Vol. 78 Monday, No. 135 July 15, 2013

Pages 41999–42388

OFFICE OF THE FEDERAL REGISTER

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Contents Federal Register Vol. 78, No. 135

Monday, July 15, 2013

Army Department Corporation for National and Community Service See Engineers Corps NOTICES Corporation for National and Community Service Strategic Centers for Disease Control and Prevention Plan; Proposed Revision, 42051 NOTICES Agency Information Collection Activities; Proposals, Defense Department Submissions, and Approvals, 42075–42080 See Engineers Corps NOTICES Agency Information Collection Activities; Proposals, Centers for Medicare & Medicaid Services Submissions, and Approvals: RULES Federal Acquisition Regulation; Examination of Records Medicaid and Children’s Health Insurance Programs: by Comptroller General and Contract Audit, 42074– Essential Health Benefits in Alternative Benefit Plans, 42075 Eligibility Notices, Fair Hearing and Appeal Arms Sales, 42051–42053 Processes, and Premiums and Cost Sharing; Cooperative Agreements: Exchanges: Eligibility and Enrollment, 42160–42322 Office of Economic Adjustment for Research and NOTICES Technical Assistance, 42054–42056 Privacy Act; Computer Matching Programs, 42080–42081 Meetings: Board of Regents, Uniformed Services University of the Children and Families Administration Health Sciences, 42053 NOTICES Military Family Readiness Council, 42053–42054 Agency Information Collection Activities; Proposals, Submissions, and Approvals, 42081–42082 Drug Enforcement Administration NOTICES Agency Information Collection Activities; Proposals, Coast Guard Submissions, and Approvals: RULES National Clandestine Laboratory Seizure Report, 42108– Drawbridge Operations: 42109 Delaware River, NJ, 42010–42011 Isle of Wight (Sinepuxent) Bay, Ocean City, MD, 42010 Education Department The Gut, South Bristol, ME, 42011–42012 NOTICES The Straights, Harkers Island, NC, 42011 Agency Information Collection Activities; Proposals, Safety Zones and Regulated Navigation Areas: Submissions, and Approvals: Chicago Sanitary and Ship Canal, Romeoville, IL, 42012– FFEL/Direct Loan/Perkins Military Service Deferment/ 42015 Post-Active Duty Student Deferment Request, 42057 Safety Zones: Guaranty Agency Financial Report, 42056–42057 Discovery World Fireworks, Milwaukee Harbor, Meetings: Milwaukee, WI, 42016–42018 National Assessment Governing Board, 42057–42059 PROPOSED RULES Safety Zones: Employee Benefits Security Administration San Diego Bayfair; Mission Bay, San Diego, CA, 42027– 42030 PROPOSED RULES NOTICES Pension Benefit Statements; Amendment, 42027 Solicitations for Membership: Boston Area Maritime Security Advisory Committee, Energy Department 42101–42102 See Federal Energy Regulatory Commission Termination of Radiotelephone Medium Frequency 2182 kHz Watchkeeping, etc., 42102–42103 Engineers Corps PROPOSED RULES Reservoirs at Headwaters of the Mississippi River; Use and Commerce Department Administration, 42030–42034 See International Trade Administration See National Oceanic and Atmospheric Administration Environmental Protection Agency NOTICES Agency Information Collection Activities; Proposals, RULES Submissions, and Approvals, 42037–42038 Determinations Regarding Applicability of Clean Air Act Privacy Act; Systems of Records, 42038 Requirements: California; Attainment for the Sacramento Nonattainment Area for the 2006 Fine Particle Standard, 42018– Consumer Product Safety Commission 42021 PROPOSED RULES NOTICES Petition for Rulemaking to Eliminate Accessible Cords on Board of Directors for the National Environmental Window Covering Products, 42026–42027 Education Foundation, 42069–42071

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Protective Action Guides Manual: Food and Drug Administration Protective Action Guides and Planning Guidance for RULES Radiological Incidents; Update, 42071–42072 Oral Dosage Form New Animal Drugs: Nicarbazin; Oclacitinib; Zilpaterol, 42006–42008 Export-Import Bank PROPOSED RULES NOTICES Administrative Detention of Drugs Intended for Human or Applications for Long-Term Loan or Financial Guarantee in Animal Use, 42382–42386 NOTICES Excess of $100 Million, 42072 Agency Information Collection Activities; Proposals, Submissions, and Approvals: Federal Aviation Administration Agreement for Shipment of Devices for Sterilization, RULES 42082–42083 Combined Drug and Alcohol Testing Programs, 41999– Center for Drug Evaluation and Research Data Standards 42006 Program Documents; Availability: Pilot Certification and Qualification Requirements for Air Electronic Study Data Submission; Data Standard Carrier Operations, 42324–42380 Support, 42084 Cooperative Agreements: Federal Communications Commission World Trade Organization’s Standards and Trade PROPOSED RULES Development Facility, 42084–42085 Extra Fees Levied on Inmate Calling Services, 42034–42036 Draft Guidance for Industry and Staff: Radio Broadcasting Services: Circumstances that Constitute Delaying, Denying, Port Lions, AK, De Beque, CO, Benjamin, Cisco, Rule, Limiting, or Refusing a Drug Inspection, 42387 and Shamrock, TX, 42036 Draft Guidance for Industry: NOTICES Content of and Process for Submitting Initial Pediatric Meetings: Study Plans and Amended Pediatric Study Plans, Consumer Advisory Committee, 42072–42073 42085–42086 Draft Guidance for Industry; Availability: Federal Deposit Insurance Corporation Arsenic in Apple Juice; Action Level, etc., 42086–42087 NOTICES Meetings: Agency Information Collection Activities; Proposals, Anesthetic and Analgesic Drug Products Advisory Submissions, and Approvals: Committee; Cancellation, 42088 Occasional Qualitative Surveys, 42073–42074 Risk Communications Advisory Committee, 42087–42088

Federal Energy Regulatory Commission General Services Administration NOTICES NOTICES Combined Filings, 42059–42061 Agency Information Collection Activities; Proposals, Complaints: Submissions, and Approvals: Chevron Products Co. v. Enterprise TE Products Pipeline Federal Acquisition Regulation; Examination of Records Co., LLC, 42061–42062 by Comptroller General and Contract Audit, 42074– Environmental Assessments; Availability, etc.: 42075 Columbia Gas Transmission, LLC; Proposed Smithfield III Expansion Project, 42062–42064 Health and Human Services Department Orders Approving Reliability Standards: See Centers for Disease Control and Prevention North American Electric Reliability Corp., 42064–42068 See Centers for Medicare & Medicaid Services Records Governing Off-the-Record Communications, 42068 See Children and Families Administration See Food and Drug Administration Federal Highway Administration See Health Resources and Services Administration NOTICES See National Institutes of Health Final Federal Agency Actions: See Substance Abuse and Mental Health Services Goethals Bridge Replacement Project in New York and Administration RULES New Jersey, 42151–42152 Medicaid and Children’s Health Insurance Programs: Essential Health Benefits in Alternative Benefit Plans, Federal Reserve System Eligibility Notices, Fair Hearing and Appeal NOTICES Processes, and Premiums and Cost Sharing; Formations of, Acquisitions by, and Mergers of Bank Exchanges: Eligibility and Enrollment, 42160–42322 Holding Companies, 42074 Health Resources and Services Administration Federal Retirement Thrift Investment Board NOTICES NOTICES Agency Information Collection Activities; Proposals, Meetings; Sunshine Act, 42074 Submissions, and Approvals, 42088–42089 Statements of Organization, Functions and Delegations of Fish and Wildlife Service Authority, 42089–42090 NOTICES Meetings: Homeland Security Department Wildlife and Hunting Heritage Conservation Council; See Coast Guard Teleconference, 42104–42105 See U.S. Customs and Border Protection

