature of the SPAC sponsor's compensation or security ownership (particularly where the security owned is purchased at disparate prices, often substantially lower than the price paid by public security holders). This type of potential conflict of interest may present significant financial incentives to pursue a de-SPAC transaction even in the absence of attractive target company transaction opportunities.
SPAC sponsors and their affiliates may also sponsor multiple SPACs, which may result in decisions regarding the allocation of these persons' time and target company acquisition opportunities that may adversely affect SPAC security holders. Alternatively (or in addition), SPAC sponsors and their affiliates may owe employment, contractual, or fiduciary duties to other companies than the SPAC, which, among other things, may affect the ability of the SPAC to execute a de-SPAC transaction or may affect the terms to which a SPAC agrees in any ultimate de-SPAC transaction. In these situations, the SPAC sponsor and others covered by the final rules may not only be incentivized to take actions that benefit other entities, but they may be compelled by these other duties to do so, potentially at the expense of the SPAC and its security holders. In addition, SPAC sponsors and their affiliates may seek to enter a de-SPAC transaction with a target company they are affiliated with when superior target company transaction opportunities may be available.
The final rules will provide investors with a more complete understanding of the conflicts of interest related to an investment in a SPAC, including in situations like the examples above. Investors will have improved information concerning interests of the SPAC sponsor and others covered by the final rule that could reduce the value of their investment or that could result in opportunities potentially available to the SPAC not being realized. In this way, the final rules will allow investors to analyze risks associated with potential conflicts of interest regarding a SPAC more accurately.
We are not including a knowledge qualifier in conflicts of interest disclosure, as suggested by one commenter,
Another commenter recommended the conflicts of interest disclosures should include: names of all sponsors and their financial arrangements with SPACs; claims investors have on the SPAC if no de-SPAC transaction takes place; and claims investors have on the SPAC if investors exit before the de-SPAC transaction.
A few commenters discussed issues related to potential SPAC and target company officer and director conflicts of interest.
One commenter recommended that we limit Item 1603(c) disclosure to
Some commenters expressed the view that proposed Item 1605, including proposed Item 1605(d) concerning conflicts of interest in connection with de-SPAC transactions, would be redundant with current rules.
Some commenters recommended we adopt certain requirements (in addition to those proposed) involving “break-even” disclosure.
We are not requiring registrants to provide “break-even” price per share disclosure regarding non-redeeming investors as suggested by commenters because each investor would already know the basis at which they acquired the shares of the SPAC and the SPAC may not know this information for many of its investors, who could have acquired the shares at a variety of prices through the public market. We are likewise not requiring disclosure suggested by commenters that would provide a price at which the SPAC sponsor would recoup their investments in the SPAC. We believe such disclosure could be confusing for investors, as many SPAC sponsors may consider such amounts as sunk costs, which they do not consider when deciding whether to proceed with a de-SPAC transaction. As a commenter notes,
In the final rules, we are not requiring a description of policies and procedures used to minimize potential or actual conflicts of interest. We believe the other disclosures we are adopting regarding conflicts of interest, including new Item 1603, will appropriately address investor protection concerns in this regard. We are also not making any changes that would expand the Series 1600 of Regulation S-K disclosures regarding conflicts of interest beyond registration statements, proxy statements, information statements, and tender offer statements as proposed to other Exchange Act reports (such as to Form 10-Q, 10-K, or 8-K).
Finally, we are making additional minor or technical changes in the final rules. First, we are making a change to the description of persons against whose interests the conflicts must be compared against from “unaffiliated security holders” to “unaffiliated security holders of the SPAC” in Items 1603(b) and 1604(a)(4) (prospectus cover page) and (b)(3) (prospectus summary). This change will avoid any potential ambiguity or confusion regarding whether target company officers and directors must compare their interests to security holders of the target company or security holders of the SPAC.
Second, we are making a technical change in final Item 1605(d) to use “or” instead of “and” each time in the phrase “held by the SPAC sponsor and the special purpose acquisition company's officers . . . and directors.” This change makes clear the disclosure should apply with respect to each named person and not only where all such persons share the same interest.
Third, we have made certain technical changes in some of the final rules regarding conflicts of interest to clarify the sets of persons being compared.
Fourth, in final Item 1603(b), we are changing each reference to “the SPAC sponsor” to “any SPAC sponsor” because there can be more than one such sponsor.
Fifth, we have revised the phrase “State whether there may be actual or potential conflicts of interest . . .” in proposed Item 1602(a)(5) to add a materiality qualifier such that the phrase in final Item 1602(a)(5) provides “State whether there may be actual or potential material conflicts of interest. . . .” This change makes prospectus cover page disclosure requirements under Item 1602(a)(5) consistent with the similar provisions of Item 1603(b), which require disclosure in the body of the disclosure document. We believe both provisions should contain the same materiality qualifier, because the provisions are related since Item 1602(a)(5) requires the registrant to provide a cross-reference to related disclosures in the prospectus, which includes disclosures made under Item 1603(b).
Information about dilution conveys important information to investors about factors that may affect the value of a security holder's interest in a SPAC. Dilution in current Commission filings is typically measured by calculating changes in net tangible book value per share.
The Commission proposed several new rules that would require additional information about SPAC dilution in connection with registered offerings by SPACs, including IPOs, and in connection with de-SPAC transactions.
First, with respect to SPAC IPOs, in Item 1602(a)(3), the Commission proposed that the prospectus outside front cover page include, among other things, disclosure of whether compensation of the SPAC sponsor and its affiliates may result in a material dilution of the purchasers' equity interests. Also, the Commission proposed Item 1602(a)(4) to require on the outside front cover page of the prospectus, disclosure in the tabular format specified below the “estimated remaining pro forma net tangible book value per share at quartile intervals up to the maximum redemption threshold,” consistent with the methodologies and assumptions used in the disclosure provided pursuant to Item 506 of Regulation S-K:
Instruction 1 to Item 1602(a)(4) provided that, if the offering includes an over-allotment option, separate rows must be included in the tabular disclosure showing remaining pro forma net tangible book value per share with and without the exercise of the over-allotment option.
In addition, in Item 1602(b)(6) the Commission proposed that for SPAC IPOs, the summary prospectus include, among other things, disclosure of the extent to which compensation of the SPAC sponsor, its affiliates, and promoters may result in a material dilution of the purchasers' equity interests. In addition to the prospectus cover page and prospectus summary requirements for SPAC IPOs, the Commission also proposed Item 1602(c) regarding dilution. This proposed item would require, in addition to the disclosure required by § 229.506 (Item 506 of Regulation S-K), a description of material potential sources of future dilution following the registered offering by the special purpose acquisition company. This proposed item also would require disclosure in tabular format of the amount of future dilution from the public offering price that will be absorbed by purchasers of the securities being offered, to the extent known and quantifiable.
The other dilution provisions proposed by the Commission related to de-SPAC transactions. The Commission proposed Item 1604(a)(3) to require on
Three additional proposed rules with respect to de-SPAC transactions, Item 1604(b)(4) through (6), each required prospectus summary disclosure. First, proposed Item 1604(b)(4) required, among other things, tabular disclosure of whether compensation of the SPAC sponsor and its affiliates has resulted or may result in a material dilution of the equity interests of unaffiliated security holders of the special purpose acquisition company. Second, proposed Item 1605(b)(5) required, among other things, disclosure of the dilutive impact, if any, of any financing transactions that have occurred or will occur in connection with the consummation of the de-SPAC transaction on unaffiliated security holders. Third, proposed Item 1604(b)(6) required disclosure of the rights of security holders to redeem the outstanding securities of the special purpose acquisition company and the potential impact of redemptions on the value of the securities owned by non-redeeming shareholders.
For de-SPAC transactions, the Commission also proposed Item 1604(c) to require a description of each material potential source of future dilution that non-redeeming shareholders may experience by electing not to tender their shares in connection with the de-SPAC transaction. Under Item 1604(c), proposed Item 1604(c)(1) required the provision of a sensitivity analysis disclosure in tabular format that expresses the amount of potential dilution under a range of reasonably likely redemption levels. Proposed Item 1604(c)(1) also required, at each redemption level in the sensitivity analysis, quantification of the dilutive impact on non-redeeming shareholders of each source of dilution, such as the amount of compensation paid or to be paid to the SPAC sponsor, the terms of outstanding warrants and convertible securities, and underwriting and other fees. Additionally, proposed Item 1602(c)(2) required a description of the model, methods, assumptions, estimates, and parameters necessary to understand the sensitivity analysis disclosure.
A number of commenters generally supported some or all of the proposed enhanced dilution disclosure requirements.
Several commenters addressed issues related to levels of redemption in connection with proposed SPAC dilution disclosure. One commenter said that the “quantitative disclosure currently required under S-K Item 506 at IPO is not helpful for investors, as the output is largely driven by the maximum redemption scenario which can differ based on (i) different provisions of the SPAC's constituent documents. . .and (ii) the interpretation of those constituent documents.”
Another commenter, who expressed the general view that “proposed Items 1602(a)(4) and 1602(c) of Regulation S-K should not be adopted,” said that “it is unclear whether a maximum redemption threshold for purposes of proposed Item 1602(a)(4) should require or call for anything other than the redemption of 100% of the SPAC's public shares.”
The same commenter said that “a SPAC may actually become subject to a maximum redemption scenario that is lower than the quartile intervals required to be presented by proposed Item 1602(a)(4).”
Commenters raised concerns that dilution disclosure would be characterized by uncertainty, be based on hypothetical assumptions, or depend on unknown variables.
Several commenters expressed concerns that the proposed dilution disclosure would not provide meaningful information to investors.
The Commission proposed that the calculation of pro forma net tangible book value be done consistent with the methodologies and assumptions used in the disclosure provided pursuant to Item 506 of Regulation S-K. One commenter said that “[Item 506] presentation is not meaningful to investors and in some instances the presentation may actually show that there is a decrease in net tangible book value from the offering after giving effect to the redeemable shares.”
Another commenter said that, without an identified de-SPAC target or structured de-SPAC transaction, the limited information at the time of the SPAC IPO used to calculate the proposed Item 1602(a)(4) disclosures would produce “an absurd result.”
Another commenter said that “proposed Item 1602(a)(4) would require disclosure of the estimated remaining pro forma net tangible book value per share at specified redemption levels consistent with the methodologies in Item 506 of Regulation S-K” but noted that “Item 506 does not provide a definition for net tangible book value,” and, as a result, the commenter has “observed diversity in such calculations.”
One commenter recommended that the Commission give “illustrative examples and calculations” of the dilution disclosure to ensure “robust, transparent, and consistent dilution disclosures.”
In response to a request for comment asking whether we should require disclosure of net cash per share (in addition to, or in lieu of the proposed dilution disclosures),
A different commenter said they “support clear disclosure of net cash per share after taking into account all sources of dilution and dissipation of cash, under various redemption scenarios.”
One group of commenters said that “the final rules for SPAC mergers should require SPACs to prominently disclose the amount of net cash underlying each share at the time of a de-SPAC transaction,” including on the cover page of the registration statement.
One commenter said they “read proposed Item 1604(c)(1) as requiring a determination of the enterprise valuation that will result in a stockholder's `interest per share' (calculated by reference to a pro forma closing date balance sheet. . .). . .being at least equal to the $10 price per share paid in the IPO.”
One commenter on the proposal said that “[f]or de-SPAC transactions, the most meaningful information would be the expected value per share, using the agreed equity value of the target company plus net cash proceeds from the de-SPAC transaction under a range of hypothetical redemption scenarios.”
One commenter recommended that the Commission should consider requiring that intermediaries provide information about “the sponsor, actual and potential conflicts of interest, [and] how much a non-redeeming SPAC investor's interest will be diluted” in a separate “Key Risks and Conflicts form” that is detached from the prospectus, so that the disclosure receives more investor attention and focus.
One commenter said that disclosures about “any lock-up periods or earnout provisions for sponsors or underwriters
After considering the comments received, regarding dilution disclosure in SPAC registered offerings (such as SPAC IPOs) other than de-SPAC transactions, we are adopting Item 1602(a)(3) and (4), (b)(6), and (c) as proposed, except for certain modifications we discuss below. Regarding de-SPAC transactions, we are also adopting Item 1604(a)(3), (b)(4), (5), and (6), and (c) as proposed, except for certain modifications we discuss below. Each of these provisions is discussed in detail below.
Final Item 1602(a)(3) requires, on the outside front cover page of the prospectus in plain English, a statement of the amount of the compensation received or to be received by the SPAC sponsor, its affiliates, and promoters, the amount of securities issued or to be issued by the SPAC to the SPAC sponsor, its affiliates, and promoters and the price paid or to be paid for such securities, and whether this compensation and securities issuance may result in a material dilution of the purchasers' equity interests. Final Item 1602(a)(3) also requires the provision of a cross-reference, highlighted by prominent type or in another manner, to the locations of related disclosures in the prospectus. Final Item 1602(a)(3) is different from the proposal only with respect to changes made regarding SPAC sponsors and securities issuances discussed above in section II.B.
Final Item 1602(a)(4) requires, with respect to SPAC IPOs, on the outside front cover page of the prospectus in plain English, disclosure in the tabular format specified at quartile intervals based on percentages of the maximum redemption threshold: the offering price; as of the most recent balance sheet date filed, the net tangible book value per share, as adjusted, as if the offering and assumed redemption levels have occurred and to give effect to material probable or consummated transactions (other than the completion of a de-SPAC transaction); and the difference between the offering price and such net tangible book value per share, as adjusted.
Final Table 1 to Paragraph (a)(4) provides:
Final Instruction 1 to Item 1602(a)(4) provides, if the offering includes an over-allotment option, separate rows in the tabular disclosure must be included showing the information required by paragraph (a)(4) with and without the exercise of the over-allotment option.
Final Item 1602(a)(4) includes several changes compared to the proposal. First, we have clarified in the final rule how to calculate the required dilution information. In response to the proposal, some commenters generally sought clarification, such as illustrative examples, calculations, or definitions, in connection with the dilution calculation.
In addition, we have deleted proposed references in Item 1602(a)(4) to “estimated remaining pro forma net tangible book value per share” as the name for the dilution measurement and instead refer to “net tangible book value per share, as adjusted.” We were concerned that references to “estimated remaining pro forma net tangible book value per share” could be ambiguous and that registrants could misinterpret the term to require estimation of what the net tangible assets of a combined company might be in any ultimate de-SPAC transaction. The deletion of this term and its replacement with the new term helps clarify that registrants should not include any estimates of the assets of any ultimate target company in this calculation.
In addition, in final Item 1602(a)(4), we have replaced the proposed phrase “at quartile intervals up to the maximum redemption threshold” with “at quartile intervals based on percentages of the maximum redemption threshold.” We believe registrants could mistakenly interpret the proposed terms to require quartile intervals based on the total number of shares issued in the offering for the three redemption levels in the table other than the maximum redemption level. We believe this change will eliminate that potential for misinterpretation.
Final Item 1602(b)(6) requires the prospectus summary to include in plain English in a tabular format, the nature and amount of the compensation received or to be received by the SPAC sponsor, its affiliates, and promoters, the amount of securities issued or to be issued by the SPAC to the SPAC sponsor, its affiliates, and promoters and the price paid or to be paid for such
Final Item 1602(c) requires disclosure in a tabular format for the same quartile intervals as in Item 1602(a)(4): the offering price; net tangible book value per share, as adjusted, determined in the same manner as in Item 1602(a)(4); and the difference between the offering price and such net tangible book value per share, as adjusted. Final Item 1602(c) also requires that the tabular disclosure must show: the nature and amounts of each source of dilution used to determine net tangible book value per share, as adjusted; and the number of shares used to determine net tangible book value per share, as adjusted; and any adjustments to the number of shares used to determine the per share component of net tangible book value per share, as adjusted. Final Item 1602(c) also requires a description of each material potential source of future dilution following the registered offering by the special purpose acquisition company, including sources not included in the table with respect to the determination of net tangible book value per share, as adjusted. Final Item 1602(c) also requires a description of the model, methods, assumptions, estimates, and parameters necessary to understand the tabular disclosure.
Final Item 1602(c) contains several changes from the proposal. We have clarified in the final rule that Item 1602(c) dilution should be calculated in the same way as in Item 1602(a)(4) and have deleted references in proposed Item 1602(c) to Item 506 of Regulation S-K, consistent with changes discussed above made to final Item 1602(a)(4) in this respect. In addition, we have clarified that the table in Item 1602(c) should show the nature and amounts of each source of dilution and the number of shares used in the calculation in order to eliminate any ambiguity and the potential that registrants could misinterpret the item to mean that the table merely needs to show the final dilution information and not the line items that went into its calculation.
With respect to the proposed requirement to describe material potential sources of future dilution, the final rules specify that the description should be located outside the table. The final rules also state that the description of each material potential source of future dilution outside of the table should include “sources not included in the table with respect to the determination of net tangible book value per share, as adjusted.” We are making this change to clarify that the disclosure outside of the table is not to be merely duplicative of the sources of dilution used for the calculation of the measure of dilution within the table. Without these changes, the item could have been misinterpreted by registrants to require only disclosure of the same sources of dilution used in the tabular calculation of dilution, only in a non-tabular format. Depending on a SPAC's specific facts and circumstances, the non-tabular disclosure of “each material potential source of future dilution” under Item 1602(c) may need to discuss a broader set of items than “material probable or consummated transactions” that are included for purposes of calculating the tabular dilution measure.
We have also clarified that underlying factors such as assumptions that are necessary to understand the table must be described in order to eliminate any ambiguity under the proposal that no such information is required beyond the numbers in the dilution table. This clarification also makes final Item 1602(c) consistent with final Item 1604(c), which contained a proposed provision to this effect (that we are adopting as discussed in detail below).
Final Item 1604(a)(3) requires, on the outside front cover page of the prospectus in plain English, a statement of the amount of the compensation received or to be received by the SPAC sponsor, its affiliates, and promoters in connection with the de-SPAC transaction or any related financing transaction; the amount of securities issued or to be issued by the SPAC to the SPAC sponsor, its affiliates, and promoters and the price paid or to be paid for such securities in connection with the de-SPAC transaction or any related financing transaction; and whether this compensation and securities issuance may result in a material dilution of the equity interests of non-redeeming shareholders who hold the securities until the consummation of the de-SPAC transaction. Final Item 1604(a)(3) also requires the provision of a cross-reference, highlighted by prominent type or in another manner, to the locations of related disclosures in the prospectus. Final Item 1604(a)(3) is different from the proposal only with respect to changes made regarding SPAC sponsors and securities issuances discussed above in section II.B.
Final Item 1604(b)(4) requires that the prospectus summary must include in plain English, in a tabular format, the terms and amount of the compensation received or to be received by the SPAC sponsor, its affiliates, and promoters in connection with the de-SPAC transaction or any related financing transaction, the amount of securities issued or to be issued by the SPAC to the SPAC sponsor, its affiliates, and promoters and the price paid or to be paid for such securities in connection with the de-SPAC transaction or any related financing transaction; and, outside of the table, the extent to which that compensation and securities issuance has resulted or may result in a material dilution of the equity interests of non-redeeming shareholders of the special purpose acquisition company.
In final Item 1604(b)(4), we revised to clarify that certain disclosure should appear outside of the table (rather than within it). It also makes the item consistent with Item 1602(b)(6) in requiring disclosure of the extent of the material dilution not merely whether or not there is such material dilution. Also, in the final rule, we have replaced the term “unaffiliated security holders” with “non-redeeming shareholders” to ensure consistency of usage throughout Item 1604. In addition, this change eliminates any ambiguity that might have caused some registrants to believe they need to subtract affiliated shares from the denominator of the net tangible book value per share calculation, which the proposal did not intend. We also made changes to final Item 1604(b)(4) as compared to the proposal with respect to SPAC sponsors, promoters, and securities issuances discussed above in section II.B.
Final Item 1604(b)(5) requires the prospectus summary to include a brief description in plain English of the material terms of any material financing transactions that have occurred or will occur in connection with the consummation of the de-SPAC transaction, the anticipated use of proceeds from these financing transactions and the dilutive impact, if any, of these financing transactions on non-redeeming shareholders. The sole change from the proposal is that, in final
Final Item 1604(b)(6) requires the prospectus summary to include a brief description in plain English of the rights of security holders to redeem the outstanding securities of the special purpose acquisition company and the potential dilutive impact of redemptions on non-redeeming shareholders. We made one change to final Item 1604(b)(6) compared to the proposal to clarify the disclosure required. Final 1604(b)(6) contains the phrase “potential dilutive impact of redemptions on non-redeeming shareholders” instead of the proposed phrase “impact of redemptions on the value of the securities owned by non-redeeming shareholders.” We believe this clarification will eliminate ambiguity and the potential that registrants could misinterpret the item to require undertaking valuations under different scenarios of the securities owned by non-redeeming shareholders.
We received comments that indicated that we should provide a definition of net tangible book value or provide examples to enhance the comparability of the disclosures.
Final Item 1604(c) requires disclosure in a tabular format that includes intervals representing selected potential redemption levels that may occur across a reasonably likely range of outcomes of: the offering price disclosed pursuant to Item 1602(a)(4) in the initial registered offering by the SPAC; as of the most recent balance sheet date filed, the net tangible book value per share, as adjusted, as if the selected redemption levels have occurred and to give effect to, while excluding the de-SPAC transaction itself, material probable or consummated transactions, and other material effects on the SPAC's net tangible book value per share from the de-SPAC transaction; and the difference between such offering price and such net tangible book value per share, as adjusted. Final Item 1604(c) also requires that the tabular disclosure must show: the nature and amounts of each source of dilution used to determine net tangible book value per share, as adjusted; the number of shares used to determine net tangible book value per share, as adjusted; and any adjustments to the number of shares used to determine the per share component of net tangible book value per share, as adjusted.
Final Item 1604(c) also requires, outside of the table, a description of each material potential source of future dilution that non-redeeming shareholders may experience by electing not to tender their shares in connection with the de-SPAC transaction, including sources not included in the table with respect to the determination of net tangible book value per share, as adjusted.
Final Item 1604(c) introductory text and (c)(1) and (2) contain certain changes from the proposal. We believe the changes in the final rules will be simpler for registrants to follow and comply with because they provide clear steps regarding how the dilution disclosure should be determined. In addition, in clarifying how to calculate the required dilution, final Item 1604(c) also ensures that redeemable common stock is not treated as temporary equity for purpose of the calculation in a way that could undermine the meaningfulness of the dilution disclosure. As part of these clarifications, we have deleted the proposed provision in Item 1604(c)(1) that would have required “sensitivity analysis disclosure in tabular format that expresses the amount of potential dilution under a range of reasonably likely redemption levels.” We were concerned the meaning of that proposed provision could be unclear to registrants, particularly its references to “sensitivity analysis.” We believe there was potential for some registrants to interpret the proposed provision merely to mean a range of redemption levels must be analyzed, while other registrants could interpret the provision to mean that a range of redemption levels must be analyzed and also that a sensitivity analysis must be conducted that reflects a range of assumptions for the range of redemption levels.
We also have deleted the following language of proposed Item 1604(c)(1): “At each redemption level in the sensitivity analysis, quantify the dilutive impact on non-redeeming shareholders of each source of dilution, such as the amount of compensation paid or to be paid to the SPAC sponsor, the terms of outstanding warrants and convertible securities, and underwriting and other fees.” We were concerned that the references in that proposed provision to certain sources of potential dilution could confuse registrants about how to calculate dilution and could produce inconsistent interpretations across different registrants.
Final Item 1604(c) accomplishes the same goal as these deleted provisions in proposed Item 1604(c)(1) by requiring disclosure “in a tabular format that includes intervals representing selected potential redemption levels that may occur across a reasonably likely range of outcomes.” We believe the final rule will make it clear that the item does not prescribe the redemption levels for which dilution information must be provided (in contrast to Item 1602(a)(4) and (c)).
Under Item 1604(c), registrants should not select redemption levels that are not possible. For example, registrants should not select levels that, combined with any other funding (such as PIPEs) in connection with the de-SPAC transaction, would result in the SPAC having cash that is lower than any minimum cash condition in the agreements related to the de-SPAC transaction. Registrants are not required to select exactly four levels for Item 1604(c) (which they are required to do in Item 1602(a)(4) and (c)) but should ensure the redemption levels reasonably inform investors of a range of potential outcomes.
Furthermore, we have clarified that the table in final Item 1604(c) should show the nature and amounts of each source of dilution and the number of shares used in the calculation in order to eliminate any ambiguity and the potential that registrants could misinterpret the item to mean that the table needs to show only the final dilution information and not the line items that went into its calculation.
In addition, with respect to the proposed requirement to describe material potential sources of future dilution, the final rule specifies that the description should be located outside of the table. The final rule also states that each material potential source of future dilution outside of the table should include “sources not included in the table with respect to the determination of net tangible book value per share, as adjusted.” We are making this change to clarify that the disclosure outside of the table is not merely duplicative of the sources of dilution used for the calculation of the measure of dilution within the table. Without these changes, the item could have been misinterpreted by registrants to require disclosure of the same sources of dilution used in the tabular calculation of dilution, only in a non-tabular format. Depending on a SPAC's specific facts and circumstances, the non-tabular disclosure of “each material potential source of future dilution” under Item 1604(c) may need to discuss a broader set of items than “material probable or consummated transactions” that are included for purposes of calculating the tabular dilution measure.
Finally, to reflect the deletion discussed above of the proposed provision in Item 1604(c)(1) regarding “sensitivity analysis,” we have inserted in final Item 1604(c)(2) the words “necessary to understand the tabular disclosure” instead of the proposed words “necessary to understand the sensitivity analysis disclosure.”
In adopting the final rules, we agree with the commenters that expressed the view that the dilution disclosures will provide helpful information to investors. There are a number of potential sources of dilution in common SPAC structures, including: (a) shareholder redemptions, (b) SPAC sponsor compensation, (c) underwriting fees, (d) warrants, (e) convertible securities, and (f) PIPE financings. The enhanced dilution disclosure required by the final rules will enable investors in a SPAC IPO and subsequent purchasers of SPAC shares to better understand the potential impact upon them of the various dilutive events that may occur over the lifespan of the SPAC.
Dilution disclosure in Commission filings has evolved over time.
Dilution disclosure is important to SPAC investors for two reasons at both the IPO and de-SPAC transaction stages: (1) it provides investors a way of understanding the impact of the disparity in price paid by insiders and the price paid by investors for shares, and (2) it enables investor comparisons to other SPACs. Additionally, at the de-SPAC transaction stage, dilution disclosure is important to SPAC investors for a third reason: it helps investors evaluate the economics of the de-SPAC transaction, which can inform their investing and voting decisions. We discuss these three reasons in more detail as follows.
First, the difference in per share net tangible book value, as adjusted, as compared to the $10 offering price, demonstrates to investors how the typically lower-priced SPAC sponsor promote stake affects these investors' claims on the tangible assets of the company. Similarly, at the de-SPAC transaction stage, when certain other transactions may become probable, the net tangible book value per share, as adjusted, will convey to investors a better understanding of the dilution that these other transactions may produce. Relatedly, net tangible book value per share, as adjusted, provides information to investors on dilution (in the sense of diminution in percentage ownership) resulting from the SPAC sponsor promote, because an increase in common shares in the denominator reduces net tangible book value per share, as adjusted.
Second, investors may focus on the relative dilution in a particular SPAC offering as compared to other SPAC offerings. For example, some types of investors may be more focused on finding SPACs with the highest net tangible book values per share compared to the $10 offering price and less focused on other qualitative factors about the SPAC.
Third, as discussed above, SPAC shares can be redeemed at an agreed upon price. Some commentators have emphasized that it is important for investors to have information at the de-SPAC transaction stage that enables investors to value these shares on a basis other than the stated agreement price.
While dilution information is important to SPAC investors for the reasons discussed above, we acknowledge that SPAC investors may use dilution information differently than investors in an operating company. For example, with an operating company some “value investors” may compare the offering price to net tangible book value.
We disagree with comments that suggested market practice of disclosing dilution information obviates the need for the proposed rules regarding dilution.
Some commenters suggested current dilution disclosure under Item 506 produces—and the proposed dilution disclosure would produce—results that are flawed or are calculated using varying methods by registrants.
After considering the comments, we have made changes (as described above) in the final rules to clarify the calculation of net tangible book value per share, as adjusted, as the measure of dilution in Items 1602(a)(4) and (c) and 1604(c). Without these revisions, there would be a risk that some disclosure, even under the new rules, could present results that are not meaningful to investors, such as negative net tangible book value per share in some transactions. In addition, we believe the changes in the final rules will be simpler for registrants to follow and comply with because they provide clear steps regarding how to determine dilution.
Final Item 1602(a)(4) and (c) are similar in that they require the disclosure of net tangible book value per share, as adjusted, shown in a tabular format. These items, however, have four key differences. First, Item 1602(a)(4) tabular disclosure must be provided on the prospectus cover, while Item 1602(c) disclosure must be provided in the prospectus body. Second, unlike Item 1602(c), registrants providing the Item 1602(a)(4) tabular disclosure do not need to show individual line-items for each source of dilution used to determine net tangible book value per share, as adjusted, in the table; for Item 1602(a)(4), they may simply show net tangible book value per share, as adjusted, in the table for the required quartiles. Third, Item 1602(c) also
With respect to the requirement in final Item 1602(c) to describe each material potential source of future dilution (including those not shown in the table), these material potential sources of future dilution under final Item 1602(c) are to be disclosed outside of the table. These sources may not be the same as transactions that must be shown in the dilution table required by Item 1602(c). This non-tabular disclosure of “each material potential source of future dilution” in Item 1602(c) potentially may need to discuss a broader set of items than “material probable or consummated transactions,” although this would depend on a SPAC's specific facts and circumstances.
Dilution disclosure is also required in final Item 1604(c) in connection with de-SPAC transactions. An objective of the dilution disclosure required by Item 1604(c) is to depict the amount of net assets that the SPAC will contribute to the post-combination entity, as also noted by some commenters.
Further, to ensure “net tangible book value per share, as adjusted” depicts the amount of net assets that the SPAC will contribute to the post-combination entity, calculation of the measure excludes the effect of the consummation of the de-SPAC transaction itself. Thus, target company assets should not be included in net tangible book value per share, as adjusted and, in de-SPAC transactions where the consideration paid for the target company is securities of the SPAC, the SPAC should not include those securities paid as consideration in the denominator of the net tangible book value per share, as adjusted, calculation.
We are not adopting one commenter's recommendation that dilution from warrants should be conveyed using the treasury share method.
The same commenter recommended that “sensitivity analyses should only be required for sources of dilution, such as warrants, where the dilutive impact varies based on changing equity values or other variables.”
As discussed above, the non-tabular disclosure of “each material potential source of future dilution” under Item 1604(c) potentially may need to discuss a broader set of items than “material probable or consummated transactions,” although this would depend on a SPAC's specific facts and circumstances. Thus, whether or not a registrant has made an adjustment for warrants in net tangible book value per share, as adjusted, the registrant may need to describe how the warrants are a material potential source of future dilution.
We are not adopting a commenter's suggestion to include a redemption scenario that would reflect “100% of the public shares (regardless of any provisions in the SPAC's governing documents that might theoretically limit redemptions).”
The same commenter expressed the view that current dilution disclosure under Item 506 of Regulation S-K is unhelpful for IPO-stage investors, as the output is driven by the maximum redemption scenario which can differ based on (i) different provisions of the SPAC's constituent documents and (ii) the interpretation of those constituent documents.
One commenter said that “a SPAC may actually become subject to a maximum redemption scenario that is lower than the quartile intervals required to be presented by proposed Item 1602(a)(4).”
One commenter recommended the Commission require dilution disclosure
Commenters raised concerns that dilution disclosure would be characterized by uncertainty, be based on hypothetical assumptions, or depend on unknown variables.
We are not adding an explicit net cash per share disclosure requirement as several commenters recommended that we require.
We do not agree with that group of commenters that the proposal was limited to dilution focused solely on reduction in the percentage ownership of a shareholder out of total shares deemed to be issued and outstanding. We agree this form of dilution described by commenters is an element of the denominator in the net tangible book value per share, as adjusted, calculation, but the numerator of the net tangible book value per share, as adjusted, calculation will capture and convey other information—such as existing cash (prior to the relevant transaction,
Because we believe substantially all the information that would be conveyed to an investor by a net cash per share measure will be conveyed by the required “net tangible book value per share, as adjusted,” we are not adding an explicit net cash per share disclosure requirement.
Regarding comments that recommended that de-SPAC transaction dilution information be presented on the prospectus cover page,
We disagree in part with the commenter who suggested that the final sentence of proposed Item 1604(c)(1) required a determination of the enterprise valuation that will result in a shareholder's “interest per share” calculated by reference to a pro forma closing date balance sheet being at least equal to the $10 price per share paid in the IPO.
To further clarify, we provide the following basic example of disclosure under Item 1604(c)(1). A hypothetical SPAC issued shares in an IPO at $10 per share. After giving effect to the IPO, the issued and outstanding shares of the SPAC are 20,000,000, for a total market capitalization of $200,000,000. In connection with the de-SPAC transaction, the SPAC issues 65,000,000 shares to the target company's shareholders and issues 15,000,000 shares in a private placement for a total of 100,000,000 outstanding shares. Two (out of several) redemption levels the SPAC has chosen to use for the disclosure required by Item 1604(c) are zero redemptions and 5,000,000 shares redeemed (5% of the total shares). Where redemptions are zero, for purposes of Item 1604(c)(1), the SPAC would have 100,000,000 total shares after giving effect to the de-SPAC transaction and related financing. Where redemptions are zero, the company valuation at or above which the non-redeeming shareholders' interest per share would be at least the IPO price per share ($10 in this example) would be calculated as: $10 (per share IPO price) times 100,000,000 shares, or $1,000,000,000. Where 5,000,000 shares are redeemed (5% of the total shares), the SPAC would have 95,000,000 total shares after giving effect to the de-SPAC transaction and related financing. At this redemption level, the company valuation at or above which the non-redeeming shareholders' interest per share would be at least the IPO price per share ($10 in this example) would be calculated as: $10 (per share IPO price) times 95,000,000 shares, or $950,000,000. For the remaining redemption levels, the registrant would provide the required disclosure in a similar manner.
With respect to the commenter's concern that some investors may misunderstand disclosure under the item and view it as a guarantee that the stock will not trade down in the aftermarket,
Another commenter recommended that the Commission consider requiring that intermediaries provide information about “the sponsor, actual and potential conflicts of interest, [and] how much a non-redeeming SPAC investor's interest will be diluted” in a separate “Key Risks and Conflicts form” that is detached from the prospectus, so that the disclosure receives more investor attention and focus.
One commenter said that “any lock-up periods or earnout provisions for sponsors or underwriters would be of significant interest to investors and should be required if part of the SPAC offering.”
For registered offerings (including IPOs) by SPACs other than de-SPAC transactions, the Commission proposed Item 1602(a) to require information on the prospectus outside front cover page in plain English about, among other things: (1) the time frame for the SPAC to consummate a de-SPAC transaction, (2) redemptions, (3) SPAC sponsor compensation, (4) dilution (including simplified tabular disclosure), and (5) conflicts of interest.
For de-SPAC transactions, the Commission proposed Item 1604(a) to require that SPACs include information on the prospectus outside front cover page in plain English about, among other things: (1) the fairness of the de-SPAC transaction, (2) material financing transactions, (3) SPAC sponsor compensation and dilution, and (4) conflicts of interest.
For registered offerings (including IPOs) by SPACs other than de-SPAC transactions, the Commission proposed Item 1602(b) to require in the prospectus summary a brief description in plain English about, among other things: (1) how the SPAC will identify and evaluate potential business combination candidates and whether it will solicit shareholder approval for the de-SPAC transaction, (2) the material terms of the trust or escrow account and the amount or percentage of the gross offering proceeds that the special purpose acquisition company will place in the trust or escrow account, (3) the material terms of the securities being offered, including redemption rights, and whether the securities are the same class as those held by the SPAC sponsor and its affiliates, (4) the period of time in which the SPAC intends to consummate a de-SPAC transaction, (5) any plans to seek additional financings and how the terms of additional financings may impact unaffiliated security holders, (6) in a tabular format, compensation of the SPAC sponsor, its affiliates, and promoters, and the extent to which this compensation may result in a material dilution of the purchasers' equity interests, and (7) any material actual or potential conflicts of interest between the SPAC sponsor or its affiliates or promoters and purchasers in the offering, including those that may arise in determining whether to pursue a de-SPAC transaction.
For de-SPAC transactions, the Commission proposed Item 1604(b) to require in the prospectus summary a brief description in plain English about, among other things: (1) the background and material terms of the de-SPAC transaction, (2) whether the SPAC reasonably believes that the de-SPAC transaction is fair or unfair to unaffiliated security holders, the bases for such belief, and whether the SPAC or the SPAC sponsor has received any report, opinion, or appraisal from an outside party concerning the fairness of the de-SPAC transaction, (3) any material actual or potential conflicts of interest between the SPAC sponsor or its affiliates or promoters and unaffiliated security holders in connection with the de-SPAC transaction, (4) in a tabular format, the terms and amount of the compensation received or to be received by the SPAC sponsor and its affiliates in connection with the de-SPAC transaction or any related financing transaction, and whether that compensation has resulted or may result in a material dilution of the equity interests of unaffiliated security holders of the special purpose acquisition company, (5) the material terms of any financing transactions that have occurred or will occur in connection with the consummation of the de-SPAC transaction, the anticipated use of proceeds from these financing transactions and the dilutive impact, if any, of these financing transactions on unaffiliated security holders, and (6) the rights of security holders to redeem the outstanding securities of the SPAC and the potential impact of redemptions on the value of the securities owned by non-redeeming shareholders.
Several commenters generally supported the proposed prospectus cover page and prospectus summary disclosure requirements.
Several commenters suggested the proposed prospectus cover page requirements would produce cover page disclosure that will be dense and longer than one page.
One commenter said “requiring disclosure to be included at least three times in the document (
After considering the comments received, we are adopting Items 1602(a) and (b) and 1604(a) and (b) as proposed with certain modifications discussed below.
We agree with the commenter who expressed the view that investors will benefit from these provisions, including by better understanding factors including compensation, conflicts of interest, and dilution.
Several commenters suggested the proposed prospectus cover page requirements would produce cover page disclosure that will be dense and longer than one page.
One commenter on the proposal said requiring cover page, prospectus summary, and body of the document disclosures seems excessive and potentially distracting to investors.
One commenter expressed the view that prospectus summary disclosure related to additional financings (other than committed financings) at the IPO stage would be hypothetical and boilerplate and would distract investors from more useful information.
In final Item 1602(a)(5), we replaced the proposed term “SPAC sponsor or its affiliates or promoters and purchasers in the offering” with the term “SPAC sponsor, its affiliates, or promoters; and purchasers in the offering.” We made the same changes to final Item 1602(b)(7).
In final Item 1604(a)(1) and (b)(2), we made revisions to reflect changes we are making to Items 1606 and 1607 that are discussed in section II.G.
In final Item 1604(a)(4), following the phrase “State whether, in connection with the de-SPAC transaction, there may be any actual or potential material conflict of interest,” we added the phrase “including any material conflict of interest that may arise in determining whether to proceed with a de-SPAC transaction and any material conflict of interest arising from the manner in which the special purpose acquisition company compensates a SPAC sponsor, officers, and directors or the manner in which a SPAC sponsor compensates its officers and directors.” This change makes Item 1604(a)(4) required cover page disclosure congruent with Item 1603(b) (non-cover page) disclosure. In de-SPAC transactions, the cover page disclosure under Item 1604(a)(4) should provide a cross reference to, among other things, the description of these actual or potential material conflicts of interest under Item 1603(b).
We also made a number of other changes to the final rules related to prospectus cover page and prospectus summary disclosure that are discussed above in other sections of this release.
The Commission proposed Item 1605 of Regulation S-K to require disclosure of the background, material terms, and effects of the de-SPAC transaction, including:
• A summary of the background of the de-SPAC transaction, including, but not limited to, a description of any contacts, negotiations, or transactions that have occurred concerning the de-SPAC transaction;
• A brief description of any related financing transaction, including any payments from the SPAC sponsor to investors in connection with the financing transaction;
• The reasons for engaging in the particular de-SPAC transaction and for the structure and timing of the de-SPAC transaction and any related financing transaction;
• An explanation of any material differences in the rights of security holders of the post-business combination company as a result of the de-SPAC transaction;
• Disclosure regarding the accounting treatment and the Federal income tax consequences of the de-SPAC transaction, if material;
• Any material interests in the de-SPAC transaction or any related financing transaction held by the SPAC sponsor and the special purpose acquisition company's officers and directors, including fiduciary or contractual obligations to other entities as well as any interest in, or affiliation with, the target company; and
• A statement whether or not security holders are entitled to any redemption or appraisal rights, a summary of such redemption or appraisal rights, and, if there are no redemption or appraisal rights available for security holders who object to the de-SPAC transaction, a brief outline of any other rights that may be available to security holders.
One commenter stated that proposed Item 1605 would provide useful information to investors.
One commenter recommended that we revise proposed Item 1605(b)(2), with respect to descriptions of related financings.
After considering the comments received, we are adopting Item 1605 as proposed, with several modifications discussed below.
By providing a specialized disclosure rule tailored to de-SPAC transactions, the Item 1605 disclosure requirements will provide investors with information necessary to evaluate the reasons for a de-SPAC transaction and for choosing a particular structure and financing for the transaction. These requirements will also help promote consistent disclosure, allowing for greater comparability of these disclosures across de-SPAC transactions.
Given the unique qualities of de-SPAC transactions, we believe registrants will benefit from the centralization of the SPAC-related requirements in the Item 1600 series of Regulation S-K. If there are facts and circumstances that may result in required disclosure under a current rule being the same as under any of the rules we are adopting, registrants are not
We are not revising Item 1605(b)(2) to provide more specificity on the types of securities or guarantees received from the SPAC, as suggested by one commenter. We are adopting Item 1605(b)(2) as proposed to require the disclosure of material terms of the de-SPAC transaction, including a brief description of any related financing transaction, including any payments from the SPAC sponsor to investors in connection with the financing transaction. In most, if not all, cases, Item 1605(b)(2) will require the registrant to disclose the price paid by PIPE investors and other benefits such as derivative securities that are acquired by PIPE purchasers (in addition to SPAC shares), because these are likely to be material terms. One commenter recommended we require “A brief description of related financing transactions, including the effective price per share at which investors are buying, after accounting for the value of any securities or guarantees they receive from the SPAC, SPAC sponsor or affiliate of either in connection with the financing transaction.”
We have made a number of modifications in final Item 1605 as compared to the proposal. First, in Item 1605(a), we have replaced the term “Furnish” with the term “Provide” in the sentence “Furnish a summary of the background of the de-SPAC transaction” to make it clear that we intend this disclosure to be filed. This change will also make Item 1605(a) consistent with the other items in Item 1605 in this respect.
Second, in Item 1605(b)(5) and (6), we have deleted the phrase “, if material” to align the phrasing with the existing disclosure requirements in Item 4 of Form S-4
Third, as discussed above in section II.C of this release regarding conflicts of interest, we are revising Item 1605(d) to address interests of target company officers and directors. Thus, in final Item 1605(d), we have added the phrase “; or held by the target company's officers or directors that consist of any interest in, or affiliation with, the SPAC sponsor or the special purpose acquisition company.”
Fourth, in final Item 1605(d), we have revised the phrase “held by the SPAC sponsor and the special purpose acquisition company's officers and directors” by replacing the term “and” with “or” in each instance, because the requirements of Item 1605(d) should apply disjunctively where any of the named persons has a material interest in the de-SPAC transaction or any related financing (and not be limited to only those situations where every named person has such an interest).
Fifth, we revised Item 1605(b)(3), (4), and (6) to clarify that these requirements will require disclosure with respect to the SPAC, target company, and/or security holders of the SPAC or target company. These changes eliminate potential ambiguity that could have caused registrants to inappropriately interpret the items as not including disclosure with respect to those persons in connection with de-SPAC transactions. Accordingly, as adopted:
• final Item 1605(b)(3) requires: “A reasonably detailed discussion of the reasons of the SPAC and the target company for engaging in the de-SPAC transaction and reasons of the SPAC for the structure and timing of the de-SPAC transaction and any related financing transaction;”
• final Item 1605(b)(4) requires: “An explanation of any material differences in the rights of SPAC and target company security holders as compared with security holders of the combined company as a result of the de-SPAC transaction;” and
• final Item 1605(b)(6) requires: “The Federal income tax consequences of the de-SPAC transaction to the SPAC, the target company, and their respective security holders.”
The Commission proposed Item 1606(a) to address concerns regarding potential conflicts of interest and misaligned incentives in connection with the SPAC's decision to proceed with a particular de-SPAC transaction and to assist investors in assessing the fairness of a particular de-SPAC transaction to unaffiliated investors. Specifically, the Commission proposed Item 1606(a) to require a statement from a SPAC as to whether it reasonably believes that the de-SPAC transaction and any related financing transactions are fair or unfair to the SPAC's unaffiliated security holders, as well as disclosures regarding whether any director voted against or abstained from voting on, approval of the de-SPAC transaction or any related financing transaction.
Commenters expressed differing views on proposed Item 1606(a). Some commenters supported the proposed requirement.
Other commenters opposed proposed Item 1606(a).
One commenter said proposed Items 1606 and 1607 would represent a “dramatic shift to de-SPAC transactions processes and disclosures,” because, in part, SPAC boards have not historically made a recommendation to shareholders regarding whether or not to redeem shares at the time of the business combination and fairness opinions obtained in connection with de-SPAC transactions are typically limited to whether the transaction is fair to the SPAC, not whether the transaction is fair to any particular class of shareholders.
Several commenters expressed the view that requiring disclosure of a fairness determination would result in increased liability and litigation risk in de-SPAC transactions
Other commenters expressed the view that proposed Items 1606 and 1607 would effectively require de-SPAC transactions to be “substantively fair,” which, in the view of these commenters, would exceed the Commission's authority.
One commenter stated that, while the disclosure in proposed Item 1606(a) would be new, “in light of the fiduciary duties applicable to SPACs and their directors and officers,” the disclosure in proposed Item 1606(a) and (b) “would likely be redundant with the standard disclosure of the SPAC board's reasons for approval of the de-SPAC transaction.”
Several commenters expressed concern that the proposed fairness determination disclosure requirement would likely or effectively require a SPAC to obtain a fairness opinion from a financial advisor
Another commenter indicated that proposed Item 1606 (and Item 1607) would be burdensome and, to address that burden, suggested that proposed Item 1606 should not apply to de-SPAC transactions generally but only to those de-SPAC transactions that raise risks of “severe conflicts of interest.”
Some commenters also said they prefer that any fairness determination be made as to the de-SPAC transaction as a whole (instead of the de-SPAC transaction and any related financing transaction separately)
We continue to believe that SPACs and the hybrid nature of de-SPAC transactions present potential conflicts of interest and misaligned incentives that are not present in other types of business combination transactions. As a result, we believe that it is appropriate for shareholders to have more complete information regarding the SPAC's decision to proceed with a particular de-SPAC transaction. Many commenters that supported proposed Item 1606(a) expressed similar views.
In response to commenters' concerns, we are revising Item 1606(a) to focus on situations in which a determination as to the advisability of the de-SPAC transaction is required by the law of the jurisdiction in which the SPAC is organized.
Instead, under final Item 1606(a), if the law of the jurisdiction of the SPAC's organization requires the SPAC's board of directors (or similar governing body)
We believe that the approach taken in final Item 1606(a) represents an appropriate balance between our goal of providing more transparency around the SPAC's decision to proceed with a particular de-SPAC transaction and the concerns raised by commenters that the proposed rule would create a new substantive corporate law requirement
In addition, these changes from the proposal should avoid any misimpression that Item 1606(a) creates a requirement, implicit or explicit, or expectation that a fairness opinion must be obtained to comply with its requirements. We are mindful of commenters' concerns about increased liability and litigation risk associated with such opinions.
The changes to Items 1606(a) and (b) and 1607
We agree with commenters who stated that any rule addressing the board's decision to proceed with a de-SPAC transaction should focus on all of a SPAC's security holders rather than only its unaffiliated security holders.
The changes to Item 1606(a) address one commenter's concern that the perceived requirement to obtain a fairness opinion could increase the need to include projections in the de-SPAC transaction disclosure documents in support of such fairness determination.
Finally, in response to commenters' recommendations that proposed Item 1606(a) be required with respect to the de-SPAC transaction and related financing as a whole,
The Commission proposed Item 1606(b) to supplement the fairness determination disclosure required by proposed Item 1606(a). Specifically, proposed Item 1606(b) would require a SPAC to discuss the material factors upon which the reasonable belief regarding the fairness of a de-SPAC transaction and any related financing transaction is based and, to the extent practicable, the weight assigned to each factor.
Commenters expressed differing views on proposed Item 1606(b). Some commenters supported the proposed requirement generally
Other commenters stated that the inclusion of a mandatory list of factors to be addressed in disclosure under proposed Item 1606(b) may force the SPAC to disclose information not actually considered by the SPAC in making its fairness determination.
Some commenters stated that the factors the proposal required to be discussed should not be assigned weight because it would not be practical or workable to do so, such weighting could result in investors placing too much or not enough emphasis on the factors described by the SPAC, and various members of the SPAC board will likely assign differing weights to differing factors.
We are adopting Item 1606(b) as proposed, with certain modifications discussed below. We continue to believe that disclosure of the factors considered by a SPAC's board of directors (or similar governing body) in making the decision to proceed with a de-SPAC transaction, to the extent they were considered, would provide shareholders with important information to allow those shareholders to make informed voting or investment decisions.
While several commenters supported proposed Item 1606(b),
Some commenters expressed concern with the practicability of assigning weight to factors, the possibility that shareholders would emphasize those weights too much or too little,
To reduce potential redundancy in the disclosure requirement, we have also removed the terms “in reasonable detail” from the first sentence of Item 1606(b). Any disclosure responsive to Item 1606(b) is already required to be complete, and the deleted terms are not necessary to confirm that such a principle applies here.
Further, as discussed above, we are revising Item 1606(b) to include any financing materially related to the de-SPAC transaction in the non-exclusive list of factors to be discussed because PIPE offerings and other financings are a common feature of a de-SPAC transaction and, in some instances, the success of the de-SPAC transaction and of the post-de-SPAC company is dependent on the existence of related financing. Given the importance of such financing, we have revised final Item 1606(b) to include financing materially related to the de-SPAC transaction in the non-exclusive list of factors that a board of directors (or similar governing body) would be required to discuss, to the extent the board of directors (or similar governing body) considered such financing. By moving the reference to related financing from Item 1606(a) to Item 1606(b), we are also eliminating any potential confusion that the board of directors (or similar governing body) would need to make a separate Item 1606(a) determination for financing materially related to the de-SPAC transaction.
The Commission proposed Item 1606(c) through (e) to provide additional information about the de-SPAC transaction and any related financing transaction, including whether a majority of unaffiliated security holders is required to approve the transaction(s), the involvement of any unaffiliated representative acting on behalf of unaffiliated security holders, and whether the transaction(s) were approved by a majority of directors of the SPAC who are not employees of the SPAC.
Commenters expressed differing views on proposed Item 1606(c) through (e). Some commenters supported the proposed requirements.
With respect to proposed Item 1606(c), one commenter indicated that disclosure about whether the de-SPAC or related financing transaction was structured to require approval of at least a majority of unaffiliated security holders would be redundant due to the requirement of Item 21 of Schedule 14A to disclose similar information.
With respect to proposed Item 1606(d), a few commenters expressed the view that retention of a representative to act solely on behalf of unaffiliated security holders in the negotiation of the de-SPAC transaction is rare and that, as a result, such a requirement will not result in meaningful additional disclosure.
One commenter supported the proposed requirement to disclose whether any non-executive director voted against, or abstained from voting on, the approval of the de-SPAC transaction
We continue to believe that the new disclosures under Item 1606(c) through (e) will provide investors with important information and a better understanding of the process by which a SPAC determined to proceed with a particular de-SPAC transaction. We are adopting Item 1606(c), (d), and (e) as proposed, with some modifications and minor technical changes discussed below. In the final rules, we moved the requirement to identify any director who voted against, or abstained from voting on, approval of the de-SPAC transaction from proposed Item 1606(a) to final Item 1606(e), because, as Item 1606(e) is generally related to issues involving approval of the de-SPAC transaction by the board of directors (or similar governing body), we considered this a more appropriate place for this requirement.
We disagree with the assertion made by a commenter that the disclosure required under proposed Item 1606(c) would be redundant given the existing requirement in Item 21 of Schedule 14A, which requires disclosure of the vote required for approval (among other things) of the matter by shareholders.
A few commenters said the use of unaffiliated representatives in negotiations is rare.
One commenter said directors will be more reluctant to vote against a de-SPAC transaction if they know that their objection will be made public.
We have also made conforming changes to Item 1606(c) through (e) to be consistent with final Item 1606(a), as discussed above.
The Commission proposed Item 1607(a) to require disclosure about whether or not the SPAC or SPAC sponsor received any report, opinion, or appraisal from an outside party relating to the consideration or the fairness of the consideration to be offered to security holders or the fairness of the de-SPAC transaction or any related financing transaction to the SPAC, SPAC sponsor or unaffiliated security holders.
The Commission proposed Item 1607(b) to require disclosure of certain information about any such report, opinion, or appraisal from an outside party as well as any negotiation or report by an unaffiliated representative, including the identity of the outside party or unaffiliated representative, the qualifications of the outside party or unaffiliated representative, any material relationship between the outside party, its affiliates, or unaffiliated representative and the SPAC, SPAC sponsor, or their respective affiliates, whether the SPAC or SPAC sponsor determined the amount of consideration to be paid or the valuation of the target company, or whether the outside party recommended the amount of consideration to be paid or the valuation of the target company. Proposed Item 1607(b) would also require a summary of the negotiation, report, opinion, or appraisal, including a description of the procedures followed, the findings and recommendations, the bases for and methods used to arrive at such findings and recommendations, any instructions received from the SPAC or SPAC sponsor, and any limitation imposed by the SPAC or SPAC sponsor on the scope of the investigation.
The Commission proposed Item 1607(c) to require all such reports, opinions or appraisals to be filed as exhibits to the Form S-4, Form F-4, and Schedule TO for the de-SPAC transaction or included in the Schedule 14A or 14C for the transaction.
We received differing views from commenters. Some commenters generally supported proposed Item 1607.
As discussed above in the comments on proposed Item 1606, several commenters stated that proposed Items 1606 and 1607 exceed the Commission's authority because they effectively require de-SPAC transactions to be “substantively fair.”
Some of these commenters suggested that the filing of board materials required under Item 1607(c) is inappropriate because it will “inevitably” result in a reduction of information presented to, and considered by, a SPAC's board of directors, which may affect the board's ability to fulfill its fiduciary duties.
One commenter indicated that the requirement in proposed Item 1607(c) to file as an exhibit (or include) any such report, opinion, or appraisal related to the fairness determination in addition to the requirement in proposed Item 1607(b) to disclose a summary of the report, opinion, or appraisal could limit any incremental benefit an investor would receive from the filing of such reports, opinions, or appraisals.
We are adopting Item 1607(a) as proposed with the modifications discussed below. Final Item 1607(a) only requires the disclosure specified in Item 1607(b)
The final rule includes some clarifying revisions to Item 1607(a). We added a reference to an “unaffiliated representative” to avoid any confusion arising out of references to an “unaffiliated representative” in Item 1607(b) without a corresponding reference in Item 1607(a). We also added the parenthetical terms “other than an opinion of counsel” to clarify that an opinion of counsel is outside of the rule's scope. In addition, we included a reference to the target company in final Item 1607(a)(3) to specify which security holders are being offered the consideration. Finally, we reversed the order of “SPAC sponsor” and “security holders” in final Item 1607(a)(4) to avoid the implication that the rule also applies to security holders of SPAC sponsor.
To address commenters' concerns regarding the possible disclosure of immaterial, speculative, or unreliable materials,
In addition, by revising Item 1606 to remove the requirement to disclose a fairness determination in the context of a de-SPAC transaction and making corresponding revisions to Item 1607, the final rule should address commenters' concerns that proposed Item 1607 would exceed the Commission's authority.
We believe adopting final Item 1607 is more consistent with the remaining rules applicable to SPACs and de-SPAC transactions than the alternative suggested by a commenter to instead update similar existing requirements in Form S-4 and F-4.
Several commenters expressed concern that compliance with Item 1607(c) will result in a reduction of information presented to the SPAC's board of directors, which could negatively affect the ability of those directors to fulfill their fiduciary duties.
Furthermore, we believe that it would be impractical to require disclosure under Item 1607 only in instances of “severe conflicts of interest” as one commenter suggested
We are adopting Item 1607(b) and (c) as proposed, with two technical modifications. We revised Item 1607(b)(5) to specify that the related disclosure is only required for reports, opinions, or appraisals related to the fairness of the consideration to be offered to security holders of the target company in the de-SPAC transaction. We also revised Item 1607(c) to specify that the reports, opinions, or appraisals required to be filed are those referred to in Items 1607(a) and (b).
We disagree with the comments that the filing of reports, opinions, or appraisals pursuant to Item 1607(c) would have limited incremental benefit to investors.
We also disagree with the comments that the filing of reports, opinions, or
We are also amending Item 601 of Regulation S-K, Schedule 14A, and Schedule TO to implement the final Item 1607(c) exhibit filing requirement. For Forms S-1, S-4, F-1, and F-4, which refer to the exhibit requirements in Item 601 of Regulation S-K, the Item 1607(c) exhibit filing requirement will be incorporated through new 17 CFR 229.601(b)(98) (Item 601(b)(98) of Regulation S-K). Schedule 14A and Schedule TO will incorporate the Item 1607(c) exhibit filing requirement through new Item 25(b) of Schedule 14A and new Item 12(b) of Schedule TO, respectively. Because Item 1 of Schedule 14C generally requires compliance with the relevant items of Schedule 14A, the Item 1607(c) exhibit filing requirement will be incorporated into Schedule 14C through new Item 25(b) of Schedule 14A.
The Commission proposed Item 1608 to codify a staff position that a Schedule TO filed in connection with a de-SPAC transaction should contain substantially the same information about a target private operating company that is required under the proxy rules and that a SPAC must comply with the procedural requirements of the tender offer rules when conducting the transaction for which the Schedule TO is filed, such as a redemption of the SPAC securities. Redemption rights offered by a SPAC to its security holders in connection with the de-SPAC transaction or an extension of the timeframe to complete a de-SPAC transaction generally have indicia of being a tender offer, but the Commission staff has not objected if a SPAC does not comply with the tender offer rules when the SPAC files a Schedule 14A or 14C in connection with a de-SPAC transaction or an extension and complies with Regulation 14A or 14C, because the Federal proxy rules would generally mandate substantially similar disclosures and applicable procedural protections as required by the tender offer rules.
A few commenters generally supported the proposed rule but suggested certain changes.
One of these commenters recommended the Commission codify and clarify that a SPAC filing a Schedule 14A or 14C in connection with a de-SPAC transaction (or seeking an extension of time to complete a de-SPAC transaction) would neither need to file a Schedule TO nor comply with the tender offer rules.
Another commenter suggested that proposed Item 1608 is too broad because it would apply to tender offers conducted by SPACs but not related to a de-SPAC transaction.
After considering the comments, we are adopting Item 1608 as proposed.
We decline to revise the final item to clarify that a SPAC filing a Schedule 14A or 14C in connection with a de-SPAC transaction (or seeking an extension of time to complete a de-SPAC transaction) would neither need to file a Schedule TO nor comply with the tender offer rules, as recommended by a commenter.
With respect to the comment that the redemption of a SPAC's shares at the option of a stockholder is not a tender offer,
Regarding the comment that FPIs whose de-SPAC transaction disclosure document is “identical” to a proxy or information statement filed by a domestic filer pursuant to Regulation 14A or 14C should not have to file a Schedule TO,
Finally, with respect to the same commenter's statement that investors in a SPAC that is an FPI and which delivers both a disclosure document similar to a proxy statement and a tender offer document will be confused without any additional protection,
We also received a suggestion to expressly state that Item 1608 is applicable only to tender offers conducted by SPACs related to a de-SPAC transaction.
In response to a commenter's view that the adoption of proposed Rule 145a may result in the requirement to use Form S-4 or F-4 for all de-SPAC transactions, thus rendering Item 1608 unnecessary,
The Commission proposed Item 1610 to require SPACs to tag all information disclosed pursuant to subpart 1600 of Regulation S-K in Inline XBRL in accordance with Rule 405 of Regulation S-T and the EDGAR Filer Manual.
A number of commenters supported proposed Item 1610.
Some commenters addressed whether the Commission should provide exemptions or different requirements for FPIs, SRCs, or emerging growth companies (“EGCs”).
One commenter indicated they believe there is no need for structured data tagging for SPAC IPOs because SPAC IPOs are considerably simpler and easier to understand for investors than traditional IPOs and the redemption rights make an investment in a SPAC IPO considerably less risky.
One commenter said the Commission should provide detailed technical guidance prior to the rule implementation, taking account of all possible use cases for reporting, and an EDGAR Beta testing environment with voluntary early filing allowed 12 to 15 months prior to the first mandatory compliance date.
One commenter suggested the Commission consider use of Legal Entity Identifiers (LEIs) within the registration process and enhanced disclosures of IPOs by SPACs and in de-SPAC transactions.
After considering the comments received, we are adopting Item 1610 as
We agree with the commenter who said that tagging the quantitative and narrative disclosures would provide investors with searchable formats to access the information they would like to review, including potential conflicts of interests and potential risks.
We believe that the structured data requirements will enhance the usability of the SPAC disclosures. The requirements we are adopting include detail tagging of the quantitative disclosures and block text tagging of the narrative disclosures required under subpart 1600. These structured data requirements will make SPAC disclosures more readily available and easily accessible to investors and other market participants for aggregation, comparison, filtering, and other analysis.
One commenter suggested that the Commission may wish to “offer a phase-in period for smaller companies and [foreign private issuers] that have more limited resources.”
We disagree with one commenter's view that there is no need for structured data tagging for SPAC IPOs because SPAC IPOs are considerably simpler and easier to understand for investors than traditional IPOs and the redemption rights make an investment in a SPAC IPO considerably less risky.
We have not received any responses from the issuer community regarding the costs of the data tagging requirements, but we nonetheless do not believe the structured data requirements will unduly add to companies' burden in preparing their filings based on our extensive experience with existing tagging requirements. We believe such incremental costs are appropriate given the significant benefits to investors, as described above.
As a result of the requirement to tag SPAC IPO disclosures, SPACs will incur tagging compliance costs at an earlier stage of their lifecycle, because SPACs do not have to tag IPO registration statements under current Commission rules.
One commenter recommended that the Commission provide an EDGAR beta-testing environment with voluntary early filing allowed 12 to 15 months prior to the first mandatory compliance date.
One commenter suggested the Commission consider use of Legal Entity Identifiers (LEIs) within the registration process and enhanced disclosures of IPOs by SPACs and in de-SPAC transactions.
In light of the reliance on de-SPAC transactions as a vehicle for private operating companies to access the U.S. public securities markets with greater relative frequency than in the past, the Commission proposed a number of new rules and amendments to existing rules to more closely align the treatment of private operating companies entering the public markets through de-SPAC transactions with that of companies conducting traditional IPOs. In connection with these proposals, the Commission expressed the view in the Proposing Release that a private operating company's method of becoming a public company should not negatively impact investor protection.
The Commission proposed to require certain non-financial statement disclosures in connection with de-SPAC transactions. The Commission proposed that, if the target company in a de-SPAC transaction is not subject to the reporting requirements of section 13(a) or 15(d) of the Exchange Act, disclosure with respect to the target company pursuant to the following items in Regulation S-K would be required in the registration statement or schedule
Also, the Commission proposed amendments to Forms S-1 and F-1 to provide that where these forms are used to register securities in connection with a de-SPAC transaction, these forms must include the information required in Forms S-4 (in the case of Form S-1) and F-4 (in the case of Form F-1).
Commenters generally supported the Commission's proposal to align non-financial disclosures for de-SPAC transactions with the requirements in a traditional IPO.
One commenter said that the proposed requirements, other than Item 701, would require information “already disclosed with respect to target companies.”
Regarding the proposed amendment to Form S-1 to require the information required by Form S-4, one commenter recommended “the final rule include explicit language that such Form S-1 should include all information for the private operating company that would have been required in a Form S-4.”
Except for the modifications we discuss below, we are adopting as proposed: (a) General Instruction L.2 to Form S-4, (b) General Instruction I.2 to Form F-4,
Second, as a result of these new requirements, this information will be available to investors prior to the inception of trading of the post-business combination company's securities on a national securities exchange, rather than the earliest instance of such requirement being the requirement to set this information out in a Form 8-K due within four business days of the completion of the de-SPAC
One commenter suggested that disclosure under the proposed requirements is already provided with respect to target companies and would not provide meaningful benefits to investors.
In response to the comment recommending that Form S-1 should include explicit language that Form S-1 should include all information for the private operating company that would have been required in a Form S-4,
With respect to instructions in both General Instruction L.2 to Form S-4 and General Instruction I.2 to Form F-4 that apply with respect to the target company “[i]f the target company is a foreign private issuer,” we made several corrections from the proposal. First, we deleted the requirement to provide target company information pursuant to Item 3.C of Form 20-F (reasons for the offer and use of proceeds), because there is not a similar analog in the list of disclosure items to be provided with respect to the target company when the target company is not an FPI in the same instructions. Second, we deleted the requirement to provide target company information pursuant to Item 9.E of Form 20-F (dilution) because dilution information will already be required through the application of Item 1604 in the forms in connection with a de-SPAC transaction.
In the final rules, we have also revised Item 14(f)(2) of Schedule 14A to remove the additional disclosure required for any directors appointed without action by the security holders of the SPAC to align the disclosure required under Item 14(f)(2) of Schedule 14A with that required under General Instruction L.2 to Form S-4 and General Instruction I.2 to Form F-4.
Historically, in business combination transactions, there has been no requirement under Commission rules to provide security holders with a minimum amount of time to consider proxy statement or other disclosures.
A number of commenters generally supported the proposed minimum dissemination periods for disclosure documents in de-SPAC transactions.
One commenter on the proposal supported “as much lead time as possible for dissemination” and suggested the Commission “consider whether federal securities laws should override the laws of the jurisdiction of incorporation or organization if such jurisdictions allow less than 20 calendar days advance dissemination for de-SPAC merger/proxy vote documentation where such de-SPAC will be trading on SEC regulated markets.”
Another commenter said that the period of 20 calendar days “is consistent with current market practice
Another commenter said, “The SEC's proposed solution does not align with the treatment of IPOs. An IPO prospectus is substantially final at launch of the IPO roadshow; however, since there is no required length for a roadshow, investors in an IPO may only have access to a substantially final version of the prospectus for a few days prior to making their investment decision.”
Another commenter appeared to suggest that the minimum dissemination period for purposes of proposed General Instruction L.3 to Form S-4 should be the same as the IPO “48 hour” rule of 17 CFR 240.15c2-8 (“Rule 15c2-8”).
We are adopting the amendments to Rules 14a-6 and 14c-2 and Forms S-4 (General Instruction L.3) and F-4 (General Instruction I.3) as proposed, except for clarifying changes discussed below. In addition to the need for enhanced disclosure in de-SPAC transactions, we continue to believe that it is important to ensure that SPAC security holders have adequate time to analyze the information presented in these transactions.
Although the laws of a SPAC's jurisdiction of incorporation or organization may require the SPAC to send a notice to its security holders at least a specified number of days before the security holder meeting to approve a proposed business combination transaction, the information in such notices is often limited.
We recognize that SPACs are often required under their governing instruments and applicable exchange listing rules to complete de-SPAC transactions within a certain time frame. Nevertheless, given the complexity of the structure of SPACs, the conflicts of interest that are often present in this structure and the effects of dilution on non-redeeming shareholders, the 20-calendar day minimum dissemination periods we are adopting will provide an important investor protection by establishing a minimum time period for security holders to review prospectuses and proxy and information statements in de-SPAC transactions.
In order to account for the prospect that the laws of a SPAC's jurisdiction of incorporation or organization may have a maximum advance time period provision applicable to the dissemination of materials to security holders, the rules we are adopting include provisions that would require a registrant to satisfy the maximum dissemination period permitted under the applicable law of such jurisdiction when this period is less than 20 calendar days to avoid conflicting with such a requirement. One commenter suggested that the Commission should override the laws of the jurisdiction of incorporation or organization of the SPAC where such jurisdictions provide a maximum period for dissemination of less than 20 days.
Another commenter said that the Commission should consider an exception to the minimum dissemination period where necessary to stay within the Investment Company Act safe harbor.
One commenter suggested that the proposed minimum dissemination period is contrary to the Commission's stated purpose of aligning de-SPAC transactions with IPOs because investors in IPOs typically have only short periods of time to review prospectuses.
One commenter also said that a preliminary version of the final registration statement may be available for months prior to the security holder meeting date related to the de-SPAC transaction.
To the extent one commenter appeared to suggest that the minimum dissemination period should be the same as the IPO “48 hour” rule of Exchange Act Rule 15c2-8,
We are making minor changes in the final rules compared to the proposals for purposes of clarity and to make the registration forms congruent with the amendments to Rules 14a-6 and 14c-2 that we are adopting. The final rules provide that each of Rules 14a-6 and 14c-2 and Forms S-4 and F-4 will contain the language “must be distributed to security holders no later than the lesser of 20 calendar days prior to the date on which the meeting of security holders is to be held or action is to be taken in connection with the de-SPAC transaction.” Where the proposed amendments to Forms S-4 and F-4 referred to the “date on which action is to be taken,” these revisions eliminate any potential for misinterpretation that the proposed language only referred to action by consent and not at a meeting of security holders. In addition, the terms “to be held” and “to be taken” are intended to clarify these rules since these events are in the future when viewed from the point in time at which the security holder materials are distributed.
Under section 6(a) of the Securities Act, each “issuer”
Given that the target company therefore is, in substance, an “issuer” of securities in a de-SPAC transaction regardless of transaction structure,
A number of commenters generally supported the proposal.
Several of these commenters also indicated that the rule proposal would benefit investors by increasing the quality and reliability of the disclosure provided in de-SPAC transaction registration statements. One argued that the disclosures provided in de-SPAC registration statements should be “enhanced” due to the fact that “both parties to the de-SPAC transaction [would be] liable for material misstatements and omissions to investors and shareholders,”
Other commenters generally opposed or had concerns regarding the proposal,
Several commenters suggested the co-registrant proposal would create a disparity compared to traditional M&A business combination transactions where a target is not a co-registrant.
Other commenters suggested the co-registration proposal is inconsistent with existing definitions of registrant and issuer because, they asserted, the target in a de-SPAC transaction is not issuing or proposing to issue any securities pursuant to the de-SPAC registration statement.
One commenter opposed the co-registration proposal and expressed the view that: “[i]n most de-SPAC transactions the shares being registered on the SPAC's registration statement are being issued only to the target's shareholders and are not being issued or sold by the target company. Adding the target company as a co-registrant means that, in most cases, the target company will have potential Section 11 liability with respect to its own shareholders, but this is not logical or intuitive and is not consistent with the structure of a traditional IPO. In a traditional IPO, a company's existing shareholders at the time of the IPO do not receive registered shares and would not have potential Section 11 claims against the company due to the disclosures in the IPO registration statement.”
Another commenter suggested the co-registration proposal is inconsistent with 17 CFR 230.140 (“Rule 140”).
Other commenters on the co-registration proposal requested certain clarifications. One commenter supported the co-registration requirement but suggested the Commission clarify whether “liability correctly or mistakenly extends to anyone other than unaffiliated, non-redeeming SPAC shareholder[s].”
Several commenters addressed issues related to the scope of section 11 liability that may stem from the co-registration proposal. One commenter suggested that, as drafted, the proposal would make the target company a signer but not a co-registrant.
Other commenters expressed views on which entity and which officers and directors should be required to sign the de-SPAC transaction registration statement. One commenter said that the Commission should “clarify that directors and executive officers of the target company, who will not be directors or executive officers of the target company following the consummation of the de-SPAC transaction, are not required to sign the registration statement used for the de-SPAC transaction and are not deemed to be directors or executive officers of the target company for purposes of the liability provisions of the securities laws.”
A number of commenters addressed Exchange Act reporting company obligations of the target company as a result of proposed co-registration requirements. Several commenters raised concerns that if the target company is a co-registrant on a de-SPAC registration statement, the target company would become an Exchange Act reporting company at the time of effectiveness.
A different commenter said “the proposed rules should clarify that a target company that will ultimately not be the public company parent following the de-SPAC transaction does not become subject to the periodic reporting requirements of Section 13 of the Exchange Act as a result of being a co-registrant in the registration statement for the de-SPAC transaction.”
Some commenters suggested the Commission should clarify in any final rules whether, in a situation where the de-SPAC transaction is not ultimately consummated, a target company that is a co-registrant for a de-SPAC registration statement that has been declared effective may suspend its periodic reporting obligations under procedures similar to those set out in Staff Legal Bulletin 18 regarding abandoned IPOs and acquired issuers.
One commenter suggested the Commission create a new form for de-SPAC transactions.
After considering the comments received, we are adopting the co-registration proposal substantially as proposed, with some modifications.
Under existing rules, when a SPAC or a holding company offers and sells its securities in a registered de-SPAC transaction, staff observed a majority of the relevant disclosure in the de-SPAC transaction registration statement is about the target company, but only the SPAC or holding company, its principal executive officer or officers, its principal financial officer, its controller or principal accounting officer, and at least a majority of its board of directors (or persons performing similar functions) are required to sign the registration statement for the de-SPAC transaction. These signers are subject to liability under section 11 of the Securities Act (along with other persons who have liability under section 11). In these situations, the private operating company and its officers and directors may therefore not incur liability as signatories to the registration statement under section 11 of the Securities Act, even though information about the target company is highly significant to investors and this result is unlike if the target company had conducted a traditional IPO registered on Form S-1 or Form F-1. As discussed in more detail below, it is our view that in a de-SPAC transaction the target company is an issuer of securities under section 2(a)(4) of the Securities Act, and, therefore, the target company along with its required officers and directors must sign a registration statement filed by a SPAC or another shell company for the de-SPAC transaction, because both in substance and by operation of new Securities Act Rule 145a, the target company is issuing or proposing to issue securities in a de-SPAC transaction, regardless of the transaction structure. In addition, the business operations of the target company will be those that are carried on by the combined company going forward. The co-registration requirements will therefore enhance investor protection by aligning Federal securities law liability with the entity that is the primary source of the information disclosed about the new public operating company.
Section 2(a)(4) of the Securities Act broadly defines the term “issuer” to include every person who issues or proposes to issue securities. The
The final rules will ensure that, when a registration statement is filed for a de-SPAC transaction, a target company, its principal executive officer or officers, its principal financial officer, its comptroller or principal accounting officer, and a majority of its board of directors or persons performing similar functions sign the registration statement.
As noted above, the final rules reflect certain modifications to the proposed rules. First, we are requiring that the names of all co-registrants appear on the cover page. Second, we are clarifying that the target company is a registrant and not merely a signatory to the registration statement, as suggested by some commenters. Third, we are addressing scenarios where the target company is a business or assets. Finally, we are expanding the instructions to Forms S-4 and F-4 to also require that the target company and its related section 6(a) signatories sign a registration statement for a de-SPAC transaction filed by a holding company. This change is intended to ensure that the target company signs the registration statement in a transaction structure involving a holding company given that, as noted above, the target company is an “issuer” of the securities in any registered de-SPAC transaction. We have also added the same requirements to Form S-1 and Form F-1. We discuss these changes to the final rules and the comments received on the proposal in more detail below.
Several commenters suggested that there are already strong incentives under the existing framework to ensure that disclosures in registration statements for de-SPAC transactions are accurate and complete.
As commenters noted, currently when a SPAC
We disagree with the commenters who suggested that existing liability protections make it unnecessary for the target company to have strict liability for statements in the de-SPAC registration statement. In the Securities Act, Congress determined that an issuer that offers and sells its securities to the public using a registration statement should be strictly liable to investors for any material misstatements and omissions in the effective registration statement.
With respect to commenters' argument that the target company, and its officers and directors, will “own” liability for statements made in the de-SPAC registration statement going forward, we acknowledge that, under the existing framework, in specific situations where the target company survives and/or the officers and directors of the target company are officers and directors of the surviving company, they would potentially have liability, including strict liability, for statements in the de-SPAC registration statement. However, that assumption of liability under current regulations does not change the fact that in other transaction structures, the target company and its officers and directors may not be strictly liable for the statements made in any registration statement filed in connection with the de-SPAC transaction, notwithstanding that the target company is, in substance, an issuer in these transaction structures for the reasons discussed above. So that target company liability is consistent across de-SPAC transaction structures, we are adopting the co-registration proposal as proposed, subject to the changes discussed herein.
A few commenters suggested the co-registrant proposal would create a disparity compared to traditional business combination transactions, because the target company is not a co-registrant in those transactions.
As noted above, the de-SPAC transaction commonly marks the introduction of the target company to the U.S. public securities markets, and investors look to the business and prospects of the target company in evaluating an investment in the combined company.
One commenter suggested the co-registration proposal is inconsistent with Securities Act Rule 140, which according to the commenter “ensures that the requisite information about the underlying issuer is adequately disclosed,” and does not apply to de-SPAC transactions, because de-SPAC registration statements already provide registrants with disclosures about the target company, and the target company already may be subject to some liability for disclosures contained therein.
One commenter supported the proposal but suggested that the Commission clarify whether “liability correctly or mistakenly extends to anyone other than unaffiliated, non-redeeming SPAC shareholder[s].”
A different commenter recommended that the Commission clarify “which entities would be considered co-registrants in these types of transactions and therefore subject to the applicable requirements under the securities laws.”
As noted above, one commenter suggested the proposal would make the target company a signer but not a co-
The proposed instruction that the term “registrant” means the SPAC for purposes of the disclosure obligations of the form was not intended to mean that a target company would not also be considered a registrant. The purpose of that instruction was to make clear that the defined term “registrant” on the form refers to the “SPAC” and to allow for a different defined term to be used on the form when specialized disclosure with respect to the “target company” is required. The proposed instruction to the Signatures section was intended to clarify that both the SPAC and target company and their required officers and directors must sign the form but would not have made the target company a “signer not a registrant.”
Nevertheless, to clarify this point, in the final rules, we are making technical changes to the instructions to the forms. In connection with the request by a commenter to compare the proposed instructions to current Instruction 3 to the Signatures section, we are revising the instructions to Forms S-4 and F-4 to require that the names of each co-registrant appear on the cover page consistent with current Instruction 3. We are also revising the instructions to require that the target company and its related section 6(a) signatories sign a registration statement for a de-SPAC transaction filed by a holding company, to account for the fact that the target company is an “issuer” of the securities in any registered de-SPAC transaction. As a result, in the final rules, the last sentence of General Instruction L.1 of Form S-4 provides: “If the securities to be registered on this Form will be issued by a special purpose acquisition company (as such term is defined in Item 1601 of Regulation S-K) or another shell company in connection with a de-SPAC transaction, the registrants also include the target company (as such term is defined in Item 1601 of Regulation S-K), and it must be so designated on the cover page of this Form. In such a de-SPAC transaction, where the target company consists of a business or assets, the seller of the business or assets is deemed to be a registrant instead of the business or assets and must be so designated on the cover page of this Form. Further, in such a de-SPAC transaction, the term `registrant' for purposes of the disclosure requirements of this Form means the special purpose acquisition company, and the term `company being acquired' for the purposes of the disclosure requirements of this Form means the target company.” Similarly, we are revising the last sentence of Instruction 1 of the Signatures section and revising proposed General Instruction I.1 to Form F-4 and the last sentence of Instruction 1 of the Signatures section of Form F-4 in the same manner as with Form S-4.
Also with respect to changes in the forms to implement the co-registration requirements, in the Proposing Release, the Commission solicited comment on whether Form S-1 and Form F-1 should be amended to include instructions as to signatures which, when used for a de-SPAC transaction, would align the signature requirements of these forms to Form S-4 and Form F-4.
A number of commenters stated that liability under the co-registration proposal would be over and/or under-inclusive with respect to the target company's officers and directors. As discussed above, the final rules make clear that the target company is a co-registrant (and not merely a signer) with respect to the de-SPAC transaction. Therefore, as with any registrant, the target company will be required to have its principal executive officer or officers, principal financial officer and controller or principal accounting officer, and at least a majority of its board of directors or persons performing similar functions sign the registration statement.
With respect to commenter suggestions that only continuing target company officers and directors should sign the registration statement,
The proposed definition of target company included a “business” or “assets” and the proposed definition of “de-SPAC transaction” included an “acquisition of assets.” One commenter pointed out that in a de-SPAC transaction structured as an acquisition of assets, the assets acquired could not sign a registration statement.
Several commenters raised concerns that, if the target company is a co-registrant on a de-SPAC registration statement, then the target company would become an Exchange Act reporting company at the time of effectiveness and would be required to file reports during the interim period between when the registration statement for the de-SPAC transaction becomes effective and the closing of the de-SPAC transaction.
As “registrants” and “issuers,” target companies will be required by applicable Exchange Act provisions to file periodic reports after the effectiveness of the de-SPAC registration statement and until the target company terminates and/or suspends its Exchange Act report obligations. We do not believe an exemption from the Exchange Act's reporting requirements is necessary or appropriate in the public interest or consistent with the protection of investors because, during the pendency of the de-SPAC transaction, SPAC investors will benefit from receiving updated information about the target company that, in substance and as reflected in Rule 145a, proposes to issue securities of the newly combined public company, through which the formerly private company will operate its business. In the event that a target company that is not the predecessor
We agree with commenters,
A number of commenters raised concerns about costs for target companies as co-registrants, particularly with respect to the cost of directors and officers insurance.
One commenter said that co-registration would result in disclosure requirements that are inconsistent with the proposed revisions to Regulation S-X, raising the issue of whether, if there were multiple target companies, each company would be required to provide
As the commenter notes, in the case of multiple companies being acquired by the SPAC, if each of those companies meets the definition of “target company” being adopted,
In order to address the tension identified by the commenter, and to clarify that all target companies are co-registrants and issuers but only target companies that are predecessors
As stated in the proposal,
To illustrate application of the final rules, assume a SPAC files a Form S-4 to register the issuance of shares to acquire two unrelated businesses and only one of the businesses will be the predecessor for financial reporting purposes. Under the final rules, each “issuer” (the SPAC and the two unrelated businesses) must sign the registration statement.
We recognize that predecessor determinations in de-SPAC transactions may include scenarios that differ from the above illustrative example. For example, a transaction with two target companies could instead result in a determination that there are two predecessors. In that example, the financial statements of both target
Section 102 of the Sarbanes-Oxley Act makes it “unlawful for any person that is not a registered public accounting firm to prepare or issue . . . any audit report with respect to any issuer.”
Regarding a commenter's suggestion that the Commission create a new S-1-like form for de-SPAC transactions, which should not include management projections,
SRCs constitute a category of registrants that are eligible for scaled disclosure requirements in Regulation S-K and Regulation S-X and in various forms under the Securities Act and the Exchange Act.