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Indian Affairs Bureau National Highway Traffic Safety Administration NOTICES NOTICES Meetings: Certain Nonconforming Motor Vehicles Eligible for Advisory Board for Exceptional Children, 42105 Importation, 42153–42155 Petitions for Inconsequential Noncompliance: Interior Department BHC Investment Corp., 42155–42156 See Fish and Wildlife Service See Indian Affairs Bureau National Institutes of Health NOTICES International Trade Administration Agency Information Collection Activities; Proposals, NOTICES Submissions, and Approvals: Antidumping Duty Administrative Reviews; Results, NIH Office of Intramural Training and Education Extensions, Amendments, etc.: Application, 42090–42091 Certain Hot-Rolled Carbon Steel Flat Products from the Meetings: People’s Republic of China, 42039–42040 National Cancer Institute; Amendment, 42091 Trade Missions: Travel and Tourism to Taiwan, Japan, and Korea, 42041 National Oceanic and Atmospheric Administration U.S. Healthcare to Russia; Cancellation, 42041 RULES Atlantic Highly Migratory Species: International Trade Commission Commercial Gulf of Mexico Aggregated Large Coastal NOTICES Shark and Gulf of Mexico Hammerhead Shark Full Five-year Reviews: Management Groups, 42021–42022 Polyethylene Terephthalate Film, Sheet, and Strip from Fisheries of the Exclusive Economic Zone Off Alaska: India and Taiwan, 42105–42106 Atka Mackerel in the Bering Sea and Aleutian Islands Investigations; Terminations, Modifications, Rulings, etc.: Management Area, 42023–42024 Certain TV Programs, Literary Works for TV Production Northern Rockfish and Dusky Rockfish in the Western and Episode Guides Pertaining to Same, 42106– Regulatory Area of the Gulf of Alaska, 42024–42025 42107 Other Rockfish in the Western Regulatory Area of the Requests for Information: Gulf of Alaska, 42022–42023 Certain Wireless Devices with 3G Capabilities and NOTICES Components Thereof; Statements on Public Interest, Permits: 42107–42108 Marine Mammals; File No. 17115, 42041–42042 Taking of Marine Mammals Incidental to Specified Justice Department Activities: See Drug Enforcement Administration U.S. Marine Corps Training Exercises at Air Station See Justice Programs Office Cherry Point, 42042–42050 NOTICES Consent Decrees under the Clean Water Act, 42108 National Science Foundation NOTICES Justice Programs Office Meetings: NOTICES Advisory Committee for Mathematical and Physical Agency Information Collection Activities; Proposals, Sciences; Correction, 42111 Submissions, and Approvals: Meetings; Sunshine Act, 42111–42112 Juvenile Justice Reform and Reinvestment Initiative Stakeholder Survey, 42109–42110 Nuclear Regulatory Commission NOTICES Labor Department Agency Information Collection Activities; Proposals, See Employee Benefits Security Administration Submissions, and Approvals, 42112 Facility Operating Licenses: Maritime Administration San Onofre Nuclear Generating Station, Units 2 and 3; NOTICES Applications and Amendments, 42113 Administrative Waivers of Coastwise Trade Laws: Vessel COMPASS ROSE, 42153 Pension Benefit Guaranty Corporation Vessel OFF COURSE, 42152–42153 RULES Benefits Payable in Terminated Single-Employer Plans; National Aeronautics and Space Administration Interest Assumptions for Paying Benefits, 42009–42010 NOTICES Agency Information Collection Activities; Proposals, Securities and Exchange Commission Submissions, and Approvals: NOTICES Federal Acquisition Regulation; Examination of Records Agency Information Collection Activities; Proposals, by Comptroller General and Contract Audit, 42074– Submissions, and Approvals, 42113–42114 42075 Applications: Meetings: Bridge Builder Trust and Olive Street Investment NASA Advisory Council; Commercial Space Committee, Advisers, LLC, 42122–42125 42111 FlexShares Trust, et al., 42114–42115 NASA Advisory Council; Education and Public Outreach NGAM Advisors, LP, et al., 42115–42122 Committee, 42110 Meetings; Sunshine Act, 42125 NASA Advisory Council; Human Exploration and Self-Regulatory Organizations; Changes to Operations: Operations Committee, 42110–42111 Options Clearing Corp., 42125–42127

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Self-Regulatory Organizations; Liquidity Deposits to See Federal Highway Administration Clearing Funds: See Maritime Administration National Securities Clearing Corp., 42127–42132 See National Highway Traffic Safety Administration Self-Regulatory Organizations; Proposed Rule Changes: See Surface Transportation Board Chicago Board Options Exchange, Inc., 42132–42135 Miami International Securities Exchange, LLC, 42138– U.S. Customs and Border Protection 42140 NOTICES National Securities Clearing Corp., 42140–42147 Agency Information Collection Activities; Proposals, NYSE MKT LLC, 42135–42138 Submissions, and Approvals: African Growth and Opportunity Act Certificate of Small Business Administration Origin, 42103–42104 NOTICES Disaster Declarations: Veterans Affairs Department Illinois; Amendment 3, 42148 NOTICES Iowa, 42147–42148 Agency Information Collection Activities; Proposals, North Carolina, 42148 Submissions, and Approvals, 42157 Oklahoma, 42147 South Dakota, 42147 Separate Parts In This Issue State Department NOTICES Part II Meetings: Health and Human Services Department, Centers for Advisory Committee on International Economic Policy, Medicare & Medicaid Services, 42160–42322 42148–42149 Health and Human Services Department, 42160–42322 Privacy Act; Systems of Records, 42149–42151 Part III Substance Abuse and Mental Health Services Transportation Department, Federal Aviation Administration Administration, 42324–42380

NOTICES Part IV Agency Information Collection Activities; Proposals, Health and Human Services Department, Food and Drug Submissions, and Approvals, 42091–42099 Administration, 42382–42387 Stay Covered Challenge and Churn Marketing Research Methodology Development Challenge; Requirements and Registrations, 42099–42101 Reader Aids Surface Transportation Board Consult the Reader Aids section at the end of this page for NOTICES phone numbers, online resources, finding aids, reminders, Acquisition Exemptions: and notice of recently enacted public laws. Sonoma–Marin Area Rail Transit District, Marin County, To subscribe to the Federal Register Table of Contents CA, 42156–42157 LISTSERV electronic mailing list, go to http:// listserv.access.gpo.gov and select Online mailing list Transportation Department archives, FEDREGTOC-L, Join or leave the list (or change See Federal Aviation Administration settings); then follow the instructions.

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CFR PARTS AFFECTED IN THIS ISSUE

A cumulative list of the parts affected this month can be found in the Reader Aids section at the end of this issue.

14 CFR 61...... 42324 120...... 41999 121...... 42324 135...... 42324 141...... 42324 142...... 42324 16 CFR Proposed Rules: Ch. II ...... 42026 21 CFR 520...... 42006 558...... 42006 Proposed Rules: 1...... 42382 16...... 42382 29 CFR 4022...... 42009 Proposed Rules: 2520...... 42027 33 CFR 117 (4 documents) ...... 42010, 42011 165 (2 documents) ...... 42012, 42016 Proposed Rules: 165...... 42027 207...... 42030 40 CFR 52...... 42018 42 CFR 431...... 42160 435...... 42160 436...... 42160 438...... 42160 440...... 42160 447...... 42160 457...... 42160 45 CFR 155...... 42160 156...... 42160 47 CFR Proposed Rules: 64...... 42034 73...... 42036 50 CFR 635...... 42021 679 (3 documents) ...... 42022, 42023, 42024

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Rules and Regulations Federal Register Vol. 78, No. 135

Monday, July 15, 2013

This section of the FEDERAL REGISTER SUPPLEMENTARY INFORMATION section of alcohol testing for commercial air tour contains regulatory documents having general this document. operations that was separate from, and applicability and legal effect, most of which FOR FURTHER INFORMATION CONTACT: For in addition to, the testing required by are keyed to and codified in the Code of technical questions concerning this part 121 and part 135. This final rule Federal Regulations, which is published under gives part 121 and part 135 operators 50 titles pursuant to 44 U.S.C. 1510. action, contact Rafael Ramos, Office of Aerospace Medicine, Drug Abatement with commercial air tour operations the The Code of Federal Regulations is sold by Division, AAM–800, Federal Aviation option of administering one drug and the Superintendent of Documents. Prices of Administration, 800 Independence alcohol testing program that will cover new books are listed in the first FEDERAL Avenue SW., Washington, DC 20591; both operations. The intent of this REGISTER issue of each week. telephone (202) 267–8442; facsimile action is to lessen the administrative (202) 267–5200; email: burden on such operators. [email protected]. This rule also includes four other DEPARTMENT OF TRANSPORTATION For legal questions concerning this actions— 1. It makes clear that operators Federal Aviation Administration action, contact Neal O’Hara, Attorney, Office of the Chief Counsel— obtaining a Letter of Authorization from the local Flight Standards District Office 14 CFR Part 120 International Law, Legislation, and Regulations Division, AGC–200, Federal (FSDO) to conduct commercial air tour operations are considered to have [Docket No.: FAA–2012–0688; Amdt. No. Aviation Administration, 800 registered their drug and alcohol testing 120–1] Independence Avenue SW., program by submitting certain Washington, DC 20591; telephone (202) RIN 2120–AK01 information to the FSDO. 267–5348; email: neal.o’[email protected]. 2. It corrects the omission of a Combined Drug and Alcohol Testing SUPPLEMENTARY INFORMATION: reference reiterating that on-duty use of Programs Authority for This Rulemaking alcohol is grounds for permanent AGENCY: Federal Aviation disqualification from service. That The FAA’s authority to issue rules on reference was inadvertently left out of Administration (FAA), DOT. aviation safety is found in Title 49 of the ACTION: Final rule. the May 14, 2009, final rule titled ‘‘Drug United States Code. Subtitle I, Section and Alcohol Testing Program’’ (74 FR 106 describes the authority of the FAA SUMMARY: This rulemaking allows air 22653). Administrator. Subtitle VII, Aviation carrier operators and commuter or on- 3. It reorganizes existing rule text to Programs, describes in more detail the demand operators that also conduct alleviate any confusion about the scope of the Agency’s authority. commercial air tour operations to requirement that training of supervisors, This rulemaking is promulgated combine the drug and alcohol testing as well as training of employees, must under the authority described in required for each operation into one be documented as part of each Subtitle VII, Part A, Chapter 451, testing program. The current rule employer’s employee assistance Section 45102—Alcohol and Controlled requires those operators to conduct program. Substances Testing. Under that section, separate testing programs for their 4. It makes clear that the Agency’s the FAA is charged with prescribing commercial air tour operations. This practice of approving the employer’s regulations for operators to establish results in an unnecessary duplication of drug and alcohol testing program has and to conduct pre-employment, effort. The intended effect of this been discontinued. reasonable suspicion, random, and post- rulemaking is to decrease operating accident drug and alcohol testing. Parts II. Background costs by eliminating the requirement for of this rule, for example those sections duplicate programs while maintaining As noted above, in May 2009, the dealing with contract air traffic the level of safety intended by existing FAA published the Drug and Alcohol controllers, were promulgated under the rules. This final rule also clarifies Testing Program rule. That rule moved FAA’s general rulemaking authority in existing instructions within the rule, the drug and alcohol testing regulations 49 U.S.C. 44701(a)(5). This regulation is corrects a typographical error, and into a new part 120. within the scope of that authority. Part 120 of Title 14 of the Code of removes language describing a practice Federal Regulations (CFR) requires the that has been discontinued. I. Overview of Final Rule establishment of a drug and alcohol DATES: Effective September 13, 2013. Some part 121 air carriers and part testing program designed to prevent Any currently held exemptions allowing 135 commuter and on-demand operators accidents and injuries that result from part 121 or part 135 operators to also conduct commercial air tours. Part the use of prohibited drugs and the combine their drug and alcohol testing 121 and part 135 each contain misuse of alcohol. Specifically, the rule programs with the testing programs for requirements for drug and alcohol requires three groups of operators to their commercial air tour operations testing. Until 2007, an operator’s drug implement a drug and alcohol testing will expire on the effective date of this and alcohol testing program covered its program: rule. commercial air tour operations. • Part 119 certificate holders ADDRESSES: For information on where to In 2007, the National Air Tour Safety authorized to conduct part 121 obtain copies of rulemaking documents Standards rule (72 FR 6884, February operations. and other information related to this 13, 2007) established a separate subpart • Part 119 certificate holders final rule, see ‘‘How To Obtain in part 91 to govern commercial air tour authorized to conduct part 135 Additional Information’’ in the operators. That rule required drug and operations.

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• Commercial air tour operators as the proposed rule, noting that the rule should be able to discern which defined in § 91.147. would reduce costs and ease operation was responsible for the These requirements are meant to administrative burdens without infraction and adjust the enforcement ensure that any person who performs compromising safety. action accordingly. The FAA, however, safety-sensitive functions for these One individual suggested that assesses penalties against the employer, operators, either directly or by contract combining the two testing programs not the type of operation. Under this (including subcontractor at any tier), is should be a requirement rather than an rule, once the two programs have been subject to drug and alcohol testing. option. The FAA believes that most combined, they become one program. Under the current rules, operators operators will take advantage of the So, for example, when a part 121 who are conducting a part 121 or part option to reduce the amount of work operator fails to give a pre-employment 135 operation and commercial air tour and cost involved in administering drug test to a pilot who conducts part operations must administer separate duplicate testing. Regardless of how 121 and air tour flights, the part 121 drug and alcohol testing programs. many operators take advantage of this operator has responsibility for the error. Numerous operators have petitioned the option, however, it would not be Therefore, any civil penalties for FAA for an exemption from the appropriate to require it. While regulatory violations are assessed at the requirement to maintain two separate combining programs may have financial part 121 or part 135 operator level. This drug and alcohol testing programs and administrative benefits, it has no is consistent with existing exemptions because having two programs often safety benefit. allowing part 119 certificate holders to requires testing the same employees The Drug and Alcohol Testing combine their part 121 or part 135 twice. This duplication adds Industry Association (DATIA) operation’s testing program with their administrative and financial burdens for commented in support of this rule and § 91.147 commercial air tour operation’s the operator but it does not increase requested that the FAA address how testing program. safety. operators can make the transition from Additionally, AOPA commented that Since 2008, the FAA has granted two programs to one and how the proposed language for clarifying the approximately 135 exemptions allowing Management Information System (MIS) consequence of on-duty alcohol use was operators to implement a single testing information should be reported after still not completely clear and suggested program. Given the large number of combining the programs. The FAA will alternate language. The FAA agrees with exemptions that the Agency has granted, post instructional information in a AOPA’s comment and has adopted its and the need to renew them every two separate document on its Drug suggested language for § 120.221(b). years, the FAA believes it is appropriate Abatement Web site (http:// to simply amend the existing rule. This www.faa.gov/go/drugabatement) for part IV. Discussion of Other Provisions in approach relieves operators from 119 certificate holders operating part the Final Rule seeking an operator-specific exemption. 121 or part 135 operations and § 91.147 The NPRM proposed provisions In granting these exemptions, the FAA operations to describe what must be identical to those codified here with the has recognized that, in most cases, the done when first seeking to combine exception that the wording of a few same employees and equipment are programs. The first step is for the part sections have been revised to make their used interchangeably between the part 121 or part 135 operator to advise the meaning clearer. The headings of 121 or part 135 operation and its Principal Operations Inspector (POI) §§ 120.117(e) and 120.225(e) have been commercial air tour operation. that one program will be implemented changed along with the regulatory Therefore, the FAA has found that when for both the part 121 or part 135 language to clarify that the procedure a part 119 certificate holder operates operation and the § 91.147 operation. for registering a drug and alcohol testing both a part 121 or a part 135 operation The POI will annotate the § 91.147 program for a § 91.147 commercial air and a § 91.147 commercial air tour operator’s records (Letter of tour operator is similar to the procedure operation, combining the two testing Authorization (LOA)) with an ‘‘A3’’ and used to obtain a drug and alcohol testing programs maintains a level of safety the part 121 or part 135 certificate program operations specification for a equivalent to that provided by the number to indicate that the programs part 121 or part 135 operator. current regulations. Under one testing are combined. The operator must then Specifically, the revised rule requires program, employees are still subject to give the same notification to the FAA’s the commercial air tour operator to drug and alcohol testing in accordance Drug Abatement Division. Once a single submit certain information to the local with part 120. Any existing exemptions testing program is established, the part FSDO instead of the Drug Abatement for combined testing programs held by 121 or part 135 operation must submit Division. In addition, paragraph (f) of part 121 or part 135 operators that also a single MIS report. The FAA wishes to both §§ 120.117 and 120.225 have been conduct § 91.147 operations will expire emphasize that an operator currently changed slightly to clarify that the on the effective date of this rule. Those holding an exemption to conduct one paragraphs apply to employers who are certificate holders with current combined drug and alcohol testing not certificated air carriers or exemptions need not take any action to program is not required to take any commercial air tour operators. Also, the comply with the requirements outlined action to continue administering its wording of § 120.221 has been revised. in this rule. combined testing program. The meaning and intent of § 120.221 Another comment was received from have not changed from what was III. Discussion of Public Comments the Aircraft Owners and Pilots originally proposed. On July 2, 2012, the FAA published Association (AOPA) regarding the This rule amends §§ 120.117 and a Notice of Proposed Rulemaking proposal that, under a combined testing 120.225 to give a part 121 or part 135 (NPRM) (77 FR 39194), entitled program, the FAA would take operator the option of including its ‘‘Combined Drug and Alcohol Testing enforcement action for noncompliance commercial air tour operation Programs.’’ The comment period for the against the part 121 or part 135 employees under § 91.147 in a NPRM closed on August 31, 2012. The operation, even if the pilot whose combined drug and alcohol testing FAA received four comments to the testing is in question is only used for program. NPRM. The National Air Transportation § 91.147 commercial air tour operations. This rule also clarifies the Association expressed its support for The AOPA maintains that the FAA requirement for registering a drug and