The Commission proposed to require a re-determination of SRC status following the consummation of a de-SPAC transaction through proposed amendments to the definition of “smaller reporting company” in each of Securities Act Rule 405, Exchange Act Rule 12b-2, and Item 10(f) of Regulation S-K. Specifically, the Commission proposed that the post-de-SPAC transaction registrant must re-determine its SRC status prior to the time it makes its first Commission filing, other than the Form 8-K filed with Form 10 information,
The Commission also proposed, in connection with this re-determination: (a) that public float be measured as of a date within four business days after the consummation of the de-SPAC transaction;
Broadly categorized, commenters on the SRC re-determination proposal focused on four areas: (1) general comments, including those with general expressions of support for or opposition to the proposals, (2) timing and re-determination of public float, (3) ramifications of loss of SRC status, and (4) requests for guidance. In addition, in response to a request for comment from
A few commenters generally supported the proposed re-determination of SRC status following a de-SPAC transaction.
Others opposed, or raised concerns regarding, the proposed re-determination of SRC status following a de-SPAC transaction.
One commenter stated they did not object to re-determination based on public float within a short time following closing of the de-SPAC transaction.
Another commenter recommended an alternative approach to re-determining SRC status similar to the determination of SRC status used by an IPO company filing its initial registration statement under Item 10(f)(2)(ii) of Regulation S-K but based on “the revenues and public float of the target company that will be the predecessor for financial reporting purposes.”
Several commenters addressed the ramifications of the loss of SRC status. Commenters observed that one such ramification is that a registration statement filed after the point at which non-SRC status must be reflected could require incremental disclosure for a non-SRC, such as an additional year of financial statements beyond what was provided in the Form S-4 in connection with a de-SPAC transaction.
Another commenter recommended that the Commission consider whether “accommodations may be warranted to the post-combination entity regarding presentation of audited financial statements and related information (such as MD&A or separate financial statements of significant equity method investees) for periods prior to those presented in the Form S-4 or F-4 for the private operating company.”
One commenter recommended that the Commission clarify whether an amendment to a Form 8-K with Form 10 information (often referred to as a “super 8-K”) to include pre-acquisition annual financial statements of the private operating company “will be deemed to be the first periodic report for the purposes of effectiveness of the SRC status in connection with a de-SPAC transaction” in circumstances where a de-SPAC transaction is consummated shortly after the fiscal year-end of the private operating company but before its financial statements for that annual period are required in a Form 10 registration statement.
Another commenter recommended, for purposes of determining whether the post-de-SPAC registrant may exclude management's assessment of internal control over financial reporting in the Form 10-K covering the fiscal year in which the transaction was consummated, that the Commission codify the staff's view
Another commenter stated that the Commission “should revisit and revise
In response to a request for comment in the Commission in the Proposing Release,
Some commenters recommended that the Commission should put post-de-SPAC transaction registrants on the same footing with respect to filer status as a company that has recently undertaken an IPO, because, otherwise, where a post-de-SPAC transaction registrant inherits the SPAC's reporting history, this could impact the timing of when the post-de-SPAC transaction registrant becomes subject to accelerated filing obligations.
A few commenters recommended that the EGC status of the combined company following a de-SPAC transaction should be re-determined upon consummation of the de-SPAC transaction.
Several commenters, including some who made recommendations regarding EGC status, recommended that the Commission provide for re-determination of FPI status in connection with the de-SPAC transaction.
One commenter noted that they have “observed an evolution in the structuring of SPAC transactions (
Another commenter stated: “Allowing redetermination of foreign private issuer status would result in disclosure requirements and filer status determinations that are consistent with what would apply if the target company went public via an IPO, without regard to the de-SPAC transaction structure. A de-SPAC transaction may be structured so that an entity other than the SPAC is the acquiror for tax reasons, due to the domicile of the surviving company, or due to required consents and approvals applicable to the target company. Aligning the disclosure requirements so that, for example, a target company that would have qualified as a foreign private issuer could be acquired by a domestic SPAC and then the surviving company could be immediately eligible for foreign private issuer status would allow de-SPAC transactions to be structured in the best interests of shareholders.”
After considering the comments received, we are adopting amendments regarding SRC re-determination as proposed with certain modifications discussed below. We are not adopting requirements, as suggested by several commenters, to re-determine filer status, EGC status, or FPI status upon the completion of a de-SPAC transaction. We are providing guidance, however, concerning FPI status, as discussed further below.
Currently, most SPACs qualify as SRCs,
As adopted, a post-de-SPAC transaction registrant must re-determine its SRC status prior to the time it makes its first Commission filing, other than the Form 8-K filed with Form 10 information, with public float measured as of a date within four business days after the consummation of the de-SPAC transaction and annual revenues measured using the annual revenues of the target company as of the most recently completed fiscal year reported in such Form 8-K.
We disagree with the commenter who recommended an alternative approach similar to the SRC determination for IPO companies under Item 10(f)(2)(ii) of Regulation S-K but based on the revenues and public float of the target company that will be the predecessor for financial reporting purposes.
Pursuant to the final rules, the four-business-day window to calculate the public float threshold following a de-SPAC transaction would begin the first business day after the day of closing of the de-SPAC transaction and end four business days later (on the due date for the Form 8-K with Form 10 information that the post-de-SPAC transaction combined company registrant is required to file after the completion of a de-SPAC transaction). Each of the number of shares outstanding that are held by non-affiliates and the price per share would be determined on the same day within the four-business-day window. This window will provide some flexibility for issuers to measure public float compared to the annual re-determination of SRC status (which is determined based on a single business day, the last business day of the most recently completed second fiscal quarter). This four-business-day window will allow for a more accurate reflection of a post-business combination company's public float in view of the limited trading history of the common equity securities of the post-business combination company following a de-SPAC transaction.
Under the proposed rule, a post-de-SPAC transaction registrant would be required to reflect its re-determined SRC status in its next periodic report after the filing of the Form 8-K with Form 10 information (often referred to as a “super 8-K”). We are aware that, if a registrant loses SRC status upon re-determination, there may be certain ramifications. Several commenters observed that one such ramification is that a registration statement filed after the point at which non-SRC status must be reflected could require incremental disclosure for a non-SRC, such as an additional year of financial statements beyond what was provided in the Form S-4 in connection with a de-SPAC transaction.
In response to these comments, in a change from the proposal, the final rules provide that a registrant does not need to reflect non-SRC status in any filing that is due in the 45-day period following the consummation of the de-SPAC transaction; the registrant would begin to reflect non-SRC status in filings made no later than after the end of this 45-day period. In contrast, under the proposal, a registrant would have needed to reflect non-SRC status in its next periodic report that could be due as soon as one day after the filing of the “super 8-K,” which is due a maximum of four days after the consummation of the de-SPAC transaction. We believe the final rule represents a reasonable compromise between the proposed rule's transition period (until the next periodic report, which could be as soon as one day after the de-SPAC transaction) and a commenter's recommended transition period (until filing of the next Form 10-K, which could be as long as nearly 15 months). Another benefit of affording this additional time to registrants that lose SRC status upon re-determination is that, where the registrant intends to file a resale registration statement shortly after the de-SPAC transaction, the registrant will retain its SRC status for purposes of any such resale registration statement filed during this additional time period.
We are not adopting the commenter's recommendation to exclude, in post-de-SPAC transaction filings, any financial statements that predate the financial statements presented in the Form S-4.
Commenters also requested guidance on certain issues. One commenter recommended that the Commission clarify whether an amendment to a “super 8-K” could be the first periodic report for the purposes of effectiveness of the SRC status.
Unrelated to SRC re-determination, other commenters recommended codification of, or revisions to, staff guidance relating to the position that a SPAC's need to file an amended Form 8-K to update the target company's financial statements for its most recent year‐end is the equivalent to the first annual report
Rule 12b-2 provides the definitions of accelerated filer and large accelerated filer, including requisite conditions.
One of the main consequences of the approach suggested by these comments—that the reporting history of the SPAC should be disregarded such that the post-de-SPAC transaction combined company could recommence the 12-month period that must elapse (pursuant to paragraphs (1)(ii) and (2)(ii) in the definition of “accelerated filer and large accelerated filer” in Rule 12b-2) before it is possible to acquire accelerated or large accelerated filer status—would be to delay management's assessment of internal control over financial reporting and outside auditor attestation of management's assessment for companies that are not EGCs. We do not believe it is necessary or appropriate to amend the filer status requirements for this reason; however, we note that the Commission staff has taken the position that under certain conditions, the Commission staff would not object if the post-combination registrant were to exclude management's assessment of internal control over financial reporting in the Form 10-K covering the fiscal
In 2012, the Jumpstart Our Business Startups Act amended the Securities Act and Exchange Act to add provisions regarding and to define an “emerging growth company.”
A SPAC typically qualifies as an EGC.
Several commenters recommended that the EGC status of the combined company following a de-SPAC transaction should be re-determined upon consummation of the de-SPAC transaction.
Several commenters addressed determination of FPI status issues raised in a request for comment.
A new registrant, such as a SPAC in an IPO, makes the determination of its FPI status
A domestic SPAC (
If such a domestic SPAC registrant were to reincorporate under the laws of a foreign country prior to the filing of the registration statement in connection with a de-SPAC transaction, that reincorporation may require the foreign SPAC, as a new entity, to file an initial registration statement. The new entity's FPI status would be determined as of a date within 30 days prior to the filing of the initial registration statement, as described above. If the new foreign entity were to qualify as an FPI, it may be eligible to file a Form F-4 registration statement in connection with the de-SPAC transaction. Currently, the FPI status of the post-de-SPAC transaction combined company would not affect the registration form to be filed in connection with the de-SPAC transaction, regardless of whether the SPAC was an existing registrant or a new foreign entity. Also, currently, where the legal entity that was the SPAC is not an FPI and is the legal entity that is the combined company following the de-SPAC transaction, even where the combined company may meet the definition of an FPI after the de-SPAC transaction, the combined company would need to wait until the end of the next second fiscal quarter to re-determine its status as an FPI.
Several commenters recommended that we should provide for re-determination of FPI status in connection with a de-SPAC transaction.
We have considered these comments and recognize that, depending on the structure of a specific de-SPAC transaction, there may be some fact-specific circumstances in which an FPI registration statement may be used. For example, a SPAC's use of an FPI registration statement (
Contrary to the suggestion of some commenters,
The PSLRA provides a safe harbor for forward-looking statements under the Securities Act and the Exchange Act, under which a company is protected from liability for forward-looking statements in any private right of action under the Securities Act or Exchange Act when, among other conditions, the forward-looking statement is identified as such and is accompanied by meaningful cautionary statements.
The Proposing Release discussed the Commission's concerns about the use of forward-looking statements, such as projections, in connection with de-SPAC transactions.
To address these concerns, the Commission proposed using its statutory authority under the PSLRA to amend the definition of “blank check company”
The Commission proposed corresponding technical changes to Rule 419, the rule the Commission adopted to implement provisions of the Penny Stock Reform Act relating to registration statements filed by blank check companies offering penny stock, that were intended to maintain consistency with that rule's historic scope which is limited to blank check companies that issue penny stock. Similarly, the Commission proposed a new definition in Rule 405, “Blank check company issuing penny stock,” and proposed conforming amendments to existing references to “blank check company” as defined in Rule 419 in various Securities Act rules in order to maintain the scope of those rules.
A number of commenters expressed general support for the proposal.
A number of commenters suggested that unreasonably optimistic or inflated projections are prevalent in de-SPAC transactions.
Several commenters expressed support for the proposal because they believed it would curb the use of unrealistic and potentially misleading projections that harm investors.
Other commenters were generally opposed to the proposal.
A number of commenters on the proposal provided views related to the statutory authority of the Commission to amend the definition of blank check company as proposed. These comments fell into two main categories. First, some of these commenters suggested the Commission does not have discretion to adopt or amend a definition of blank check company for purposes of the PSLRA that differs from the current Rule 419 definition (which includes the qualification the relevant company is issuing penny stock).
Second, some commenters suggested that the Commission's proposed definition of blank check company is inconsistent with the Penny Stock Reform Act's statutory definition of blank check company, which includes the qualification that the relevant company is issuing penny stock and which predated the PSLRA.
Finally, in addition to these two main groups of comments related to statutory authority issues, one commenter expressed the view that the proposed changes to the definition of “blank check company” are contrary to the Administrative Procedure Act of 1946
A number of commenters focused on comparing de-SPAC transactions to two categories of other kinds of transactions: (1) traditional IPOs and (2) other business combinations. Some commenters supported the proposal with respect to rules related to the PSLRA safe harbor on the basis that it would level the playing field with IPOs.
Other commenters, however, suggested de-SPAC transactions should be treated differently than IPOs because de-SPAC transactions involve business combinations, which may be subject to disclosure obligations under State law.
Furthermore, other commenters suggested de-SPAC transactions should be treated differently than IPOs, because of concerns about the interaction of the proposed changes regarding availability of the PSLRA safe harbor with other proposals in the Proposing Release.
Some commenters suggested the proposal would create inconsistency by making the PSLRA safe harbor unavailable for one kind of business combination transaction (de-SPAC transactions) but not for other kinds of business combination transactions.
A number of commenters suggested the proposal would have a chilling effect on the use of projections that investors find useful.
Commenters also expressed concerns about the combined effect of the proposed change in PSLRA safe harbor availability and proposed 17 CFR 230.140a (“Rule 140a”) concerning underwriters.
Other commenters, however, expressed the view that PSLRA safe harbor availability does not meaningfully affect existing disclosure practices.
Several commenters observed that other safe harbors in Commission rules and legal doctrines protecting against liability under common law would continue to be available with respect to forward-looking statements notwithstanding the proposed changes regarding the availability of the PSLRA safe harbor.
Some commenters questioned the need for the amendments, expressing the view that investors are well-capable of assessing the reasonableness of projections used by SPACs.
Some commenters suggested that the need to alter the availability of the PSLRA safe harbor is overstated.
Several commenters suggested that the proposal would invite litigation against SPACs.
Other commenters suggested alternative policy approaches and other recommendations in connection with projection disclosure. One commenter suggested the Commission should restrict the use of projections because “[a]s written, the Proposal would leave the door open for projections for which there are little to no reasonable basis, when an issuer has no historical operations, and when the company or asset acquisition is speculative in nature without any disclosure” and because “[s]ponsors, target companies and underwriters that would become liable under the Proposal may attempt to evade liability by combining boilerplate risk factors with forward looking cautionary information that prefaces claims of unreasonable upside potential to investors.”
One commenter suggested that, instead of adopting the PSLRA proposal, the Commission should require that earnings statements include a comparison of past projections in earning statements to actual results in order to enhance issuer accountability.
Two other alternative policy approaches suggested by commenters were that: (a) the safe harbor should be made unavailable only to the “maker” of the statement but that others such as “underwriters (or sellers) could continue to enjoy the full protection of the PSLRA;”
One commenter said the Commission should “monitor the effects of the safe harbor removal for de-SPACs on the availability and quality of forward-looking information critical for SPAC investor decisions on merger approval votes and exercising redemption rights.”
After considering the comments received, we are adopting a new definition of “blank check company” in Securities Act Rule 405 and Exchange Act Rule 12b-2 under the PSLRA. The new definition of “blank check company” in Rule 405 provides that for purposes of section 27A of the Securities Act of 1933 (15 U.S.C. 77z-2), the term
We are not amending Securities Act Rule 419 as proposed. Instead, as discussed in detail below, we are adopting a definition of “blank check company” under the PSLRA in Securities Act Rule 405 and Exchange Act Rule 12b-2 to clarify that such definitions are solely for purposes of the PSLRA and not for purposes of any other rules (including rules the Commission adopted pursuant to mandates under the Penny Stock Reform Act, such as Securities Act Rule 419). The final rules have the same substantive effect as the proposal, notwithstanding the different approach taken.
We also are not adopting any amendments as proposed to Securities Act Rules 137, 138, 139, 163A, 164, 174, 405, 430B, and 437a, because the definition of blank check company in Rule 419 that these rules cross-reference will not be changed as a result of the final rules. In addition, we also are not adopting a definition of “blank check company issuing penny stock” in Securities Act Rule 405 as proposed. This proposed amendment is also unnecessary since the definition of “blank check company” in Rule 419 will not change.
Having considered the comments received, we continue to believe that it is appropriate that forward-looking statements made in connection with de-SPAC transactions should be treated similarly with forward-looking statements made in traditional IPOs, because the de-SPAC transaction results in public shareholders acquiring a formerly private company, similar to an IPO. In both IPOs and de-SPAC transactions, similar informational asymmetries exist between issuers (and their insiders and early investors) and public investors and there are similar risks of generating unfounded interest on the part of investors. In both IPOs and de-SPAC transactions, there is no track record of public disclosure to help investors evaluate projections. Moreover, these risks do not disappear merely because a blank check company raised more than $5 million in a firm commitment underwritten IPO (and therefore may not be issuing penny stock). The definitions of “blank check company” we are adopting and the concomitant changes to the availability of the PSLRA will help protect investors because blank check companies
We disagree, based on the text of the PSLRA, with the commenters who expressed the view that the PSLRA does not give the Commission authority to amend the Commission's definition of “blank check company” that existed at the time the PSLRA was adopted. On the contrary, in providing in the PSLRA that definitions, including blank check company, “have the meanings given those terms by rule or regulation of the Commission,” Congress expressly provided the Commission the authority to define these terms and to amend those definitions, consistent with the text, structure, and purpose of the PSLRA.
The text of the PSLRA demonstrates in other ways as well that the Commission has the authority to define, and amend its definition of, “blank check company.” For example, Congress
In addition, the PSLRA safe harbors provide that they are unavailable to issuers that issue “penny stock.”
Furthermore, we also do not agree, based on the legislative history of the PSLRA, with commenters that asserted that Congress fixed the definition of “blank check company” to the Commission's rules as they existed in 1995, when the PSLRA was enacted. Commission staff reviewed the complete legislative history of the PSLRA and found no evidence of any intent on the part of Congress to fix the definition of “blank check company” as the term was defined in Securities Act Rule 419 at the time of the adoption of the PSLRA in 1995.
One commenter said the proposed change regarding the definition of blank check company “appears inconsistent with the exemptive authority found in section 27A(g) and (h), which makes clear the Commission's ability to extend the scope of the safe harbor protections rather than narrow them.”
With respect to the commenters who expressed the view that the Commission's definition of “blank check company” under the PSLRA may not be broader than the statutory definition of this term in the Penny Stock Reform Act, nothing in the text of either statute limits the Commission's definition for the term “blank check company” for purposes of the PSLRA to be no broader (
Congress
Also, Congress
Furthermore, the PSLRA legislative history does not evidence an intent by Congress to require the Commission's PSLRA “blank check company” definition to be fixed to a specific definition (
Some commenters suggested that the proposed changes to the definition of “blank check company” are contrary to the Administrative Procedure Act of 1946, because the Commission does not have explicit statutory authority to make the changes.
Notwithstanding the foregoing, the final rules include technical changes from the proposal to clarify that the definitions of “blank check company” that we are adopting are solely for purposes of the PSLRA and not for purposes of any rules the Commission adopted pursuant to mandates under the Penny Stock Reform Act, such as Rule 419. In the Proposing Release, the Commission proposed moving the definition of blank check company out of Rule 419 (into Rule 405) and amending Rule 419 to use the proposed blank check company definition with a qualification in Rule 419 (that would be outside of that definition) limiting the applicability of Rule 419 to issuers of penny stocks.
As discussed above, some commenters did not support the proposal or expressed a view it is inappropriate to adopt the proposal because of concerns related to the definition of “blank check company” in the Penny Stock Reform Act.
As discussed above, some commenters suggested that projections are rarely used in traditional IPOs.
Issuers in certain types of IPOs also often include industry- or offering-specific projections. For example, Commission staff has observed that real estate investment trusts may disclose dividend distribution plans and anticipated cash available for distribution (sometimes referred to by industry participants as the “Magic Page”). One commenter also noted that “while it may not be common in certain
Some commenters expressed concern with the proposal because State law may require disclosure of certain projections
In addition, investors are likely to understand the difference between: (i) on one hand, third-party projections provided to the management of a SPAC about a target company prior to the business combination agreement with the target company; and (ii) on the other hand, disclosure by registrants in registration statements in connection with de-SPAC transactions that include SPAC or target company management projections regarding certain financial statement line items or financial measures in future years with respect to the target company that is intended to guide investors in connection with the de-SPAC transaction.
Some commenters suggested that the proposal potentially would have a chilling effect on the use of projections in de-SPAC transactions and give rise to one of the perceived downsides of an IPO, where a limited group of institutional investors may receive issuer projections indirectly (
Some commenters suggested the proposal would create inconsistency by making the PSLRA safe harbor unavailable for one kind of business combination transaction (de-SPAC transactions) but not for other kinds of business combination transactions.
As discussed above, there are certain differences between SPACs and other business combination transactions due to the hybrid nature of de-SPAC transactions.
As discussed above, several commenters addressed protections from liability in Commission rules and in common law other than the PSLRA safe harbor.
With respect to commenters that expressed the view that the PSLRA safe harbor availability does not meaningfully affect existing disclosure practices,
Some commenters suggested the need to alter the availability of the PSLRA safe harbor is overstated.
This commenter also suggested the need to alter the availability of the PSLRA is overstated because boards of directors of SPACs review projections, including related assumptions and cautionary language, consistent with their fiduciary duty of care.
A different commenter suggested the need to alter the availability of the PSLRA safe harbor is overstated because the PSLRA safe harbor only affects private litigation and does not prevent the Commission from pursuing claims for misleading disclosure.
Several commenters suggested that the proposal regarding the change in availability of the PSLRA safe harbor would invite litigation against SPACs.
Several commenters provided a range of views on how the proposal could or should change the current use of forward-looking statements, such as projections. Some commenters expressed concerns that the proposal would bar issuers from using projections.
The final definition of “blank check company” we are adopting would not prohibit the use of projections in SPAC registration statements. In this respect, the final rules are not a departure from the Commission's general policies towards projections held since 1973 when the Commission moved away from its previous “long standing policy generally not to permit projections to be included in prospectuses and reports filed with the Commission.”
We recognize that forward-looking statements can provide useful and necessary disclosure to investors, and that such statements may be mandated by State and/or fiduciary legal obligations. We also recognize that removing certain liability protections for these forward-looking statements could lead some blank check companies to provide fewer forward-looking statements or no forward-looking statements compared with what they might have provided in the absence of the final rules. However, we believe the definition of “blank check company” that we are adopting and the concomitant impact on the availability of the PSLRA safe harbors are necessary and appropriate to help address concerns over the misuse of forward-looking statements in de-SPAC transactions and other business combinations involving blank check companies.
Some commenters suggested that market forces would hold issuers with unmet projections accountable by preventing future capital access.
One commenter suggested allowing the PSLRA safe-harbor to apply to de-SPAC transactions might lower liability insurance premiums.
One commenter suggested the Commission should require that earnings statements include a comparison of past projections to actual results in order to enhance issuer accountability.
Another commenter suggested that the safe harbor should be made unavailable only to the “maker” of the statement but that others such as “underwriters (or sellers) could continue to enjoy the full protection of the PSLRA.”
Another commenter suggested that the safe harbor should be unavailable for longer-term projections (where the commenter provided the example of a statement, “we will penetrate 50% of [total addressable market] in 10 years”) but available for short-term projections (where the commenter provided the example of a statement, “we expect to make revenue in 1 year or have positive [free cash flow] in 2 years.”)
One commenter said it is inappropriate to deem a transaction to be a de-SPAC transaction where the SPAC survives as an IPO and suggested the Commission should provide an interpretation that de-SPAC transactions are “tender offers” which would make the PSLRA safe harbor unavailable.
The Commission proposed Rule 140a to clarify that anyone who acts as an underwriter in a SPAC IPO and participates in the distribution associated with a de-SPAC transaction by taking steps to facilitate such transaction, or any related financing transaction, or otherwise participates (directly or indirectly) in the de-SPAC transaction is engaged in the distribution of securities of the surviving public entity and, therefore, is an “underwriter” within the meaning of section 2(a)(11) of the Securities Act.
Several commenters generally supported proposed Rule 140a.
Several commenters disagreed with the discussion in the Proposing Release regarding what it means to participate in a distribution.
Some commenters questioned the scope of the section 11 liability that would attach to any underwriter under the proposed rule.
To the extent the Commission were to adopt Rule 140a, some commenters requested specific changes or additional provisions related to the rule. Several commenters asked the Commission to limit the scope of proposed Rule 140a underwriter liability in a de-SPAC transaction to disclosures akin to those in a traditional IPO.
Several commenters proposed alternatives to adopting Rule 140a, including:
• Relying on statutory “seller” liability under Securities Act section 12(a)(2);
• Requiring a SPAC to file a current report upon announcement of a signed agreement to consummate a de-SPAC Transaction;”
• Mandating “a new role for an investment bank in de-SPAC transactions for all exchange-listed SPACs;”
• Establishing a maximum threshold on redemptions in order for a de-SPAC transaction to proceed.
Finally, several commenters asked the Commission to apply proposed Rule 140a on a prospective basis or to adopt a phase in period.
As discussed in the Proposing Release, underwriters play an important role in the U.S. financial markets, acting as gatekeepers for the investing public in the distribution of a new issuer's securities to the public markets for the first time.
Having considered the comments received on proposed Rule 140a and given the broad nature of the definition of underwriter in section 2(a)(11), we are not adopting Rule 140a. Although we agree with commenters that the term underwriter does not have “unlimited applicability,” as further explained below, the statutory definition of underwriter, itself, encompasses any person who sells for the issuer or participates in a distribution associated with a de-SPAC transaction. To assist parties in applying section 2(a)(11) to de-SPAC transactions, we are providing the following general guidance regarding statutory underwriter status. For the avoidance of doubt, this guidance does not implement proposed Rule 140a. Rather than promulgate a rule clarifying when a specific party is an underwriter for de-SPAC transactions, we intend to follow the Commission's longstanding practice of applying the statutory terms “distribution” and “underwriter” broadly and flexibly, as the facts and circumstances of any transaction may warrant.
The concept of distribution within section 2(a)(11) is not limited to a transaction taking the form of a traditional IPO or traditional capital raising. For example, a spin-off is not traditional capital raising; yet, in certain circumstances, has been found to constitute a distribution of securities for the purposes of section 2(a)(11).
Some commenters asked the Commission to better explain the distribution that occurs in a de-SPAC transaction.
One commenter asserted that not every de-SPAC transaction would involve a distribution of securities because in at least some de-SPAC transactions the target company is not “selling” or “distributing” any securities in the transaction.
While one commenter asserted that there is not always a distribution of securities associated with a de-SPAC transaction,
Several commenters disagreed with the discussion in the Proposing Release regarding what it means to participate in a distribution.
We acknowledge that in a de-SPAC transaction, there is generally no single party accepting securities from the issuer with a view to resell such securities to the public in a distribution in the same manner as a traditional underwriter in traditional capital raising. Nevertheless, in a de-SPAC distribution, there would be an underwriter present where someone is selling for the issuer or participating in the distribution of securities in the combined company to the SPAC's investors and the broader public. Depending on the facts and circumstances, such an entity could be deemed a “statutory underwriter” even though it may not be named as an underwriter in any given offering or may not be engaged in activities typical of a named underwriter in traditional capital raising. Section 11 would apply as it would to anyone acting as underwriter with respect to a registered de-SPAC transaction, and such person will have liability for any material misstatement or omission in the registration statement.
The prior discussion is not intended to signal that we believe that every de-SPAC transaction or offering of securities generally involves or needs the involvement of an underwriter. But where a distribution and an underwriter are present, the party acting as underwriter will need to perform the necessary due diligence of the disclosures made in connection with the registered offering of securities or face full exposure to liability without the benefit of the due diligence defense under the Securities Act of 1933.
By its terms, proposed Rule 140a would have applied only to SPAC IPO underwriters that took steps to facilitate a de-SPAC transaction or any related financing transaction, or otherwise participated (directly or indirectly) in the de-SPAC transaction. However, as noted above, commenters indicated that the proposal raised numerous questions about whether other parties that similarly facilitate de-SPAC transactions would be subject to liability and, whether a similar analysis applies to other types of transactions, such as more “traditional” M&A transactions (
In response to these comments, we note that Rule 140a was not intended to address any business combination transaction not involving a de-SPAC transaction. Similarly, the guidance presented in this release is not intended to influence current practice in traditional M&A, as the two situations are readily distinguishable. As discussed above,
In response to concerns regarding the use of shell companies
The Commission proposed Rule 145a to address the use of reporting shell companies as a means to enter the U.S. capital markets without Securities Act registration and the related disclosures which are intended to protect investors. The rule was proposed due to the significant increase in such reporting shell company business combination transactions, including through the use of a SPAC, in an effort to provide reporting shell company shareholders with more consistent Securities Act protections regardless of transaction structure.
Several commenters generally supported proposed Rule 145a.
Other commenters generally opposed, or expressed concerns regarding, proposed Rule 145a.
One commenter asserted that not all shell company business combinations are similar and, in particular, that de-SPAC transactions are not comparable to shell company transactions with microcap companies.
A number of commenters requested that the Commission clarify and/or modify aspects of proposed Rule 145a. In particular, a commenter requested, if Rule 145a were adopted, that “[i]n the spirit of aligning treatment of IPOs and de-SPAC transactions, Rule 145 [17 CFR 230.145] should be revised to not apply to any transaction that Rule 145a applies to.”
Finally, certain commenters questioned the Commission's explanation of the application of section 3(a)(9) in Rule 145a transactions.
We are adopting Rule 145a as proposed. Currently, investors in reporting shell companies may not always receive the disclosures and other protections afforded by the Securities Act at the time when there is a fundamental change in the nature of their investment due to the business combination involving another entity that is not a shell company.
To address this, Rule 145a specifies that a sale occurs from the post-transaction company to the existing shareholders of a reporting shell company in situations where a reporting shell company that is not a business combination related shell company enters into a business combination transaction involving another entity that is not a shell company.
As discussed in the Proposing Release, Rule 145a will apply to any reporting shell company that has assumed the appearance of having more than “nominal” assets or operations.
Some commenters questioned the Commission's authority to adopt Rule 145a because, in the commenters' view, a sale cannot be deemed to occur in situations where no actual distribution of securities occurs
Similarly, here, we have concluded that, notwithstanding the fact that there may be no traditional investment decision or vote in connection with a business combination transaction where a shell company changes its status from a shell company to an operating company through a business combination, such a change is nonetheless a sale of securities for the purposes of section 2(a)(3) because investors are exchanging their interests in a shell company for interests in a combined public operating company, which is a transaction “for value.”
Several commenters questioned whether the constructive sale would be “for value,” within the meaning of this term in section 2(a)(3).
A change in a reporting shell company's status via a business combination with an operating company results in the reporting shell company investors effectively exchanging their security representing an interest in the reporting shell company, an entity that has no or nominal operations and either (i) no or nominal assets; (ii) assets consisting solely of cash and cash equivalents; or (iii) assets consisting of any amount of cash and cash equivalents and nominal other assets, for a new security representing an interest in a combined operating company.
Moreover, courts
Finally, one commenter asked that we clarify within the rule text that the sale contemplated by Rule 145a would be “a disposition of a security or an interest in a security . . . for value.”
If, in the course of a business combination with a reporting shell company, the exchange of the shell company shares for securities of the surviving combined operating business is already being registered, then there is no need to register any additional transaction under the Securities Act to comply with Rule 145a because the transaction that is recognized as a sale by Rule 145a is already being registered. For example, in many de-SPAC transactions, an actual exchange of securities between the SPAC's existing shareholders and the target company or a new holding company is already being registered at the time of the business
However, in transaction structures where reporting shell company shareholders are not actually exchanging their shell company shares for securities of a combined operating company, the parties will need to consider Rule 145a in structuring the transaction. For example, in a de-SPAC transaction structured such that the shareholders of the SPAC keep their existing shares in the SPAC throughout the business combination transaction, and those interests change into interests in the combined company, the parties would need to consider the impact of Rule 145a on the transaction and either register the transaction or find an exemption for the constructive exchange between the shell company's pre-transaction shareholders and the surviving combined company.
While we acknowledge, as several commenters have argued,
A commenter asserted that the Commission had not previously found it necessary to adopt a provision like Rule 145a to regulate shell company mergers “and was amenable at that time to allow such transactions to proceed so long as public investors were given current and complete information about the new business they owned.”
A commenter stated that an investment in a SPAC transaction is not comparable to other reporting shell company business combinations.
A commenter argued that de-SPAC transactions should not be distinguished
Additionally, some commenters asked for clarification regarding the intended trigger for the application of Rule 145a in a de-SPAC transaction
Having considered the views of commenters regarding the application of the section 3(a)(9) exemption in Rule 145a constructive sales,
In addition, the four requirements of an exchange qualifying for the section 3(a)(9) exemption are as follows:
• Same issuer—the issuer of the old securities being surrendered must be the same as the issuer of the new securities;
• No additional consideration from the security holder;
• Offer must be made exclusively with existing security holders; and
• No commission or compensation may be paid for soliciting the exchange.
The failure to meet any single one of these requirements would be enough to preclude use of the section 3(a)(9) exemption.
First, section 3(a)(9) is limited to securities exchanged by the issuer with its existing shareholders. In the case where shareholders of a reporting shell company constructively exchange their shares with securities of the combined entity, we view the combined entity to be a different issuer than the shell that originally issued the securities even if the reporting shell company is the entity that survives the merger. Although the combined company may retain the legal identity of the shell for the purposes of State or local law, it is substantively a new entity. To hold otherwise would place form over substance, given that the use of the section 3(a)(9) exemption is premised upon an investor's familiarity with the company in which they have already invested.
Second, the section 3(a)(9) exemption would not be available where the Rule 145a constructive sale occurs in connection with the offer and sale of securities to target company security holders. Such a sale would not occur exclusively to the reporting shell company's existing security holders. Thus, where interests in the existing reporting shell are also being exchanged with the target company's shareholders, the exchange would not be exclusively with the reporting shell company's existing security holders and section 3(a)(9) would not be available to exempt the deemed sale to the reporting shell company shareholders.
Finally, section 3(a)(9) is not available where a commission or other remuneration is paid or given directly or indirectly for soliciting participation in the deemed exchange. This would occur, for example, if a proxy solicitor is compensated to solicit the reporting shell company's shareholders for proxy votes in connection with the business combination. Certain commenters asserted that section 3(a)(9) of the Securities Act should not be rendered unavailable simply because a proxy solicitor is paid to solicit proxies from SPAC shareholders in connection with the shareholder vote on a de-SPAC transaction.
After a business combination involving a shell company, the financial statements of a business
How a business chooses to become a public company could affect its financial statement disclosures due to differences in the requirements of registration statements on Form S-1 or F-1 (for IPOs) and the requirements of registration statements on Form S-4 or F-4 (regarding business combination transactions). In our view, a company's choice of the manner in which it goes public should not generally result in substantially different financial statement disclosures being provided to investors.
In the Proposing Release, the Commission proposed amendments to its forms and rules to more closely align the financial statement reporting requirements in business combinations involving a shell company registrant and a business with those in traditional IPOs.
In the Proposing Release, the Commission proposed Rule 15-01(a), amendments to Rule 1-02(d), and related new instructions to Forms S-4 and F-4.
We received comments from several commenters that were supportive of proposed Rule 15-01(a), because it would codify existing staff guidance.
As noted in section III.C above, one commenter said that co-registration
After considering the comments, we are adopting Rule 15-01(a), the amendments to Rule 1-02(d), and the instructions to Forms S-4 and F-4 largely as proposed, with a few modifications discussed below.
In the past, the Commission staff has advised shell companies that it expects the financial statements of the predecessor, including a private operating company, in a transaction involving a shell company, to be audited under the same standards as a registrant in an IPO, because, at consummation, the financial statements of the business become that of the shell company.
We are not adopting amendments to permit the use of Canadian GAAS in connection with de-SPAC transactions involving a Canadian business. Under current rules, a registrant must meet the MJDS requirements and register on an MJDS form in order to rely on such accommodations.
In final Rule 1-02(d), we have deleted the proposed term “financial statements of a company” and replaced it with the term “financial statements of an issuer.” The use of “issuer” rather than “company” will ensure consistency with related provisions in Rule 15-01.
We have revised proposed Instruction 1 to Item 17(b)(7) of Form S-4 and Instruction 4 to Item 8 of Form 20-F by replacing “provide the financial statements required by § 240.15-01 (Rule 15-01 of Regulation S-X)” with “see § 240.15-01 (Rule 15-01 of Regulation S-X),” because the financial statement requirements extend beyond Rule 15-01. We further revised Instruction 4 to Item 8 of Form 20-F by clarifying that it is applicable for filings on Form 20-F filed pursuant to General Instruction A.(d) of this form and for registration statements, so that a shell company would not consider Rule 15-01 when it is filing its annual report in due course before acquiring a business. Also, for this Instruction 4, we revised “shell company that will acquire a business” to “shell company that is combining with a business,” in order for the reference to Rule 15-01 to apply in more structures. Lastly, we have revised each of these instructions to remove reference to the predecessor because the instruction would apply to a non-predecessor as well.
Currently, a registration statement in connection with a de-SPAC transaction on Form S-4 or F-4 and a proxy or information statement must include financial statements of the target
In the Proposing Release, the Commission proposed Rule 15-01(b) in order to align the number of fiscal years required to be included in the financial statements for a business
Several commenters supported this proposed rule, noting generally that it would align the number of fiscal years required to be included in the financial statements for a private company that will be the predecessor in a shell company combination with those that would be required for a traditional IPO.
Having considered the comments received, we are adopting Rule 15-01(b) largely as proposed, except for certain revisions, in order to align the number of fiscal years required to be included in the financial statements for a business that will combine with a shell company registrant with the financial statements required to be included in a Securities Act registration statement for an IPO of equity securities. We are clarifying that a business that is combining with a shell company registrant, beyond just the predecessor, must comply with the financial statement requirements of Regulation S-X as if the filing were a registration statement for its own IPO by removing the reference to predecessor in this rule. Absent this revision, three years of financial statements for a business that would be an EGC but is not a predecessor may be required, which would exceed the two years required for a predecessor that qualifies as an EGC.
In the Proposing Release, the Commission proposed Rule 15-01(c) regarding the age of predecessor financial statements. The proposed rule provided that the financial statements of a business that will be the predecessor to a shell company must comply with the requirements in 17 CFR 210.3-12 (“Rule 3-12” of Regulation S-X) (Rule 8-08 when that business would qualify to be an SRC based on its annual revenues as of the most recently completed fiscal year, if it were filing a registration statement alone) in determining the age of the financial statements of the predecessor business in the registration statement or proxy statement of the registrant.
Several commenters indicated support for proposed Rule 15-01(c).
We are adopting Rule 15-01(c) largely as proposed, with certain modifications discussed below.
Currently—with respect to companies being acquired that do not meet Form S-3 use requirements and are not subject to the reporting requirements of either section 13(a) or 15(d) of the Exchange Act, which is the case with most target companies in de-SPAC transactions—Form S-4 (under Item 17(b)(7)) requires inclusion of financial statements that would be required in an annual report sent to security holders under 17 CFR 240.14a-3(b)(1) and (2) (Rule 14a-3(b)(1) and (2)), if an annual report is required. In summary, Rule 14a-3(b)(1) and (2) require the inclusion of consolidated audited balance sheets as of the end of the two most recent fiscal years and consolidated audited statements of income and cash flows for each of the three most recent fiscal years prepared in accordance with Regulation S-X. Form F-4 is similar in this respect.
Absent this amendment, the required financial statements of each company being acquired in a Form S-4, because the shell company is a reporting company, would not have the same age requirements as those in the context of an initial registration statement.
Thus, in order to align the age requirements for financial statements for each business involved in a business combination with a shell company filed on Form S-4 or F-4 with those for an issuer in an IPO on Form S-1 or F-1, we are adopting final Rule 15-01(c). Further, we revised the rule to clarify that Rule 3-12 or 8-08 must be applied to each business involved in a business combination with a shell company as if the financial statements were included in an initial registration statement. Based on the Commission staff's experience reviewing filings in de-SPAC transactions and other shell company business combination transactions, Rule 15-01(c) is consistent with existing market practice for the age of financial statements, where they are updated similar to an IPO. We further revised the rule to clarify that the rule applies to any business being acquired by a shell company, and not only a predecessor, that is included in registration statement under Item 17 of Form S-4, in order to ensure that the financial statements of non-predecessors are subject to the same age requirements. Also, in the parenthetical in the final sentence of the rule, we have revised the phrase “if it were filing a registration statement itself” to delete the word “itself” and replace it with the word “alone”; we believe the term “alone” will more clearly convey the intent of the rule.
Currently, the financial statements of a business that is, or will be, the predecessor to a shell company registrant are required in registration statements or proxy statements related to the business combination.
Commission staff has taken the position that existing Securities Act Rule 408(a) and Exchange Act Rule 12b-20, elicit financial statements of a business (
Since proposed Rule 15-01(d) would require the application of Rule 3-05 or 8-04, which in turn would require application of 17 CFR 210.1-02(w)(1) (“Rule 1-02(w)(1)” of Regulation S-X) in measuring significance, the Commission also proposed amendments to Rule 1-02(w)(1) and a new Rule 15-01(d)(1) to change how significance is measured in a shell company business combination transaction.