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alcohol program for a § 91.147 now broken into separate lines. For (1) The final rule is voluntary. The commercial air tour operator by aligning § 120.115, the requirements were final rule does not impose new that requirement with the requirements ultimately numbered in such a way that regulatory requirements or additional for obtaining a drug and alcohol it appeared that employers needed only costs. program operations specification for a to retain employee training records. The (2) The final rule is not a ‘‘significant part 121 or part 135 operator. Currently, FAA is reordering the wording to make regulatory action’’ as defined in section § 91.147 specifies that operators it clear that supervisory training must be 3(f) of Executive Order 12866; intending to begin commercial air tour documented as well. It was never the (3) The final rule will not have a operations must obtain a Letter of FAA’s intention to change this significant economic impact on a Authorization which includes an requirement. substantial number of small entities ‘‘Antidrug and Alcohol Misuse Finally, in 2004, the FAA under the Regulatory Flexibility Act; Prevention Program registration.’’ The discontinued the practice of approving (4) The final rule will not have a current §§ 120.117 and 120.225, which drug and alcohol testing programs. That significant effect on international trade; contain the drug and alcohol testing language was never removed from the and requirements that apply to commercial Code of Federal Regulations. This rule (5) The final rule will not impose an air tour operations, refer to a need for amends § 120.115 to remove ‘‘submitted unfunded mandate on State, local, or operators intending to begin commercial to the FAA for approval.’’ tribal governments, or on the private air tours to ‘‘register with the FAA.’’ sector, by exceeding the monetary This rule changes §§ 120.117(e) and V. Regulatory Notices and Analyses threshold identified. (6) No comments were received on the 120.225(e) to clarify that operators Changes to Federal regulations must economic portions of the NPRM during obtaining a Letter of Authorization from undergo several economic analyses. the public comment period. their local FSDO are considered to have First, Executive Order 12866 and registered their drug and alcohol testing These analyses are summarized below. Executive Order 13563 direct that each Currently, part 121 operators or part program by submitting certain Federal agency shall propose or adopt a information to the local FSDO. In 135 operators who also conduct air tour regulation only upon a reasoned operations must have separate drug and addition, the language of §§ 120.117(f) determination that the benefits of the and 120.225(f) was changed slightly to alcohol testing programs for the air tour intended regulation justify its costs. operations and their other (part 121 or indicate that it applies to contractors Second, the Regulatory Flexibility Act and repair stations, but not to part 135) operations. The intended of 1980 (Pub. L. 96–354) requires effect of this rulemaking is to decrease certificated air carriers or commercial agencies to analyze the economic air tour operators. Also, the FAA has this duplicative drug and alcohol testing impact of regulatory changes on small by eliminating the requirement for two removed language in § 120.117(e) and (f) entities. Third, the Trade Agreements and § 120.225(e) and (f) that referred to testing programs while maintaining the Act (Pub. L. 96–39) prohibits agencies level of safety required by the current submitting information to the FSDO in from setting standards that create duplicate. The FAA does not need the drug and alcohol testing regulations. unnecessary obstacles to the foreign This may reduce operators’ costs by information to be submitted in commerce of the United States. In duplicate. allowing them to eliminate one testing developing U.S. standards, this Trade Other errors in the Agency’s 2009 program and its associated costs. This Act requires agencies to consider Drug and Alcohol Testing Program final final rule will also reduce the FAA’s rule were also brought to the FAA’s international standards and, where costs by reducing the number of drug attention. In § 120.221(b), references to appropriate, that they be the basis of and alcohol testing programs that the §§ 120.19(c) and 120.37(c) were U.S. standards. Fourth, the Unfunded FAA will have to inspect. inadvertently omitted. The omitted Mandates Reform Act of 1995 (Pub. L. In addition, this rulemaking allows references point the reader to existing 104–4) requires agencies to prepare a the agency to clarify that air tour §§ 120.19(c) and 120.37(c), which written assessment of the costs, benefits, operators obtaining a Letter of indicate that one occurrence of on-duty and other effects of proposed or final Authorization from the local FSDO to alcohol use carries the consequence of rules that include a Federal mandate conduct air tour operations are permanent disqualification from service. likely to result in the expenditure by considered to have registered their drug The FAA has corrected that error and State, local, or tribal governments, in the and alcohol testing program by has reorganized that paragraph for aggregate, or by the private sector, of submitting certain information to the clarity. $100 million or more annually (adjusted FSDO. This may reduce costs to the Additionally, when the FAA for inflation with base year of 1995). operators and the FAA by reducing the combined part 121 appendices I and J to This portion of the preamble amount of time spent attempting to form part 120, the FAA renumbered the summarizes the FAA’s analysis of the clarify requirements. requirements. This reorganization economic impacts of this final rule. Based on the above analyses, this final created some confusion in § 120.115, Department of Transportation Order rule is considered to be a cost-relieving which contains the requirement that DOT 2100.5 prescribes policies and rule. For this reason, and because the employers must include documentation procedures for simplification, analysis, FAA made a similar determination for of the training given to both supervisors and review of regulations. If the the proposed rule and received no and employees in their employee expected cost impact is so minimal that comment on this point, the FAA assistance programs. When moving a proposed or final rule does not believes that the final rule will reduce these requirements from appendix I to warrant a full evaluation, this order costs with no loss of benefits. Thus this the subpart in part 120, not only did the permits that a statement to that effect final rule is cost beneficial. FAA need to assign new section and the basis for it be included in the numbers to the requirements but the preamble if a full regulatory evaluation Regulatory Flexibility Determination FAA also needed to list the details of of the cost and benefits is not prepared. The Regulatory Flexibility Act of 1980 those requirements under separate line Such a determination has been made for (RFA) establishes ‘‘as a principle of numbers. Requirements that had been this final rule. The reasoning for this regulatory issuance that agencies shall previously stated in one paragraph were determination follows: endeavor, consistent with the objective

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of the rule and of applicable statutes, to number of small part 119 certificate International Compatibility and fit regulatory and informational holders that conduct part 121 operations Cooperation requirements to the scale of the or part 135 operations and commercial In keeping with U.S. obligations businesses, organizations, and air tour operations under § 91.147. under the Convention on International governmental jurisdictions subject to International Trade Impact Assessment Civil Aviation, it is FAA policy to regulation.’’ To achieve that principle, conform to International Civil Aviation the RFA requires agencies to solicit and The Trade Agreements Act of 1979 Organization (ICAO) Standards and consider flexible regulatory proposals (Pub. L. 96–39), as amended by the Recommended Practices to the and to explain the rationale for their Uruguay Round Agreements Act (Pub. maximum extent practicable. The FAA actions. The RFA covers a wide range of L. 103–465), prohibits Federal agencies has reviewed the corresponding ICAO small entities, including small from establishing standards or engaging Standards and Recommended Practices businesses, not-for-profit organizations in related activities that create and has identified no differences with and small governmental jurisdictions. these regulations. Agencies must perform a review to unnecessary obstacles to the foreign determine whether a proposed or final commerce of the United States. Executive Order 13609, Promoting rule will have a significant economic Pursuant to these Acts, the International Regulatory Cooperation establishment of standards is not impact on a substantial number of small Executive Order 13609, Promoting entities. If the agency determines that it considered an unnecessary obstacle to the foreign commerce of the United International Regulatory Cooperation, will, the agency must prepare a (77 FR 26413, May 4, 2012) promotes regulatory flexibility analysis as States, so long as the standard has a legitimate domestic objective, such as international regulatory cooperation to described in the Act. meet shared challenges involving However, if an agency determines that the protection of safety, and does not health, safety, labor, security, a proposed or final rule is not expected operate in a manner that excludes environmental, and other issues and to to have a significant economic impact imports that meet this objective. The reduce, eliminate, or prevent on a substantial number of small statute also requires consideration of entities, section 605(b) of the 1980 RFA international standards and, where unnecessary differences in regulatory provides that the head of the agency appropriate, that they be the basis for requirements. The FAA has analyzed may so certify and a regulatory U.S. standards. No comments were this action under the policies and flexibility analysis is not required. The received on this section in the NPRM agency responsibilities of Executive certification must include a statement during the public comment period. The Order 13609, and has determined that providing the factual basis for this FAA has assessed the potential effect of this action would have no effect on determination, and the reasoning should this final rule and has determined that international regulatory cooperation. be clear. it will have little or no effect on Environmental Analysis international trade. Size Standards FAA Order 1050.1E identifies FAA Size standards for small entities are Unfunded Mandates Assessment actions that are categorically excluded published by the Small Business from preparation of an environmental Title II of the Unfunded Mandates Administration (SBA) on their Web site assessment or environmental impact Reform Act of 1995 (Pub. L. 104–4) at http://www.sba.gov/size. The size statement under the National requires each Federal agency to prepare standards used herein are from ‘‘SBA Environmental Policy Act in the a written statement assessing the effects U.S. Small Business Administration, absence of extraordinary circumstances. of any Federal mandate in a proposed or Table of Small Business Size Standards, The FAA has determined this final agency rule that may result in an Matched to North American Industry rulemaking action qualifies for the expenditure of $100 million or more Classification System Codes.’’ The Table categorical exclusion identified in (adjusted annually for inflation) in any is effective November 5, 2010, and uses paragraph 312d and involves no one year by State, local, and tribal the 2007 NAICS codes. Scheduled extraordinary circumstances. governments, in the aggregate, or by the Passenger Air Transportation is listed in private sector; such a mandate is VI. Executive Order Determinations Sector 48–49–Transportation and deemed to be a ‘‘significant regulatory Warehousing; Subsector 481–Air A. Executive Order 13132, Federalism action.’’ The FAA currently uses an Transportation; NAICS Code 48111. The FAA has analyzed this final rule inflation-adjusted value of $143.1 Non-Scheduled Chartered Passenger Air under the principles and criteria of million in lieu of $100 million. No Transportation is listed under the same Executive Order 13132, Federalism. The comments on this section in the NPRM Sector and Subsector with NAICS code agency determined that this action will were received during the public 481211. In both cases the small entity not have a substantial direct effect on comment period. This final rule does size standard is 1,500 employees. the States, or the relationship between not contain such a mandate; therefore, It is estimated that most of the air the Federal Government and the States, the requirements of Title II do not carriers involved in this type of activity or on the distribution of power and apply. are small entities. Therefore, the final responsibilities among the various rule affects a large number of small Paperwork Reduction Act levels of government, and, therefore, entities. does not have Federalism implications. However, the final rule imposes no The Paperwork Reduction Act of 1995 costs and may result in a cost reduction (44 U.S.C. 3507(d)) requires that the B. Executive Order 13211, Regulations for an entity that should choose to use FAA consider the impact of paperwork That Significantly Affect Energy Supply, the final rule. No comments were and other information collection Distribution, or Use received on the Regulatory Flexibility burdens imposed on the public. The The FAA analyzed this final rule Section of the NPRM. Therefore, the FAA has determined that there is no under Executive Order 13211, Actions FAA Administrator certifies that this new information collection associated Concerning Regulations that final rule will not have a significant with allowing operators to combine Significantly Affect Energy Supply, economic impact on a substantial drug and alcohol testing programs. Distribution, or Use (May 18, 2001). The

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agency has determined that it is not a C. Small Business Regulatory 44701, 44702, 44703, 44709, 44710, 44711, ‘‘significant energy action’’ under the Enforcement Fairness Act 45101–45105, 46105, 46306. executive order and it is not likely to ■ 2. Amend § 120.115 as follows: The Small Business Regulatory have a significant adverse effect on the ■ a. Redesignate paragraphs (c)(1)(iii) Enforcement Fairness Act (SBREFA) of supply, distribution, or use of energy. and (c)(5) as paragraphs (c)(5) and (c)(6) 1996 requires FAA to comply with respectively. VII. How To Obtain Additional small entity requests for information or ■ b. Revise newly redesignated Information advice about compliance with statutes paragraphs (c)(5) and (c)(6). and regulations within its jurisdiction. A. Rulemaking Documents The revisions read as follows: A small entity with questions regarding An electronic copy of a rulemaking this document may contact its local § 120.115 Employee Assistance Program document may be obtained by using the FAA official, or the person listed under (EAP). Internet— the FOR FURTHER INFORMATION CONTACT * * * * * 1. Search the Federal eRulemaking heading at the beginning of the (c) * * * Portal at http://www.regulations.gov; preamble. To find out more about (5) Documentation of all training 2. Visit the FAA’s Regulations and SBREFA on the Internet, visit http:// given to employees and supervisory Policies Web page at http:// www.faa.gov/regulations_policies/ personnel must be included in the www.faa.gov/regulations_policies/ or rulemaking/sbre_act/. training program. 3. Access the Government Printing List of Subjects in 14 CFR Part 120 (6) The employer shall identify the Office’s Federal Digital System Web employee and supervisor EAP training page at http://www.gpo.gov/fdsys/. Alcoholism, Air carriers, Air traffic in the employer’s drug testing program. Copies may also be obtained by control, Airmen, Alcohol abuse, Alcohol ■ 3. Amend § 120.117 as follows: sending a request (identified by notice, testing, Aviation safety, Charter flights, ■ a. Revise paragraphs (a) and (b); amendment, or docket number of this Commercial air tour operators, Contract ■ b. Redesignate paragraph (e) as rulemaking) to the Federal Aviation air traffic controllers, Drug abuse, Drug paragraph (f); Administration, Office of Rulemaking, testing, Operators, Reporting and ■ c. Add new paragraph (e); ARM–1, 800 Independence Avenue recordkeeping requirements, Safety, ■ d. Revise newly redesignated SW., Washington, DC 20591, or by Safety-sensitive, Transportation. paragraph (f). calling (202) 267–9680. The Amendment The additions and revisions read as B. Comments Submitted to the Docket follows: In consideration of the foregoing, the Comments received may be viewed by Federal Aviation Administration § 120.117 Implementing a drug testing going to http://www.regulations.gov and amends chapter I of title 14, Code of program. following the online instructions to Federal Regulations as follows: (a) Each company must meet the search the docket number for this requirements of this subpart. Use the action. Anyone is able to search the PART 120—DRUG AND ALCOHOL following chart to determine whether electronic form of all comments TESTING PROGRAM your company must obtain an Antidrug received into any of the FAA’s dockets and Alcohol Misuse Prevention Program by the name of the individual ■ 1. The authority citation for part 120 Operations Specification, Letter of submitting the comment (or signing the is revised to read as follows: Authorization, or Drug and Alcohol comment, if submitted on behalf of an Authority: 49 U.S.C. 106(f), 106(g), 40101– Testing Program Registration from the association, business, labor union, etc.). 40103, 40113, 40120, 41706, 41721, 44106, FAA:

If you are . . . You must . . .

(1) A part 119 certificate holder with authority to operate under parts Obtain an Antidrug and Alcohol Misuse Prevention Program Operations 121 or 135. Specification by contacting your FAA Principal Operations Inspector. (2) An operator as defined in § 91.147 of this chapter ...... Obtain a Letter of Authorization by contacting the Flight Standards Dis- trict Office nearest to your principal place of business. (3) A part 119 certificate holder with authority to operate under parts Complete the requirements in paragraphs 1 and 2 of this chart and ad- 121 or 135 and an operator as defined in § 91.147 of this chapter. vise the Flight Standards District Office and the Drug Abatement Di- vision that the § 91.147 operation will be included under the part 119 testing program. Contact the Drug Abatement Division at FAA, Office of Aerospace Medicine, Drug Abatement Division (AAM–800), 800 Independence Avenue SW., Washington, DC 20591. (4) An air traffic control facility not operated by the FAA or by or under Register with the FAA, Office of Aerospace Medicine, Drug Abatement contract to the U.S. Military. Division (AAM–800), 800 Independence Avenue SW., Washington, DC 20591. (5) A part 145 certificate holder who has your own drug testing pro- Obtain an Antidrug and Alcohol Misuse Prevention Program Operations gram. Specification by contacting your Principal Maintenance Inspector or register with the FAA, Office of Aerospace Medicine, Drug Abate- ment Division (AAM–800), 800 Independence Avenue SW., Wash- ington, DC 20591, if you opt to conduct your own drug testing pro- gram. (6) A contractor who has your own drug testing program ...... Register with the FAA, Office of Aerospace Medicine, Drug Abatement Division (AAM–800), 800 Independence Avenue SW., Washington, DC 20591, if you opt to conduct your own drug testing program.

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(b) Use the following chart for you intend to begin air traffic control Authorization, or Drug and Alcohol implementing a drug testing program if operations (not operated by the FAA or Testing Program Registration from the you are applying for a part 119 by or under contract to the U.S. FAA. Your employees who perform certificate with authority to operate Military). Use it to determine whether safety-sensitive functions must be tested under parts 121 or 135 of this chapter, you need to have an Antidrug and in accordance with this subpart. The if you intend to begin operations as Alcohol Misuse Prevention Program chart follows: defined in § 91.147 of this chapter, or if Operations Specification, Letter of

If you . . . You must . . .

(1) Apply for a part 119 certificate with authority to operate under parts (i) Have an Antidrug and Alcohol Misuse Prevention Program Oper- 121 or 135. ations Specification, (ii) Implement an FAA drug testing program no later than the date you start operations, and (iii) Meet the requirements of this subpart. (2) Intend to begin operations as defined in § 91.147 of this chapter ..... (i) Have a Letter of Authorization, (ii) Implement an FAA drug testing program no later than the date you start operations, and (iii) Meet the requirements of this subpart. (3) Apply for a part 119 certificate with authority to operate under parts (i) Have an Antidrug and Alcohol Misuse Prevention Program Oper- 121 or 135 and intend to begin operations as defined in § 91.147 of ations Specification and a Letter of Authorization, this chapter. (ii) Implement your combined FAA drug testing program no later than the date you start operations, and (iii) Meet the requirements of this subpart. (4) Intend to begin air traffic control operations (at an air traffic control (i) Register with the FAA, Office of Aerospace Medicine, Drug Abate- facility not operated by the FAA or by or under contract to the U.S. ment Division (AAM–800), 800 Independence Avenue SW., Wash- military). ington, DC 20591, prior to starting operations, (ii) Implement an FAA drug testing program no later than the date you start operations, and (iii) Meet the requirements of this subpart.

* * * * * Office nearest your principal place of this part and 49 CFR part 40; and you (e) Register your Drug and Alcohol business. intend to provide safety-sensitive Testing Program by obtaining a Letter of (4) If you are a part 119 certificate functions by contract (including Authorization from the FAA in holder with authority to operate under subcontract at any tier) to a part 119 accordance with § 91.147. (1) A drug parts 121 or 135 and intend to begin certificate holder with authority to and alcohol testing program is operations as defined in § 91.147 of this operate under part 121 or part 135 of considered registered when the chapter, you must also advise the this chapter, an operator as defined in following information is submitted to Federal Aviation Administration, Office § 91.147 of this chapter, or an air traffic the Flight Standards District Office of Aerospace Medicine, Drug Abatement control facility not operated by the FAA nearest your principal place of business: Division (AAM–800), 800 Independence or by or under contract to the U.S. (i) Company name. Avenue SW., Washington, DC 20591. military. (ii) Telephone number. (f) Obtaining a Drug and Alcohol (2) Send this information to the (iii) Address where your drug and Testing Program Registration from the Federal Aviation Administration, Office alcohol testing program records are FAA. (1) Except as provided in of Aerospace Medicine, Drug Abatement kept. paragraphs (d) and (e) of this section, to Division (AAM–800), 800 Independence (iv) Type of safety-sensitive functions obtain a Drug and Alcohol Testing Avenue SW., Washington, DC 20591. you or your employees perform (such as Program Registration from the FAA, you (3) This Drug and Alcohol Testing flight instruction duties, aircraft must submit the following information Program Registration will satisfy the dispatcher duties, maintenance or to the Office of Aerospace Medicine, registration requirements for both your preventive maintenance duties, ground Drug Abatement Division: drug testing program under this subpart (i) Company name. security coordinator duties, aviation (ii) Telephone number. and your alcohol testing program under screening duties, air traffic control (iii) Address where your drug and subpart F of this part. duties). alcohol testing program records are (4) Update the registration (v) Whether you have 50 or more kept. information as changes occur. Send the covered employees, or 49 or fewer (iv) Type of safety-sensitive functions updates to the address specified in covered employees. you or your employees perform (such as paragraph (f)(2) of this section. (vi) A signed statement indicating that flight instruction duties, aircraft ■ 4. Amend § 120.221 by revising your company will comply with this dispatcher duties, maintenance or paragraph (b) to read as follows: part and 49 CFR part 40. preventive maintenance duties, ground (2) This Letter of Authorization will security coordinator duties, aviation § 120.221 Consequences for employees satisfy the requirements for both your screening duties, air traffic control engaging in alcohol-related conduct. drug testing program under this subpart duties). * * * * * and your alcohol testing program under (v) Whether you have 50 or more (b) Permanent disqualification from subpart F of this part. covered employees, or 49 or fewer service. (1) An employee who violates (3) Update the Letter of Authorization covered employees. §§ 120.19(c) or 120.37(c) is permanently information as changes occur. Send the (vi) A signed statement indicating precluded from performing for an updates to the Flight Standards District that: your company will comply with employer the safety-sensitive duties the

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employee performed before such duties the employee performed before § 120.225 Implementing an alcohol testing violation. such violation. program. (2) An employee who engages in * * * * * (a) Each company must meet the alcohol use that violates another alcohol ■ 5. Amend § 120.225 as follows: requirements of this subpart. Use the misuse provision of §§ 120.19 or 120.37, ■ a. Revise paragraphs (a) and (b); following chart to determine whether ■ and who had previously engaged in b. Redesignate paragraph (e) as your company must obtain an Antidrug alcohol use that violated the provisions paragraph (f); and Alcohol Misuse Prevention Program ■ c. Add new paragraph (e); of §§ 120.19 or 120.37 after becoming ■ d. Revise newly redesignated Operations Specification, Letter of subject to such prohibitions, is paragraph (f). Authorization, or Drug and Alcohol permanently precluded from performing The additions and revisions read as Testing Program Registration from the for an employer the safety-sensitive follows: FAA:

If you are . . . You must . . .