The existing significance tests in 17 CFR 210.1-02(w) (“Rule 1-02(w)” of Regulation S-X), as applied to acquisitions involving shell companies where significance would be measured
The Commission also proposed Rule 15-01(d)(2) to specify when the proposed Rule 15-01(d)-required financial statements, through application of Rule 3-05 (or Rule 8-04), for a business that is not the predecessor to a shell company, would be required to be filed if such financial statements are properly omitted from a registration, information, or proxy statement under Regulation S-X. Specifically, 17 CFR 210.3-05(b)(4)(i) (“Rule 3-05(b)(4)(i)” of Regulation S-X) provides that financial statements of a recently acquired or to be acquired business may be omitted from a registration or proxy statement when the significance of that acquisition, under the required significance tests in Rule 3-05, is measured at 50% or less. Rule 3-05 further provides that such omitted financial statements must be filed under cover of Form 8-K within 75 days after consummation of the acquisition.
Several commenters expressed general support for proposed Rule 15-01(d) or general support for proposed changes to Regulation S-X.
One commenter recommended “that the Commission address the interaction between proposed Rule 15-01(d)(2) of Regulation S-X and the company's reporting requirements under section 15(d) as it relates to recently acquired businesses (or real estate operations) which are excluded from a registration or proxy or information statement prepared in connection with the de-SPAC transaction.”
This same commenter also recommended that Rule 15-01(d) reference Rule 3-14 for real estate operations the same way the proposed rule referenced Rules 3-05 and 8-04 for businesses so that the acquisition of real estate operations is explicitly addressed.
Several commenters supported,
We are adopting new Rule 15-01(d) introductory text and (d)(1) and (2), as well as the amendments to Rules 1-02(w)(1), 3-05, and 3-14, substantially as proposed, except for certain modifications discussed below. New Rule 15-01(d) and corresponding amendments more closely align the financial reporting of an acquired business in a shell company business combination transaction reported on
In the context of a registration statement on Form S-4 or F-4, the acquired business financial statements addressed in Rule 15-01(d) that are filed pursuant to Rule 3-05 do not represent financial statements of a company being acquired that would be a co-registrant in a shell company business combination.
New Rule 15-01(d)(1) directs registrants to Rule 1-02(w)(1) in order to determine how significance is measured in certain shell company business combination transactions. New Rule 15-01(d)(2) clarifies when and how financial statements for a recently acquired or to be acquired business should be filed.
We have made a few revisions to the final rule in response to comments received and some other revisions to improve the clarity of the final rules. First, consistent with commenters' suggestions,
In response to a comment about the interaction of this rule and section 15(d) of the Exchange Act,
Next, we have revised Rule 15-01(d) to add references to Rule 3-14 and Rule 8-06 regarding real estate operations, which were inadvertently omitted from the proposal, as noted by a commenter.
Unrelated to commenter feedback, we revised the parenthetical in Rule 15-01(d) related to when Rules 8-04 and 8-06 for SRCs will apply to clarify that these rules would apply when the predecessor qualifies as an SRC.
We also made several technical changes to improve the clarity of each of final Rule 15-01(d) introductory text and (d)(1) and (2). In final Rule 15-01(d), in place of the proposed term “when that business,” we have inserted instead the term “when the predecessor.” This change will help clarify which entity's SRC status is being referred to. Also, we have changed the term “itself” to “alone” for the same reasons the same change was made in Rule 15-01(b) and (c) as discussed above.
We also removed from final Rule 15-01(d) references to acquisitions by a shell company, because we determined that the financial statements for acquisitions by a shell company would be required by Item 17 of Form S-4 or F-4 as a “company being acquired” and not required through application of Rule 3-05 or 3-14. Relatedly, we revised Rules 1-02(w), 3-05, and 3-14 so that they pertain to acquisitions by a predecessor rather than an acquisition by a shell company. Lastly, we reorganized some of the language in Rule 15-01(d)(2) to improve the readability of the requirement.
We are adopting the amendments to Rule 1-02(w) largely as proposed, except for two modifications discussed below. Final Rule 1-02(w) provides for the use of the predecessor's financial statements as the denominator in the significance tests, which determine when financial statements are required for an acquired business, instead of those of the shell company registrant. We expect the rule will produce results more consistent with the objective of the sliding scale approach in Rule 3-05 and appropriately differentiate for investors those acquisitions that have a greater impact to the predecessor than others.
In the final rule, we made some technical changes and the modification already discussed above, in relation to final Rule 15-01(d), to remove the reference to acquisitions by a shell company. In the final rule, we also added the terms “consolidated” before “predecessor” and “those of” before “the shell company registrant” as well as eliminated “the subsidiaries consolidated” for clarity. We also added “shell company” before “registrant” in order to clarify which registrant should not be used as part of the significance test.
In recent years, the Commission staff has received questions on whether the historical financial statements of a shell company registrant are required in filings made after a business combination. The Commission proposed new Rule 15-01(e) to allow a shell company, including a SPAC, to exclude
In the example of a de-SPAC transaction, assuming the first condition is met, the financial statements of the SPAC, as a shell company, would generally no longer be relevant or meaningful to an investor once the financial statements of the registrant include the period in which the de-SPAC transaction was consummated for any filing.
Several commenters were supportive of the proposed rule.
Two commenters, however, asserted that the financial statements of the shell company should no longer be required in any filings made after consummation of a transaction because the shell company's financial statements would no longer be relevant or material.
We are adopting Rule 15-01(e) substantially as proposed, except for modifications discussed further below. The final rules reflect our belief that the financial statements of a shell company would be necessary and material to an investor until such time that the combined registrant's financial statements include the period in which the acquisition was consummated.
We disagree with commenters' assertions that the shell company's financial statements would provide no material information prior to the point in time when the financial statements of the combined entity registrant include the period in which the acquisition was consummated. Specifically, we note that the shell company's financial statements may include material information about its equity or outstanding derivative financial instruments. While we understand, as a commenter asserted,
In response to the comments on the inconsistency between the proposed rule text and the discussion in the Proposing Release, we added “registrant” to “shell company” for clarity that the shell company in this rule represented a registrant. As a registrant, the shell company is required to file financial statements for all required periods through the acquisition date under Exchange Act section 13(a) or 15(d) and rules thereunder.
In final Rule 15-01(e), we have made a change from the proposal to include a provision that has a similar effect as the proposed amendments to Rule 11-01(d) would have had if we had adopted them. This added provision states that if a registrant
The final rule will provide clarity as to when the financial statements of a shell company are required after a shell company business combination transaction. The final rule applies regardless of whether the business combination is accounted for by the shell company as a forward acquisition of the business, which may be a private operating company, or as a reverse recapitalization of the business.
The Commission proposed to amend Rule 11-01(d) of Regulation S-X to state that a SPAC is a business for purposes of the rule. While Rule 11-01(d) states that an entity is presumed to be a business, consideration of the continuity of the SPAC's operations prior to and after the de-SPAC transaction may lead some parties to conclude that the SPAC is not a business.
As a result of the proposed rule, an issuer that is not a SPAC may be required to file financial statements of the SPAC in a resale registration statement on Form S-1.
Further, the proposed amendment to Rule 11-01(d) would change the application of 17 CFR 210.11-01(b)(3)(i)(B) (“Rule 11-01(b)(3)(i)(B)” of Regulation S-X)
Several commenters opposed the proposed amendments to Rule 11-01(d) that would treat the SPAC as a business for purposes of 17 CFR 210.11-01.
One commenter that opposed the amendments said that the SPAC historical financial statements are not relevant to the ongoing business of the target operating company.
One commenter expressed the view that the proposed amendment is contradictory to current Rule 11-01(d)'s requirement to evaluate whether there is sufficient continuity of the acquired entity's operations prior to and after the transaction so that disclosure of prior financial information is material to an understanding of future operations.
This commenter also said, “[w]hile there is a presumption that a separate entity, such as a SPAC, is a business, none of the attributes identified in S-X Rule 11-01(d)(2) for evaluation of whether a lesser component of a business constitutes a business (
Current Rule 11-01(b)(3)(i)(B) permits pro forma information to be used in the denominator of significance tests under certain circumstances. This commenter also said that “[t]he use of pro forma financials should only be allowed to the extent they would be permitted for an acquisition in connection with a pending or completed IPO.”
One commenter said that the proposed amendment to Rule 11-01(d) is contradictory to proposed Rule 15-01(e), about which the Proposing Release stated: “the financial statements of the SPAC, as a shell company, would generally no longer be relevant or meaningful to an investor after a de-SPAC transaction once the financial statements of the registrant include the period in which the de-SPAC transaction was consummated for any filing.”
One commenter, while not specifically referring to proposed Rule 11-01(d), expressed views consistent with proposed Rule 11-01(d).
After considering the comments received, we are not adopting the proposed amendment of Rule 11-01(d), because we agree with a commenter's feedback
As highlighted in the Proposing Release, application of the proposed amendment to Rule 11-01(d) that would treat a shell company as a business could have resulted in significance testing of a future acquired business (
Item 2.01(f) of Form 8-K currently requires a shell company registrant to file, after an acquisition, the information that would be required if the registrant were filing a general form for the registration of securities on Form 10 under the Exchange Act. The Commission proposed to revise this item to refer to “acquired business,” rather than “registrant,” in an effort to clarify that the information provided relates to the acquired business for periods prior to consummation of the acquisition and not the shell company registrant.
One commenter supported the proposed amendment to refer to “acquired business” instead of “registrant.”
Currently, a Form 8-K filed pursuant to Item 2.01(f) may require three fiscal years of financial statements for an acquired business that is the predecessor to a shell company, while only two fiscal years may be required in the Form S-4 for the de-SPAC transaction for the same company under Rule 15-01(b).
We are adopting the proposed amendments to Item 2.01 of Form 8-K, with modifications made in response to comments received. We agree with the commenter's recommendation that we use the term “predecessor,” instead of “acquired business,” in order to avoid potential confusion with acquired businesses that are not the predecessor.
We agree with the comments suggesting that, when the predecessor meets the conditions of an EGC at the time of filing the Form 8-K, the registrant should not be required to present audited financial statements for any period prior to the earliest audited period presented in the predecessor's financial statements in connection with a de-SPAC registration or proxy statement of the registrant.
Currently, 17 CFR 210.3-02 (“Rule 3-02” of Regulation S-X) requires that statements of comprehensive income be filed for the registrant and its predecessors. Rules 3-01 and 8-02 and 17 CFR 210.10-01(a)(1) (“Rule 10-01(a)(1)” of Regulation S-X), however, specify that balance sheets be filed for the registrant but do not specifically refer to balance sheets of predecessors. In the Proposing Release, the Commission proposed amendments to Rules 3-01, 8-02, and 10-01(a)(1) of Regulation S-X to refer specifically to financial statements of predecessors (consistent with the provision in current Rule 3-02 regarding statements of comprehensive income).
One commenter expressed support for the proposed amendments.
We are adopting the amendments largely as proposed, with a technical modification discussed below. We do not believe the intent of current Rules 3-02, 8-01, and 10-01(a)(1) is to require a predecessor's statements of comprehensive income without the balance sheets as that would not be considered a complete set of financial statements, which would be inconsistent with Article 3 of Regulation S-X.
These final amendments are consistent with existing financial reporting practices of registrants. We do not expect the final amendments to result in any changes in disclosures.
Finally, we made a technical revision to Rule 8-02 to add “and its subsidiaries consolidated” to “registrant” in order to conform to Rule 3-01.
In order to deter potential abuses involving shell company transactions,
• For a person to resell securities initially issued by a shell company in reliance on 17 CFR 230.144, a former shell company must satisfy the requirements of 17 CFR 230.144(i)(2);
• A former shell company may not use Form S-8 until at least 60 calendar days after the company is no longer a shell company and has filed current Form 10 information;
• For three years following the change in shell company status, a former shell company is an “ineligible issuer” under Rule 405 that may not, among other things, use free writing prospectuses for communications during a registered offering or rely on the safe harbor of Rule 163A from section 5(c) of the Securities Act for pre-filing communications;
• For three years following the change in shell company status, a broker-dealer may not rely on the safe harbors of Securities Act Rules 137, 138, and 139 for research reports regarding a former shell company.
Several commenters asked the Commission to carve out a post-de-SPAC transaction combined company from these and other former shell company limitations and to make certain safe harbors available to the combined company that are not available to former shell companies.
We are not adopting changes to these limitations or to other rules and limitations related to former shell companies that may apply to the combined company at this time. In light of the comments we received and taking into account the rules being adopted herein and market practices that may develop as a result, we believe that further consideration of potential application of these rules and limitations to the combined company is warranted.
Current Item 10(b) of Regulation S-K provides Commission guidance with respect to factors to be considered in formulating and disclosing management's projections of future economic performance that applies to all filings made with the Commission. The Commission proposed to amend Item 10(b) of Regulation S-K to expand and update the Commission's views on the use of such projections. The proposed amendments to Item 10(b) continued to state the Commission's view that projected financial information included in filings must have a reasonable basis. To address specific concerns with respect to the format of projections, namely that some companies may present projections more prominently than actual historical results (or the lack of historical results where they have no operations at all) or use non-GAAP financial measures in the projections without a clear explanation or definition of such measures, the Commission proposed amending Item 10(b) to state that:
• Any projected measures that are not based on historical financial results or operational history should be clearly distinguished from projected measures that are based on historical financial results or operational history;
• It generally would be misleading to present projections that are based on historical financial results or operational history without presenting such historical measure or operational history with equal or greater prominence; and
• The presentation of projections that include a non-GAAP financial measure should include a clear definition or explanation of the measure, a description of the GAAP financial measure to which it is most closely related,
Finally, the Commission proposed amending Item 10(b) to clarify that it would apply to a target company's projections when they are presented to investors through the registrant's Commission filings. Pursuant to the proposed amendments, the guidance in amended Item 10(b) would apply to any projections of future economic performance of both the registrant and persons other than the registrant (which would include a target company in a de-SPAC transaction), that are included in the registrant's Commission filings.
The Commission proposed Item 1609 of Regulation S-K, which would apply only to de-SPAC transactions, to require a registrant to provide the following disclosures:
• With respect to any projections disclosed in the filing, the purpose for which the projections were prepared and the party that prepared the projections;
• All material bases of the disclosed projections, all material assumptions underlying the projections, and any factors that may impact such assumptions (including a discussion of any material growth rates or discount multiples used in preparing the projections, and the reasons for selecting such growth rates or discount multiples); and
• Whether the disclosed projections reflect the view of the board or management of the SPAC or target company, as applicable, as of the date of the filing; if not, then a statement regarding the purpose of disclosing the projections and the reasons for any continued reliance by management or the board on the projections.
A number of commenters generally supported the proposed items.
In a comment letter that addressed issues raised in a request for comment in the Proposing Release, one group of commenters expressed support for the proposals but stated that “[w]e are opposed to mandating the disclosure of certain financial statement line items (
Several commenters addressed the reasonableness of projections made concerning companies with no operating history. One of the commenters who supported the proposed amendments recommended that we adopt an additional provision providing that “if a registrant does not have a history of operations for the basis of the projections, then it is possible to acquire an outside review of the projections as support for the `reasonable' projections.”
Another commenter recommended that Item 1609(b) include a requirement to disclose sensitivity testing of the key assumptions underlying the projections.
A few commenters also sought clarification that the staff guidance provided in Questions 101.01, 101.02 and 101.03 of the Compliance and Disclosure Interpretations relating to Non-GAAP Financial Measures (last updated December 13, 2022)
In response to a request for comment,
In comment letters that addressed issues raised in a request for comment in the Proposing Release,
A few commenters indicated that proposed Item 1609(b) is likely to reduce the disclosure of projections in Commission filings but acknowledged that the rules are unlikely to “significantly impact the willingness of parties to De-SPAC Transactions to continue preparing and disclosing projections” because the disclosure of projections is compelled by certain other Federal and State requirements.
A few commenters stated that the requirement in proposed Item 1609(b) to discuss the material bases and assumptions underlying projections, despite the inclusion of a materiality qualifier, is unduly prescriptive, may result in the inclusion of “inputs and assumptions that are not material to an investor's understanding of the projections” and may lead registrants towards a conservative approach of disclosing growth rates or discount multiples in order to protect against future claims that such inputs were material.
With respect to Item 1609(c), some commenters indicated that registrants should not have to affirm the validity of projections as of the date of the filing because it would be unduly burdensome and inconsistent with the purpose of the preparation of the projections.
Also regarding Item 1609(c), one commenter expressed the view that projections are included in a de-SPAC transaction disclosure document to describe the basis upon which the directors of the SPAC approved the transaction, not to serve as a basis for investors to make an investment decision.
Some commenters expressed the view that the proposed rule was not sufficiently specific in its use of the phrase “as of the date of the filing” and that the requirement could be interpreted to require compliance with this item in the original filing and all subsequent amendments.
One commenter made a number of suggestions with respect to the disclosure of projections in IPOs of all types, including in de-SPAC transactions.
We are adopting the amendment of Item 10(b) as proposed and new Item 1609 substantially as proposed, except for clarifying revisions that we discuss below.
With respect to the final amendment to Item 10(b), we note that the rule is Commission guidance that already applies to all filings made with the Commission and this aspect of Item 10(b) precedes the revisions to the rule adopted in this release.
In response to one commenter's opposition to an obligation to present certain specific line items in all projections,
With respect to the recommendation to revise the rule to allow a company with no history of operations to obtain an outside review of projections,
With respect to the suggestion from a commenter that non-GAAP financial metrics should be highlighted for investor review,
With respect to commenters' request for clarification that certain staff guidance will continue to apply notwithstanding adoption of proposed Item 10(b)(2)(iv),
With respect to commenters' responses to our request for comment that we should not require projections to be presented in a separately captioned section of a filing,
In the final rules, we made three technical revisions to Item 10(b). First, in final Item 10(b)(2)(i), we replaced the term “foregoing measures of income” with the term “foregoing measures of income (loss).” Second, in final Item 10(b)(2)(iii), we replaced the term “historical financial measure” with the term “historical financial results.” We believe these changes will enhance clarity and avoid potential ambiguity. Third, we made revisions in final Item 10(b)(2)(iv) to require a description of the GAAP financial measure “most directly comparable” to the non-GAAP measure, rather than “most closely related” (as proposed). We made this change in final Item 10(b)(2)(iv) to create consistency with the terms used in existing Item 10(e)(1)(i)(A) of Regulation S-K, which requires the inclusion of the directly comparable financial measure or measures calculated and presented in accordance with GAAP whenever one or more non-GAAP financial measures are included in a filing with the Commission.
With respect to commenters' views that Item 1609 should apply to all companies that publicly disclose financial projections in Commission filings,
With respect to commenters who expressed concern there could be an uncertain impact on the use of projections under Item 1609,
With respect to the recommendation that Item 1609(b) include a requirement to disclose sensitivity testing of the key assumptions underlying the projections,
With respect to the comment that the requirement in Item 1609(b) to discuss material growth rates or discount multiples used in preparing the projections is unduly prescriptive and may result in the over-inclusion of certain immaterial information,
In final Item 1609(b), we have added a materiality qualifier to the requirement to disclose any factors that may impact the material assumptions underlying the projections to clarify that only material factors are required to be disclosed. In final Item 1609(b), we have also made two technical revisions to the proposal in order to improve the clarity of this item and avoid potential ambiguity.
With respect to the proposed requirement in Item 1609(c)—to include a statement regarding whether or not projections disclosed in a filing reflect the current views of the SPAC or target company management or board of directors as of the date of filing—commenters expressed concerns that the requirement would be unduly burdensome, may involve an expensive and time-consuming effort to update the projections,
In response to commenters who said that the proposed terms “as of the date of the filing” were unclear and could be interpreted to require compliance with this item in the original filing and all subsequent amendments,
For several reasons we discuss below, we are not adopting the alternative approach suggested by two commenters that involved several elements, including: (1) that disclosure should be required that provides the date the projections were prepared and the views of the preparer of the projections as of the date of preparation, (2) that, with certain exceptions, registrants should be permitted to disclaim any duty to update the projections, and (3) that the Commission may seek disclosure confirming whether the projections still reflect management's views on future performance.
For several reasons we discuss below, we are also not adopting the following suggestions of one commenter with respect to the disclosure of projections in IPOs of all types, including in de-SPAC transactions: (1) requiring disclosure of management's assessment of the probability of achieving any forecasts provided, (2) requiring as a condition to qualify for the PSLRA safe harbor when projections are disclosed that directors, management and other affiliates must agree to a lock-up on sales of shares until the company has released audited financial statements for its first full fiscal year following the transaction, and (3) requiring disclosure of the track record of the company, the sponsor, or the chief executive officer or chief financial officer for meeting past projections disclosed.
We are amending General Instruction B to Form 8-K to require the
Finally, we revised Item 1609(c) to replace the proposed term “board” with the terms “board of directors (or similar governing body)” for purposes of clarity and consistency with other final rules.
The Commission proposed Rule 3a-10 under the Investment Company Act, which would have provided a safe harbor from the definition of investment company under section 3(a)(1)(A) of the Investment Company Act
Instead, we are setting forth below our views on facts and circumstances that are relevant to whether a SPAC meets the definition of investment company under the Investment Company Act.
The Commission received comments that represented a range of views and positions on proposed Rule 3a-10. While some commenters expressed the view that SPACs are not investment companies,
Commenters also held varying views about the need for a Commission safe harbor. Some commenters believed that a safe harbor would provide clarity.
Commenters also expressed differing opinions about the proposed safe harbor's duration limits. Some commenters stated that the duration limits were unnecessary and potentially harmful to SPACs and their investors.
As discussed above, depending upon the facts and circumstances, a SPAC may meet the definition of “investment company” in section 3(a)(1) of the Investment Company Act.
Typically, a SPAC is organized for the purpose of merging with or acquiring one or more operating companies.
A SPAC may hold, or propose to hold, assets
A SPAC that holds only the sort of securities typically held by SPACs today, such as U.S. Government securities, money market funds
Another significant factor in the analysis of whether a SPAC is an investment company under section 3(a)(1)(A) is the actions of its officers, directors, and employees.
Depending on the facts and circumstances, the management of a SPAC also could cause SPAC sponsors to come within the definition of “investment adviser” in section 202(a)(11) of the Investment Advisers Act of 1940.
When evaluating whether it is an investment company under section 3(a)(1)(A), a SPAC whose assets and income are substantially composed of, and derived from, securities should be mindful of the length of time that it has been operating prior to entering into an agreement with a target company and then completing the de-SPAC transaction with that company.
In evaluating whether a SPAC has reached such a point in time, a SPAC should consider how its duration falls within the framework of the Investment Company Act, the rules thereunder, and past Commission positions, including Rule 3a-2 under the Investment Company Act and the Commission's position regarding Rule 419 under the Securities Act.
A SPAC that holds itself out in a manner that suggests that investors should invest in its securities primarily to gain exposure to its portfolio of securities prior to the de-SPAC transaction would likely be an investment company under the definition in section 3(a)(1)(A). For example, if a SPAC were to market itself primarily as a fixed-income investment, as an alternative to an investment in a mutual fund, or as an opportunity to invest in Treasury securities or money market funds, it would likely be holding itself out as being primarily engaged in the business of investing, reinvesting, or trading in securities. Accordingly, such a SPAC would likely be an investment company under section 3(a)(1)(A).
If a SPAC were to engage or propose to engage in a de-SPAC transaction with a target company that meets the definition of investment company, such as a closed-end fund or a business development company, the SPAC is likely to be an investment company under section 3(a)(1)(A) of the Investment Company Act because it would be proposing to be engaged in the business of investing, reinvesting and trading in securities as set out in section 3(a) of that Act. A SPAC that seeks to engage in a de-SPAC transaction with an investment company would, at some point prior to the de-SPAC transaction, be proposing to engage in the business of being an investment company.
Depending upon the facts and circumstances, a SPAC may meet the definition of investment company in section 3(a)(1)(A) or 3(a)(1)(C) (or both) of the Investment Company Act. To the extent that a SPAC's activities—including any of those discussed above—may cause it to fall within one or more of these definitions, a SPAC should consider options that would bring it into compliance such as changing its operations, winding down its operations, or registering as an investment company under the Investment Company Act. The Investment Company Act imposes registration, reporting, governance and minimum capital requirements on investment companies. Issuers that meet the definition of investment company but fail to comply with the Investment Company Act's provisions, or otherwise qualify for an exclusion or exemption from the provisions of the Act, could, among other things, be subject to enforcement action by the Commission or to private litigation.
If any of the provisions of these rules, or the application thereof to any person or circumstance, is held to be invalid, such invalidity shall not affect other provisions or application of such provisions to other persons or circumstances that can be given effect without the invalid provision or application.
Pursuant to the Congressional Review Act, the Office of Information and Regulatory Affairs has designated this rule as a “major rule,” as defined by 5 U.S.C. 804(2).
We are mindful of the costs and benefits of these new rules and amendments. The discussion below addresses the potential economic effects of the new rules and amendments, including the likely benefits and costs, as well as the potential effects on efficiency, competition, and capital formation.
A SPAC is a shell company organized for the purpose of combining with one or more target companies.
The final rules include a number of additional disclosure requirements that help address information asymmetries between investors
The final rules also include several provisions to help ensure that shareholders more consistently receive the full protections of Securities Act disclosure and liability provisions in connection with the de-SPAC transaction. For example, because the target company is effectively an “issuer” of the securities in any registered de-SPAC transaction, the rules require that the target company sign the registration statement filed in connection with the de-SPAC transaction.
Certain rules we are adopting are intended to align disclosures in de-SPAC transactions more closely to those of traditional IPOs. For example, certain non-financial disclosures regarding a target company that are currently not filed by the company until a Form 8-K, within four business days after the completion of a de-SPAC transaction, will be required to be included in the disclosures that are filed in connection with a de-SPAC transaction (on Form S-4 or F-4, a proxy or information statement, or a Schedule TO).
We are also adopting final rules that apply to shell companies more broadly. Rule 145a deems any business combination involving a reporting shell company and another entity that is not a shell company to involve a sale of securities to the reporting shell company's shareholders. Currently, investors in reporting shell companies may not always receive the disclosures and other protections afforded by the Securities Act at the time when there is a fundamental change in the nature of their investment due to the business combination involving another entity that is not a shell company. In addition, the amendments to Regulation S-X more closely align the financial statement requirements in business combinations between a shell company and a non-shell company with those required in connection with traditional IPOs.
As discussed in section I, market participants have raised concerns that disclosures that currently accompany SPAC IPOs and de-SPAC transactions do not provide investors with adequate information to assess the potential risks of investing in SPACs and the ways in which the SPAC sponsor and other affiliates stand to gain from these transactions. We expect the final rules to elicit information regarding SPAC transactions that is more consistent, useful, and readily comparable.
SPACs and their target companies may incur costs related to the public disclosure of the newly required information. The costs will be lower for parties that already provide such disclosures voluntarily in response to market demands.
We received several comments specifically addressing the economic analysis of the Proposing Release.
The baseline against which the costs, benefits, and the effects on efficiency, competition, and capital formation of the final rules and amendments are measured consists of the current state of the SPAC market, current practice as it relates to SPAC IPOs and subsequent business combination transactions between SPACs and private operating companies, and the current regulatory framework.
We begin by discussing current market practices related to SPAC IPOs in section VIII.A.1. We then discuss de-SPAC transactions in section VIII.A.2.
The parties most likely to be directly affected by the final rules regarding specialized disclosure requirements for SPACs in IPOs and other registered offerings are: SPAC sponsors and their affiliates or potential SPAC sponsors intending to organize a new SPAC; current SPAC officers, SPAC directors, or promoters; SPAC investors; and any other market participants whose service or activities involve analysis of the information, data, and disclosures related to SPACs in these offerings.
In addition, if the adoption of the final rules alters the incentives for other parties (
Table 2 shows the estimated number of SPAC IPOs since 1990. They peaked in 2021, following a similar trend in traditional IPOs.
The vast majority of SPACs claim either SRC or EGC status, with the majority claiming both.
SPAC listings have migrated from the over-the-counter (OTC) market to three national securities exchanges: first, NYSE American (formerly, the American Stock Exchange (“AMEX”)); then, the Nasdaq Stock Market (“Nasdaq”) and the New York Stock Exchange (“NYSE”) (see Table 2).
NYSE, Nasdaq, and NYSE American have rules setting forth listing requirements for a company whose business plan is to complete an IPO and engage in a business combination.
SPACs are managed by SPAC sponsors, who spend time and effort managing the SPAC process and searching for a suitable target to complete a de-SPAC transaction. Sponsors also invest in the SPAC and are compensated with a portion of ownership in the combined company that results from the de-SPAC transaction, which means that such compensation will generally only be realized if a de-SPAC transaction occurs. Commentators have suggested that one reason a SPAC might provide a more attractive route to the public markets than a traditional IPO is because the target company may benefit from the leadership and professional advice from one or more individuals composing the SPAC sponsor, including in some cases beyond the consummation of the de-SPAC transaction and into the life of the resulting combined public company.
Underwriters of SPAC IPOs may be affected by the final rules, to the extent they are liable for IPO disclosures or any involvement in de-SPAC transactions. During the period 1990-2022, the average number of named underwriters participating in a SPAC IPO was 2.4.
Most SPAC IPOs register the offering of a unit composed of a common share, warrants, or fractions thereof, and—in some cases—rights.
As SPAC offerings have evolved, however, the dilutive potential of the warrant component of a SPAC offering unit appears to have somewhat diminished. As indicated in Figure 1, across all the years included in Table 1, many SPACs offer units with fractional warrant components. In more recent years (2019-2022, inclusive), the majority of SPACs that have conducted an IPO offered units with fractional warrants representing half a share or less. The result of this trend is that warrant features have in some respects become less dilutive in more recent years.
At the de-SPAC transaction stage, the primary parties affected by the new disclosure requirements include SPACs, SPAC sponsors, investors (including PIPE investors if any), and target companies. Additionally, the final rules to amend or otherwise clarify the existing liability framework would affect those same parties (and certain individuals at those parties).
As illustrated in Table 3, based on staff analysis of SPAC IPOs that registered a sale of securities between 1990 and 2023, approximately two-
Currently, the typical SPAC discloses in its IPO prospectus that it is formed for the purpose of effecting a business combination with one or more businesses. Most SPACs pursue only one target company for a de-SPAC transaction. Of the 583 business combination transactions with operating companies that occurred over the 1990-2022 period involving SPAC IPOs approximately 3% of transactions (17 of 583) involved two or more target companies (15 transactions involved two target companies and two transactions involved three target companies).
PIPEs have supported de-SPAC transactions since approximately 2005.
According
As the SPAC market has evolved, so too has the role of PIPEs that support, and in some cases enable, de-SPAC transactions. In 2021, according to one study, approximately 95% of de-SPAC transactions included PIPE financings and the average ($316 million) and median ($210 million) amounts raised in PIPE financings were similar to the average size of the SPAC trust account at the time of the IPO.
PIPEs are typically priced at a discount relative to the market value of the publicly traded securities. For example, one study of PIPE transactions (including but not limited to de-SPAC transactions) indicates that the average discount for PIPE investors is 11.2% (compared to the market value of those securities), and for the subsample of PIPEs that do not include warrants, the average discount is 5.7%.
Item 1609 of Regulation S-K will require certain enhanced disclosures about any projections disclosed in de-SPAC transactions.
Three recent papers discuss the use of projections by SPACs and target private operating companies in de-SPAC transactions. Chapman, Frankel, and Martin (2021) collected data on SPACs with IPO dates from 2015 to 2020.
Item 1607 of Regulation S-K will require disclosures related to any report, opinion (other than an opinion of counsel) or appraisal received by the SPAC or the SPAC sponsor from an outside party or unaffiliated representative materially relating to, among other things, the fairness of the de-SPAC transaction to the SPAC, its security holders or SPAC sponsor if the SPAC or SPAC sponsor receives such a report, opinion, or appraisal.
In 2021, only 15% of de-SPAC transactions disclosed that they were supported by fairness opinions, according to one study.
In considering the potential economic effects of the final rules, we have taken into consideration elements of both the
While the majority of SPACs that subsequently consummated a de-SPAC transaction remain organized in the same location, Table 4 indicates that, for some SPACs, the jurisdiction of organization of the combined company may change (compared to the SPAC's jurisdiction) in connection with the de-SPAC transaction. As a result, SPACs may face changes in prevailing legal standards that arise from a change in jurisdiction of organization. To the extent that different jurisdictions have different disclosure requirements and provide differing levels of investor protections, the baseline regulatory framework will vary across SPACs and may change upon the de-SPAC transaction. For example, the incremental impact of the minimum dissemination period requirement may vary by jurisdiction.
We are adopting final rules that define “blank check company” for purposes of the PSLRA safe harbor provisions regarding forward-looking statements.
We estimate that, in addition to potentially affected SPACs, as previously discussed,
Securities Act Rule 145a and Article 15 of Regulation S-X may affect SPACs and other shell companies (other than business combination related shell companies) involved in business combination transactions. To the extent that Rule 145a transactions are registered, investors would receive disclosures in a registration statement, and registration would result in enhanced liabilities for the registrant and other parties who have liability under Securities Act section 11 with respect to the registration statement. Article 15 of Regulation S-X will affect the financial statements associated with business combinations involving shell companies and thereby affect parties that are typically associated with the preparation, review, and dissemination of financial statements.
Table 5 below illustrates that the proportion of de-SPAC transactions to non-SPAC reporting shell company business combinations has increased due to the recent increase in the number of SPACs entering the market and subsequently merging with target companies.
We estimate that, in addition to existing SPACs that have yet to complete a de-SPAC transaction (as of the end 2022, there were 324 such SPACs according to the figures reported in Table 3), approximately 156 additional existing non-SPAC reporting shell companies may be affected by the final rules.
New Item 1601 defines certain parties and transactions to which the requirements of subpart 1600 of Regulation S-K apply. Defining the terms “special purpose acquisition company,” “de-SPAC transaction,” “SPAC sponsor,” and “target company” establishes the scope of the parties and transactions subject to the requirements of subpart 1600 and any other rules, including other final rules, that rely on these definitions and thereby provides both registrants and investors notice of the associated obligations and expectations.
As discussed above, in response to commenters, the Commission is adopting Item 1601 with
At the SPAC IPO stage, there are information asymmetries between potential SPAC investors and the SPAC, making it challenging for investors to differentiate between SPACs and other investment options and to differentiate among SPACs. A SPAC sponsor looking to secure IPO investments may have incentives to obscure information that would be relevant to potential investors.
Item 1602 requires a prospectus filed in connection with a SPAC's IPO to disclose information in plain English on certain features unique to SPAC offerings and the potential associated risks, in addition to the information currently required by Item 501 of Regulation S-K and 17 CFR 229.503(a) (Item 503 of Regulation S-K), on the prospectus cover page and in the prospectus summary, as discussed above.
We expect Item 1602 will also reduce SPAC investors' information processing costs. Investors in SPACs vary in financial sophistication and ability to process the information provided in SPAC IPO prospectuses, and the potential benefits may accrue more to investors that are less financially sophisticated. Specifically, because investors are likely to allocate their attention selectively,
Item 1602(b)(6) will require tabular disclosure in the prospectus summary regarding the nature and amount of the compensation received or to be received by, as well as the amount of securities issued or to be issued to, the SPAC sponsor, its affiliates, and promoters separately, and the extent to which this may result in a material dilution of the purchasers' equity interests. There is empirical evidence that visualization improves individuals' perception of information.
More broadly, Item 1602 will standardize these disclosures across all registration statements filed for SPAC IPOs, which may make it less costly for investors to compare terms across offerings and thereby promote better investment decisions to the extent these lower costs facilitate broader or more comprehensive analysis.
Finally, to the extent the additional disclosures on the cover page and in the prospectus summary would increase investors' awareness of SPAC sponsors' incentives and potential conflicts of interest, they may have an incremental disciplining effect on SPAC sponsors' behavior. For example, if SPAC
The additional required disclosures on the prospectus cover page and in the prospectus summary may increase compliance costs for SPACs to the extent that they will need to provide more information in their IPO prospectuses than they currently provide. We believe that SPACs are likely to have this information readily available. In addition, based on the experience of the Commission staff reviewing current SPAC filings, SPACs often already disclose some of this information, such as the time frame for the SPAC to consummate a de-SPAC transaction. Thus, we expect that the additional compliance costs resulting from these new items will not be significant.
Investors may also experience additional economic costs from these new disclosures. In particular, it is possible that, by requiring more items to be added to the cover page and the prospectus summary, the salience of the current required disclosures on the cover page and in the prospectus summary may be reduced because they will have to compete with the new required disclosures for investors' attention, a concern voiced by some commenters.
SPAC investors may experience dilution from various transactions by a number of parties at various stages of a SPAC's lifecycle, and understanding these potential dilutive impacts is important for investment and other decisions.
The impact of dilution is further magnified by a common feature in many SPACs whereby public shareholders may redeem their shares before the de-SPAC transaction and have their original investment returned plus a pro-rata amount of earnings (typically interest) accrued on the original investment proceeds held in the trust account. Following these redemptions, the non-redeeming IPO investors will own a relatively smaller portion of the SPAC relative to the portion owned by the SPAC sponsor (SPAC sponsor shares are typically not redeemable). This change in the relative portion of shares generally has a dilutive effect because the IPO investors often contribute more per share to net tangible book value (typically $10/share) than do SPAC sponsors (typically several cents per share, as mentioned above).
To put the effects of redemption in context, we present the historical redemption levels below in Figure 2. Figure 2 presents the average realized redemptions from de-SPAC transactions between 2010 and 2022. As shown in Figure 2, typically just over half of the public shareholders opt to redeem their shares on average before the de-SPAC transaction (the average redemption level for de-SPACs from 2010 to 2022 was 55% and the median was 65%), but that the level of redemptions is not consistent over time. For example, in 2022 the average redemption level was 85%, whereas the average in 2020 and 2021 was 38% and 45%, respectively. This time-series variation in average redemption rates is not a result of variation in the average maximum redemption rate, which has remained relatively steady at just above 90% since 2015.
Understanding the sources and extent of dilution, including the impact of potential redemptions, is important for investors to make informed decisions and efficiently allocate capital. As discussed above, the final rules require new disclosures about the sources and extent of expected dilution, which we expect will reduce the information asymmetry between the various SPAC participants by providing information that investors can use to form their expectations about the investment value of a SPAC.
The dilution disclosures in Item 1602(a)(4) and (c) require measuring dilution using net tangible book value per share, adjusted as if the offering (and assumed redemption levels) have occurred and giving effect to material probable or consummated transactions (other than the de-SPAC transaction itself). Net tangible book value per share, as adjusted, captures effects from changes in net tangible book value, as adjusted, in the numerator (for example, returning cash to redeeming shareholders or other transactions that change the amount of assets held in the SPAC trust account), and/or the number of shares outstanding in the denominator (for example, redemptions of shares or other transactions that change the total shares outstanding).
As a simple illustrative example of how net tangible book value per share, as adjusted, reflects various dilutive effects, a hypothetical SPAC might conduct an IPO at $10/share, and sell 80 shares, resulting in $800 in the trust account. The SPAC sponsor might receive promote shares equal to 25% of the IPO shares sold, or 20 shares, bringing the total shares outstanding to 100 (for simplicity, we omit the typical nominal amount SPAC sponsors often pay for their promote). Assuming no other expenses, the net tangible book value per share, as adjusted, in this simplified hypothetical would be $800/100 shares or $8/share. In this hypothetical example, if 75% of public shareholders, representing 60 total shares, were to redeem their shares for $10/share, then $600 would be removed from the trust account and paid to those redeeming shareholders, and the SPAC would be left with $200 in the trust account, 20 shares owned by the public shareholders, and 20 shares owned by the sponsor. In this case, the net tangible book value per share, as adjusted, would be $200/40 or $5/share. This $5/share value can be thought of as reflecting that, of the $10/share invested by public investors in the IPO, only half remains to be invested in the target. It can also be seen to reflect the fact that the SPAC sponsor and the non-redeeming public investors now have an equal ownership (where initially there was a 4:1 ownership ratio), and the SPAC sponsor owns half of the remaining shares.
At the SPAC IPO stage, we expect that the tabular disclosure of net tangible book value per share, as adjusted, under Item 1602(a)(4) and (c) typically may include fewer sources of dilution that factor into such calculation as compared to the number of sources of dilution that factor into tabular disclosure of value.
Specifically, Item 1602(a)(4) requires registration statements on Form S-1 or Form F-1 filed by SPACs, including for an IPO, to include on the cover page a tabular disclosure of net tangible book value per share, as adjusted, as of the most recent balance sheet date at quartile intervals based on the percentages of the maximum redemption threshold, and the difference between this value and the offering price.
Item 1602(a)(3) also requires a further cover page disclosure of whether the compensation or issuance of securities described in Item 1602(a)(3) may result in material dilution of the purchasers' equity interests. Item 1602(b)(6) requires in the prospectus summary similar disclosure to that of Item 1602(a)(3) but specifies that the registrant should describe the extent (rather than “whether,” as required in Item 1602(a)(3)) to which the associated compensation or issuance of securities may result in material dilution of the purchasers' equity interests.
Item 1602(c) requires that registered offerings by SPACs (other than de-SPAC transactions) provide a description of each material potential source of future dilution following the registered offering (
We expect these dilution disclosures at the SPAC IPO stage will facilitate investor differentiation between SPACs as an investment and other non-SPAC investments by highlighting the sources of potential dilution and demonstrating their effects for investors to incorporate into their investment decisions. While some of this information is available elsewhere as required by existing disclosures (
We acknowledge that it is possible the dilution disclosures could be interpreted by investors as conveying more certainty about the sources or effects of dilution (or lack or omission thereof, where those sources are not deemed probable) than is intended by the SPAC.
We expect the dilution disclosures at the IPO stage to provide valuable information to investors, both to compare between SPAC IPOs, and as a baseline against which they can compare the de-SPAC dilution disclosures, if and when a de-SPAC transaction is proposed. We expect this dilution disclosure to be especially informative for SPAC investors who remain investors in the combined company, as historically they have been greatly impacted by the above-mentioned dilution effects.