(1) A part 119 certificate holder with authority to operate under part 121 Obtain an Antidrug and Alcohol Misuse Prevention Program Operations or 135. Specification by contacting your FAA Principal Operations Inspector. (2) An operator as defined in § 91.147 of this chapter ...... Obtain a Letter of Authorization by contacting the Flight Standards Dis- trict Office nearest to your principal place of business. (3) A part 119 certificate holder with authority to operate under part 121 Complete the requirements in paragraphs 1 and 2 of this chart and ad- or part 135 and an operator as defined in § 91.147 of this chapter. vise the Flight Standards District Office and Drug Abatement Division that the § 91.147 operation will be included under the part 119 test- ing program. Contact Drug Abatement Division at FAA, Office of Aerospace Medicine, Drug Abatement Division (AAM–800), 800 Independence Avenue SW., Washington, DC 20591. (4) An air traffic control facility not operated by the FAA or by or under Register with the FAA, Office of Aerospace Medicine, Drug Abatement contract to the U.S. Military. Division (AAM–800), 800 Independence Avenue SW., Washington, DC 20591. (5) A part 145 certificate holder who has your own alcohol testing pro- Obtain an Antidrug and Alcohol Misuse Prevention Program Operations gram. Specification by contacting your Principal Maintenance Inspector or register with the FAA Office of Aerospace Medicine, Drug Abatement Division (AAM–800), 800 Independence Avenue SW., Washington, DC 20591, if you opt to conduct your own alcohol testing program. (6) A contractor who has your own alcohol testing program ...... Register with the FAA, Office of Aerospace Medicine, Drug Abatement Division (AAM–800), 800 Independence Avenue SW., Washington, DC 20591, if you opt to conduct your own alcohol testing program.

(b) Use the following chart for chapter, or if you intend to begin air Authorization, or Drug and Alcohol implementing an alcohol testing traffic control operations (not operated Testing Program Registration from the program if you are applying for a part by the FAA or by or under contract to FAA. Your employees who perform 119 certificate with authority to operate the U.S. Military). Use it to determine safety-sensitive duties must be tested in under part 121 or part 135 of this whether you need to have an Antidrug accordance with this subpart. The chart chapter, if you intend to begin and Alcohol Misuse Prevention Program follows: operations as defined in § 91.147 of this Operations Specification, Letter of

If you . . . You must . . .

(1) Apply for a part 119 certificate with authority to operate under parts (i) Have an Antidrug and Alcohol Misuse Prevention Program Oper- 121 or 135. ations Specification, (ii) Implement an FAA alcohol testing program no later than the date you start operations, and (iii) Meet the requirements of this subpart. (2) Intend to begin operations as defined in § 91.147 of this chapter ..... (i) Have a Letter of Authorization, (ii) Implement an FAA alcohol testing program no later than the date you start operations, and (iii) Meet the requirements of this subpart. (3) Apply for a part 119 certificate with authority to operate under parts (i) Have an Antidrug and Alcohol Misuse Prevention Program Oper- 121 or 135 and intend to begin operations as defined in § 91.147 of ations Specification and a Letter of Authorization, this chapter. (ii) Implement your combined FAA alcohol testing program no later than the date you start operations, and (iii) Meet the requirements of this subpart. (4) Intend to begin air traffic control operations (at an air traffic control (i) Register with the FAA, Office of Aerospace Medicine, Drug Abate- facility not operated by the FAA or by or under contract to the U.S. ment Division (AAM–800), 800 Independence Avenue SW., Wash- military). ington, DC 20591, prior to starting operations, (ii) Implement an FAA alcohol testing program no later than the date you start operations, and (iii) Meet the requirements of this subpart.

* * * * * (e) Register your Drug and Alcohol Authorization from the FAA in Testing Program by obtaining a Letter of accordance with § 91.147. (1) A drug

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and alcohol testing program is flight instruction duties, aircraft ACTION: Final rule. considered registered when the dispatcher duties, maintenance or following information is submitted to preventive maintenance duties, ground SUMMARY: The Food and Drug the Flight Standards District Office security coordinator duties, aviation Administration (FDA) is amending the nearest your principal place of business: screening duties, air traffic control animal drug regulations to reflect (i) Company name. duties). approval actions for new animal drug (ii) Telephone number. (v) Whether you have 50 or more applications (NADAs) and abbreviated (iii) Address where your drug and covered employees, or 49 or fewer new animal drug applications alcohol testing program records are covered employees. (ANADAs) during May 2013. FDA is kept. (vi) A signed statement indicating (iv) Type of safety-sensitive functions that: your company will comply with also informing the public of the you or your employees perform (such as this part and 49 CFR part 40; and you availability of summaries the basis of flight instruction duties, aircraft intend to provide safety-sensitive approval and of environmental review dispatcher duties, maintenance or functions by contract (including documents, where applicable. preventive maintenance duties, ground subcontract at any tier) to a part 119 DATES: This rule is effective July 15, security coordinator duties, aviation certificate holder with authority to 2013. screening duties, air traffic control operate under part 121 or part 135 of duties). this chapter, an operator as defined in FOR FURTHER INFORMATION CONTACT: (v) Whether you have 50 or more § 91.147 of this chapter, or an air traffic George K. Haibel, Center for Veterinary covered employees, or 49 or fewer control facility not operated by the FAA Medicine (HFV–6), Food and Drug covered employees. or by or under contract to the U.S. Administration, 7519 Standish Pl., (vi) A signed statement indicating that military. Rockville, MD 20855, 240–276–9019, your company will comply with this (2) Send this information to the [email protected]. part and 49 CFR part 40. Federal Aviation Administration, Office (2) This Letter of Authorization will of Aerospace Medicine, Drug Abatement SUPPLEMENTARY INFORMATION: FDA is satisfy the requirements for both your Division (AAM–800), 800 Independence amending the animal drug regulations to drug testing program under subpart E of Avenue SW., Washington, DC 20591. reflect approval actions for NADAs and this part and your alcohol testing (3) This Drug and Alcohol Testing ANADAs during May 2013, as listed in Program Registration will satisfy the program under this subpart. table 1. In addition, FDA is informing registration requirements for both your (3) Update the Letter of Authorization the public of the availability, where information as changes occur. Send the drug testing program under subpart E of applicable, of documentation of updates to the Flight Standards District this part and your alcohol testing environmental review required under Office nearest your principal place of program under this subpart. the National Environmental Policy Act business. (4) Update the registration (4) If you are a part 119 certificate information as changes occur. Send the (NEPA) and, for actions requiring holder with authority to operate under updates to the address specified in review of safety or effectiveness data, part 121 or part 135 and intend to begin paragraph (f)(2) of this section. summaries of the basis of approval (FOI operations as defined in § 91.147 of this Issued under authority provided by 49 Summaries) under the Freedom of chapter, you must also advise the U.S.C. 106(f) and 45102 in Washington, DC, Information Act (FOIA). These public Federal Aviation Administration, Office on July 1, 2013. documents may be seen in the Division of Aerospace Medicine, Drug Abatement Michael P. Huerta, of Dockets Management (HFA–305), Division (AAM–800), 800 Independence Administrator. Food and Drug Administration, 5630 Avenue SW., Washington, DC 20591. [FR Doc. 2013–16852 Filed 7–12–13; 8:45 am] Fishers Lane, Rm. 1061, Rockville, MD (f) Obtaining a Drug and Alcohol BILLING CODE 4910–13–P 20852, between 9 a.m. and 4 p.m., Testing Program Registration from the Monday through Friday. Persons with FAA. (1) Except as provided in access to the Internet may obtain these paragraphs (d) and (e) of this section, to DEPARTMENT OF HEALTH AND documents at the CVM FOIA Electronic obtain a Drug and Alcohol Testing HUMAN SERVICES Reading Room: http://www.fda.gov/ Program Registration from the FAA you AboutFDA/CentersOffices/ must submit the following information Food and Drug Administration OfficeofFoods/CVM/ to the Office of Aerospace Medicine, CVMFOIAElectronicReadingRoom/ Drug Abatement Division: 21 CFR Parts 520 and 558 default.htm. (i) Company name. (ii) Telephone number. [Docket No. FDA–2013–N–0002] This rule does not meet the definition of ‘‘rule’’ in 5 U.S.C. 804(3)(A) because (iii) Address where your drug and Oral Dosage Form New Animal Drugs; it is a rule of ‘‘particular applicability.’’ alcohol testing program records are Nicarbazin; Oclacitinib; Zilpaterol kept. Therefore, it is not subject to the (iv) Type of safety-sensitive functions AGENCY: Food and Drug Administration, congressional review requirements in 5 you or your employees perform (such as HHS. U.S.C. 801–808.

TABLE 1—ORIGINAL AND SUPPLEMENTAL NADAS AND ANADAS APPROVED DURING MAY 2013

NADA/ New animal drug 21 CFR FOIA NEPA ANADA Sponsor product name Action section summary review

141–279 .... Zoetis Inc., 333 Portage St., NICARB 25% (nicarbazin) Supplement revising 558.366 No ...... CE 1 Kalamazoo, MI 49007. and BMD (bacitracin meth- nicarbazin dosage to a ylene disalicylate) Type A range consistent with dos- medicated articles. age approved for use in combination feeds.

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TABLE 1—ORIGINAL AND SUPPLEMENTAL NADAS AND ANADAS APPROVED DURING MAY 2013—Continued

NADA/ New animal drug 21 CFR FOIA NEPA ANADA Sponsor product name Action section summary review

141–345 .... Zoetis Inc., 333 Portage St., APOQUEL (oclacitinib tablet) Original approval for control 520.1604 Yes ...... CE 1 Kalamazoo, MI 49007. of pruritus associated with allergic dermatitis and con- trol of atopic dermatitis in dogs at least 12 months of age. 200–544 .... Huvepharma AD, 5th Floor, ZILMAX (zilpaterol hydro- Original aapproval as a ge- 528.665 Yes ...... CE 1 3A Nikolay Haytov Str., chloride) plus RUMENSIN neric copy of NADA 141– 1113 Sophia, Bulgaria. (monensin) plus TYLOVET 280). 100 (tylosin phosphate) plus MGA (melengestrol acetate) Type A medicated articles. 1 The Agency has determined under 21 CFR 25.33 that this action is categorically excluded (CE) from the requirement to submit an environ- mental assessment or an environmental impact statement because it is of a type that does not individually or cumulatively have a significant ef- fect on the human environment.

List of Subjects § 520.1604 Oclacitinib. PART 558—NEW ANIMAL DRUGS FOR 21 CFR Part 520 (a) Specifications. Each tablet USE IN ANIMAL FEEDS Animal drugs. contains 3.6, 5.4, or 16 milligrams (mg) ■ 3. The authority citation for 21 CFR of oclacitinib as oclacitinib maleate. part 558 continues to read as follows: 21 CFR Part 558 (b) Sponsor. See No. 054771 in Authority: 21 U.S.C. 360b, 371. Animal drugs, Animal feeds. § 510.600(c) of this chapter. ■ Therefore, under the Federal Food, 4. In § 558.366, in paragraph (d), (c) Conditions of use—(1) Amount. amend the table by: Drug, and Cosmetic Act and under Administer orally 0.18 to 0.27 mg/per authority delegated to the Commissioner ■ a. Revising the entry for ‘‘90.8 to 181.6 pound of body weight (0.4 to 0.6 mg/kg (0.01 to 0.02 pct)’’, and of Food and Drugs and redelegated to body weight) twice daily for up to 14 the Center for Veterinary Medicine, 21 ■ b. Removing the entry for ‘‘Bacitracin days; then administered once daily for methylene disalicylate 4 to 50’’ under CFR parts 520 and 558 are amended as maintenance therapy. follows: the heading ‘‘113.5 (0.0125 pct)’’; and (2) Indications for use. For control of ■ c. Removing the entry for ‘‘Bacitracin PART 520—ORAL DOSAGE FORM pruritus associated with allergic methylene disalicylate 50’’ under the NEW ANIMAL DRUGS dermatitis and control of atopic heading ‘‘113.5 (0.0125 pct)’’. dermatitis in dogs at least 12 months of The additions and revisions read as ■ 1. The authority citation for 21 CFR age. follows: part 520 continues to read as follows: (3) Limitations. Federal law restricts § 558.366 Nicarbazin. Authority: 21 U.S.C. 360b. this drug to use by or on the order of * * * * * ■ 2. Add § 520.1604 to read as follows: a licensed veterinarian. (d) * * *

Nicarbazin in Combination in grams per grams per ton ton Indications for use Limitations Sponsor

******* 90.8 to 181.6 ...... Broiler chickens: As an aid Feed continuously as sole ration from time chicks are 066104 (0.01 to 0.02 in preventing outbreaks placed on litter until past the time when coccidiosis pct). of cecal (Eimeria tenella) is ordinarily a hazard. Do not use as a treatment for and intestinal (E. coccidiosis. Do not feed to laying hens. Withdraw 4 acervulina, E. maxima, days before slaughter for use levels at or below E. necatrix, and E. 113.5 g/ton. Withdraw 5 days before slaughter for brunetti) coccidiosis. use levels above 113.5 g/ton. Bacitracin methylene disa- Broiler chickens: As an aid Feed continuously as sole ration from time chicks are 054771 licylate 4 to 50. in preventing outbreaks placed on litter until past the time when coccidiosis of cecal (Eimeria tenella) is ordinarily a hazard. Do not use as a treatment for and intestinal (E. coccidiosis. Do not feed to laying hens. Withdraw 4 acervulina, E. maxima, days before slaughter for use levels at or below E. necatrix, and E. 113.5 g/ton. Withdraw 5 days before slaughter for brunetti) coccidiosis; for use levels above 113.5 g/ton. Bacitracin methylene increased rate of weight disalicylate as provided by No. 054771 in gain and improved feed § 510.600(c) of this chapter. efficiency.

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Nicarbazin in Combination in grams per grams per ton ton Indications for use Limitations Sponsor

Bacitracin methylene disa- Broiler chickens: As an aid Feed continuously as sole ration from time chicks are 066104 licylate 4 to 50 and in preventing outbreaks placed on litter until past the time when coccidiosis roxarsone 22.7 to 45.4. of cecal (Eimeria tenella) is ordinarily a hazard. Do not use as a treatment for and intestinal (E. coccidiosis. Discontinue medication 5 days before acervulina, E. maxima, marketing birds for human consumption. Do not feed E. necatrix, and E. to laying hens. Nicarbazin as provided by No. brunetti) coccidiosis; for 066104; bacitracin methylene disalicylate and increased rate of weight roxarsone as provided by No. 054771 in gain and improved feed § 510.600(c) of this chapter. efficiency. Bacitracin methylene disa- Broiler chickens: As an aid Feed continuously as sole ration from time chicks are 066104 licylate 30. in preventing outbreaks placed on litter until past the time when coccidiosis of cecal (Eimeria tenella) is ordinarily a hazard. Do not use as a treatment for and intestinal (E. coccidiosis. Do not feed to laying hens. Withdraw 4 acervulina, E. maxima, days before slaughter for use levels at or below E. necatrix, and E. 113.5 g/ton. Withdraw 5 days before slaughter for brunetti) coccidiosis; for use levels above 113.5 g/ton. Bacitracin methylene increased rate of weight disalicylate as provided by No. 054771 in gain and improved feed § 510.600(c) of this chapter. efficiency. Bacitracin methylene disa- Broiler chickens: As an aid Feed continuously as sole ration from time chicks are 054771 licylate 50. in preventing outbreaks placed on litter until past the time when coccidiosis of cecal (Eimeria tenella) is ordinarily a hazard. Do not use as a treatment for and intestinal (E. coccidiosis. Do not feed to laying hens. Withdraw 4 acervulina, E. maxima, days before slaughter for use levels at or below E. necatrix, and E. 113.5 g/ton. Withdraw 5 days before slaughter for brunetti) coccidiosis; as use levels above 113.5 g/ton. Bacitracin methylene an aid in the prevention disalicylate as provided by No. 054771 in of necrotic enteritis § 510.600(c) of this chapter. caused or complicated by Clostridium spp. or other organisms suscep- tible to bacitracin.

*******

* * * * * revise the last sentence in the § 558.665 Zilpaterol. ■ 5. In § 558.665, in the table, in ‘‘Limitations’’ column and revise the * * * * * paragraphs (e)(2), (e)(4), and (e)(6), ‘‘Sponsor’’ column to read as follows: (e) * * *

Zilpaterol in grams/ton Combination in grams/ton Indications for use Limitations Sponsor

******* (2) ...... * * * Melengestrol acetate as provided by Nos. 000061 000986 or 054771 in § 510.600(c) of this chapter. 000986

******* (4) ...... * * * Monensin as provided by No. 000986; and 000061 melengestrol acetate as provided by Nos. 000986 or 000986 054771 in § 510.600(c) of this chapter.

******* (6) ...... * * * Monensin as provided by No. 000986; tylosin as 000061 provided by Nos. 000986 or 016592; and 000986 melengestrol acetate as provided by Nos. 000986 or 016592 054771 in § 510.600(c) of this chapter.