Given the empirical evidence that visualization improves individuals' perception of information
Moreover, the required dilution disclosure should provide prospective SPAC investors with information (with the aforementioned benefits of the tabular format) that more accurately represents the dilution that they might experience if they invest in the SPAC, as compared to current Item 506 disclosures with regard to the effect of potential redemptions.
The reasoning that a tabular disclosure at multiple levels of redemption will better inform expectations of the ultimate dilution is supported by the evidence in Figure 2, which demonstrates that while the maximum redemption level has been very stable over time, the actual redemption levels have been typically far below the maximum threshold. The final rules will provide investors with more granular information about potential dilution across multiple redemption levels than previously required, which should provide information more congruent with the observed variation in dilution—such as that shown by the variation from one year to another of average realized redemption percentages in Figure 2. This, in turn, should allow investors to better anticipate the effects of such dilution on future returns to these investors from their investment and better inform their investment decision-making.
The disclosures may not include some dilution effects in some SPAC structures. For example, as one commenter explained, “some de-SPAC transactions are structured such that certain funding mechanisms, such as backstop, forward purchase or PIPE arrangements, apply only in the event of certain redemption thresholds.”
We expect the final rules to reduce the costs to investors of conducting a dilution analysis. Without the tabular disclosures we are requiring, each shareholder wishing to understand the net effects of all the financing arrangements would have to calculate the various conditions themselves—which would require a full understanding of the terms and extents to which they interact—before being able to calculate the ultimate impact on dilution. Under the final rules, this process will be completed by the registrant, which already has the full understanding of conditions and terms and is best suited to conduct said calculations.
The tabular format of the disclosures required by Item 1602(a)(4) and (c) will standardize the presentation of dilution information, which we expect will allow investors to analyze and compare more easily across SPACs. This increase in comparability should allow investors to compare the structural differences in dilution across SPACs which, to the extent relevant, should improve investment and capital allocation decisions.
We expect the incremental compliance costs of the final dilution disclosure requirements at the SPAC IPO stage to be low for two reasons. First, registrants should already have the underlying information at their disposal and are therefore unlikely to incur significant additional costs to procure the necessary data (especially so since SPACs currently conduct a dilution calculation pursuant to Item 506).
Second, while Item 1602(a)(4) and (c) require registrants to account in the tabular disclosure for material probable sources of dilution and analyze several levels of redemption, which may require the services or input of quantitative specialists, the material probable sources of dilution are generally common across SPAC offerings and are generally well known and quantifiable. For example, sources of dilution at the IPO stage may include shareholder redemptions, SPAC sponsor compensation or “promote,” general and administrative expenses, underwriting fees, warrants, and other convertible securities.
We are also amending Form S-1 to no longer require Item 506 dilution disclosures for SPAC filings because the dilution disclosures required in Item 1602 will replace those generic dilution disclosures. We believe these Item 506 disclosures are less informative in the SPAC setting because, based on the Commission staff's experience reviewing recent SPAC filings, SPACs classify the redeemable shares as temporary equity and exclude the cash raised from sales of those shares from the net tangible book value. This classification results in a dilution measure that excludes the vast majority of the SPAC's cash holdings.
At the SPAC IPO, new Item 1603(a) requires disclosure of certain information regarding a SPAC sponsor, its affiliates, and any promoters. This item requires, among other information, disclosures concerning the SPAC sponsor that include the following: name, form of organization, controlling persons, general character of business, and any arrangements or other agreements between the sponsor and the SPAC, its officers, directors, or affiliates with respect to determining whether to proceed with a de-SPAC transaction. This item also requires, among other information, disclosures about the SPAC sponsor, its affiliates, and promoters that include the following: their experience; material roles and responsibilities and the nature and amounts of their compensation and reimbursements and SPAC securities issued to them or to be issued to them.
These disclosures about the SPAC sponsor, affiliates, and promoters may benefit investors by enabling them to better evaluate the circumstances that may impact their investment decision regarding a specific SPAC.
Item 1603(a) may increase compliance costs at the SPAC IPO, mainly in the form of collecting, preparing, and filing the required information for disclosures about SPAC sponsors, their affiliates, and their promoters. While SPAC sponsors, their affiliates, and promoters may be external to the SPAC, we believe the close relationships typically between the SPAC and these parties will enable the SPAC to request the data required to be disclosed under the final rules with little additional difficulty compared to compiling the same information from persons internal to the SPAC, such as its officers and directors subject to the rules. Overall, we do not expect registrant compliance costs to be substantial because most of this information should be readily available; some of this information is currently being provided by SPACs, as suggested by commenters.
Item 1603(b) requires disclosure of conflicts of interest between: (1) a SPAC sponsor or its affiliates; the SPAC's officers, directors, or promoters; or the target company's officers and directors and (2) the unaffiliated security holders of the SPAC. We expect these disclosure requirements will enable investors to better assess any actual or potential material conflict of interest, including any material conflict of interest that may arise in determining whether to proceed with a de-SPAC transaction and any material conflict of interest arising from the manner in which the SPAC compensates SPAC sponsors, officers, and directors or the manner in which SPAC sponsors compensate its officers and directors. Such enhanced ability to evaluate conflicts should benefit investors by enabling them to more accurately assess potential adverse selection risks, thereby facilitating better investment decisions. Further, information about conflicts of interest at the SPAC IPO stage should improve investors' ability to differentiate investments in a SPAC from other investment opportunities and to differentiate one SPAC from another SPAC.
With respect to the conflicts of interest disclosures required by Item 1603(b), SPACs could bear direct costs associated with: (i) reviewing and preparing disclosures describing any such conflict of interest; (ii) developing and maintaining methods for tracking any such conflict of interest; and (iii) seeking legal or other advice. While the additional direct costs associated with Item 1603(b) disclosure requirements will depend on the extent to which a SPAC already provides this disclosure under current practices, we expect these costs to generally be low.
Item 1603(c) requires disclosure about the fiduciary duties that a SPAC's officers and directors owe to other companies. We expect that this disclosure will allow investors to assess the extent to which the officers and directors may face outside obligations, including the possibility that they might be compelled to act in the interest of another company that competes with the SPAC. The extent that a SPAC's officers or directors owe fiduciary duties to other companies may also limit the attention that they are able to provide to the SPAC. We expect that these disclosures will benefit investors by allowing them to better assess the ability and incentives of the officers and directors managing the SPAC.
We do not expect the disclosures of a SPAC officer's or director's fiduciary duties to other companies pursuant to Item 1603(c) will generally impose significant costs on SPACs. Officers and directors who manage the business of the SPAC should know their own roles in connection with other companies, so this information is likely known and easily accessible to the SPAC. Depending on specific facts and circumstances of a SPAC, however, the SPAC officers and directors may incur costs to comply with Item 1603(c) if they must research or seek the advice of counsel to determine whether a fiduciary relationship with another company exists. These costs may be minimal where little or no research or outside advice is required, such as in the absence of any other fiduciary relationships or when those relationships are already known. However, those costs are likely to increase as more research or outside advice is required.
Item 1610 requires all disclosures in Items 1601 through 1609 of Regulation S-K to be tagged in Inline XBRL.
These final rules should be especially beneficial for investors differentiating between SPAC features, particularly due to the standardization of SPAC IPO disclosures, as specified in Items 1602 and 1603. Together, we expect the adopted disclosure rules will facilitate investors' ability to process more
Research evidence suggests that XBRL requirements for public operating company financial statement disclosures mitigate information asymmetry by reducing information processing costs, thereby making the disclosures easier to access and analyze.
In addition, we expect Inline XBRL will facilitate increased insight into the specialized SPAC IPO disclosures, and will allow for easier, less costly comparisons with other SPACs by providing additional functionality such as detailed filtering by criteria such as offering size, dilutive impact, or SPAC sponsor name.
We expect the requirement to tag SPAC-specific disclosures in Inline XBRL will impose compliance costs on SPACs at an earlier stage of their life cycle than under the current baseline. Currently, SPACs are required to tag financial statements (including notes) and cover page information in certain registration statements and periodic reports in Inline XBRL.
Various preparation solutions have been developed and used by operating companies to fulfill XBRL tagging requirements, and some evidence suggests that XBRL compliance costs have decreased over time for smaller companies.
Given the hybrid nature of the de-SPAC transaction (
As discussed above, Item 1603 includes, among other things, disclosure of details about the SPAC sponsor, its affiliates, and promotors, and conflicts of interest generally between those parties and SPAC shareholders. Similar to the final rule requirements that apply
We expect the benefits of Item 1603 (and Item 1604(a)(4) and (b)(3)) in connection with disclosures at the de-SPAC transaction stage on a proxy, information, or registration statement or on a Schedule TO to be largely the same as the effects of the same Item 1603 disclosures made in connection with the SPAC IPO, as discussed above.
Currently, a de-SPAC transaction may be registered on a Form S-4 or Form F-4, and, to the extent that a de-SPAC registration statement must be filed due to the operation of Rule 145a, we expect that there will be additional registered de-SPAC transactions as a result of the final rules. Item 1604(a) and (b) require any prospectus at the de-SPAC transaction stage to include certain information about the de-SPAC transaction on the outside front cover page and in the prospectus summary, similar to the requirements of Item 1602 at the SPAC IPO stage.
We expect that final Item 1604(a) and (b) will have similar potential direct benefits for investors as those we discussed for Item 1602 above—that is, the additional disclosures on the de-SPAC transaction prospectus cover page and in the prospectus summary may increase the likelihood that investors pay attention to and process this information by making it more salient.
In addition to the direct benefits discussed above, certain information that Item 1604 requires registrants to disclose may benefit investors through incrementally improved SPAC governance. For example, the inclusion of disclosures regarding material potential or actual conflicts of interest could increase investors' attention to such issues, allowing them to identify and focus in on those conflicts they deem potentially adverse to their own interests.
The additional information that Item 1604(a) and (b) require in the de-SPAC transaction prospectus may increase compliance costs for SPACs if it would result in SPACs needing to gather and disclose information they would not otherwise have provided in a de-SPAC transaction. Additionally, as with Item 1602, it is possible that the disclosures required under Item 1604 could result in additional processing costs for investors.
By the time a SPAC finds a target company and prepares its de-SPAC transaction, many facts and circumstances that affect dilution and the financial position of the SPAC have changed, both when compared to the SPAC at its IPO stage as well as when compared to other SPACs. The result of this evolution is that, unlike at the SPAC IPO stage when most SPACs exhibit similar features, de-SPAC transactions are often more complex and idiosyncratic. By the time of the de-SPAC transaction, many new sources of dilution are likely to have arisen. For example, a SPAC may determine a potential PIPE investment or potential change to a SPAC sponsor's compensation or securities issued to a SPAC sponsor is a “material probable transaction.” Pursuant to Item 1604(c), in calculating dilution, a SPAC will be required to make adjustments to net tangible book value per share, as adjusted, to reflect such events.
Item 1604(a)(3) requires the outside cover page of the prospectus at the de-SPAC transaction stage to contain a statement as to whether certain compensation and securities issuances disclosed pursuant to this item may result in a material dilution of the equity interests of non-redeeming shareholders who hold the securities until the consummation of the de-SPAC transaction. Item 1604(b)(4) requires disclosure in the prospectus summary of the extent to which certain compensation and securities issuances have resulted or may result in a material dilution of the equity interests of non-redeeming shareholders of the SPAC. Item 1604(b)(5) requires disclosure of the dilutive impact on non-redeeming shareholders that any financing transactions associated with the de-SPAC transaction may have. Item 1604(b)(6) requires disclosure of the potential dilutive impact on non-redeeming shareholders of the rights of security holders to redeem their outstanding securities.
Item 1604(c) requires tabular disclosure of the impact from dilutive sources on net tangible book value per share, as adjusted, at intervals representing selected potential redemption levels that may occur across a reasonably likely range of outcomes. Specifically, Item 1604(c) requires disclosure of the net tangible book value per share, as adjusted, as if the selected redemption levels have occurred and to give effect to, while excluding the de-SPAC transaction itself, material probable or consummated transactions and other material effects on the SPAC's net tangible book value per share, as adjusted, from the de-SPAC transaction. The requirement in Item 1604(c) to provide these disclosures across “a reasonably likely range of outcomes” instead of the fixed quartiles required in Item 1602(c) will allow registrants to account for facts and circumstances that are unique to each SPAC and allow for more customized disclosures that still conform to a consistent and comparable format.
The tabular disclosure in Item 1604(c) is also required to include separate quantification of the dilutive impact from each source of dilution, which will provide detailed disaggregated information on the various sources of dilution.
Generally, we expect Item 1604(c) to result in similar benefits and costs as those discussed above with regard to dilution disclosures at the SPAC IPO stage.
The dilution disclosure at redemption levels across a “reasonably likely range of outcomes” required in Item 1604(c) will provide investors with information that should more accurately represent the dilution that they might experience if they choose not to redeem their shares, as compared to current disclosures.
Allowing registrants discretion to select “reasonably likely” redemption levels may impact the comparability of these disclosures across SPACs to the extent that the final rule results in tables with different numbers of chosen redemption scenarios or at different values or with differences in both respects. On the other hand, such allowance should result in registrants selecting redemption levels based on registrant-specific information (for example, if a PIPE investment has a firm commitment to buy if redemption thresholds are reached), which could result in disclosures that are more informative to investors. We expect the informational value of de-SPAC-transaction-specific redemption sensitivity will offset the reduced direct comparability across SPACs.
We expect some incremental compliance costs from Item 1604(c) for registrants in future de-SPAC transactions that did not already intend to provide disclosures similar in nature
Item 1605(a) through (c) of Regulation S-K require disclosure of the background of the de-SPAC transaction (
Item 1605(e) requires disclosure as to whether security holders are entitled to any redemption or appraisal rights, and if so, a summary of the redemption or appraisal rights. These disclosures should help investors to better understand their rights and assess the impact of any redemption or appraisal rights on a proposed de-SPAC transaction, including whether the existence of such rights might lead some investors to redeem their securities after voting in favor of a de-SPAC transaction.
Item 1605 could increase registrants' compliance costs related to de-SPAC transactions. The magnitude of the incremental increase in these costs will depend on the amount of information that SPACs and target companies would have intended to disclose in connection with future de-SPAC transactions in the absence of the final rule. Based on staff experience of market practice and current disclosure requirements, we expect registrants to have already planned to disclose much of what is required by Item 1605(a), (b), (d), and (e).
If the law of the jurisdiction in which the SPAC is organized requires its board of directors (or similar governing body) to determine whether the de-SPAC transaction is advisable and in the best interests of the SPAC and its shareholders, or otherwise make any comparable determination, Item 1606(a) requires disclosure of that determination. Item 1606(b) requires a discussion of the material factors considered in making the determination, including but not limited to, to the extent considered, the target company valuation, financial projections relied upon by the board of directors (or similar governing body) of the SPAC, and the terms of financing materially related to the de-SPAC transaction. Item 1606(c) through (e) require disclosure about the de-SPAC transaction, including whether a majority of unaffiliated security holders is required to approve the de-SPAC transaction, the involvement of any unaffiliated representative acting on behalf of unaffiliated security holders, whether the de-SPAC transaction was approved by a majority of the directors (or members of similar governing body) of the SPAC who are not employees of the SPAC, and if known after making reasonably inquiry, the reason behind any abstentions or votes against the transaction.
Investors should benefit from the requirements of Item 1606(a) and (b) as disclosure thereunder will reduce information asymmetry between the SPAC investors and the SPAC by providing information about the board's determination and decision making regarding the de-SPAC transaction. Information disclosed under Item 1606(c) through (e) will benefit investors by providing further details about the de-SPAC transaction bargaining and voting process, including important information regarding potential dissenting director votes, which could potentially mitigate conflicts of interest. These disclosures provide information that collectively should allow investors to understand the multiple factors undergirding the decisions of the board, thereby improving investment decision-making by investors in connection with the de-SPAC transaction.
We expect Item 1606(a) and (b) will result in limited increases in compliance costs for registrants because this information should be readily available to the SPAC as the directors are likely to have already assembled the information necessary to provide these disclosures in carrying out their fiduciary duties to the SPAC, and the disclosure is only required if the law of the jurisdiction in which the SPAC is organized requires such board determination.
One commenter raised the possibility that requiring the identification of members of the governing body that do not vote for the transaction (and the reasoning for their abstention or vote against) might disincentivize them to vote accordingly and “could also have the effect of inhibiting discussion among directors at board meetings.”
Item 1607(a) requires disclosure of the information required by Item 1607(b) if the SPAC or the SPAC sponsor received any report, opinion (other than an opinion of counsel), or appraisal from an outside party or an unaffiliated representative referred to in Item 1606(d) that materially relates to any determination disclosed in response to Item 1606(a), the approval of the de-SPAC transaction, the consideration or fairness of the consideration to be offered to security holders of the target company in the de-SPAC transaction, or the fairness of the de-SPAC transaction to the SPAC, its security holders, or SPAC sponsor. Item 1607(b) requires, among other things, disclosure about the preparer of the reports, opinions or appraisals referred to in Item 1607(a) or negotiations or reports described in response to Item 1606(d), and a summary of those negotiations, reports, opinions or appraisals.
The Item 1607 disclosures will help ensure that SPAC shareholders have access to information that the SPAC or a SPAC sponsor received from an outside party or unaffiliated representative (referred to in Item 1606(d)) when determining whether to proceed with a de-SPAC transaction. We expect this additional information will improve investors' ability to make informed investment decisions and thus will contribute to price efficiency of the combined company. Moreover, we expect the reduction in asymmetric information will contribute to improved liquidity of the combined company.
As discussed above, Item 1607 requires, among other things, with respect to certain reports, opinions, or appraisals: a summary of findings and recommendations; filing of the report, opinion, or appraisal; and a summary of the bases for and methods of arriving at the findings and recommendations. We expect the requirements of Item 1607 will improve investor investment decision-making. For example, the summary of findings and recommendations should help investors understand the report contents. Even where a report is brief, it may be written in a particular standardized format that the outside party requires in connection with all such reports they provide, which some investors may have difficulty understanding. The summary version disclosed in the filing may present the information in a narrative fashion that enhances investor understanding. If investors prefer additional details, they can consult the actual report filed with the filing that contains the summary. Additionally, the requirement to disclose the bases and methods underlying the findings should provide important information to the investor that may not be part of the report itself but may be necessary to understand the basis for the report's conclusions.
The Item 1607 disclosures should also help investors assess the reliability and relevance of the report. In particular, we expect disclosure related to compensation, method of selection, and material relationships will help investors understand the incentives, potential conflicts of interest, or potential biases that could influence the outside party in preparing the report, opinion, or appraisal. Similarly, we expect the disclosure requirements related to identity, qualifications, instructions, limitations on scope of the investigation, will help investors assess the relevance of the report to their assessment of the proposed combination.
We expect the cost of gathering the information necessary to make the required Item 1607 disclosures related to identity, qualifications, compensation, selection process, instructions and limitations on the scope of the investigation will not be significant because we expect that the information required will generally be readily available to the registrant or the outside party that prepared the report or both.
Regarding material relationships, we expect the limited two-year look-back period will limit the burden on the SPAC to research relevant past relationships. We expect the SPAC and SPAC sponsor (or advisor or other unaffiliated representative) will have this information readily available in internal records, such as agreements between the relevant persons or records of financial transactions. We expect, however, the SPAC or its advisors will incur some costs to perform additional research in order to ensure it has identified the affiliates of the outside party.
The incremental costs and benefits of the final rules will be somewhat mitigated to the extent that some of these disclosures would otherwise be required to comply with other rules, such as Regulation M-A or FINRA Rule 5150.
Item 1607(c) requires the filing of the relevant report, opinion, or appraisal. As a result of this requirement, registrants will need to ensure the report, opinion, or appraisal is formatted so it can be filed in EDGAR. Based on the Commission staff's experience, we do not expect registrants
The final rules may also impact the cost of obtaining third-party reports.
Finally, while Item 1607 does not mandate registrants to obtain any report, opinion, or appraisal, we acknowledge that it is possible that the requirement could prompt some registrants to obtain reports, opinions or appraisals to avoid the appearance of failing to adequately assess the target companies' prospects and financial condition. As discussed in the baseline, approximately 68% of de-SPAC transactions in 2022 did not disclose that a fairness opinion was obtained in connection with the transaction. Conversely, the requirement may also deter some SPACs from relying on third-party reports, choosing instead to rely on internal assessments (as Item 1607 does not apply to internal work product). As a result, some SPACs may fail to identify low-quality targets during the due-diligence process, to the extent that such internal assessments do not include the depth of analysis or expertise that would ordinarily be reflected in a fairness opinion. Finally, any impact of the rule on decisions to obtain third-party opinions or valuations could depend on the prospects of the target company. That is, sponsors may be more likely to seek third-party opinions for deals that they view as being more likely to result in favorable opinions.
We are adopting Item 1608 of Regulation S-K to codify the staff position that a Schedule TO filed in connection with a de-SPAC transaction should contain substantially the same information about a target company that is required under the proxy rules and clarify that a SPAC must comply with the procedural requirements of the tender offer rules when conducting any transaction for which a Schedule TO is filed, which includes extensions as well as de-SPAC transactions.
There were 23 Schedule TOs filed by 21 SPACs from 2020 to 2022.
Given that the staff has historically expressed the view that a Schedule TO
Item 1609 complements the amendments to Item 10(b) of Regulation S-K
If the projections relate to the performance of the SPAC, the rule requires a statement of whether or not the projections reflect the view of the SPAC's management or board about its future performance as of the most recent practicable date prior to the date of the disclosure document required to be disseminated to security holders. If the projections relate to the target company, the rule requires disclosure of whether the target company has affirmed to the SPAC that its projections reflect the view of the target company's management or board about its future performance as of the most recent practicable date prior to the date of the disclosure document required to be disseminated to security holders. If the projections no longer reflect the views of the SPAC's or the target company's management or board regarding the future performance of their respective companies as of the most recent practicable date prior to the date of the disclosure document required to be disseminated to security holders, the rule requires a statement of the purpose of disclosing the projections and the reasons for any continued reliance by the management or board on the projections.
We expect Item 1609, along with the amendments to Item 10(b), will result in improved disclosure about forward-looking information provided to investors, allowing them to better understand and consider the disclosed projections when making their investment decisions. We also expect that the final rules will result in increased standardization of the presentation of projections, which will further reduce information acquisition costs and facilitate comparisons across SPACs.
The required disclosure of preparers' identities and purposes for which the projections were prepared should mitigate information asymmetry between the SPAC and investors as those disclosures may reveal preparers' potential conflicts of interest or allow assessment of their qualifications or abilities to perform projections. This is expected to be beneficial as the existing academic literature provides evidence that SPAC projections are common but often overly optimistic.
We also expect the final rule will benefit investors by providing them with the information necessary to better determine the degree to which they may wish to rely on projections. Specifically, the requirement to discuss material bases and assumptions and their underlying rationales should enable investors to understand how the projections were derived, and subsequently how investors may choose to incorporate these projections into their expectations and decision-making. The requirement to disclose whether any projections disclosed in a filing still reflect the views of management or the board of the SPAC or target company (as the case may be) may also help investors evaluate the reliability of the projections. Because we expect the company that is the subject of the projections to have more information about itself than outsiders, this information also could reduce information asymmetry between the SPAC and/or target company and investors regarding the reliability of those projections. Overall, the adopted disclosure under Item 1609 should benefit investors by helping them assess whether and to what extent to rely on projections used in a de-SPAC transaction in making voting, redemption, and investment decisions.
As discussed above, Item 1609 requires registrants to identify providers of projections. Studies of the behavior of auditors of financial statements found that similar identification was associated with audit quality increases and misreporting decreases.
We do not expect the direct compliance costs of Item 1609(a) and (b) to be substantial because companies should have the required information readily available given that the information required to be disclosed largely is what is necessary to perform the projections in the first place.
However, there may be indirect costs to these amendments, such as registrants incurring increased liability costs
We also acknowledge that the requirements of Item 1609(c) may impose additional costs on SPACs due to the timing mismatch between the original preparation of projections and their inclusion in subsequent filings, as echoed by some commenters.
To the extent that Item 1609 elicits additional contextual information disclosures related to SPAC projections, investors could incur incremental costs in processing the added information.
As with the specialized disclosure requirements applicable to SPACs at the IPO stage as discussed above, Item 1610 also requires that the disclosures prepared in compliance with respective sections of subpart 1600 of Regulation S-K applicable to de-SPAC transactions be tagged in Inline XBRL.
Unlike the Inline XBRL tagging requirement being adopted for SPAC specialized disclosures, which applies to registration statements for IPOs, the tagging requirement being adopted for de-SPAC transaction disclosures typically will not impose a tagging obligation on a SPAC to which the SPAC was not previously subject because a SPAC would be subject to Inline XBRL tagging obligations as of their first periodic report on Form 10-Q, Form 20-F, or Form 40-F.
The final rules provide that, upon the consummation of a de-SPAC transaction, an issuer must re-determine its status as an SRC prior to its first filing, other than pursuant to Items 2.01(f), 5.01(a)(8), and/or 9.01(c) of Form 8-K, following the de-SPAC transaction and reflect this re-determination in its filings, beginning 45 days after consummation of the de-SPAC transaction. As an example of the effect of the final rules, consider a SPAC that qualifies as an SRC that conducts a de-SPAC transaction with a target company that results in a post-combination company that does not qualify as an SRC. Under current rules, the company would retain the SRC status throughout the fiscal year that includes its next re-determination date (at second fiscal quarter-end of that fiscal year), which could be up to 18 months if the de-SPAC transaction occurs at the beginning of the third quarter. In contrast, that same target
The final rules should result in a level of disclosure appropriate to the post-combination entity's facts and circumstances and be similar to those applicable in the traditional IPO setting. We expect this will reduce any regulatory arbitrage by requiring a target company going public through a de-SPAC transaction to provide an appropriate level of information to investors as it would were it to conduct a traditional IPO.
The re-determination of SRC status is based on annual revenues and the public float on the measuring day, with such public float being measured within the four-business day window following the de-SPAC transaction. The calculation of public float depends on the market price at which the common equity was last sold on that selected date, or the average of the bid and asked prices of the common equity. The public float calculation allows for secondary market trading to determine the public float of the SPAC used for SRC re-determination. To the extent that the secondary market might not reflect all the information about the post-combination business within four business days, this could result in an inappropriate determination of SRC status or lack thereof. However, this reflection of market price in SRC status determination exists at every second quarter-end
The final rules will increase compliance costs compared to the baseline for combined companies that do not meet the SRC definition as of the accelerated re-determination date. Those companies may need to provide more detailed disclosure to investors sooner after the de-SPAC transaction than they would under current disclosure requirements. To the extent that the amendment to the public float calculation timing creates an effective difference between the IPO and de-SPAC transaction settings, whereby the latter is affected by secondary market trading where the former is not, the effect of this difference is not expected to systematically generate inefficiencies with regards to the de-SPAC transaction setting. This is because the effect of market trading on the public float calculation could result in both increases and decreases in post-de-SPAC transaction public float (based on observations of historical de-SPAC outcomes).
A potential cost of the re-determination is that, under certain circumstances, a SPAC that qualifies as an SRC could file two years of audited financial statements in conjunction with the de-SPAC transaction, but then upon re-determination lose its SRC qualification, and potentially be required to include an additional year of audited financial statements in subsequent registration statements. This scenario would result in additional costs, such as engaging audit services for the additional historical year, that would not be incurred without the re-determination.
Some of the companies that lose SRC status but meet the EGC definition could avail themselves of the accommodations associated with EGC reporting requirements, which could mitigate some of the disclosure costs required by the adopted amendment.
We are adopting final rules that require a minimum dissemination period for registration statements, proxy statements, and information statements filed in connection with de-SPAC transactions.
The costs of this amendment, including printing and mailing costs, management time, and or consulting fees, may be limited by the fact that, under the baseline, SPACs may have incentives to provide the required disclosure materials in advance of a minimum deadline. For example, as retail ownership of its shares increases, a SPAC may face increasing pressure to communicate with its investors earlier, more extensively, and with greater frequency to ensure that a quorum will be present at the shareholder meeting to approve a de-SPAC transaction and that a sufficiently high number of votes are cast in favor of the transaction. In these cases, we do not expect the final rules will cause a change in behavior for firms already submitting these statements 20 calendar days or greater in advance.
The additional time required by the amendment could, in effect, shorten a SPAC's time to otherwise complete a business combination within its limited lifespan, and this amendment will remove the option value inherent in the existing flexibility in dissemination timing. Costs associated with adopting this proposal could also increase in proximity to the SPAC's dissolution date, because, under such conditions, logistical costs like expedited reviewing and printing would accrue.
Furthermore, because we are also adopting Rule 145a, which will require the filing of a registration statement or reliance on an exemption for a de-SPAC transaction, and because de-SPAC transactions can incorporate information by reference, we expect there may be few future de-SPAC transactions to which the minimum dissemination period requirement would impose an otherwise additional binding time constraint.
We are adopting amendments such that target companies in a de-SPAC transaction not subject to the reporting requirements of section 13(a) or 15(d) of the Exchange Act must include in their registration statement or schedule filed in connection with the de-SPAC, disclosures relating to the target company that would be provided in a Form S-1 or F-1 for an IPO. These final amendments would require disclosure with respect to the target comprising: (1) Item 101 (description of business); (2) Item 102 (description of property); (3) Item 103 (legal proceedings); (4) Item 304 (changes in and disagreements with accountants on accounting and financial disclosure); (5) Item 403 (security ownership of certain beneficial owners and management), assuming the completion of the de-SPAC transaction and any related financing transaction; and (6) Item 701 (recent sales of unregistered securities).
The costs and benefits of these final amendments depend on the baseline level of information available that is required to be disclosed in the Form 8-K with Form 10 information that is currently disclosed in advance of the filing of the Form 8-K.
Figure 3 shows the information that is incorporated by reference in the Forms 8-K filed in connection with de-SPAC transactions, as identified by the item requirement of Regulation S-K. Disclosures pursuant to Item 101 (description of business), Item 102 (description of property), and Item 103 (legal proceedings) of Regulation S-K are most commonly incorporated by reference. Less frequently incorporated by reference are disclosures pursuant to Item 304 (changes in and disagreements with accountants on accounting and financial disclosure), Item 403 (security ownership of certain beneficial owners and management, assuming the completion of the de-SPAC transaction and any related financing transaction), and Item 701 (recent sales of unregistered securities) of Regulation S-K.
These final amendments will ensure information about the target company is provided before shareholders potentially make voting, redemption, or investment decisions in connection with the de-SPAC transaction (whereas under the baseline this information is required to be included in a Form 8-K with Form 10 information that must be filed within 4 business days after the completion of a de-SPAC transaction). This timing change could reduce potential opportunities to engage in regulatory arbitrage, minimize differences in informational content, timing, and presentation, and potentially provide investors with more information about the target company when making such decisions, relative to the baseline. The benefits of such alignment to unaffiliated investors would depend on the ability of investors to otherwise procure such information prior to the filing of the Form 8-K with Form 10 information.
As a result of the final amendments, investors may obtain disclosure required by Item 403 of Regulation S-K regarding the target company's beneficial ownership structure before making a voting, redemption, or investment decision in connection with the de-SPAC transaction, which could, in some cases, represent a meaningful change to the informational environment in advance of the completion of a de-SPAC transaction, particularly when this information may be critical to an investor's ability to evaluate potential conflicts of interest. In addition, the disclosures may allow investors to identify potential misalignments of interests between non-redeeming shareholders and other parties to the de-SPAC transaction. The final amendments therefore should provide increased investor protections and generally improve the information environment for investors making a voting, redemption, or investment decision in connection with the de-SPAC transaction.
The final amendments require disclosure of information that must already be included in the “Super 8-K” filed after closing of the de-SPAC transaction. Thus, we expect the compliance costs of these amendments to be low to the extent they will primarily stem from the accelerated filing timeline for these disclosures (with the exception of cases involving failed de-SPAC transaction votes), although we recognize that some items may be more costly to disclose earlier than others. Further, these additional compliance costs should be limited to the extent they are consistent with
In addition to the rules discussed above pertaining to disclosures, we are adopting rules and amendments to clarify and amend the existing liability framework to resolve certain ambiguities and protect investors. In this section, we discuss the potential costs and benefits of requiring that the target company be treated as a co-registrant on a Form S-4, Form F-4, Form S-1, or Form S-4 filed in connection with a de-SPAC transaction. In addition, we discuss the amendment to the definitions of “blank check company” for purposes of the PSLRA to remove the “penny stock” condition.
Currently, a SPAC, the target company, or a holding company may file the registration statement for a de-SPAC transaction depending on the structure of the transaction. When the SPAC or holding company files the registration statement for a de-SPAC transaction, section 11 liability may not apply to the target company. Given that the target company effectively is an “issuer” of securities in a de-SPAC transaction regardless of transaction structure, the final rules will require that the target company and its related section 6(a) signatories sign these registration statements when filed by a SPAC or another shell company.
The primary benefit of this rule will be to align potential section 11 liability applicable to the target company in a de-SPAC transaction with such liability that may apply in a traditional IPO because, given that the transaction is essentially its IPO, it is the target company that, in substance, issues or proposes to issue its securities or, pursuant to new Rule 145a, the securities of the combined company.
A few commenters compared de-SPAC transactions and M&A transactions generally, in which targets typically do not sign a registration statement filed by the acquiror and do not share liability as a signing party. They argued that, if market forces ensure sufficient information about the target reaches investors in traditional M&A transactions, market forces should serve the same function in de-SPAC transactions.
Another reason we expect the final rules will produce a more optimal solution than reliance on existing market incentives is that we do not expect “inherited liability” of target company officials to effectively address the information asymmetry and incentive misalignment issues, as suggested by a few commenters.
The final rules regarding “co-registration” may be associated with additional administrative or other costs. First, in connection with the filing of the registration statement, the co-registrant requirements could increase compliance costs of target companies and introduce the prospect of new potential costs if the target company incurs section 11 liability. Compliance costs compared to the baseline may increase in cases where the target would not otherwise have been a registrant of
Second, target companies may elect to spend more money than under the baseline for directors and officers insurance coverage, although this would not be a direct compliance cost of the final rules. A number of commenters raised such concerns.
Third, depending on when the business combination closes, the target company may incur compliance costs in connection with periodic and current reporting, because, as a registrant of a de-SPAC transaction registration statement, once this registration statement is effective, the target company will become an Exchange Act reporting company.
Finally, we expect audit costs may increase for a minority of target companies as a result of the co-registration requirement. Under the current regulatory regime, filings of U.S. public companies must be audited by PCAOB-registered auditors, including financials of predecessor target companies.
These costs may be factors that a target company that seeks to become public considers when evaluating the route of a traditional IPO versus a de-SPAC transaction. As such, under the final rules, the additional costs for target companies, balanced against reduced adverse selection faced by investors, potentially drawing more investors to the SPAC market, may tilt the relative attractiveness of seeking a public listing away from a de-SPAC transaction towards a traditional IPO or away from public listing entirely. The extent to which these factors influence such a decision would depend on a variety of factors, such as target company preferences toward the de-SPAC transaction method of going public—based on views of the process such as its level of transaction costs, its timing, and its certainty of closing.
As discussed in section III.E, we are adopting new Securities Act and Exchange Act rule definitions of “blank check company” under the PSLRA. The effect of the final rules will be that the PSLRA statutory safe harbors will be unavailable for forward-looking statements made in connection with a de-SPAC transaction involving an offering of securities by a SPAC or other issuer meeting the final definitions of “blank check company.”
These provisions of the final rules have two related benefits: (1) an increase in the likelihood that such issuers will take more care in avoiding the use of unreasonable forward-looking statements, and (2) an increase in the likelihood that investors will have
First, the final rules will benefit investors by incentivizing SPACs and other blank check companies
It is possible the market already discounts to some extent overly optimistic claims in forward-looking statements by SPACs who were operating under the assumption that their disclosures were subject to PSLRA safe harbor protections, reducing the potential harm from such forward-looking statements that this rule is intended to ameliorate.
By incentivizing SPACs and other blank check companies to avoid unreasonable forward-looking statements, the final rules will also benefit investors and issuers by increasing the likelihood that those investors will have confidence that the forward-looking statements are reliable. If investors are aware that SPACs are taking greater care to avoid unreasonable forward-looking statements, investors may be able to analyze SPAC opportunities with greater precision, resulting in less adverse selection and encouraging investment and capital formation. Similar benefits will accrue to investors in registered securities offerings of non-SPAC registrants that meet the final definitions of “blank check company,” although this is less likely to have a significant impact on the overall market due to the limited number of business combinations involving these issuers, as observed in recent years.
Considering the final rules holistically, we note that Item 1609 of Regulation S-K, amended Item 10(b) of Regulation S-K, and other provisions of the final rules intended to increase investor awareness of potential conflicts of interest
This provision of the final rules may entail additional costs. First, SPACs and other blank check companies may experience greater legal and related costs in connection with defending actions brought against them under the Federal securities laws, particularly if the combined company that results from a business combination transaction underperforms relative to any forward-looking statements.
Second, SPACs and other blank check companies may incur additional costs related to efforts by these companies to ensure projections they provide investors are not unreasonable.
Third, given the potential legal and preparation costs, a SPAC or other blank check company may decide not to provide forward-looking statements it otherwise would have provided in connection with a business combination absent the final rules. In this case, investors may have less information, potentially negatively impacting their ability to accurately value these companies and allocate their investments accordingly to the extent such forward-looking statements would have been informative.
Fourth, if potential SPACs (or other blank check companies) or target companies determine forward-looking statement disclosures are necessary but are not willing to provide such statements without PSLRA protections, fewer SPACs could form and/or impacted blank check companies such as SPACs may decide not to enter into a business combination transaction, such as a de-SPAC transaction. In addition, potential target companies may decide not to go public by way of a de-SPAC transaction. In particular, as stated by a commenter, the combination of the increased liability associated with forward-looking statements and any State law fiduciary requirements to provide such disclosure could result in de-SPAC transactions, on net, facing more liability than IPOs, which have the ability to avoid such liability by not providing forward-looking projections.
In addition to the rules discussed above, we are also adopting rules and amendments to address further areas of incongruity in requirements that guide the disclosures and liabilities in the context of shell-companies more broadly, excluding those that are business combination related shell companies.
Rule 145a deems any business combination of a reporting shell company (that is not a business combination related shell company) involving an entity that is not a shell company to involve a sale of securities under the Securities Act to the reporting shell company's shareholders. To the extent that an exemption is unavailable for a de-SPAC transaction, the transaction must be registered. Rule 145a is intended to address concerns regarding the use of reporting shell companies generally as a means by which private companies access the U.S. capital markets. One reason for these concerns is that reporting shell company shareholders may not receive the Securities Act protections (including disclosure and liability) they receive in a traditional IPO because of transaction structure. Under the final rule, these deemed sales will need to be registered under the Securities Act unless there is an applicable exemption.
Currently, if a reporting shell company buys a target company by issuing its shares as consideration for the interests of the target shareholders, reporting shell company investors are unlikely to receive a Securities Act registration statement in connection with the transaction. In this example, the reporting shell company shareholders would not receive the protections afforded by the Securities Act, including any enhanced disclosure or liability that would be available if the transaction were registered under the Securities Act.
Rule 145a should provide shareholders in a reporting shell company that is not a business combination related shell company,
Under Rule 145a in certain business combination transactions where reporting shell companies, including SPACs, are parties, the combined company will be required to register the deemed sale of its securities to the pre-transaction reporting shell company shareholders at the time of the business combination, unless there is an available exemption. We expect this will increase costs in those cases where the business combination is not structured in a manner that otherwise would need to be registered. These costs could include, in the extreme case, all costs associated with conducting a registered offering of securities, such as preparing a Securities Act registration statement, if no exemption is available. The rule may also introduce opportunity costs in the form of transactions that might otherwise have occurred but would be disincentivized under the new requirements. For example, under current rules, a business combination involving a reporting shell company can be structured to avoid registration entirely, if, for example, any securities issued to the target company's shareholders in exchange for their interests in the target can be issued under an exemption. Because Rule 145a deems such a transaction to involve a sale to reporting shell company shareholders that will need to be registered (unless there is an applicable exemption), affected parties may opt not to pursue such a transaction to avoid the new transaction costs involved.
To the extent that the final rule requires the filing of a Securities Act registration statement, we expect extra costs associated with greater care in preparation and review of the disclosures therein due to the applicability of section 11.
Article 15 of Regulation S-X and related amendments aim to more closely align the financial statement reporting requirements in business combinations involving a shell company and a private operating company with those in traditional IPOs. These amendments should ensure the appropriate level of investor protections by reducing the potential for regulatory arbitrage by private companies that go public through a business combination with a shell company rather than a traditional IPO. Furthermore, the disclosure and audit requirements (
The final rules and amendments should allow investors to more readily locate and process relevant information and reduce processing costs, and should increase investor confidence in the reporting provided by entities involved in these business combinations.
Rule 15-01(a), in connection with the amendments to Rule 1-02(d) and related new instructions to Forms S-4 and F-4 aligns the level of audit assurance required in business combination transactions involving a shell company with that for an IPO. The rule requires the financial statements of a business that is or will be a predecessor to a shell company to be audited in accordance with the standards of the PCAOB, which are the same auditing standards required in an IPO registration statement. This amendment will codify existing staff guidance. Rule 15-01(a) permits non-predecessor businesses to be audited under PCAOB standards or U.S. GAAS, aligning with the audit standards that would be applied in an IPO registration statement.
Rule 15-01(a) should benefit investors by clarifying that the financial statements of a business that is or will be a predecessor to a shell company are to be audited in accordance with PCAOB standards consistent with a traditional IPO.
Under Rule 15-01(b), a shell company registrant will be permitted to include in its Form S-4/F-4/proxy or information statement balance sheets as of the end of the two most recent fiscal years and two years of statements of comprehensive income, changes in stockholders' equity, and cash flows for the target company where both the shell company and a target company would qualify as an EGC, and this determination would not be dependent on whether the shell company has filed or was already required to file its annual report. Rule 15-01(b) will align the number of years required to be disclosed in the financial statement between de-SPAC transactions and traditional IPOs.
For those transactions affected by the rule, registrants that qualify for EGC status and are not SRCs should benefit from reduced cost of producing audited financial statements because this rule will reduce the number of years of financial statements required from three years to two years. In those cases, this rule could cause some information loss for investors. However, investors would still have access to two years of financial statements for the target company, the same amount that would be required had the target company gone public via a traditional IPO. In addition, the omitted “third year” of financial statements would be the oldest information and thus may provide less incremental value to investors than the two most recent fiscal years.
Rule 15-01(c) provides that the age of financial statements for a business that will be acquired by a shell company in a registration statement or proxy statement will be based on the age requirements in Rule 3-12 or 8-08 of Regulation S-X, rather than the target company provisions in Item 17 of Form S-4. Because this amendment is generally consistent with existing market practice, we do not expect it to have significant economic effects for registrants or investors. This rule will align disclosure requirements across the different routes of going public, which may reduce compliance uncertainty for registrants and their predecessors and increase investor confidence.
Rule 15-01(d) requires application of Rule 3-05 or 8-04 (or Rule 3-14 or 8-06, respectively, as relates to a real estate operation), the Regulation S-X provisions related to financial statements of an acquired business or real estate operation, to an acquisition by a predecessor of a shell company registrant. This amendment is consistent with the current market practice of applying Rule 3-05 (or Rule 8-04) to acquisitions by the business that will be the predecessor, therefore we believe that the incremental benefits and costs should be limited.
Rule 15-01(d)(1) pertains to the calculation of significance tests and refers to Rule 1-02(w) of Regulation S-X, which we are amending as well, to require that the significance of the acquired business be calculated using the predecessor's financial information as the denominator instead of that of the shell company registrant. The use of the shell company registrant, which has nominal activity, for the denominator in materiality tests under current rules results in limited to no sliding scale for business acquisitions, including those made by the target company that will be the predecessor to the shell company because every acquisition would be significant and thus require financial statements. The adopted amendment may alleviate compliance burdens to the extent that it would no longer require inclusion of financial statements of acquired businesses or real estate operations that formerly would have been in excess of a significance test in Rule 1-02(w).
Rule 15-01(d)(2) requires a shell company that omits from a registration statement or proxy statement the financial statements of a recently acquired business or real estate operation that is not or will not be its predecessor pursuant to Rule 3-05(b)(4)(i) or 17 CFR 210.3-14(b)(3)(i) of Regulation S-X to file those financial statements in a Form 8-K by the later of the filing of the Item 2.01(f) Form 8-K or 75 days after consummation of the acquisition.
As a result of these final amendments, we expect registrants' compliance burden will likely be reduced. Although, the final amendments to the significance test may reduce the information available to investors about business acquisitions by the target company that will be the predecessor to the shell company, it may also reduce investors' information processing costs by focusing on financial statements of acquired businesses that are significant rather than those of all acquired businesses. We also believe any potential costs to investors as a result of decreases in disclosure may be mitigated by the fact that registrants must otherwise disclose material information about the acquisition that is necessary to make the required statements not misleading.
Rule 15-01(e) allows a registrant post combination to exclude the pre-acquisition financial statements of a shell company (including a SPAC) for periods prior to the business combination that results in the combined entity no longer being a shell company once the following conditions have been met: (1) the financial statements of the predecessor, as that term is used in financial reporting, have been filed for all required periods through the acquisition date, and (2) the financial statements of the combined entity registrant include the period in which the acquisition was consummated, which would also include the accounting for the business combination. In the vast majority of cases, the target is a predecessor business, and therefore, in effect, this rule requires historical financial information for the shell and target companies up to and including the acquisition, after which the financial statements of the shell can be omitted, because at that point they are not expected to continue providing investor relevant information (at least not beyond the extent to which they are reflected in the registrant's financials). Rule 15-01(e) has been revised from the proposal to clarify that similar requirements apply in cases where the target acquires the shell company. This will, in effect, apply the same requirement for reporting SPAC financials post-combination regardless of the structure of the de-SPAC transaction.
It is possible that Exchange Act Rule 12b-20 or Securities Act Rule 408(a), which both require disclosure of additional information “necessary to make the required statements, in the light of the circumstances under which they are made, not misleading,” could prompt firms to include these financials notwithstanding the newly final Rule 15-01(e), as mentioned by several commenters.
Rule 15-01(e) should reduce disclosure requirements for, and associated costs of disclosing, information that may no longer be relevant or meaningful to investors when the pre-business combination financial statements of the shell company are included in previous filings and the historical financial statements of the shell company likely are no longer representative of the combined company. To the extent that this rule is consistent with existing practice, whereby after a reverse recapitalization a registrant may omit historical SPAC financial statements once the financial statements of the combined company were reflected in a periodic filing, we do not expect this rule to result in a significant change in disclosure behavior. In addition, to the extent that the final rule extends the practice to forward acquisitions, we expect the final rule will reduce compliance costs related to continued filing of previous year financial statements of a shell company. Investors may also benefit from the increased efficiency in processing post-business combination filings that exclude uninformative historical SPAC financials.
We are adopting an amendment to Item 2.01(f) of Form 8-K, which will apply to all shell companies, that clarifies that the information required by Item 2.01(f) of Form 8-K should relate to the “acquired business that is its predecessor” and not the “registrant,” as currently stated in the Form 8-K. This amendment is intended to eliminate any potential misunderstanding as to the entity for which Item 2.01(f) disclosure is necessary. The increased clarity may reduce registrants' compliance costs to the extent there is currently any confusion. In turn, investors may also benefit from the timely disclosure of information about an “acquired business that is the predecessor” due to registrants' more consistent application of Item 2.01(f). We are also adopting revisions to Item 2.01(f) to Form 8-K stipulating that when the predecessor meets the conditions of an EGC, the registrant does not need to present audited financial statements of the predecessor for periods prior to the earliest of those presented in the de-SPAC registration, proxy, or information statement of the registrant. This amendment will harmonize the required disclosures of Form 10 information with the requirements of Rule 15-01(b) and should reduce registrants' compliance costs to the extent they were required to produce a greater number of years of audited financial statements under the baseline.
We are also adopting amendments to Rules 3-01, 8-02, and 10-01(a)(1) of Regulation S-X to clarify that the requirement of “balance sheets” would apply to both the registrant and its predecessors. Because these amendments codify existing financial reporting practices necessary for a complete set of financial statements, they should not impact registrants' compliance costs, and should reduce uncertainty regarding regulatory requirements.
Item 10(b) of Regulation S-K sets forth the Commission's views on important factors to be considered in formulating and disclosing projections in filings with the Commission. The final amendments update this guidance, broadening the scope of covered projections and adding detail on the formatting of disclosed projections. More specifically, the final amendments state that the guidelines also apply to projections of future economic
Due to these final amendments, investors should gain additional information and context to help them evaluate the reasonableness of the projections and make more informed investment decisions. For example, the final amendments related to historical financial results or operational history could inform investors about potential biases in the financial projections and help them more efficiently process the underlying assumptions, thereby potentially improving their investment decisions.
In addition, to the extent that registrants have not previously applied the Commission's guidance in Item 10(b) to third-party projections included in the registrant's filings and choose to do so as a result of the final amendments, investors may benefit from improved presentation with respect to any third-party projections in a registrant's filing.
To the extent that registrants follow the guidance in the amendments to Item 10(b), the incremental compliance costs are likely to be limited. Registrants should already have information about historical financial results or operational history and GAAP financial measures and should be able to easily obtain this information in connection with any included third-party estimates.
The final rules and amendments should enhance and standardize disclosure about specific aspects inherent to the SPAC structure at both the SPAC IPO stage and the de-SPAC transaction stage. Requiring the SPAC and the target company to provide such disclosure will provide market participants more information that is likely relevant to voting, redemption, and investment decisions. The final rules will also improve the standardization and comparability of disclosures through changes to the disclosure formatting and presentation, which should make it easier for investors to efficiently process information about SPACs and for market prices to reflect such information. Together we expect these changes to result in more efficient prices and deployment of invested capital.
The final rules, by adopting new definitions of “blank check company” under the PSLRA, should incentivize blank check companies that are not penny stock issuers and underwriters to exercise greater care to ensure any forward-looking disclosures are reasonable, increasing efficiency. The final rules regarding shell company business combination transactions (
By improving the informational environment at the SPAC IPO and the de-SPAC transaction stages through changes in disclosure requirements, we expect the final rules will allow investors to make better informed investment decisions which should encourage greater competition among SPAC sponsors, which would further benefit SPAC investors. For example, by increasing comparability through standardization of the disclosures provided regarding SPAC IPOs and de-SPAC transactions, the final rules should lead to improved investor awareness, greater transparency, and lower search costs. These improvements to the information available to investors should allow them to better differentiate between SPACs based on factors the investors deem important (such as costs or fees), and in response SPAC sponsors may be forced to compete for those better informed investors by offering better terms such as lower costs.
A reduction in shell company business combinations or activity in the SPAC market could reduce competition between SPAC sponsors or for investment opportunities in target companies.
Enhanced disclosure at both the SPAC IPO and the de-SPAC stages, combined with a stronger incentive to perform better due diligence at the de-SPAC transaction stage, should improve investor protection at both stages, as should the rules and amendments for shell company mergers. For example, Rule 145a will help shareholders of reporting shell companies more consistently receive the protections of the Securities Act in business combinations involving reporting shell companies, regardless of the transaction structure, which should reduce adverse selection and improve the availability and reliability of information for investors, incentivizing more investors to invest in reporting shell companies, including SPACs, thus enhancing capital formation.
If the final rules and amendments create significant costs for shell companies, including SPACs, this may reduce the number of private companies that go public through shell companies, including through de-SPAC transactions, and may reduce the overall number of companies that choose to go public. For example, one commenter asserted that the proposed rules would “overregulate SPACs to such a degree that they will no longer be viable vehicles for companies to access the public markets.”
In response to these comments and concerns, and as previously discussed, the final rules include provisions that reduce expected compliance costs relative to the proposal. However, given the potential increase in the cost of going public through a shell company merger, such as a de-SPAC transaction, compared to the current baseline, it is possible that some private companies could consider using the traditional IPO channel or a merger with a non-shell company as a more cost-effective alternative. We are not able to estimate how many companies would consider these alternatives if the cost of the overall SPAC transaction structure increases. It is possible, however, that a significant increase in the cost of shell company mergers and de-SPAC transactions could deter some private companies from going public and, thus, potentially reduce overall public offering activity and capital formation.
As an alternative to Item 1603, we considered whether to adopt a complementary requirement to describe or to file as an exhibit any policies and procedures used or to be used by a SPAC or by a target company to minimize potential or actual conflicts of interest related to disclosures provided in response to Items 1603(b) or to describe any SPAC policies and procedures related to duties of SPAC officers or directors owed to other companies in connection with disclosure required under Item 1603(c). We considered that such information could assist investors in gauging the economic significance, or lack thereof, of the various conflicts of interest given the presence, absence, and likely degree of effectiveness of the policies and procedures designed to address or ameliorate them. We also considered, on the other hand, that requiring this information would increase compliance costs for SPACs and target companies and could cause some of these companies to adopt policies and procedures that would not be efficient or cost-effective given their particular organizational structure and determined not to require this information in part for those reasons. Further, our determination not to adopt such a requirement was also based on our view that there are incentives to provide such disclosure voluntarily, as these disclosures would indicate to investors the degree to which conflicts of interest may be ameliorated.
We are requiring, in connection with de-SPAC transactions, the filing of certain reports, opinions (other than an opinion of counsel), or appraisals provided to the SPAC or a SPAC sponsor materially relating to any determination described in Item 1606(a), the approval of the de-SPAC transaction, the consideration or the fairness of the consideration to be offered to security holders of the target company in the de-SPAC transaction, or the fairness of the de-SPAC transaction to the SPAC, its security holders or SPAC sponsor (Item 1607) as exhibits to registration statements and schedules (or as part of the schedule if the
As an alternative, we considered requiring disclosure of only a summary of the reports, opinions, appraisals, and negotiations (without the requirement that the reports, opinions, and appraisals be filed). We considered that this could avoid costs of additional compensation third parties may require for providing reports that are suitable for public disclosure. At the same time, this alternative would reduce the benefits of the disclosure, as investors and market participants would have less information available to assess the quality and robustness of the analysis underlying such report, opinion, or appraisal.
As another alternative, we considered whether the re-determination for SRC status of the combined company following a de-SPAC transaction should require only a re-measurement of the revenue component of the SRC test and not its public float component. Generally, SRC status is re-determined on an annual basis at the end of the second fiscal quarter based on the issuer's public float on the last day of the second fiscal quarter, and, if there is no public float or there is a public float of between $250 million or more and $700 million, based as well on a determination of whether the annual revenues as of the most recently completed fiscal year for which audited financial statements are available are less than $100 million (where greater annual revenues than $100 million causes loss of SRC status). Revenues of the combined company may be more relevant to SRC status than public float because, generally, the target company has generated revenue while the SPAC has not done so.
Accordingly, the revenue test may be the more determinative factor than the public float test in determining whether the combined company following a de-SPAC transaction remains an SRC because, based on staff experience, the public float of most SPACs and subsequent combined companies typically is between $250 and $700 million, which exceeds the public float threshold for SRC status, unless the company's revenue is under $100 million. Also, the public float component of this test is measured as of the last business day of the issuer's most recently completed second fiscal quarter. Given that the public float re-measurement likely would not occur at the end of the second fiscal quarter when the annual public float measurement occurs, under the final rule the combined company may have to measure its public float more than one time during the same fiscal year, which may impose additional burdens for the company as compared to an alternative of using only revenue as the basis for determining SRC status following the de-SPAC, in which case public float would only need to be measured once during the annual re-determination period.
We considered, however, that compared to joint determination with the public float, revenue, if used as a sole basis of the significance test, may be subject to a greater degree of managerial discretion or manipulation.
As another alternative, we considered whether to change the scope of the Inline XBRL tagging requirements for the SPAC disclosures, such as by excluding certain subsets of registrants or disclosures. For example, the tagging requirements could have excluded the SPAC IPO disclosures. Under such an alternative, SPACs would have submitted IPO disclosures in unstructured HTML or ASCII and would not incur Inline XBRL compliance costs until their first periodic filing on Form 10-Q, 20-F, or 40-F.
We also considered requiring only the quantitative SPAC-related disclosures to be tagged in Inline XBRL. Excluding qualitative disclosures from the tagging requirements could have provided some incremental cost savings for registrants compared to the rule as adopted, because incrementally less time would have been required to select and review the particular tags to apply to quantitative disclosures. However, we expect these incremental cost savings would have been low because SPACs are subject to similar Inline XBRL requirements, including requirements to tag quantitative and qualitative disclosures, in other Commission filings.
Moreover, narrowing the scope of tagging requirements to exclude qualitative information would have diminished the extent of informational benefits that would accrue to investors by inhibiting the efficient extraction and searching of narrative SPAC-related disclosures (
With respect to the compliance date for tagging requirements, we could have added a separate phase-in period for SRCs and FPIs, as one commenter suggested.
As an alternative to disclosure of net tangible book value, as adjusted, to capture dilution incurred by non-redeeming shareholders, various commenters suggested a measure based on the net cash per share held by the SPAC prior to the de-SPAC transaction.
We believe that the net tangible book value as adjusted measure that we are adopting and the net cash per share alternative both generally capture expectations of the remaining amount of financing to be provided by the SPAC in the merger transaction, or, according to one commenter, “of the $10 that I am paying per share, how much will actually be invested in the post-merger company?”
Another alternative to the dilution table columns would be to require a fixed range of redemption levels, rather than the fixed range of
As an alternative to addressing the use of forward-looking statements in de-SPAC transactions and other business combinations involving blank check companies that are not penny stock issuers by adopting a “blank check company” definitions under the PSLRA, we could have issued interpretive guidance stating that the PSLRA safe harbor for forward-looking statements is not available because business combinations with shell companies that are not penny stock issuers are “initial public offerings” by target private operating companies for purposes of the PSLRA. This alternative would avoid
Rule 145a specifies that a sale occurs between the shareholders of a reporting shell company and the post-transaction company in situations where a reporting shell company that is not a business combination related shell company enters into a business combination transaction involving another entity that is not a shell company. As an alternative, instead of deeming all such transactions to be a sale that would need to be registered under the Securities Act, absent an applicable exemption, we could expand the disclosure requirements applicable to reporting shell company business combinations such that the disclosure requirements would be comparable to that which would have been required if the transaction was registered under the Securities Act. Under this alternative, regardless of the document that is filed with the Commission (
However, merely expanding the set of disclosures investors receive regardless of transaction structure does not provide investors with the same level of protection because the liability standards differ based on the type of filing, if any, that is required. Only by specifying that a sale occurs would investors necessarily receive all of the protections that apply in connection with all purchases and sales of securities under the Federal securities laws, such as the availability of private actions under section 10(b) and Rule 10b-5. In addition, to the extent there is not an available exemption for the reporting shell company business combination, only with Securities Act registration do investors receive the full panoply of available protections under that Act that they would receive in a traditional IPO, such as a private right of action under section 11.
The amendments to Item 10(b) of Regulation S-K present the Commission's updated views on projected performance measures and include a statement that projections based on a non-GAAP financial measure should include a clear definition or explanation of the non-GAAP measure, and a description of the GAAP financial measure to which it is most closely related. As an alternative to this guidance, we could have adopted a rule requiring firms, when providing projections, to present a reconciliation of projections based on a non-GAAP measure to those based on the nearest GAAP measure. While the reconciliation would further help investors understand the bases of projections involving non-GAAP measures, it would likely also increase compliance costs and in turn might reduce the provision of otherwise useful projections.
Certain provisions of our rules and forms that will be affected by the final rules contain “collection of information” requirements within the meaning of the Paperwork Reduction Act of 1995 (“PRA”).
The hours and costs associated with preparing, filing, and sending the forms constitute reporting and cost burdens imposed by each collection of information.
The forms, schedules, and regulations listed above were adopted under the Securities Act or the Exchange Act. These regulations, schedules, and forms set forth the disclosure requirements for registration statements, annual and quarterly reports, proxy and information statements, and tender offer statements filed by registrants to provide investors with information to make informed investment and voting decisions. Compliance with these information collections is mandatory to the extent applicable to each registrant. A description of the final rules, including the need for the information and its use, as well as a description of the likely respondents, may be found in sections II through V above, and a discussion of the economic effects of the final rules may be found in section VIII above.
The following PRA Table 1 summarizes the estimated effects of the final rules on the paperwork burdens associated with the affected forms and schedules.
In addition, we are adopting requirements that a post-business combination company re-determine whether it is an SRC following a de-SPAC transaction. Under the final rules, a post-business combination company is required to reflect this re-determination in its filings beginning 45 days after consummation of the de-SPAC transaction. We estimate that the re-determination of SRC status will result in increased burdens in filing Forms 10-K, Forms 10-Q, Schedules 14A, Schedules 14C, and Forms S-1 for those post-business combination companies that will lose SRC status, which takes into account the increased incremental burden in providing disclosures pursuant to non-SRC disclosure requirements. The following PRA Table 2 sets forth our estimates regarding the increase in compliance burden per filing when a post-business combination company loses SRC status:
At the outset, we note that the current OMB inventory for the above-referenced collections of information reflects an average rate of $400 per burden hour borne by outside professionals. Similarly, in the Proposing Release, the Commission used an estimated cost of $400 per hour, recognizing that the costs of retaining outside professionals may vary depending on the nature of the professional services.
Next, we estimate the incremental and aggregate increase in paperwork burden as a result of the final amendments. These estimates represent the average burden for all respondents, both large and small. In deriving our estimates, we recognize that the burdens will likely vary among individual respondents based on a number of factors, including the size and complexity of their business. These estimates include the time and the cost of preparing and reviewing disclosure and filing documents. We believe that some registrants will experience costs in excess of this average and some registrants will experience lower than the average costs. Our methodologies for deriving these estimates are discussed below.
Our estimates represent the burden for all SPACs that file registration statements with the Commission for registered offerings and all registrants that file disclosure documents in connection with a de-SPAC transaction or a business combination involving a shell company or a reporting shell company.
• SPACs will file an average of 90 registration statements each year for registered offerings on Form S-1 and eight registration statements on Form F-1, other than for de-SPAC transactions;
• Regarding filings made per year in connection with de-SPAC transactions, we estimate there will be an average of: 50 registration statements on Form S-4 and eight registration statements on Form F-4;
• An average of 20 registration statements on Form S-4 and two registration statements on Form F-4 will be filed each year for business combination transactions involving a reporting shell company that is not a business combination related shell company and a non-shell company, other than de-SPAC transactions.
For purposes of the PRA, the burden is allocated between internal burden hours and outside professional costs. The portion of the burden carried by outside professionals is reflected as a cost, while the portion of the burden carried by the company internally is reflected in hours. The following PRA Table 4 sets forth the percentage estimates we use for the burden allocation for each form and schedule, consistent with current OMB estimates and recent Commission rulemakings. We estimate that the average cost of retaining outside professionals is $600 per hour.
The following PRA Table 5 summarizes the estimated effects of the final new rules and amendments on the paperwork burdens associated with the affected forms, schedules, and records, including those effects related to Rule 145a, which have been broken out to demonstrate the impact of that rule on certain forms:
In addition, we estimate that an average of 50 fewer post-business combination companies following a de-SPAC transaction will qualify as SRCs than under the current rules until the next annual re-determination date.
The following PRA Table 6 summarizes the estimated effects of the re-determination of SRC status on the paperwork burdens associated with the affected forms and schedules:
The following PRA Table 7 summarizes the requested paperwork burden changes to existing information collections, including the estimated total reporting burdens and costs, under the final rules.
The Regulatory Flexibility Act (“RFA”)
We are adopting new subpart 1600 of Regulation S-K and amendments to existing forms and schedules to require certain disclosures in registered offerings by SPACs, including IPOs, and in disclosure documents for de-SPAC transactions with respect to, among other things, compensation paid to SPAC sponsors, conflicts of interest, and dilution. For de-SPAC transactions, we are also adopting final rules that require disclosure of a determination of the board of directors (or similar governing body) of the SPAC whether the de-SPAC transaction is advisable and in the best interests of the SPAC and its security holders if such a determination is required by the law of the jurisdiction in which the SPAC is organized or disclosure of any comparable determination that is required under such law, additional disclosures about the target company, a re-determination of SRC status following the completion of a de-SPAC transaction, and a minimum dissemination period for certain disclosure documents in these transactions. The final rules apply to, depending on the circumstances, registration statements on Forms S-1, F-1, S-4, and F-4 filed under the Securities Act and Schedules 14A, 14C, and TO under the Exchange Act. In addition, the first filing in which re-determination of SRC status following a de-SPAC transaction is reflected may be in a Form 10-K or Form 10-Q filing under the Exchange Act. The final rules also provide that if securities to be registered on Form S-4 or F-4 will be issued by a SPAC or another shell company in connection with a de-SPAC transaction, the registrants must also include the target company, except that in a de-SPAC transaction where the target company consists of a business or assets, the seller of the business or assets is deemed to be a registrant instead of the business or assets. Further, we are adopting: new definitions of “blank check company” under the PSLRA such that the safe harbor under the PSLRA for forward-looking information would not be available to SPACs and certain other blank check companies; updated and expanded guidance in Item 10(b) of Regulation S-K regarding the use of projections in Commission filings;
In regard to business combination transactions involving a reporting shell company,
The need for and objectives of the final rules are discussed in more detail in sections II through V above. We discuss the economic impact, including the estimated costs and burdens, of the final rules on all registrants, including small entities, in sections VIII and IX above.
In the Proposing Release, we requested comment on all aspects of the IRFA, including the number of small entities that would be affected by the proposed rules, the existence or nature of the potential impact of the proposals on small entities discussed in the analysis, how the proposed rules could further lower the burden on small entities, and how to quantify the impact of the proposed rules. While we did not receive any comments specifically addressing the IRFA, as discussed above, one commenter suggested that the Commission consider a phased-in compliance period for smaller reporting companies for the tagging requirements.
The final rules will affect registrants that are small entities. The RFA defines “small entity” to mean “small business,” “small organization,” or “small governmental jurisdiction.”
The final disclosure and other requirements applicable to SPACs would not apply to issuers that raise less than $5 million at the time of their IPOs.
In regard to final Rule 145a and the final amendments to Regulation S-X, we estimate that there are 136 non-SPAC reporting shell companies that are small entities.
We expect that the final disclosure and other requirements applicable to registrants, including target companies, will have an incremental effect on reporting, recordkeeping, and other compliance burdens for registrants (including target companies), including small entities. These requirements will increase compliance costs for registrants (including target companies), and compliance with these requirements will require the use of professional skills, including accounting, legal, and technical skills. We generally expect that the nature of any benefits and costs associated with the final rules to be similar for large and small entities. We also anticipate that the economic benefits and costs likely could vary among small entities based on a number of factors, such as the nature and conduct of their businesses, which makes it difficult to project the economic impact on small entities with precision. The final rules are discussed in detail in sections II through V above. We discuss the economic effects, including the estimated costs and burdens, of the final rules on all registrants (including target companies), including small entities, in sections VIII and IX above.
Final Rule 145a may impose reporting or compliance requirements and related costs on a small entity to the extent it would require such a small entity to register the transaction under the Securities Act or comply with an exemption from registration.
The final disclosure requirements in subpart 1600 of Regulation S-K partially duplicate and overlap with a number of existing disclosure requirements under Regulation S-K that are currently applicable to SPAC registered offerings and in de-SPAC transactions.
Other than these disclosure requirements, we believe that the final rules and amendments would not duplicate, overlap, or conflict with other Federal rules.
The RFA directs us to consider alternatives that would accomplish our stated objectives, while minimizing any significant adverse impact on small entities. Accordingly, we considered several alternatives, including the following:
• Establishing different compliance or reporting requirements or timetables that take into account the resources available to small entities;
• Clarifying, consolidating or simplifying compliance and reporting requirements under the rules for small entities;
• Using performance rather than design standards; and
• Exempting small entities from all or part of the requirements.
The final rules will enhance and clarify information provided to investors, including by enabling investors to make better informed decisions as to whether to purchase securities in SPAC registered offerings or to purchase or sell SPAC securities in secondary trading markets and as to voting, investment, redemption, and tender decisions in connection with de-SPAC transactions. Further, with respect to Rule 145a and co-registration requirements, as discussed above in sections III.C and IV.A, the final rules will help ensure that a private operating company's method of becoming a public company does not negatively impact the protection of investors. Due to the nature of SPAC transactions and the investor protection concerns discussed above, we believe that the final rules are equally appropriate for SPACs of all sizes that are engaged in a registered offering and for SPACs and target companies of all sizes that are engaged in a de-SPAC transaction because we believe investors should receive the enhanced protections of the final rules regardless of the size of the entity engaged in the SPAC transaction. For the same reason, we believe that the final rules that apply to shell companies and/or blank check companies, including SPACs, are equally appropriate for such shell companies and/or blank check companies of all sizes.
As discussed in section IV.A above, Rule 145a is designed to ensure that shareholders more consistently receive the full protections of Securities Act disclosure and liability provisions, as applicable, and that such investor protections will apply more consistently regardless of transaction structure. As a result, with respect to Rule 145a, we do not believe that it is appropriate to adopt different compliance or reporting requirements for small entities, to
The amendments to Regulation S-X that we are adopting would generally codify existing staff guidance on financial statement requirements for certain business combinations involving shell companies, and, based on staff analysis of disclosures in these transactions, we believe that most companies, including small entities, already report consistently with this staff guidance. The amendments are not expected to have any significant adverse effect on small entities (and are expected to reduce compliance burdens as discussed in sections VIII and IX). Accordingly, we do not believe that it is necessary: to exempt small entities from all or part of the amendments to Regulation S-X; to establish different compliance or reporting requirements for such entities; or to clarify, consolidate, or simplify compliance and reporting requirements for small entities. Furthermore, the final amendments to Regulation S-X regarding financial statement requirements use design standards to a greater degree than performance standards in order to promote consistency in financial reporting which benefits investors who use financial data in making investment decisions, including by comparing financial data across companies.
We are adopting the rule and form amendments contained in this document under the authority set forth in sections 6, 7, 10, 19(a), and 28 of the Securities Act; and sections 3, 12, 13, 14, 15, 23(a), and 36 of the Exchange Act.
Accountants, Accounting, Banks, Banking, Employee benefit plans, Holding companies, Insurance companies, Investment companies, Oil and gas exploration, Reporting and recordkeeping requirements, Securities, Utilities.
Administrative practice and procedure, Reporting and recordkeeping requirements, Securities.
For the reasons set out in the preamble, to the Commission is adopting amendments to title 17, chapter II of the Code of Federal Regulations as follows:
15 U.S.C. 77f, 77g, 77h, 77j, 77s, 77z-2, 77z-3, 77aa(25), 77aa(26), 77nn(25), 77nn(26), 78c, 78j-1, 78
(d)
(w) * * *
(1) The term
(a) There must be filed, for the registrant and its subsidiaries consolidated and for its predecessors, audited balance sheets as of the end of each of the two most recent fiscal years. If the registrant has been in existence for less than one fiscal year, there must be filed an audited balance sheet as of a date within 135 days of the date of filing the registration statement.
(b) * * *
(4) * * *
(ii) A registrant, other than a foreign private issuer required to file reports on Form 6-K (§ 249.306 of this chapter) or a shell company (other than a business combination related shell company), that omits from its initial registration statement financial statements of a recently consummated business acquisition pursuant to paragraph (b)(4)(i) of this section must file those financial statements and any pro forma information specified by §§ 210.11-01 through 210.11-03 (Article 11) under cover of Form 8-K (§ 249.308 of this chapter) no later than 75 days after consummation of the acquisition. When a predecessor to a shell company (other than a business combination related
(b) * * *
(3) * * *
(ii) A registrant, other than a foreign private issuer required to file reports on Form 6-K (§ 249.306 of this chapter) or shell company (other than a business combination related shell company), that omits from its initial registration statement financial statements of a recently consummated acquisition of a real estate operation pursuant to paragraph (b)(3)(i) of this section must file those financial statements and any pro forma information specified by §§ 210.11-01 through 210.11-03 (Article 11) under cover of Form 8-K (§ 249.308 of this chapter) no later than 75 days after consummation of the acquisition. When a predecessor to a shell company (other than a business combination related shell company) acquires a real estate operation and the financial statements of that recently consummated acquisition of a real estate operation are omitted from a registration statement or proxy statement pursuant to paragraph (b)(3)(i) of this section, refer to § 210.15-01(d)(2).
Smaller reporting companies must file an audited balance sheet for the registrant and its subsidiaries consolidated and for its predecessors as of the end of each of the most recent two fiscal years, or as of a date within 135 days if the issuer has existed for a period of less than one fiscal year, and audited statements of comprehensive income, cash flows and changes in stockholders' equity for each of the two fiscal years preceding the date of the most recent audited balance sheet (or such shorter period as the registrant has been in business).
(a) * * *
(1) Interim financial statements required by this section need only be provided as to the registrant and its subsidiaries consolidated and its predecessors and may be unaudited. Separate statements of other entities which may otherwise be required by this part may be omitted.
(a)
(b)
(c)
(d)
(1) See § 210.1-02(w)(1) for rules on applying the significance tests to acquisitions of a business or real estate operation that is not or will not be the predecessor.
(2) When the financial statements of a recently acquired business or real estate operation that is not or will not be the predecessor are omitted from a registration statement or proxy statement pursuant to § 210.3-05(b)(4)(i) (Rule 3-05(b)(4)(i) of Regulation S-X) or § 210.3-14(b)(3)(i) (Rule 3-14(b)(3)(i) of Regulation S-X), those financial statements must be filed in a Form 8-K by the later of the filing of the Form 8-K filed pursuant to Item 2.01(f) of Form 8-K or 75 days after consummation of the acquisition.
(e)
15 U.S.C. 77e, 77f, 77g, 77h, 77j, 77k, 77s, 77z-2, 77z-3, 77aa(25), 77aa(26), 77ddd, 77eee, 77ggg, 77hhh, 77iii, 77jjj, 77nnn, 77sss, 78c, 78i, 78j, 78j-3, 78
The revision and addition read as follows:
(b)
(1)
(2)
(ii) The presentation of projected measures that are not based on historical financial results or operational history should be clearly distinguished from projected measures that are based on historical financial results or operational history.
(iii) It generally would be misleading to present projections that are based on historical financial results or operational history without presenting such historical financial results or operational history with equal or greater prominence.
(iv) The presentation of projections that include non-GAAP financial measures should include a clear definition or explanation of those financial measures, a description of the Generally Accepted Accounting Principles (GAAP) financial measure to which it is most directly comparable, and an explanation why the non-GAAP measure was selected instead of a GAAP measure.
(f) * * *
(2) * * *
(iv) Upon the consummation of a de-SPAC transaction, as defined in § 229.1601(a) (Item 1601(a) of Regulation S-K), an issuer must re-determine its status as a smaller reporting company pursuant to the thresholds set forth in paragraph (f)(1) of this section prior to its first filing, other than pursuant to Items 2.01(f), 5.01(a)(8), and/or 9.01(c) of Form 8-K, following the de-SPAC transaction and reflect this re-determination in its
(A) Public float is measured as of a date within four business days after the consummation of the de-SPAC transaction and is computed by multiplying the aggregate worldwide number of shares of its voting and non-voting common equity held by non-affiliates as of that date by the price at which the common equity was last sold, or the average of the bid and asked prices of common equity, in the principal market for the common equity; and
(B) Annual revenues are the annual revenues of the target company, as defined in § 229.1601(d) (Item 1601(d) of Regulation S-K), as of the most recently completed fiscal year reported in the Form 8-K filed pursuant to Items 2.01(f), 5.01(a)(8), and/or 9.01(c) of Form 8-K.
The additions read as follows:
(a) * * *
(b) * * *
(98)
(101) * * *
(i) * * *
(D) Is required in any filing that is excluded by paragraphs (b)(101)(i)(A), (B), or (C) of this section, that contains any disclosure required by subpart 229.1600 of this part but only as to such disclosure.
For the purposes of this subpart:
(a)
(b)
(1) Indicated that its business plan is to:
(i) Conduct a primary offering of securities that is not subject to the requirements of § 230.419 of this chapter (Rule 419 under the Securities Act);
(ii) Complete a business combination, such as a merger, consolidation, exchange of securities, acquisition of assets, reorganization, or similar transaction, with one or more target companies within a specified time frame; and
(iii) Return proceeds from the offering and any concurrent offering (if such offering or concurrent offering intends to raise proceeds) to its security holders if the company does not complete a business combination, such as a merger, consolidation, exchange of securities, acquisition of assets, reorganization, or similar transaction, with one or more target companies within the specified time frame; or
(2) Represented that it pursues or will pursue a special purpose acquisition company strategy.
(c)
(d)
(a)
(1) State the time frame for the special purpose acquisition company to consummate a de-SPAC transaction and whether this time frame may be extended.
(2) State whether security holders will have the opportunity to redeem the securities offered and whether the redemptions will be subject to any limitations.
(3) State the amount of the compensation received or to be received by the SPAC sponsor, its affiliates, and promoters, the amount of securities issued or to be issued by the SPAC to the SPAC sponsor, its affiliates, and promoters and the price paid or to be paid for such securities, and whether this compensation and securities issuance may result in a material dilution of the purchasers' equity interests. Provide a cross-reference, highlighted by prominent type or in another manner, to the locations of related disclosures in the prospectus.
(4) Disclose in the tabular format specified below at quartile intervals based on percentages of the maximum redemption threshold: the offering price; as of the most recent balance sheet date filed, the net tangible book value per share, as adjusted, as if the offering and assumed redemption levels have occurred and to give effect to material probable or consummated transactions (other than the completion of a de-SPAC transaction); and the difference between the offering price and such net tangible book value per share, as adjusted. Provide a cross-reference, highlighted by prominent type or in another manner, to the locations of related disclosures in the prospectus:
(5) State whether there may be actual or potential material conflicts of interest between the SPAC sponsor, its affiliates, or promoters; and purchasers in the offering. Provide a cross-reference, highlighted by prominent type or in another manner, to the locations of related disclosures in the prospectus.
(b)
(1) The manner in which the special purpose acquisition company will identify and evaluate potential business combination candidates and whether it will solicit shareholder approval for the de-SPAC transaction;
(2) The material terms of the trust or escrow account and the amount or percentage of the gross offering proceeds that the special purpose acquisition company will place in the trust or escrow account;
(3) The material terms of the securities being offered, including redemption rights, and whether the securities are the same class as those held by the SPAC sponsor and its affiliates;
(4) The period of time in which the special purpose acquisition company intends to consummate a de-SPAC transaction and its plans in the event that it does not consummate a de-SPAC transaction within this time period, including whether, and if so, how, it may extend the time period; any limitations on extensions, including the number of times; the consequences to the SPAC sponsor of not completing an extension of this time period; and whether security holders will have voting or redemption rights with respect to such an extension;
(5) Any plans to seek additional financings and how the terms of additional financings may impact unaffiliated security holders;
(6) In a tabular format, the nature and amount of the compensation received or to be received by the SPAC sponsor, its affiliates, and promoters, the amount of securities issued or to be issued by the SPAC to the SPAC sponsor, its affiliates, and promoters and the price paid or to be paid for such securities, and, outside of the table, the extent to which this compensation and securities issuance may result in a material dilution of the purchasers' equity interests; and
(7) Any actual or potential material conflict of interest between the SPAC sponsor, its affiliates, or promoters; and purchasers in the offering, including those that may arise in determining whether to pursue a de-SPAC transaction.
(c)
(a)
(1) State the SPAC sponsor's name and describe the SPAC sponsor's form of organization.
(2) Describe the general character of the SPAC sponsor's business.
(3) Describe the experience of the SPAC sponsor, its affiliates, and any promoters in organizing special purpose acquisition companies and the extent to which the SPAC sponsor, its affiliates,
(4) Describe the material roles and responsibilities of the SPAC sponsor, its affiliates, and any promoters in directing and managing the special purpose acquisition company's activities.
(5) Describe any agreement, arrangement, or understanding between the SPAC sponsor and the special purpose acquisition company, its officers, directors, or affiliates with respect to determining whether to proceed with a de-SPAC transaction.
(6) Disclose the nature (
(7) Identify the controlling persons of the SPAC sponsor. Disclose, as of the most recent practicable date, the persons who have direct and indirect material interests in the SPAC sponsor, as well as the nature and amount of their interests.
(8) Describe any agreement, arrangement, or understanding, including any payments, between the SPAC sponsor and unaffiliated security holders of the special purpose acquisition company regarding the redemption of outstanding securities of the special purpose acquisition company.
(9) Disclose, in a tabular format to the extent practicable, the material terms of any agreement, arrangement, or understanding regarding restrictions on whether and when the SPAC sponsor and its affiliates may sell securities of the special purpose acquisition company, including the date(s) on which the agreement, arrangement, or understanding may expire; the natural persons and entities subject to such an agreement, arrangement, or understanding; any exceptions under such an agreement, arrangement, or understanding; and any terms that would result in an earlier expiration of such an agreement, arrangement, or understanding.
(b)
(1) The SPAC sponsor or its affiliates; the special purpose acquisition company's officers, directors, or promoters; or the target company's officers or directors; and
(2) Unaffiliated security holders of the SPAC.
(c)
(a)
(1) State the determination, if any, of the board of directors (or similar governing body) of the special purpose acquisition company disclosed in response to § 229.1606(a) (Item 1606(a) of Regulation S-K) and, if applicable, that the special purpose acquisition company or the SPAC sponsor has received a report, opinion, or appraisal referred to in § 229.1607(a) (Item 1607(a) of Regulation S-K).
(2) Describe briefly any material financing transactions that have occurred since the initial public offering of the special purpose acquisition company or will occur in connection with the consummation of the de-SPAC transaction.
(3) State the amount of the compensation received or to be received by the SPAC sponsor, its affiliates, and promoters in connection with the de-SPAC transaction or any related financing transaction; the amount of securities issued or to be issued by the SPAC to the SPAC sponsor, its affiliates, and promoters and the price paid or to be paid for such securities in connection with the de-SPAC transaction or any related financing transaction; and whether this compensation and securities issuance may result in a material dilution of the equity interests of non-redeeming shareholders who hold the securities until the consummation of the de-SPAC transaction. Provide a cross-reference, highlighted by prominent type or in another manner, to the locations of related disclosures in the prospectus.
(4) State whether, in connection with the de-SPAC transaction, there may be any actual or potential material conflict of interest, including any material conflict of interest that may arise in determining whether to proceed with a de-SPAC transaction and any material conflict of interest arising from the manner in which the special purpose acquisition company compensates a SPAC sponsor, officers, and directors or the manner in which a SPAC sponsor compensates its officers and directors, between: on one hand, the SPAC sponsors, their affiliates, SPAC officers, SPAC directors, or promoters, target company officers or target company directors; and, on the other hand, unaffiliated security holders of the SPAC. Provide a cross-reference, highlighted by prominent type or in another manner, to the locations of related disclosures in the prospectus.
(b)
(1) The background and material terms of the de-SPAC transaction;
(2) The determination, if any, of the board of directors (or similar governing body) of the special purpose acquisition company disclosed in response to § 229.1606(a) (Item 1606(a) of Regulation S-K), the material factors that the board of directors (or similar governing body) of the special purpose acquisition company considered in making such determination, and any report, opinion, or appraisal referred to in § 229.1607(a) (Item 1607(a) of Regulation S-K);
(3) In connection with the de-SPAC transaction, any actual or potential material conflict of interest between:
(i) The SPAC sponsor, SPAC officers, SPAC directors, SPAC affiliates or promoters, target company officers, or target company directors; and
(ii) Unaffiliated security holders of the SPAC;
(4) In a tabular format, the terms and amount of the compensation received or
(5) The material terms of any material financing transactions that have occurred or will occur in connection with the consummation of the de-SPAC transaction, the anticipated use of proceeds from these financing transactions and the dilutive impact, if any, of these financing transactions on non-redeeming shareholders; and
(6) The rights of security holders to redeem the outstanding securities of the special purpose acquisition company and the potential dilutive impact of redemptions on non-redeeming shareholders.
(c)
(1) With respect to each redemption level, state the company valuation at or above which the potential dilution results in the amount of the non-redeeming shareholders' interest per share being at least the initial public offering price per share of common stock.
(2) Provide a description of the model, methods, assumptions, estimates, and parameters necessary to understand the tabular disclosure.
(a) Provide a summary of the background of the de-SPAC transaction. Such summary must include a description of any contacts, negotiations, or transactions that have occurred concerning the de-SPAC transaction.
(b) State the material terms of the de-SPAC transaction, including but not limited to:
(1) A brief description of the de-SPAC transaction;
(2) A brief description of any related financing transaction, including any payments from the SPAC sponsor to investors in connection with the financing transaction;
(3) A reasonably detailed discussion of the reasons of the SPAC and the target company for engaging in the de-SPAC transaction and reasons of the SPAC for the structure and timing of the de-SPAC transaction and any related financing transaction;
(4) An explanation of any material differences in the rights of SPAC and target company security holders as compared with security holders of the combined company as a result of the de-SPAC transaction;
(5) A brief statement as to the accounting treatment of the de-SPAC transaction; and
(6) The Federal income tax consequences of the de-SPAC transaction to the SPAC, the target company, and their respective security holders.
(c) Describe the effects of the de-SPAC transaction and any related financing transaction on the special purpose acquisition company and its affiliates, the SPAC sponsor and its affiliates, the target company and its affiliates, and unaffiliated security holders of the special purpose acquisition company. The description must include a reasonably detailed discussion of both the benefits and detriments of the de-SPAC transaction and any related financing transaction to the special purpose acquisition company and its affiliates, the SPAC sponsor and its affiliates, the target company and its affiliates, and unaffiliated security holders of the special purpose acquisition company. The benefits and detriments of the de-SPAC transaction and any related financing transaction must be quantified to the extent practicable.
(d) Disclose any material interests in the de-SPAC transaction or any related financing transaction: held by the SPAC sponsor or the special purpose acquisition company's officers or directors, including fiduciary or contractual obligations to other entities as well as any interest in, or affiliation with, the target company; or held by the target company's officers or directors that consist of any interest in, or affiliation with, the SPAC sponsor or the special purpose acquisition company.
(e) State whether or not security holders are entitled to any redemption or appraisal rights. If so, summarize the redemption or appraisal rights. If there are no redemption or appraisal rights available for security holders who object to the de-SPAC transaction, briefly outline any other rights that may be available to security holders.
(a)
(b)
(c)
(d)
(e)
(a)
(1) Any determination disclosed in response to § 229.1606(a) (Item 1606(a) of Regulation S-K);
(2) The approval of the de-SPAC transaction;
(3) The consideration or the fairness of the consideration to be offered to security holders of the target company in the de-SPAC transaction; or
(4) The fairness of the de-SPAC transaction to the special purpose acquisition company, its security holders, or SPAC sponsor.
(b)
(1) Identify the outside party and/or unaffiliated representative;
(2) Briefly describe the qualifications of the outside party and/or unaffiliated representative;
(3) Describe the method of selection of the outside party and/or unaffiliated representative;
(4) Describe any material relationship that existed during the past two years or is mutually understood to be contemplated and any compensation received or to be received as a result of the relationship between:
(i) The outside party, its affiliates, and/or unaffiliated representative; and
(ii) The special purpose acquisition company, the SPAC sponsor and/or their respective affiliates;
(5) If the report, opinion, or appraisal relates to the fairness of the consideration to be offered to security holders of the target company in the de-SPAC transaction, state whether the special purpose acquisition company or SPAC sponsor determined the amount of consideration to be paid to the target company or its security holders, or the valuation of the target company, or whether the outside party and/or unaffiliated representative recommended the amount of consideration to be paid or the valuation of the target company; and
(6) Furnish a summary concerning the negotiation, report, opinion, or appraisal. The summary must include but need not be limited to: the procedures followed; the findings and recommendations; the bases for and methods of arriving at such findings and recommendations; instructions received from the special purpose acquisition company or SPAC sponsor; and any limitation imposed by the special purpose acquisition company or SPAC sponsor on the scope of the investigation.
(c)
If the special purpose acquisition company files a Schedule TO (§ 240.14d-100 of this chapter) pursuant to § 240.13e-4(c)(2) of this chapter (Rule 13e-4(c)(2)) for any redemption of securities offered to security holders, such Schedule TO must provide the information required by General Instruction L.2. to Form S-4, General Instruction I.2. to Form F-4, and Item 14(f)(2) of Schedule 14A (§ 240.14a-101 of this chapter), as applicable, in addition to the information otherwise required by Schedule TO. Such redemption must be conducted in compliance with all other provisions of §§ 240.13e-4 (Rule 13e-4) and 240.14e-1 through 240.14e-8 (Regulation 14E) of this chapter.
(a) With respect to any projections disclosed in the filing (or any exhibit thereto), disclose the purpose for which the projections were prepared and the party that prepared the projections.
(b) Disclose all material bases of the disclosed projections and all material assumptions underlying the projections, and any material factors that may affect such assumptions. The disclosure referred to in this section should include a discussion of any material growth or reduction rates or discount rates used in preparing the projections, and the reasons for selecting such growth or reduction rates or discount rates.
(c) If the projections relate to the performance of the special purpose acquisition company, state whether or not the projections reflect the view of the special purpose acquisition company's management or board of directors (or similar governing body) about its future performance as of the most recent practicable date prior to the date of the disclosure document required to be disseminated to security holders. If the projections relate to the target company, disclose whether or not the target company has affirmed to the special purpose acquisition company that its projections reflect the view of the target company's management or board of directors (or similar governing body) about its future performance as of the most recent practicable date prior to the date of the disclosure document required to be disseminated to security holders. If the projections no longer reflect the views of the special purpose acquisition company's or the target company's management or board of directors (or similar governing body) regarding the future performance of
Provide the disclosure required by this subpart in an Interactive Data File in accordance with §§ 232.405 (Rule 405 of Regulation S-T) and 232.301 (the EDGAR Filer Manual) of this chapter.
15 U.S.C. 77b, 77b note, 77c, 77d, 77f, 77g, 77h, 77j, 77r, 77s, 77z-3, 77sss, 78c, 78d, 78j, 78
With respect to a reporting shell company's shareholders, any direct or indirect business combination of a reporting shell company that is not a business combination related shell company involving another entity that is not a shell company, as those terms are defined in § 230.405, is deemed to involve an offer, offer to sell, offer for sale, or sale within the meaning of section 2(a)(3) of the Act. For purposes of this section, a reporting shell company is a company other than an asset-backed issuer as defined in § 229.1101(b) of this chapter (Item 1101(b) of Regulation AB), that has:
(a) No or nominal operations;
(b) Either:
(1) No or nominal assets;
(2) Assets consisting solely of cash and cash equivalents; or
(3) Assets consisting of any amount of cash and cash equivalents and nominal other assets; and
(c) An obligation to file reports under section 13 (15 U.S.C. 78m) or section 15(d) (15 U.S.C. 78
The additions read as follows:
(3)
(iv) Upon the consummation of a de-SPAC transaction, as defined in § 229.1601(a) of this chapter (Item 1601(a) of Regulation S-K), an issuer must re-determine its status as a smaller reporting company pursuant to the thresholds set forth in paragraphs (1) and (2) of this definition prior to its first filing, other than pursuant to Items 2.01(f), 5.01(a)(8), and/or 9.01(c) of Form 8-K, following the de-SPAC transaction and reflect this re-determination in its filings beginning 45 days after consummation of the de-SPAC transaction.
(A) Public float is measured as of a date within four business days after the consummation of the de-SPAC transaction and is computed by multiplying the aggregate worldwide number of shares of its voting and non-voting common equity held by non-affiliates as of that date by the price at which the common equity was last sold, or the average of the bid and asked prices of common equity, in the principal market for the common equity; and
(B) Annual revenues are the annual revenues of the target company, as defined in § 229.1601(d) of this chapter (Item 1601(d) of Regulation S-K), as of the most recently completed fiscal year reported in the Form 8-K filed pursuant to Items 2.01(f), 5.01(a)(8), and/or 9.01(c) of Form 8-K.
15 U.S.C. 77c, 77f, 77g, 77h, 77j, 77s(a), 77z-3, 77sss(a), 78c(b), 78
The revisions and addition read as follows:
This section applies to electronic filers that submit Interactive Data Files. Section 229.601(b)(101) of this chapter (Item 601(b)(101) of Regulation S-K), General Instruction F of § 249.311 of this chapter (Form 11-K), paragraph (101) of Part II—Information Not Required to be Delivered to Offerees or Purchasers of § 239.40 of this chapter (Form F-10), § 240.13a-21 of this chapter (Rule 13a-21 under the Exchange Act), paragraph 101 of the Instructions as to Exhibits of § 249.220f of this chapter (Form 20-F), paragraph B.(15) of the General Instructions to § 249.240f of this chapter (Form 40-F), paragraph C.(6) of the General Instructions to § 249.306 of this chapter (Form 6-K), § 240.17Ad-27(d) of this chapter (Rule 17Ad-27(d) under the Exchange Act), Note D.5 of § 240.14a-101 of this chapter (Rule 14a-101 under the Exchange Act), Item 1 of § 240.14c-101 of this chapter (Rule 14c-101 under the Exchange Act), General Instruction L of § 240.14d-100 of this chapter (Rule 14d-100 under the Exchange Act), General Instruction I of § 249.333 of this chapter (Form F-SR), General Instruction C.3.(g) of §§ 239.15A and 274.11A of this chapter (Form N-1A), General Instruction I of §§ 239.14 and 274.11a-1 of this chapter (Form N-2), General Instruction C.3.(h) of §§ 239.17a and 274.11b of this chapter (Form N-3), General Instruction C.3.(h) of §§ 239.17b and 274.11c of this chapter (Form N-4), General Instruction C.3.(h) of §§ 239.17c and 274.11d of this chapter (Form N-6), General Instruction 2.(
(a) * * *
(2) Be submitted only by an electronic filer either required or permitted to submit an Interactive Data File as specified by § 229.601(b)(101) of this chapter (Item 601(b)(101) of Regulation S-K), General Instruction F of § 249.311 (Form 11-K), paragraph (101) of Part II—Information Not Required to be Delivered to Offerees or Purchasers of § 239.40 of this chapter (Form F-10), § 240.13a-21 of this chapter (Rule 13a-21 under the Exchange Act), paragraph 101 of the Instructions as to Exhibits of § 249.220f of this chapter (Form 20-F), paragraph B.(15) of the General Instructions to § 249.240f of this chapter (Form 40-F), paragraph C.(6) of the General Instructions to § 249.306 of this chapter (Form 6-K), Rule 17Ad-27(d) under the Exchange Act, Note D.5 of Rule 14a-101 under the Exchange Act, Item 1 of Rule 14c-101 under the Exchange Act, General Instruction L of § 240.14d-100 of this chapter (Rule 14d-100 under the Exchange Act), General Instruction I to § 249.333 of this chapter (Form F-SR), General Instruction C.3.(g) of §§ 239.15A and 274.11A of this chapter (Form N-1A), General Instruction I of §§ 239.14 and 274.11a-1 of this chapter (Form N-2), General Instruction C.3.(h) of §§ 239.17a and 274.11b of this chapter (Form N-3), General Instruction C.3.(h) of §§ 239.17b and 274.11c of this chapter (Form N-4), General Instruction C.3.(h) of §§ 239.17c and 274.11d of this chapter (Form N-6), General Instruction 2.(
(4) Be submitted in accordance with the EDGAR Filer Manual and, as applicable, § 229.601(b)(101) of this chapter (Item 601(b)(101) of Regulation S-K), paragraph (101) of Part II—Information Not Required to be Delivered to Offerees or Purchasers of § 239.40 of this chapter (Form F-10), § 240.13a-21 of this chapter (Rule 13a-21 under the Exchange Act), paragraph 101 of the Instructions as to Exhibits of § 249.220f of this chapter (Form 20-F), paragraph B.(15) of the General Instructions to § 249.240f of this chapter (Form 40-F), paragraph C.(6) of the General Instructions to § 249.306 of this chapter (Form 6-K), § 240.17Ad-27(d) of this chapter (Rule 17Ad-27(d) under the Exchange Act), Note D.5 of § 240.14a-101 of this chapter (Rule 14a-101 under the Exchange Act), Item 1 of § 240.14c-101 of this chapter (Rule 14c-101 under the Exchange Act), General Instruction L of § 240.14d-100 of this chapter (Rule 14d-100 under the Exchange Act), General Instruction I to § 249.333 of this chapter (Form F-SR), General Instruction C.3.(g) of §§ 239.15A and 274.11A of this chapter (Form N-1A), General Instruction I of §§ 239.14 and 274.11a-1 of this chapter (Form N-2), General Instruction C.3.(h) of §§ 239.17a and 274.11b of this chapter (Form N-3), General Instruction C.3.(h) of §§ 239.17b and 274.11c of this chapter (Form N-4), General Instruction C.3.(h) of §§ 239.17c and 274.11d of this chapter (Form N-6); General Instruction 2.(
(b) * * *
(4) * * *
(vi) The information required by §§ 229.1601 through 229.1610 of this chapter (subpart 1600 of Regulation S-K).
Section 229.601(b)(101) of this chapter (Item 601(b)(101) of Regulation S-K) specifies the circumstances under which an Interactive Data File must be submitted and the circumstances under which it is permitted to be submitted, with respect to §§ 239.11 (Form S-1), 239.13 (Form S-3), 239.25 (Form S-4), 239.18 (Form S-11), 239.31 (Form F-1), 239.33 (Form F-3), 239.34 (Form F-4), 249.310 (Form 10-K), 249.308a (Form 10-Q), and 249.308 (Form 8-K) of this chapter. General Instruction F of § 249.311 of this chapter (Form 11-K) specifies the circumstances under which an Interactive Data File must be submitted, and the circumstances under which it is permitted to be submitted, with respect to Form 11-K. Paragraph (101) of Part II—Information not Required to be Delivered to Offerees or Purchasers of § 239.40 of this chapter (Form F-10) specifies the circumstances under which an Interactive Data File must be submitted and the circumstances under which it is permitted to be submitted, with respect to Form F-10. Paragraph 101 of the Instructions as to Exhibits of § 249.220f of this chapter (Form 20-F) specifies the circumstances under which an Interactive Data File must be submitted and the circumstances under which it is permitted to be submitted, with respect to Form 20-F. Paragraph B.(15) of the General Instructions to § 249.240f of this chapter (Form 40-F) and Paragraph C.(6) of the General Instructions to § 249.306 of this chapter (Form 6-K) specify the circumstances under which an Interactive Data File must be submitted and the circumstances under which it is permitted to be submitted, with respect to §§ 249.240f (Form 40-F) and 249.306 (Form 6-K) of this chapter. Section 240.17Ad-27(d) of this chapter (Rule 17Ad-27(d) under the Exchange Act) specifies the circumstances under which an Interactive Data File must be submitted with respect the reports required under Rule 17Ad-27. Note D.5 of § 240.14a-101 of this chapter (Schedule 14A) and Item 1 of § 240.14c-101 of this chapter (Schedule 14C) specify the circumstances under which an Interactive Data File must be submitted with respect to Schedules 14A and 14C. General Instruction L of § 240.14d-100 of this chapter (Schedule TO) specifies the circumstances under which an Interactive Data File must be submitted with respect to Schedule TO. Section 240.13a-21 of this chapter (Rule 13a-21 under the Exchange Act) and General Instruction I to § 249.333 of this chapter (Form F-SR) specify the circumstances under which an Interactive Data File must be submitted, with respect to Form F-SR. §§ 242.829 and 242.831 of this chapter (Rules 829 and 831 of Regulation SE) and the Registration Instructions to § 249.1701 of this chapter (Form SBSEF), as applicable, specify the circumstances under which an Interactive Data File must be submitted with respect to filings made under Regulation SE. Item 601(b)(101) of Regulation S-K, paragraph (101) of Part II—Information not Required to be Delivered to Offerees or Purchasers of Form F-10, paragraph 101 of the Instructions as to Exhibits of Form 20-F, paragraph B.(15) of the General Instructions to Form 40-F, and paragraph C.(6) of the General Instructions to Form 6-K all prohibit submission of an Interactive Data File by an issuer that prepares its financial statements in accordance with §§ 210.6-01 through 210.6-10 of this chapter (Article 6 of Regulation S-X). For an issuer that is a management investment company or separate account registered under the Investment Company Act of 1940 (15 U.S.C. 80a
15 U.S.C. 77c, 77f, 77g, 77h, 77j, 77s, 77z-2, 77z-3, 77sss, 78c, 78
Sections 239.31, 239.32 and 239.33 are also issued under 15 U.S.C. 78
Form S-1 is attached as appendix A to this document. Form S-1 will not appear in the Code of Federal Regulations.
Form S-4 is attached as appendix B to this document. Form S-4 will not appear in the Code of Federal Regulations.
Form F-1 is attached as appendix C to this document. Form F-1 will not appear in the Code of Federal Regulations.
Form F-4 is attached as appendix D to this document. Form F-4 will not appear in the Code of Federal Regulations.
15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77z-3, 77eee, 77ggg, 77nnn, 77sss, 77ttt, 78c, 78c-3, 78c-5, 78d, 78e, 78f, 78g, 78i, 78j, 78j-1, 78j-4, 78k, 78k-1, 78
Sections 240.12b-1 to 240.12b-36 also issued under secs. 3, 12, 13, 15, 48 Stat. 892, as amended, 894, 895, as amended; 15 U.S.C. 78c, 78
Sections 240.14c-1 to 240.14c-101 also issued under sec. 14, 48 Stat. 895; 15 U.S.C. 78n;
The additions read as follows:
(3) * * *
(iv) Upon the consummation of a de-SPAC transaction, as defined in § 229.1601(a) of this chapter (Item 1601(a) of Regulation S-K), an issuer must re-determine its status as a smaller reporting company pursuant to the thresholds set forth in paragraphs (1) and (2) of this definition prior to its first filing, other than pursuant to Items 2.01(f), 5.01(a)(8), and/or 9.01(c) of Form 8-K, following the de-SPAC transaction and reflect this re-determination in its filings, beginning 45 days after consummation of the de-SPAC transaction.
(A) Public float is measured as of a date within four business days after the consummation of the de-SPAC transaction and is computed by multiplying the aggregate worldwide number of shares of its voting and non-voting common equity held by non-affiliates as of that date by the price at which the common equity was last sold, or the average of the bid and asked prices of common equity, in the principal market for the common equity; and
(B) Annual revenues are the annual revenues of the target company, as defined in § 229.1601(d) of this chapter (Item 1601(d) of Regulation S-K), as of the most recently completed fiscal year reported in the Form 8-K filed pursuant to Items 2.01(f), 5.01(a)(8), and/or 9.01(c) of Form 8-K.
(q)
The additions read as follows:
(f)
(2) Provide the following additional information for the target company:
(i) Information required by § 229.101 (Item 101 of Regulation S-K, description of business);
(ii) Information required by § 229.102 (Item 102 of Regulation S-K, description of property);
(iii) Information required by § 229.103 (Item 103 of Regulation S-K, legal proceedings);
(iv) Information required by § 229.304 (Item 304 of Regulation S-K, changes in and disagreements with accountants on accounting and financial disclosure);
(v) Information required by § 229.403 (Item 403 of Regulation S-K, security ownership of certain beneficial owners and management), assuming the completion of the de-SPAC transaction and any related financing transaction; and
(vi) Information required by § 229.701 (Item 701 of Regulation S-K, recent sales of unregistered securities).
(b) If the transaction is a de-SPAC transaction, as defined in § 229.1601(a) (Item 1601(a) of Regulation S-K), all reports, opinions, or appraisals required to be filed or included by § 229.1607(c) (Item 1607(c) of Regulation S-K); and
(e) If a transaction is a de-SPAC transaction, as defined in § 229.1601(a) of this chapter (Item 1601(a) of Regulation S-K), the information statement of the special purpose acquisition company, as defined in § 229.1601(b) (Item 1601(b) of Regulation S-K), must be distributed to security holders no later than the lesser of 20 calendar days prior to the date on which the meeting of security holders is to be held or action is to be taken in connection with the de-SPAC transaction or the maximum number of days permitted for disseminating the information statement under the applicable laws of the jurisdiction of incorporation or organization.
The additions read as follows:
General Instructions:
K. If the filing relates to a de-SPAC transaction, as defined in § 229.1601(a) (Item 1601(a) of Regulation S-K), then the provisions of §§ 229.1603, 229.1604(b)(1) through (6) and (c) and 229.1605 through 229.1609 (Items 1603, 1604(b)(1) through (6) and (c) and 1605 through 1609 of Regulation S-K) apply in addition to the provisions of this schedule and disclosure thereunder must be provided in this schedule, and the structured data provisions of § 229.1610 (Item 1610 of Regulation S-K) apply to those disclosures. The information required by § 229.1604(b)(1) through (6) must be briefly described in the front of the disclosure document. If the filing by a special purpose acquisition company, as defined in § 229.1601(b) (Item 1601(b) of Regulation S-K), relates to any other redemption of securities offered to security holders, then the provisions of § 229.1608 (Item 1608 of Regulation S-K) apply in addition to the provisions of this schedule and disclosure thereunder, if applicable, must be provided in this schedule and the structured data provisions of § 229.1610 (Item 1610 of Regulation S-K) apply to those disclosures. To the extent that the applicable disclosure requirements of subpart 229.1600 of Regulation S-K are inconsistent with the disclosure requirements of this filing, the requirements of subpart 229.1600 of this chapter are controlling.
L. An Interactive Data File must be included in accordance with § 232.405 (Rule 405 of Regulation S-T) and the EDGAR Filer Manual where applicable pursuant to General Instruction K and § 232.405(b).
(b) If the filing relates to a de-SPAC transaction, as defined in § 229.1601(a) (Item 1601(a) of Regulation S-K), all reports, opinions, or appraisals required to be filed or included by § 229.1607(c) (Item 1607(c) of Regulation S-K); and
15 U.S.C. 78a
Section 249.220f is also issued under secs. 3(a), 202, 208, 302, 306(a), 401(a), 401(b), 406 and 407, Pub. L. 107-204, 116 Stat. 745, and secs. 2 and 3, Pub. L. 116-222, 134 Stat. 1063.
Section 249.308 is also issued under 15 U.S.C. 80a-29 and 80a-37.
Form 20-F is attached as appendix E to this document. Form 20-F will not appear in the Code of Federal Regulations.
Form 8-K is attached as appendix F to this document. Form 8-K will not appear in the Code of Federal Regulations.
By the Commission.
The following appendices will not appear in the Code of Federal Regulations.
If a registration statement on this Form S-1 is being used to register an offering of securities of a special purpose acquisition company, as defined in Item 1601(b) of Regulation S-K (17 CFR 229.1601(b)), other than in connection with a de-SPAC transaction, as defined in Item 1601(a) of Regulation S-K (17 CFR 229.1601(a)), the registrant must furnish in the prospectus the information required by Items 1602 and 1603 of Regulation S-K (17 CFR 229.1602 and 229.1603), in the manner set forth by the structured data provision of Item 1610 of Regulation S-K (17 CFR 229.1610), in addition to the Items that are otherwise required by this Form. If the securities to be registered on this Form will be issued in a
Provide the information required by Item 506 of Regulation S-K (§ 229.506 of this chapter), unless the registrant is a special purpose acquisition company (as defined in Item 1601 of Regulation S-K).
1. The registration statement shall be signed by the registrant, its principal executive officer or officers, its principal financial officer, its controller or principal accounting officer and by at least a majority of the board of directors or persons performing similar functions. If the registrant is a foreign person, the registration statement shall also be signed by its authorized representative in the United States. Where the registrant is a limited partnership, the registration statement shall be signed by a majority of the board of directors of any corporate general partner signing the registration statement. If the securities to be registered on this Form will be issued by a special purpose acquisition company, as such term is defined in Item 1601 of Regulation S-K, or another shell company in connection with a de-SPAC transaction, as such term is defined in Item 1601 of Regulation S-K, the term “registrant” for purposes of this instruction and the Signatures section of this form also includes the target company, as such term is defined in Item 1601 of Regulation S-K, except that in connection with any de-SPAC transaction involving the purchase of assets or a business, with respect to the purchase of assets or a business, the term “registrant” also includes the seller of the business or assets.
1. If securities to be registered on this Form will be issued in a de-SPAC transaction, as defined in Item 1601(a) of Regulation S-K (17 CFR 229.1601(a)), then the disclosure provisions of Items 1603 through 1607 and 1609 of Regulation S-K (17 CFR 229.1603 through 229.1607 and 229.1609) apply in addition to the provisions of this Form and disclosure thereunder must be provided in the prospectus, and the structured data provisions of Item 1610 of Regulation S-K (17 CFR 229.1610) apply to those disclosures. To the extent that the applicable disclosure requirements of Subpart 229.1600 are inconsistent with the disclosure requirements of this Form, the requirements of Subpart 229.1600 are controlling. If the securities to be registered on this Form will be issued by a special purpose acquisition company (as such term is defined in Item 1601 of Regulation S-K) or another shell company in connection with a de-SPAC transaction, the registrants also include the target company (as such term is defined in Item 1601 of Regulation S-K), and it must be so designated on the cover page of this Form. In such a de-SPAC transaction, where the target company consists of a business or assets, the seller of the business or assets is deemed to be a registrant instead of the business or assets and must be so designated on the cover page of this Form. Further, in such a de-SPAC transaction, the term “registrant” for purposes of the disclosure requirements of this Form means the special purpose acquisition company, and the term “company being acquired” for the purposes of the disclosure requirements of this Form means the target company.
2. If the target company, as defined in Item 1601(d) of Regulation S-K (17 CFR 229.1601(d)), in a de-SPAC transaction, as defined in Item 1601 of Regulation S-K (17 CFR 229.1601), is not subject to the reporting requirements of either Section 13(a) or 15(d) of the Exchange Act, provide the following additional information with respect to the target company:
a. Item 101 of Regulation S-K (§ 229.101 of this chapter, description of business);
b. Item 102 of Regulation S-K (§ 229.102 of this chapter, description of property);
c. Item 103 of Regulation S-K (§ 229.103 of this chapter, legal proceedings);
d. Item 304 of Regulation S-K (§ 229.304 of this chapter, changes in and disagreements with accountants on accounting and financial disclosure);
e. Item 403 of Regulation S-K (§ 229.403 of this chapter, security ownership of certain beneficial owners and management), assuming the completion of the de-SPAC transaction and any related financing transaction; and
f. Item 701 of Regulation S-K (§ 229.701 of this chapter, recent sales of unregistered securities).
If the target company is a foreign private issuer, as defined in Rule 405 (§ 230.405 of this chapter), information with respect to the target company may be provided in accordance with Items 4, 6.E, 7.A, 8.A.7, and 16F of Form 20-F, in lieu of the information specified above.
3. If securities to be registered on this Form will be issued in a de-SPAC transaction, as defined in Item 1601(a) of Regulation S-K (17 CFR 229.1601(a)), the prospectus must be distributed to security holders no later than the lesser of 20 calendar days prior to the date on which the meeting of security holders is to be held or action is to be taken in connection with the de-SPAC transaction or the maximum number of days permitted for disseminating the prospectus under the applicable laws of the jurisdiction of incorporation or organization.
(7) Financial statements that would be required in an annual report sent to security holders under Rules 14a-3(b)(1) and (b)(2) (§ 240.14b-3 of this chapter), if an annual report was required. In a de-SPAC transaction, see § 240.15-01 (Rule 15-01 of Regulation S-X). If the registrant's security holders are not voting, the transaction is not a roll-up transaction (as described by Item 901 of Regulation S-K (§ 229.901 of this chapter)), and:
1. The financial statements required by this paragraph for the latest fiscal year need be audited only to the extent practicable. The financial statements for the fiscal years before the latest fiscal year need not be audited if they were not previously audited. For a company combining with a registrant that is a shell company, see § 210.15-01(a).
1. The registration statement must be signed by the registrant, its principal executive officer or officers, its principal financial officer, its controller or principal accounting officer, and by at least a majority of the board of directors or persons performing similar functions. If the registrant is a foreign person, the registration statement must also be signed by its authorized representative in the United States. Where the registrant is a limited partnership, the registration statement must be signed by a majority of the board of directors of any corporate general partner signing the registration statement. If the securities to be registered on this Form will be issued by a special purpose acquisition company, as such term is defined in Item 1601 of Regulation S-K, or another shell company in connection with a de-SPAC transaction, as such term is defined in Item 1601 of Regulation S-K, the term “registrant” for purposes of this instruction and the Signatures section of this form also includes the target company, as such term is defined in Item 1601 of Regulation S-K, except that in connection with any de-SPAC transaction involving the purchase of assets or a business, with respect to the purchase of assets or a business, the term “registrant” also includes the seller of the business or assets.
If a registration statement on this Form F-1 is being used to register an offering of securities of a special purpose acquisition company, as defined in Item 1601(b) of
E. Dilution. The following information shall be provided:
4. Where the registrant is a special purpose acquisition company (as defined in Item 1601 of Regulation S-K), in lieu of providing the information required under Item 9.E.1 and Item 9.E.2, provide the disclosure required pursuant to Items 1602(a)(4) and 1602(c) of Regulation S-K in an offering other than a de-SPAC transaction (as defined in Item 1601 of Regulation S-K) and provide the disclosure required under Item 1604(c) of Regulation S-K in connection with a de-SPAC transaction.
1. The registration statement shall be signed by the registrant, its principal executive officer or officers, its principal financial officer, its controller or principal accounting officer, at least a majority of the board of directors or persons performing similar functions, and its authorized representative in the United States. Where the registrant is a limited partnership, the registration statement shall be signed by a majority of the board of directors of any corporate general partner signing the registration statement. If the securities to be registered on this Form will be issued by a special purpose acquisition company, as such term is defined in Item 1601 of Regulation S-K, or another shell company in connection with a de-SPAC transaction, as such term is defined in Item 1601 of Regulation S-K, the term “registrant” for purposes of this instruction and the Signatures section of this form also includes the target company, as such term is defined in Item 1601 of Regulation S-K, except that in connection with any de-SPAC transaction involving the purchase of assets or a business, with respect to the purchase of assets or a business, the term “registrant” also includes the seller of the business or assets.
1. If securities to be registered on this Form will be issued in a de-SPAC transaction, as defined in Item 1601(a) of Regulation S-K (17 CFR 229.1601(a)), then the disclosure provisions of Items 1603 through 1607 and 1609 of Regulation S-K (17 CFR 229.1603 through 229.1607 and 1609) apply in addition to the provisions of this Form and disclosure thereunder must be provided in the prospectus, and the structured data provisions of Item 1610 of Regulation S-K (17 CFR 229.1610) apply to those disclosures. To the extent that the applicable disclosure requirements of Subpart 229.1600 are inconsistent with the disclosure requirements of this Form, the requirements of Subpart 229.1600 are controlling. If the securities to be registered on this Form will be issued by a special purpose acquisition company (as such term is defined in Item 1601 of Regulation S-K), or another shell company in connection with a de-SPAC transaction, the registrants also include the target company (as such term is defined in Item 1601 of Regulation S-K), and it must be so designated on the cover page of this Form. In such a de-SPAC transaction, where the target company consists of a business or assets, the seller of the business or assets is deemed to be a registrant instead of the business or assets and must be so designated on the cover page of this Form. Further, in such a de-SPAC transaction, the term “registrant” for purposes of the disclosure requirements of this Form means the special purpose acquisition company, and the term “company being acquired” for the purposes of the disclosure requirements of this Form means the target company.
2. If the target company, as defined in Item 1601(d) of Regulation S-K (17 CFR 229.1601(d)), in a de-SPAC transaction, as such term is defined in Item 1601 of Regulation S-K, is not subject to the reporting requirements of either Section 13(a) or 15(d) of the Exchange Act, provide the following additional information with respect to the company:
a. Item 101 of Regulation S-K (§ 229.101 of this chapter, description of business);
b. Item 102 of Regulation S-K (§ 229.102 of this chapter, description of property);
c. Item 103 of Regulation S-K (§ 229.103 of this chapter, legal proceedings);
d. Item 304 of Regulation S-K (§ 229.304 of this chapter, changes in and disagreements with accountants on accounting and financial disclosure);
e. Item 403 of Regulation S-K (§ 229.403 of this chapter, security ownership of certain beneficial owners and management), assuming the completion of the de-SPAC transaction and any related financing transaction; and
f. Item 701 of Regulation S-K (§ 229.701 of this chapter, recent sales of unregistered securities)
3. If securities to be registered on this Form will be issued in a de-SPAC transaction, as defined in Item 1601(a) of Regulation S-K (17 CFR 229.1601(a)), the prospectus must be distributed to security holders no later than the lesser of 20 calendar days prior to the date on which the meeting of security holders is to be held or action is to be taken in connection with the de-SPAC transaction or the maximum number of days permitted for disseminating the prospectus under the applicable laws of the jurisdiction of incorporation or organization.
1. The financial statements required by this paragraph for the latest fiscal year need be audited only to the extent practicable. The financial statements for the fiscal years before the latest fiscal year need not be audited if they were not previously audited. For a company combining with a registrant that is a shell company, see § 210.15-01(a).
If the financial statements required by paragraphs (b)(5) and (b)(6) are prepared on the basis of a comprehensive body of accounting principles other than U.S. GAAP, provide a reconciliation to U.S. GAAP in accordance with Item 18 of Form 20-F (§ 249.220f of this chapter) if the foreign business being acquired will be a predecessor to the issuer that is a shell company or, in all other circumstances, with Item 17 of Form 20-F (§ 249.220f of this chapter) unless a reconciliation is unavailable or not obtainable without unreasonable cost or expense. At a minimum, provide a narrative description of all material variations in accounting principles, practices and methods used in preparing the non-U.S. GAAP financial statements from those accepted in the U.S. when the financial statements are prepared on a basis other than U.S. GAAP.
1. The registration statement must be signed by the registrant, its principal executive officer or officers, its principal financial officer, its controller or principal accounting officer, at least a majority of the board of directors or persons performing similar functions and its authorized representative in the United States. Where the registrant is a limited partnership, the
4. For filings on Form 20-F filed pursuant to General Instruction A.(d) of this form and for registration statements, when the issuer is a shell company that is combining with a business, see § 240.15-01 (Rule 15-01 of Regulation S-X).
7. If a registrant's report or exhibit to such report relates to a de-SPAC transaction (as defined in Item 1601(a) of Regulation S-K (17 CFR 229.1601(a)) and includes projections that relate to the performance of the special purpose acquisition company or the target company, the report or exhibit, as applicable, must include the information required by paragraphs (a) and (b) of Item 1609 of Regulation S-K (17 CFR 229.1609(a), (b)).
(f) if the registrant was a shell company, other than a business combination related shell company, as those terms are defined in Rule 12b-2 under the Exchange Act (17 CFR 240.12b-2), immediately before the transaction in which the registrant acquired a business that is its predecessor, disclose the information that would be required if the acquired business or real estate operation that is its predecessor were filing a general form for registration of securities on Form 10 under the Exchange Act reflecting all classes of the registrant's securities subject to the reporting requirements of Section 13 (15 U.S.C. 78m) or Section 15(d) (15 U.S.C. 78
Federal Maritime Commission.
Final rule.
In accordance with the Ocean Shipping Reform Act of 2022, the Federal Maritime Commission (the Commission or FMC) is issuing regulations governing demurrage and detention billing requirements. This final rule requires common carriers and marine terminal operators to include specific minimum information on demurrage and detention invoices, outlines certain detention and demurrage billing practices, such as determination of which parties may appropriately be billed for demurrage or detention charges, and sets timeframes for issuing invoices, disputing charges with the billing party, and resolving such disputes. It adopts with changes the notice of proposed rulemaking published on October 14, 2022. Substantive changes allow consignees to be billed and clarify the timeframe for non-vessel-operating common carriers passing through demurrage and detention charges to issue their own invoices. Non-substantive changes improve clarity and remove drafting errors.
This final rule is effective on May 28, 2024, except for instruction 2 adding § 541.6, and instruction 3 adding § 541.99, which are delayed. The Commission will publish a document in the
To view background documents or comments received, you may use the Federal eRulemaking Portal at
David Eng, Secretary; Phone: (202) 523-5725; Email:
As rising cargo volumes have increasingly put pressure on common carriers, port and terminal performance, demurrage and detention charges have for a variety of reasons substantially increased. For example, over a two-year period between 2020 and 2022, nine of the largest carriers serving the U.S. liner trades individually charged a total of approximately $8.9 billion in demurrage and detention charges and collected roughly $6.9 billion.
On February 15, 2022, the Commission issued an ANPRM to request industry views on potential demurrage and detention billing requirements.
• Whether a proposed regulation on demurrage and detention billing practices should apply to non-vessel-operating common carriers (NVOCCs) as well as vessel-operating common carriers (VOCCs);
• Whether the regulations should differ based on whether the billing party is an NVOCC or a VOCC;
• Whether the proposed regulations on demurrage and detention billings should apply to marine terminal operators (MTOs);
• What information should be required in demurrage and detention invoices;
• Whether bills should include information on how the billing party calculated demurrage and detention charges.
○ Identifying clear and concise container availability dates in addition to vessel arrival dates for import shipments; and,
○ For export shipments, the earliest return dates (and any modifications to those dates) as well as the availability of return locations and appointments, where applicable;
• Whether the bills should include information on any events (
In the ANPRM, the Commission stated that it was considering whether it should require common carriers and MTOs to adhere to certain practices regarding the timing of demurrage and detention billings. The Commission sought comments on whether it should require billing parties to issue demurrage or detention invoices within 60 days after the charges stopped accruing.
On June 16, 2022, after the Commission issued the ANPRM and received comments, the Ocean Shipping Reform Act of 2022 (OSRA 2022) was
• date that container is made available;
• the port of discharge;
• the container number or numbers;
• for exported shipments, the earliest return date;
• the allowed free time in days;
• the start date of free time;
• the end date of free time;
• the applicable detention or demurrage rule on which the daily rate is based;
• the applicable rate or rates per the applicable rule;
• the total amount due;
• the email, telephone number, or other appropriate contact information for questions or requests for mitigation of fees;
• a statement that the charges are consistent with any of Federal Maritime Commission rules with respect to detention and demurrage; and
• a statement that the common carrier's performance did not cause or contribute to the underlying invoiced charges.
Failure to include the required information on a demurrage or detention invoice eliminates any obligation of the billed party to pay the applicable charge.
OSRA 2022 additionally requires the Commission to initiate a rulemaking further defining prohibited practices by common carriers, marine terminal operators, shippers, and OTIs regarding the assessment of demurrage or detention charges.
On October 14, 2022, the Commission published a notice of proposed rulemaking (NPRM) that would require common carriers and marine terminal operators to include specific minimum information on demurrage and detention invoices and outlined certain billing practices relevant to appropriate timeframes for issuing invoices, disputing charges with the billing party, and resolving such disputes.
In response to the NPRM published October 14, 2022, the Commission received 191 comments from interested parties. All major groups of interested persons were represented in the comments: vessel-operating common carriers (VOCCs), non-vessel-operating common carriers (NVOCCs), marine terminal operators (MTOs), motor carriers, beneficial cargo owners (BCOs), ocean transportation intermediaries (OTIs), third party logistics providers, customs brokers, bi-partisan groups of the U.S. House of Representatives, another Federal agency, and the National Shipping Advisory Committee (the Commission's federal advisory committee). Comments were submitted by individuals, large and small companies, and by national trade associations. All comments submitted on the NPRM are available at
About 75 percent of commenters supported the rule, about 15 percent questioned the rule, and 10 percent did not specify. Motor carriers overwhelmingly support the entire rule. BCOs mostly support the rule but some object to prohibiting others from being billed. NVOCCs and OTIs generally supported the rule, but with many objecting to the inclusion of NVOCCs. VOCCs overwhelmingly questioned or did not support the rule. Nearly all VOCCs questioned the rule prohibiting billing other parties and the timing of billing requirements. About half of VOCCs questioned the required information from the ANPRM that the Commission added to the information specifically required by OSRA 2022. MTOs overwhelmingly questioned the rule, with most arguing these regulations should not apply to MTOs.
The top three issues addressed by commenters were: (1) concerns with the prohibition on billing other parties that are not contractually connected, (2) concerns with additional information the Commission proposed to require in addition to the OSRA 2022 mandated information, and (3) concerns with the time periods for billing.
These comments are addressed in the discussion that follows.
MTOs offered many reasons why they should not be subject to the proposed regulations. The majority presented their interpretation of the effect that the legislative process leading to the
NAWE also argued that the Commission cannot enforce 46 U.S.C. 41102(c) here without contravening the Commission's Interpretive Rule at 46 CFR 545.4(b). NAWE stated that the Commission's Interpretive Rule requires that an impermissible “practice” occur on a “normal, customary, and continuing basis,” while the proposed rule would penalize any isolated invoice omission. NAWE argued that taking action in a case alleging a single shipment violation is an implicit repeal of the agency's Interpretive Rule at § 545.4 without public notice and comment.
Other members of Congress submitted comments on the proposed rule as well, but in support of the inclusion of MTOs in this rule.
Section 41102(c) of Title 46 prohibits common carriers, MTOs, and ocean transportation intermediaries from failing to establish, observe, and enforce just and reasonable regulations and practices relating to or connected with the receiving, handling, storing, or delivering property. The Commission has authority under 46 U.S.C. 46105(a) to prescribe regulations to carry out its duties and powers. The Commission has repeatedly explained that the issue of detention and demurrage charges falls within the prohibitions of 46 U.S.C. 41102(c).
Arguments that the Commission lacks this authority because Congress chose to place detailed invoicing requirements in a section that only applies to carriers, or because Congress removed requirements that would expressly apply to MTOs during the statutory drafting process, do not address the Commission's pre-
The need to include MTOs in this rule is supported by the comments. Excluding MTOs from this rule is likely to create a regulatory loophole, significantly affecting the ability of the rule to effect change in the current invoicing process. The comments support a finding that MTOs are invoicing for their own demurrage and detention charges.
The August 17th Congressional Letter and other commenters argued that it was not Congress's intent that these rules apply to MTOs.
Further, the January 2nd Congressional Letter urged the Commission to ensure the inclusion of MTOs in the Commission's final rule. Congressmen Garamendi, Johnson, Costa, Valado, Thompson, and Panetta wrote the January 2nd Congressional Letter.
With respect to the specific information required in invoices, Congress and the President have already spoken on what they believe to be reasonable demurrage and detention invoicing requirements for billing parties, as evidenced by what they required of common carriers at 46 U.S.C. 41104(d). The Commission believes that these elements are appropriate to require in a demurrage and detention invoice sent to a billed party, regardless of whether the invoices come from an MTO or a common carrier, because these elements are mandated by Congress and supported by past agency investigation and review.
Requiring standardized practices from MTOs also addresses the confusion raised in comments about what actual role MTOs play in invoicing for demurrage and detention. Some MTOs
These inconsistent statements by MTOs highlight the need for clear rules governing all demurrage and detention billing parties so that billed parties receive accurate information to facilitate faster payment and dispute resolution. Allowing MTOs to escape the basic requirements of this rule by artfully styling their demurrage and detention invoices as “receipts” or “disclosures” would undermine the statute, frustrate the Commission's expressed intention to simplify and clarify demurrage and detention invoicing for billed parties, and leave in place the confusing status quo that spurred Congress to pass OSRA 2022.
Further, the logic of the MTO argument against regulation is not persuasive. If, as some MTOs claim, they do not invoice shippers, BCOs, and truckers for demurrage and detention, the rule would not affect their practices in any event. If MTOs
Some commenters further challenged the Commission's authority to regulate MTOs pursuant to 46 U.S.C. 41102. NAWE argued that the Commission lacks authority to regulate MTO invoicing through the general legal authority to regulate unjust and unfair practices at 46 U.S.C. 41102(c). NAWE argued that a more specific statutory provision controls over a more general provision, and that when two statutes cannot be harmonized, the later in time statute controls over the earlier. NAWE contended that 46 U.S.C. 41102(c) and OSRA 2022 can be harmonized, by simply omitting MTOs from the proposed rule. If, however, the authorities cannot be harmonized, it contends, the Commission must follow OSRA 2022 as it is the more specific and later-in-time statute.
As previously noted, the Commission has explained that it interprets 46 U.S.C. 41102(c) as governing the invoicing of demurrage and detention. Nothing in OSRA 2022 prohibited the Commission from regulating MTO demurrage and detention invoicing. Therefore, the Commission disagrees with NAWE's argument that the statutes cannot be harmonized.
Some commenters argue the rule is inconsistent with the Interpretive Rule at 46 CFR 545.4. The Commission finds that OSRA 2022 specifically required the Commission to issue rules under 46 U.S.C. 41102(c) that further define the prohibited practices by common carriers, marine terminal operators, and shippers, regarding the assessment of detention or demurrage charges. The plain language of this directive and the plain language of 41104(d) do not require evidence of multiple violations. This view is further supported by 46 U.S.C. 41104(f) which functions to void an invoice if a single required element is not included, not when the complainant can show multiple instances of such behavior.
While the circumstances of each case must be known to make any particular determination as to whether an agency relationship exists, it is fair to assume, based on the Restatement's description of agency that the majority of instances where MTOs collect demurrage and detention charges on behalf of another party likely create an agency relationship. Thus, except to the extent that a principal VOCC or NVOCC has not delegated their obligations under 46 U.S.C. 41104, the agent-MTO must assume those obligations when acting to collect demurrage and detention charges. Of course, the exact principal-agent relationship is open to negotiation between the principal and agent. An agent is free to negotiate the specific acts they will or will not undertake on behalf of the principal. It is possible that in a particular MTO-principal demurrage and detention billing relationship that the MTO is responsible for providing all of the invoice elements in 46 U.S.C. 41104(d)(2) while in another MTO-principal demurrage and detention billing relationship that the MTO complies with only certain elements of 46 U.S.C. 41104(d)(2) and that the invoice must be sent back to the principal for completion of the other elements before the invoice is issued to the billed party.
As discussed in the NPRM, there are important reasons for requiring NVOCCs to comply with detention and demurrage invoicing requirements: invoices that a BCO receives from an NVOCC may be their only notice of detention and demurrage charges and because of its contractual relationship with the BCO an NVOCC is often the only party in this transaction able to inform BCOs as to the nature of these charges.
In regard to the second comment, there seems to be a misunderstanding on the commenter's part about the rule's applicability. As discussed in the NPRM, a primary purpose of this rule is to stop demurrage and detention invoices from being sent to parties who did not negotiate contract terms with the billing party. That concern is not present where a motor carrier has directly contracted with a VOCC. Nothing in this rule, either in the proposed or final version, prohibits a VOCC from issuing a demurrage or detention invoice to a motor carrier when a contractual relationship exists between the VOCC and the motor carrier for the motor carrier to provide carriage or storage of goods to the VOCC. The definition of “billed party” is intentionally broad to capture any party to whom a detention or demurrage invoice is issued. When a VOCC issues a detention or demurrage invoice to a motor carrier, the VOCC must comply with the requirements of part 541. The Commission has jurisdiction over common carriers, marine terminal operators (MTOs), and ocean transportation intermediaries (OTIs), including over through transportation. Without knowing the particulars of the hypothetical, in this situation, presumably the FMC's jurisdiction, and thus this rule, would apply only to cargo moved inland under a through bill of lading and contracts between a VOCC. A motor carrier not based on a through bill of lading would likely be outside the scope of this rule.
The Commission specifically sought comments on the NPRM as to whether it would be appropriate to allow common carriers to bill consignees named on the bill of lading as an alternative to the shipper.
The Commission received many comments on proposed § 541.4, the “Properly Issued Invoice” provision. The majority of commenters, especially motor carriers and shippers, expressed support for the proposed rule. One commenter characterized this proposed provision as “critical to accomplishing the Commission's objective in the rulemaking.”
Many commenters that supported the proposed provision noted that third parties do not have a contractual relationship with the ocean carrier.
Furthermore, several commenters asserted that because there is a contractual relationship between the billing and billed parties, there would be a greater incentive to provide timely and accurate invoices as well as a greater willingness to resolve disputes.
Commenters stated that “parties who are not party to the ocean transportation contract and had no financial interests in the cargo itself, should not be subjected to detention [or] demurrage invoices.”
Additionally, several commenters noted that the proposed provision would improve the current demurrage and detention billing process because the invoice would be sent to the person with the most knowledge of the terms of the contract.
Motor carriers and motor carrier trade organizations detailed several issues with the current system. For example, motor carriers frequently find themselves locked out from marine terminals for failure to pay detention charges as the motor carriers wait to receive payment from their customers.
In addition, the proposed provision would reduce confusion with who is responsible for paying the invoice because it prohibits the billing party from invoicing more than one party.
Although many commenters supported proposed § 541.4, a few commenters, especially ocean common carriers and MTOs, expressed concerns with the proposed regulation.
Finally, the Commission does not believe that shippers located outside of the United States will serve as a basis of significant delay in the movement of cargo. As discussed in the preamble to the Interpretive Rule, shippers have commercial incentives to get their cargo off terminal, and modern digital Information Technology systems allow for prompt communications between parties, regardless of potential vast geographical distances.
This rule does not prohibit or otherwise limit an MTO from maintaining the practice of issuing any party—including BCOs or Motor Carriers—an invoice based on a Terminal Schedule, including charges for detention or demurrage, if the Terminal Schedule includes such charges and the Schedule has been made available in accordance with 46 CFR 525.3. In fact, the practice of issuing invoices based on a Terminal Schedule that includes those charges continue to be permissible if they are just and reasonable as stated in 46 CFR 545.4. The consistent application of the Terminal Schedule charges to various customers is likely to be done on a normal, customary, and continuous
This rule does require that when an MTO issues a bill for demurrage or detention for purposes of enforcing a Terminal Schedule, the billing must comply with part 541, including providing all the information required by § 541.6. The Commission recognizes that this may require MTOs to revise their current business practices. The Commission's primary concern with this rule is to ensure that billed parties understand the demurrage or detention invoices they receive.
The vast majority of comments (24), however, were of the opinion that the rule should make allowances for sending invoices to the shipper or the consignee (in at least some scenarios).
A few commenters asserted that the penalty of having a billed party not be required to pay an invoice if the invoice was not compliant is an extreme penalty for a single violation.
Similarly, pursuant to 46 U.S.C. 41102(c), it is a prohibited practice for an MTO to fail to include the required minimum information in a demurrage and detention invoice sent to a party other than a VOCC. Sending incomplete bills that do not contain sufficient information for shippers to verify if the bills received are accurate would not constitute having just and reasonable practices relating to or connected with receiving, handling, storing or delivering property. Extending the elimination of charge obligations provision at 46 U.S.C. 41104(f) to MTOs issuing demurrage and detention invoices would meet the statutory direction that the Commission must “further define prohibited practices by . . . marine terminal operators, . . . under section 41102(c) of title 46, United States Code, regarding the assessment of demurrage or detention charges” and ensure that all demurrage and detention bills sent to billed parties provide the necessary information for the bills to be paid or disputed quickly
The bill of lading number and container number provide valuable identifying information to the billed party such as determining which shipment is being charged and a means of verifying accuracy of charges. Therefore, the Commission is retaining the requirement that this information be included on the invoice. The Commission recognizes that some billing parties may need to revise operations, including software and website updates, such as those related to how they generate cargo pick-up numbers. However, the Commission has no evidence to support a finding nor received data from commenters showing that such revisions would be time intensive or costly. Billing parties could, for example, for minimal time and cost, replace that portion of a pick-up number currently based on bill of lading number/container number with a number produced by a random number generator and doing so would be more secure than current systems that incorporate bill of lading numbers/container numbers into the pick-up number.
A number of comments raised the issue of earliest return date. Intermodal Motor Carriers Conference urged the Commission to clarify OSRA 2022's earliest return date, and to require that date on the detention and demurrage invoice.
To strengthen the rule's requirements, the National Association of Chemical Distributors
The Meat Import Council of America, Inc. (MICA) and the North American Meat Institute (NAMI) jointly argued that the final rule should not diminish the significance of intervening, clock-stopping events when a billed party disputes the charges.
In addition, Commissioner Rebecca Dye has proposed to reform three practices of ocean carriers and marine terminal operators at the Ports of Los Angeles and Long Beach, and the Port of New York and New Jersey that relate to earliest return date, container returns, and container pickup (notice of availability).
The Commission did not receive comments regarding proposed § 541.6(c). It is adopting the proposed language from the NPRM in this final rule with minor, non-substantive, clarifying amendments. In paragraph (c), “The invoice” has been changed to “A demurrage or detention invoice” to reflect the language of § 541.3. Paragraph (c) has also been amended to clarify that these are minimum requirements. Paragraph (c)(2) has been amended by adding terminal schedule to the listed examples of documents, and “i.e.,” has been changed to “e.g.,” to reflect that this is not an exhaustive list of all possible documents.
One commenter suggested eliminating paragraphs (d)(2) and (3) and merging the necessary information into a single paragraph § 541.6(d) to read as follows: “The invoice must contain sufficient information to enable the billed party to readily identify a contact to whom they may direct questions or concerns related to the invoice including the name, email, telephone number and mailing address of the responsible person to whom invoice questions or notifications of a billing dispute must be submitted.”
Three additional commenters all said the rule would benefit from expanding the acceptable digital platforms beyond URLs to include QR codes or digital watermarks, for example, so that information regarding the dispute process can be retrieved to keep pace with evolving innovations and technologies.
The Commission did not receive comments regarding proposed § 541.6(d)(3) and is adopting the proposed language from the NPRM in this final rule.
The U.S. Department of Agriculture supported the 30-day time limit.
VOCCs/MTOs and their trade associations were mixed in their responses. Intransit Container fully supported a deadline of 30 days.
The VOCCs and their trade associations also complained that the proposal is unfair. Hapag-Lloyd (America) LLC argued that the proposal provides no consequences for failure to timely submit a dispute to an invoice, so it is unclear what incentive billed parties have to respond quickly.
BassTech International LLC stated that the proposed rule's invoicing requirements do not address the need for invoicing “on demand” in instances where payment is a prerequisite for cargo release, such as is customary for import demurrage charges.
Neither is the Commission persuaded by commenters stating that it should follow widely accepted and longstanding practices. The text of OSRA 2022 indicates it was written to help remedy dysfunctional, predatory, and unfair invoicing permitted by these accepted and longstanding practices.
Hapag-Lloyd (America) LLC noted that the rule provides no consequences for failing to timely dispute an invoice.
Another commenter requested that paragraph (b) be deleted from § 541.7 “and to leave this exceptional circumstance to be handled through reasonable and conventional business practice . . . .”
FedEx Trade Networks stated that the Commission should make clear that when a demurrage or detention charge is in dispute, the billing party should be prohibited from issuing further overdue statements.
FedEx Trade Networks also recommended that when demurrage and detention fees do have to be paid, the Commission should implement certain requirements to create greater efficiencies and serve the objective of demurrage and detention: demurrage bills should be separated from freight pick-up for credit-worthy customers; demurrage should be a standard amount per port and per day, with no tiered fees; more payment options, such as electronic funds transfers, credit cards (without fees), should be available, and credit should be universally accepted; charges should be fair and reasonable, with the goal of moving freight from the terminal; the amortized value of the equipment should be considered when setting detention rates; and the bill should be readily available, especially online.
Furthermore, this rule provides the requirements for detention and demurrage invoices and is already designed to make the process more efficient. FedEx Trade Networks' suggestions are outside the process for demurrage and detention billing requirements. As such, they are outside the scope of this rulemaking.
As noted above, some of the commenters that supported the proposal, did so with qualification. The Agriculture Transportation Coalition said that 30 days is sufficient time for shippers to review invoices and submit requests for fee mitigation, refund, or waiver but that the clock should start once the shipper receives the invoice or after the invoice has been posted on-line in a location accessible to the shipper.
Billed parties, such as shippers and their trade associations, generally argued that 30 days is insufficient. They argued that they need more time because shippers do not have the administrative bandwidth to examine each invoice carefully within 30 days and to determine if a dispute should be filed, particularly considering that some charges have unique and complex scenarios that need to be investigated before they are disputed.
VOCCs and their trade associations asserted the proposal is unfair. Hapag-Lloyd (America) LLC argued that the proposal provides no consequences for failure to timely submit a dispute to an invoice, so it is unclear what incentive billed parties have to respond quickly.
Commenters also expressed concern about the Commission setting strict deadlines for billing parties that could result in forfeiting contractual rights, with billed parties potentially facing no consequences for failing to meet the rule's deadlines. For instance, WSC, OCEMA, and Hapag-Lloyd all argued that it is unfair that billed parties face no consequences for failing to timely submit a dispute to an invoice. The Pacific Merchant Shipping Association (PMSA) agreed with WSC that the lack of consequences for billed parties is
Further, the regulatory timeframe for disputes serves only as a minimum timeframe billed parties must permit dispute. The timeframes are not designed or intended to control in every dispute scenario. They are intended to ensure billing parties provide some minimum time for a billed party to dispute an invoice. The billing and billed parties can agree to extend the timeframe, or the billed party can file a complaint with the Commission at any time. Nothing in the final rule prevents a billed party from filing a complaint during the 30-day dispute deadline or prevents a billed party from filing a complaint with the Commission even though they did not dispute the charge with the billing party during the 30-day timeframe.
Based on this record, the Commission has removed the language from § 541.8(b) stating that a billed party was not required to pay an invoice if a billing party takes longer than 30 days to resolve a dispute. The Commission also added language to § 541.8(b) to allow the parties to agree to longer timeframes for the dispute resolution process. These changes better allow for the balancing of benefits that this process requires.
Consumer Technology Association was concerned that the process would be subject to abuse and potentially undermine incentives of demurrage and detention charges.
(1) carriers may adopt reasonable documentation requirements for claims for waivers/refunds, and that carriers do not waive their right to collect charges when they do not act on claims that fail to comply with reasonable documentation requirements;
(2) claims that are not submitted to carriers via the informal dispute process are presumed reasonable and the burden of proof as to the unreasonableness of such charges shifts back to the entity challenging the charge;
(3) Abuse of the informal dispute resolution process (
(4) At an absolute minimum, indicate that: billed parties have an obligation to act in good faith when disputing invoices, that submission of excessive and/or frivolous disputes does not constitute good faith, and that charges that are the subject of waiver/refund requests not submitted in good faith are to be presumed reasonable.
Other commenters who opposed the proposed regulation, generally said that they disagreed with it because it did not account for those instances when more than 30 days is required to investigate and reach a final resolution.
We decline to formally define “resolution” or “attempted resolution” because what these terms mean in any particular instance will be determined based upon mutual agreement of the involved parties. The Commission believes it is acceptable for some ambiguity, especially given that the Commission has removed the penalty of the billed party not having to pay the invoice if the parties do not come to a resolution. Applying the normal meaning of the word, resolution of a request includes payment by the billing party of any refund due to the billed party.
As noted above, § 541.8 does not impact a party's right to file a Charge Complaint with the Commission. Parties do not need to wait a certain period of time or for a triggering event to occur prior to filing a complaint under § 541.8. Parties interested in filing a Charge Complaints at the Commission may do so by following the
Pacific Merchant Shipping Association (PMSA) argued that voiding an invoice is a harsh result.
Furthermore, PMSA argued that because the Charge Complaint process is available to any billed party, § 541.8(b) could have been set up in any number of more reasonable and less punitive ways to address a non-responsive billing party and still be within the scope of clarifying the process, such as introducing a rebuttable presumption against a non-responsive billing party or foreclosing certain defenses against a non-responsive billing party in the Complaint process.
Mediterranean Shipping Company argued that cargo that is the subject of a disputed demurrage or detention invoice should be permitted to be maintained by the billing party pending payment.
A third alternative was proposed by Consumer Technology Association.
The joint comment of the Meat Import Council of America and North America Meat Institute said that it is a common practice by VOCCs to hold additional, unrelated cargo from being released until all outstanding invoices are paid, even when the receiving party may be contesting the validity of those original invoices.
MICA/NAMI said that when invoiced charges are contested by the receiving party, it is unacceptable for VOCCs to “lock out” that entity from all future business with the VOCC until those outstanding fees are paid. MICA/NAMI argued that the current practice does not comport with the tenets of the Incentive Principle, and that allowing it to continue would dissuade importers and exporters, as well as third party service providers, from availing themselves of any dispute settlement mechanisms that are available given the need to service other, unrelated loads with the VOCC.
The Retail Industry Leaders Association echoed similar concerns of MICA/NAMI, stating that a common complaint among its members is the practice of ocean common carriers and MTOs refusing to provide additional bookings to a BCO unless the BCO or another entity in the supply chain pays outstanding detention and demurrage charges that are under dispute.
The Commission does not believe that leaving the issue of not allowing additional bookings unaddressed will result in circumvention of the rule. The main purpose of this rule is to provide clarity and transparency of invoices and the billing process. This rule also eliminates the practice of issuing invoices to multiple parties in the hopes that one of them will pay it, which was one of the concerns raised by RILA.
This principle has become settled in Commission case law decided under the Shipping Act. For example, in
In
Given this discussion, it remains the Commission's position that it has jurisdiction over ocean cargo that is shipped under a through bill of lading to a final destination in the United States. This rulemaking does not change the Commission's authority over merchandise carried pursuant to a through bill of lading.
Pacifica Trucks LLC stated that in addition to the invoicing rules that this regulation encompasses, the Commission should address ocean carriers' application of demurrage and detention fees in other situations that Pacifica Trucks considers unfair.
In addition, the Harbor Trucking Association requested Commission action on the return of empty containers, as well as standardizing
The World Shipping Council argued that the proposed rule violates the APA “because the Commission's replacement of the Interpretive Rule and the Incentive Principle with a series of bright-line rules represents a clear departure from its past precedent on detention and demurrage without any reasonable explanation.” WSC elaborated, saying:
[T]he Commission's proposed bright-line regulations on which parties can be billed cannot logically coexist with its current policies under the Interpretive Rule, which employs a case-by-case analytical tool and the Incentive Principle to determine if a carrier, MTO, or OTI's detention and demurrage billing practices are reasonable. The proposed rules and the Interpretive Rule cannot coexist because there are numerous instances when it is not only reasonable for carriers to take actions prohibited by this proposed regulation, but to do otherwise would disincentivize the fluid movement of freight through the supply chain. The predictable result is a proposal that is not only unworkable and unreasonable as a matter of policy, but per se arbitrary and capricious as a matter of law.
The National Association of Waterfront Employers and Port Houston said that in contravention of 46 CFR 545.4(b)'s requirement that an unjust and unreasonable practice must be something that occurs on a “normal, customary, and continuous basis,” this rule, as proposed would penalize MTOs for any isolated, one-off invoice omission, and apply the penalty to the entire invoice, including as to charges that may not be implicated by the mistake at issue. These commenters said that: “In effect, this regulation would be an implicit repeal of the existing regulatory definition of “unjust and unreasonable practices” under 46 CFR 545.5 as it relates to MTO demurrage charges, without an opportunity for public comment on such repeal, as required by the APA.”
As for concerns that this rule implicitly overrules the Commission's Interpretive Rule at 46 CFR 545.4, these concerns have also been previously addressed. Any argument about what parts of the Interpretive Rules at 46 CFR 545.4 and 545.5 remain in force is inherently an argument about that guidance and not about whether this rule complies with the APA. OSRA 2022 specifically required the Commission to issue rules under 46 U.S.C. 41102(c) that further define the prohibited practices by common carriers, marine terminal operators, and shippers, regarding the assessment of detention or demurrage charges. The plain language of this direction and the plain language of 41104(d) do not require evidence of multiple violations. This view is further supported by 46 U.S.C. 41104(f) which functions to void an invoice if a single required element is not included, not when the complainant can show multiple instances of such behavior.
In response to NAWE and Port Houston, the Commission has amended § 541.5 to read “applicable charge” rather than “applicable invoice.” This change mirrors the statutory language of 46 U.S.C. 41104(f). It was not the Commission's intent to imply that a failure to include the mandatory invoice requirements related to detention and demurrage charges would void non-detention or demurrage charges that might appear on the same invoice.
There are no changes from the text proposed in the NPRM.
This final rule makes minor changes to the text proposed in the NPRM. In paragraph (a), “to a billed party or their designated agent” has been removed. “To a billed party” has been removed because part 541 also covers demurrage or detention invoices that are sent to persons who are not a “billed party” as defined in § 541.3. “Or their designated agent” has been removed as the text is unnecessary. Traditional rules of agency remain applicable under the Shipping Act.
Part 541 governs any invoice issued by an ocean common carrier or non-vessel-operating common carrier for the collection of demurrage or detention charges. Part 541 does not govern the billing relationships among and between ocean common carriers and marine terminal operators. The Commission has not received information about the relationships or interactions between VOCCs and MTOs that warrants regulating the format used by MTOs to bill VOCCs. At the present time, the Commission is confident that the strong commercial relationships between the parties is enough to ensure that the proper information is shared and that the party who ultimately receives the invoice is receiving accurate information. Part 541 does apply to all other demurrage and detention invoices issued by MTOs. MTOs often do not have direct contractual relationships with shippers. However, MTOs are entitled to separately assess demurrage as an implied contract provided that it is published as part of an MTO Schedule and there are some situations where marine terminal operators impose fees directly on shippers and NVOCCs. A primary concern of the Commission is to ensure billed parties understand the demurrage or detention invoices they receive. Therefore, in those cases where an MTO charges any party other than a VOCC detention or demurrage charges, the Commission finds that MTOs should be subject to the same regulations that apply to VOCCs and NVOCCs.
This final rule makes three changes from the text proposed in the NPRM. “Billing dispute” has been removed and “consignee” and “person” have been added as defined terms. “Billing dispute” does not need to be defined because it is not a term used in §§ 541.4-541.99, in either the NPRM or final rule.
This final rule makes changes to the proposed § 541.4 text to allow consignees to be issued demurrage and detention invoices as an alternative billed party. The revised regulation makes clear that the consignee is an alternative billed party, and the same invoice may be not issued to both the shipper and the consignee. Additionally, the Commission has made minor, non-substantive changes that aid in clarity.
If the billed party has firsthand knowledge of the terms of a service contract with a common carrier, then they are in a better position to ensure that both they and the carrier are abiding by those terms. When demurrage or detention invoice disputes
In the final rule, the Commission has changed the word “goods” to “cargo” in § 541.4(a)(1). “Cargo” is a broader term that puts the focus on the container, rather than the items inside it. As such, this comports with the rule's focus on the container, as demurrage and detention charges are levied on the container rather than the items inside it.
“Contract” in this rule has its normal and ordinary legal meaning.
Consignees may be billed as an alternative to the shipper when the consignee is the party contracting for the shipping and is therefore in contractual privity with the carrier. Merely listing the consignee on the bill of lading is not sufficient to support billing the consignee. (Conversely, although rarer, it is possible to properly issue an invoice to a consignee that has not been listed on the bill of lading.)
This rule does not prohibit or otherwise limit an MTO from issuing any party—including BCOs or Motor Carriers—an invoice based on a Terminal Schedule, including charges for detention or demurrage, if the Terminal Schedule includes such charges and the Schedule has been made available in accordance with 46 CFR 525.3. As noted by the commenters, 46 U.S.C. 40501(f) and 46 CFR 525.2(a)(2) establish that such Schedules are enforceable as implied contracts. Under such a scenario, a Motor Carrier has a contractual relationship with the MTO and the terms of the contract (the Schedule) are known to the Motor Carrier in advance by operation of 46 CFR 525.3. This is a very different situation than where a Motor Carrier is billed for demurrage or detention and the Motor Carrier has no contractual relationship with the billing party and is not privy to the specifics of the contractual agreement (such as where a Motor Carrier is billed demurrage or detention based on an agreement between a shipper and a billing party).
This rule does require that when an MTO issues a bill for demurrage or detention for purposes of enforcing a Terminal Schedule, the billing must comply with part 541, including providing all the information required by § 541.6. The Commission recognizes that this may require MTOs to revise their current business practices. As discussed in the NPRM, the Commission's primary concern with this rule is to ensure that billed parties understand the demurrage or detention invoices they receive.
The Commission notes that other MTO billing relationships are also subject to part 541. For example, an MTO issuing a demurrage or detention invoice in order to collect on behalf of a VOCC or issuing a demurrage or detention invoice to an NVOCC must comply with part 541. However, MTOs sometimes require BCOs or their agents to pay freight charges prior to removal of cargo and those freight charges are excluded from the definition of “demurrage and detention” in § 541.3.
Under 46 U.S.C. 41104(f), failure to include any of the required minimum information in 46 U.S.C. 41104(d) eliminates the obligation of the charged party to pay the applicable charge. Section 541.5 is intended to mirror this requirement. To clarify that intent, the Commission has changed the paragraph from “applicable invoice” in the NPRM to “applicable charge” in this final rule. It was not the agency's intent to imply that non-demurrage or detention charges could be voided by failure to include the information in § 541.6.
Similarly, pursuant to 46 U.S.C. 41102(c), it is a prohibited practice for an MTO to fail to include the required minimum information in a demurrage and detention invoice sent to a party other than a VOCC. Sending incomplete bills that do not contain sufficient information for shippers to verify if the bills received are accurate would not constitute having just and reasonable practices relating to or connected with receiving, handling, storing or delivering property. Extending the elimination of charge obligations provision at 46 U.S.C. 41104(f) to MTOs issuing demurrage and detention invoices would enforce Congress' intent to have the Commission “further define prohibited practices by . . . marine terminal operators, . . . under section 41102(c) of title 46, United States Code, regarding the assessment of demurrage or detention charges” and ensure that all demurrage and detention bills sent to billed parties provide the necessary information for the bills to be paid or disputed quickly thereby ensuring efficiency across the shipping system.
This final rule makes minor changes to the proposed requirements regarding digital notification of how a billed party can request fee mitigation, refund, or waiver as well as minor, non-substantive changes to align language with OSRA 2022 and the defined terms in § 541.3.
The Commission has made changes throughout the regulation to align the text to the defined terms in § 541.3. “Invoice” has been replaced with “demurrage or detention invoice.” “Billing date” and “billing due date” have been changed to “invoice date” and “invoice due date.” Finally, “invoiced party” has been changed to “billed party.”
In response to comments, the Commission has added language that clearly specifies that the information submitted on the invoice must be accurate. Inclusion of the language aligns with the language used in 46 U.S.C. 41104(d)(2).
The Commission has amended the introductory sentences of paragraphs (a), (b), and (c) to make clear that these are minimum information elements. Billing parties may include additional information on the invoices and are encouraged to do so if they believe that such information will be useful to billed parties in verifying the validity of demurrage and detention charges.
The Commission has amended paragraph (c)(2) by adding terminal schedule to the listed examples of documents, and changing “
The Commission has amended paragraph (d)(2) to expand the means of digital notification to billed parties of what they need to do to successfully submit a fee mitigation, refund, or waiver request. The language in the proposed rule required that the invoice contain a URL address that directs the billed party to a publicly accessible website that provides the necessary information. This final rule has expanded that to any digital means, including QR codes, or digital watermarks.
This rule requires detention and demurrage invoices to be issued within specified timeframes. As the proposed timeframe language was ambiguous, in this final rule the Commission has clarified that all “days” in the regulation are calendar days.
The Commission is retaining the requirement as proposed in the NPRM that, generally, all demurrage and detention invoices must be issued in 30 days. The Commission has removed the language “required timeframe” from the version of § 541.7(a) that appeared in the NPRM in order to make this subsection clearer. The Commission has revised this subsection to more explicitly dictate the required timing for purposes of clarity.
In response to comments received during the NPRM, the Commission has revised § 541.7 to allow an exception for NVOCCs. That exception is located in paragraph (b) in this final rule. NVOCCs must issue demurrage and detention invoices within 30 days from the issuance date of the demurrage or detention invoice it received. If a billing party does not issue a demurrage or detention invoice within the required timeframe, then the billed party is not required to pay the charge. Paragraph (c) has been added to reflect situations where an NVOCC is acting as both a billing and billed party in relation to the same charge, and allows the NVOCC to inform its billing party that the charge has been disputed by the NVOCC's billed party. In that circumstance, the NVOCC must provide an additional 30 days for the NVOCC to dispute the charge upon notice.
The final language of § 541.7(d) has removed the link between a billing party reissuing an invoice with an incorrectly billed party's disputing of that invoice. This is consistent with the incentive present in the rest of the rule. The burden of issuing a correct invoice should not rely on an incorrectly billed party to dispute the incorrect invoice. Removing this link is also consistent with several comments that requested removing the 60-day requirement from § 541.7(d), which applied to bills sent to a correctly billed party following the billing of an incorrect party. Section 541.7(d) now gives a billing party 30 calendar days to issue a corrected invoice, which is consistent with the rule's purpose of a swift timeline for demurrage and detention billing.
The NPRM's linking a billing party's ability to reissue an invoice with an incorrectly billed party's disputing that invoice also caused confusion as to whether there was any interplay between § 541.7 and § 541.8. The changes to the rule text adopted in this final rule make clear that § 541.7 spells out the rules for issuing an invoice to the correctly billed party. By contrast, § 541.8 speaks to a process that assumes the invoice was sent to the correct party, as the term “billed party” encompasses the fact that it is the correct party.
This rule requires billing parties to allow at least 30 days for billed parties to submit a fee mitigation, refund, or waiver request. The Commission has retained the NRPM's proposal that if such a request is submitted by the billed party, the billing party must resolve the request within 30 days. However, based on public comments, the Commission has allowed an exception. A request for fee mitigation, refund, or waiver may be resolved later than 30 days if both parties agree to the later date. The Commission has added language to clarify that the timeframes in the regulation are calendar days. Also based on public comment, the Commission has removed the penalty provision proposed in the NPRM that if the billing party fails to resolve the fee mitigation, refund, or waiver request within the 30-day deadline, the billed party is not required to pay the charge at issue. This proposed penalty provision is not a requirement of OSRA 2022.
Section 541.8 does not impact a party's right to file a Charge Complaint with the Commission. Parties do not need to wait a certain period of time or for a triggering event to occur prior to filing a complaint. Parties interested in filing a Charge Complaints at the Commission may do so by following the steps outlined on the Commission's website.
When the Commission receives sufficient information, it will promptly initiate an investigation.
The Regulatory Flexibility Act, 5 U.S.C. 601-612, provides that whenever an agency is required to publish a notice of proposed rulemaking under the Administrative Procedure Act (APA), 5 U.S.C. 553, the agency must prepare and make available for public comment an initial regulatory flexibility analysis (IRFA) describing the impact of the proposed rule on small entities, unless the head of the agency certifies that the rulemaking will not have a significant economic impact on a substantial number of small entities. 5 U.S.C. 603, 605.
This final rule requires VOCCs, NVOCCs, and MTOs to include minimum billing information on detention and demurrage invoices. The rulemaking additionally requires billing parties that issue demurrage and detention invoices to follow certain billing practices; specifically, billing parties must issue demurrage and detention invoices within 30 calendar days from when charges stop accruing.
The Commission presumes that VOCCs and MTOs generally do not qualify as small entities under the guidelines of the Small Business Administration (SBA). The Commission previously stated that VOCCs and MTOs generally are large companies that exceed the employee (500) and/or annual revenue ($21.5 million) thresholds to be considered small business entities. However, the Commission presumes that NVOCCs are small business entities.
There are likely two types of costs imposed by the proposed rulemaking on the affected businesses. The imposition of a 30-calendar day deadline to issue an invoice from when demurrage and detention charges stop accruing could result in a loss of revenue to the billing
Most of the costs of the rulemaking will be borne by VOCCs and MTOs as they generally assess demurrage and detention charges, and not NVOCCs. As discussed above, in most cases, NVOCCs pass through detention and demurrage charges billed to them on invoices generated by VOCCs or MTOs. Accordingly, NVOCCs should receive the minimum billing information required by the proposed rule from either the VOCC or MTO issuing the invoice.
For these reasons, the Chairman of the Federal Maritime Commission certifies that this rule will not have a significant economic impact on a substantial number of small entities.
The rule is not a “major rule” as defined by the Congressional Review Act (5 U.S.C. 801 et seq). The rule will not result in: (1) An annual effect on the economy of $100,000,000 or more; (2) a major increase in costs or prices; or (3) significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of United States-based companies to compete with foreign based companies. 5 U.S.C. 804(2).
The National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4347) requires Federal agencies to consider the environmental impacts of proposed major Federal actions significantly affecting the quality of the human environment, as well as the impacts of alternatives to the proposed action. When a Federal agency prepares an environmental assessment, the Council on Environmental Quality (CEQ) NEPA implementing regulations (40 CFR parts 1500-1508) require it to “include brief discussions of the need for the proposal, of alternatives [. . .], of the environmental impacts of the proposed action and alternatives, and a listing of agencies and persons consulted.” 40 CFR 1508.9(b). After an environmental assessment, the Commission issued a Finding of No Significant Impact (“FONSI”), 87 FR 73278 (Nov. 29, 2022), and explained that the FONSI would become final 10 days after publication unless a petition for review was filed with FMC by Dec. 9, 2022. (The World Shipping Council and Pacific Merchant Shipping Association jointly filed a petition for review on December 9, 2022.
This final rule calls for a collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). As defined in 5 CFR 1320.3(c), “Collection of Information” comprises reporting, recordkeeping, monitoring, posting, labeling, and other, similar actions. In compliance with the PRA, the Commission submitted the proposed information collection to the Office of Management and Budget. Notice of the information collections was published in the
The title and description of the information collections, a description of those who must collect the information, and an estimate of the total annual burden follow. The estimate covers the time for reviewing instructions, searching existing sources of data, gathering and maintaining the data needed, and completing and reviewing the collection.
As required by the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)), we have submitted a copy of this rule to the Office of Management
This rule meets the applicable standards in E.O. 12988, “Civil Justice Reform,” (61 FR 4729, Feb. 7, 1996) to minimize litigation, eliminate ambiguity, and reduce burden.
Demurrage and detention; Common carriers; Exports; Imports; Marine terminal operators.
For the reasons set forth in the preamble, the Federal Maritime Commission amends title 46 of the CFR by adding part 541 to read as follows:
5 U.S.C. 553; 46 U.S.C. 40101, 40102, 40307, 40501-40503, 41101-41106, 40901-40904, and 46105; and 46 CFR 515.23.
This part establishes the minimum information that must be included on or with demurrage and detention invoices. It also establishes procedures that must be adhered to when invoicing for demurrage or detention.
(a) This part sets forth regulations governing any invoice issued by an ocean common carrier, marine terminal operator, or non-vessel-operating common carrier for the collection of demurrage or detention charges.
(b) This part does not govern the billing relationships among and between ocean common carriers and marine terminal operators.
In addition to the definitions set forth in 46 U.S.C. 40102, when used in this part:
(a) A properly issued invoice is a demurrage or detention invoice issued by a billing party to:
(1) The person for whose account the billing party provided ocean transportation or storage of cargo and who contracted with the billing party for the ocean transportation or storage of cargo; or
(2) The consignee.
(b) If a billing party issues a demurrage or detention invoice to the person identified in paragraph (a)(1) of this section, it cannot also issue a demurrage or detention invoice to the person identified in paragraph (a)(2) of this section.
(c) A billing party cannot issue an invoice to any other person.
Failure to include any of the required minimum information in this part in a demurrage or detention invoice eliminates any obligation of the billed party to pay the applicable charge.
(a) A billing party must issue a demurrage or detention invoice within thirty (30) calendar days from the date on which the charge was last incurred. If the billing party does not issue a demurrage or detention invoice within thirty (30) calendar days from the date on which the charge was last incurred, then the billed party is not required to pay the charge.
(b) If the billing party is a non-vessel-operating common carrier, then it must issue a demurrage or detention invoice within thirty (30) calendar days from the issuance date of the demurrage or detention invoice it received. If such a billing party does not issue a demurrage or detention invoice within thirty (30) calendar days from the issuance date of the demurrage or detention invoice it received, then the billed party is not required to pay the charge.
(c) A non-vessel-operating common carrier (NVOCC) can be both a billing and billed party in relation to the same charge. When an NVOCC is acting in both roles, it can inform its billing party that the charge has been disputed by the NVOCC's billed party. The NVOCC's billing party must then provide an additional thirty (30) calendar days for the NVOCC to dispute the charge upon this notice.
(d) If the billing party invoices an incorrect person, the billing party may issue an invoice to the correct billed party provided that such issuance is within thirty (30) calendar days from the date on which the charge was last incurred. If the billing party does not issue this corrected demurrage or detention invoice within thirty (30) calendar days from the date on which the charge was last incurred, then the billed party is not required to pay the charge.
(a) The billing party must allow the billed party at least thirty (30) calendar days from the invoice issuance date to request mitigation, refund, or waiver of fees from the billing party.
(b) If a billing party receives a fee mitigation, refund, or waiver request from a billed party, the billing party must attempt to resolve the request within thirty (30) calendar days of receiving such a request or at a later date as agreed upon by both parties.
(a)
(1) The Bill of Lading number(s);
(2) The container number(s);
(3) For imports, the port(s) of discharge; and
(4) The basis for why the billed party is the proper party of interest and thus liable for the charge.
(b)
(1) The invoice date;
(2) The invoice due date;
(3) The allowed free time in days;
(4) The start date of free time;
(5) The end date of free time;
(6) For imports, the container availability date;
(7) For exports, the earliest return date; and
(8) The specific date(s) for which demurrage and/or detention were charged.
(c)
(1) The total amount due;
(2) The applicable detention or demurrage rule (
(3) The specific rate or rates per the applicable tariff rule or service contract.
(d)
(1) The email, telephone number, or other appropriate contact information for questions or request for fee mitigation, refund, or waiver;
(2) Digital means, such as a URL address, QR code, or digital watermark, that directs the billed party to a publicly accessible website that provides a detailed description of information or documentation that the billed party must provide to successfully request fee mitigation, refund, or waiver; and
(3) Defined timeframes that comply with the billing practices in this part, during which the billed party must request a fee mitigation, refund, or waiver and within which the billing party will resolve such requests.
(e)
(1) The charges are consistent with any of the Federal Maritime Commission's rules related to demurrage and detention, including, but not limited to, this part and 46 CFR 545.5; and
(2) The billing party's performance did not cause or contribute to the underlying invoiced charges.
The Commission has received Office of Management and Budget approval for this collection of information pursuant to the Paperwork Reduction Act of 1995, as amended. The valid control number for this collection of information is 3072-XXXX.
By the Commission.