Dated: July 1, 2013. Bernadette Dunham, Director, Center for Veterinary Medicine. [FR Doc. 2013–16258 Filed 7–12–13; 8:45 am] BILLING CODE 4160–01–P

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PENSION BENEFIT GUARANTY Employee Retirement Income Security market conditions as accurately as CORPORATION Act of 1974. The interest assumptions in possible. the regulation are also published on Because of the need to provide 29 CFR Part 4022 PBGC’s Web site (http://www.pbgc.gov). immediate guidance for the payment of PBGC uses the interest assumptions in benefits under plans with valuation Benefits Payable in Terminated Single- Appendix B to Part 4022 to determine dates during August 2013, PBGC finds Employer Plans; Interest Assumptions whether a benefit is payable as a lump that good cause exists for making the for Paying Benefits sum and to determine the amount to assumptions set forth in this AGENCY: Pension Benefit Guaranty pay. Appendix C to Part 4022 contains amendment effective less than 30 days Corporation. interest assumptions for private-sector after publication. pension practitioners to refer to if they ACTION: Final rule. PBGC has determined that this action wish to use lump-sum interest rates is not a ‘‘significant regulatory action’’ SUMMARY: This final rule amends the determined using PBGC’s historical under the criteria set forth in Executive Pension Benefit Guaranty Corporation’s methodology. Currently, the rates in Order 12866. regulation on Benefits Payable in Appendices B and C of the benefit Because no general notice of proposed Terminated Single-Employer Plans to payment regulation are the same. rulemaking is required for this prescribe interest assumptions under The interest assumptions are intended amendment, the Regulatory Flexibility the regulation for valuation dates in to reflect current conditions in the Act of 1980 does not apply. See 5 U.S.C. August 2013. The interest assumptions financial and annuity markets. 601(2). are used for paying benefits under Assumptions under the benefit terminating single-employer plans payments regulation are updated List of Subjects in 29 CFR Part 4022 covered by the pension insurance monthly. This final rule updates the Employee benefit plans, Pension system administered by PBGC. benefit payments interest assumptions insurance, Pensions, Reporting and for August 2013.1 DATES: recordkeeping requirements. Effective August 1, 2013. The August 2013 interest assumptions FOR FURTHER INFORMATION CONTACT: under the benefit payments regulation In consideration of the foregoing, 29 Catherine B. Klion will be 1.75 percent for the period CFR part 4022 is amended as follows: ([email protected]), Assistant during which a benefit is in pay status PART 4022—BENEFITS PAYABLE IN General Counsel for Regulatory Affairs, and 4.00 percent during any years Pension Benefit Guaranty Corporation, TERMINATED SINGLE-EMPLOYER preceding the benefit’s placement in pay PLANS 1200 K Street NW., Washington, DC status. In comparison with the interest 20005, 202–326–4024. (TTY/TDD users assumptions in effect for July 2013, ■ may call the Federal relay service toll- 1. The authority citation for part 4022 these interest assumptions represent an continues to read as follows: free at 1–800–877–8339 and ask to be increase of 0.50 percent in the connected to 202–326–4024.) immediate annuity rate and are Authority: 29 U.S.C. 1302, 1322, 1322b, SUPPLEMENTARY INFORMATION: PBGC’s otherwise unchanged. 1341(c)(3)(D), and 1344. regulation on Benefits Payable in PBGC has determined that notice and ■ 2. In appendix B to part 4022, Rate Set Terminated Single-Employer Plans (29 public comment on this amendment are 238, as set forth below, is added to the CFR Part 4022) prescribes actuarial impracticable and contrary to the public table. assumptions—including interest interest. This finding is based on the assumptions—for paying plan benefits need to determine and issue new Appendix B to Part 4022—Lump Sum under terminating single-employer interest assumptions promptly so that Interest Rates for PBGC Payments plans covered by title IV of the the assumptions can reflect current * * * * *

For plans with a valuation Immediate Deferred annuities Rate set date annuity rate (percent) (percent) On or after Before i1 i2 i3 n1 n2

******* 238 8–1–13 9–1–13 1.75 4.00 4.00 4.00 7 8

■ 3. In appendix C to part 4022, Rate Set Appendix C to Part 4022—Lump Sum 238, as set forth below, is added to the Interest Rates for Private-Sector table. Payments * * * * *

For plans with a valuation Immediate Deferred annuities Rate set date annuity rate (percent) (percent) On or after Before i1 i2 i3 n1 n2

1 Appendix B to PBGC’s regulation on Allocation benefits under terminating covered single-employer ERISA section 4044. Those assumptions are of Assets in Single-Employer Plans (29 CFR Part plans for purposes of allocation of assets under updated quarterly. 4044) prescribes interest assumptions for valuing

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For plans with a valuation Immediate Deferred annuities Rate set date annuity rate (percent) (percent) On or after Before i1 i2 i3 n1 n2

******* 238 8–1–13 9–1–13 1.75 4.00 4.00 4.00 7 8

Issued in Washington, DC, on this 10th day [email protected]. If you Dated: July 3, 2013. of July 2013. have questions on viewing the docket, Waverly W. Gregory, Jr., Leslie Kramerich, call Barbara Hairston, Program Manager, Bridge Program Manager, Fifth Coast Guard Acting Chief Policy Officer, Pension Benefit Docket Operations, telephone 202–366– District. Guaranty Corporation. 9826. [FR Doc. 2013–16811 Filed 7–12–13; 8:45 am] [FR Doc. 2013–16853 Filed 7–12–13; 8:45 am] SUPPLEMENTARY INFORMATION: OC Tri BILLING CODE 9110–04–P BILLING CODE 7709–02–P Running Sports, on behalf of Maryland Transportation Authority, has requested a temporary deviation from the current DEPARTMENT OF HOMELAND DEPARTMENT OF HOMELAND operating regulations of the US 50 SECURITY SECURITY Bridge across Isle Wight (Sinepuxent) Bay mile 0.5, at Ocean City, MD. Coast Guard Coast Guard The closure has been requested to ensure the safety of the increased 33 CFR Part 117 33 CFR Part 117 volume of runners and spectators that [Docket No. USCG–2013–0607] will be participating in the 10th annual [Docket No. USCG–2013–0469] ‘‘Island 2 Island’’ Half Marathon on Drawbridge Operation Regulation; April 26, 2014. The event is expected to Delaware River, NJ Drawbridge Operation Regulation; Isle bring in over 4,000 runners and 6,000 of Wight (Sinepuxent) Bay, Ocean City, spectators. The OC Tri Sports is AGENCY: Coast Guard, DHS. MD extending the course to 13.1 miles to ACTION: Notice of deviation from drawbridge regulation. AGENCY: Coast Guard, DHS. accommodate the request of the community. Under this temporary ACTION: Notice of deviation from SUMMARY: The Coast Guard has issued a deviation, the Route 50 Bridge will regulation. temporary deviation from the operating remain in the closed position to vessels, schedule that governs the bascule span from 8 a.m. through 10:30 a.m. SUMMARY: The Commander Fifth Coast of the Tacony-Palmyra Bridge (Route Information provided by our Coast Guard District has issued a temporary 73), across the Delaware River, mile Guard Station Ocean City reveals that, deviation from the regulations 107.2, between the townships of in the past, vessel traffic for that time of governing the operation of the US 50 Tacony, PA and Palmyra, NJ. The year is very limited with most vessels Bridge, over Isle of Wight (Sinepuxent) deviation is necessary to facilitate the being small enough to pass without a Bay, mile 0.5, at Ocean City, MD. The replacement of the bridge deck. This bridge lift. The US 50 Bridge, over Isle deviation is necessary to accommodate deviation allows the bridge to remain in of Wight (Sinepuxent) Bay, mile 0.5, at the 10th annual ‘‘Island 2 Island’’ Half the closed to navigation position during Ocean City, MD has a vertical clearance Marathon. This deviation allows the the rehabilitation project. in the closed position to vessels of 13 drawbridge to remain in the closed DATES: This deviation is effective from position to vessels during the race. feet above mean high water. Vessels that can pass under the bridge without a 9 p.m. on Friday, August 16, 2013 until DATES: This deviation is effective from 9 p.m. on Friday, August 30, 2013. 8 a.m. until 10:30 a.m. April 26, 2014. bridge opening may do so at any time and are advised to proceed with ADDRESSES: The docket for this ADDRESSES: The docket for this caution. The Atlantic Ocean is the deviation [USCG–2013–0607] is deviation [USCG–2013–0469] is alternate route for vessels with mast available at http://www.regulations.gov. available at http://www.regulations.gov. heights greater than 13 feet transiting Type the docket number in the Type the docket number in the ‘‘Search’’ this section of Isle of Wight ‘‘SEARCH’’ box and click ‘‘SEARCH’’. box and click ‘‘Search.’’ Click on the (Sinepuxent) Bay. At all other times Click on Open Docket Folder on the line Open Docket Folder on the line during the effected period, the bridge associated with this deviation. You may associated with this deviation. You may will operate as outlined at 33 CFR also visit the Docket Management also visit the Docket Management 117.559. Facility in Room W12–140 on the Facility in Room W12–140, on the The Coast Guard will inform ground floor of the Department of ground floor of the Department of waterway users through our Local and Transportation West Building, 1200 Transportation West Building, 1200 Broadcast Notices to Mariners of the New Jersey Avenue SE., Washington, New Jersey Avenue SE., Washington, closure periods for the bridge so that DC 20590, between 9 a.m. and 5 p.m., DC 20590, between 9 a.m. and 5 p.m., vessels can arrange their transits to Monday through Friday, except Federal Monday through Friday, except Federal minimize any impacts caused by the holidays. holidays. temporary deviation. FOR FURTHER INFORMATION CONTACT: If FOR FURTHER INFORMATION CONTACT: If In accordance with 33 CFR 117.35(e), you have questions on this temporary you have questions on this temporary the drawbridge must return to its regular deviation, call or email Terrance deviation, call or email Kashanda operating schedule immediately at the Knowles, Environmental Protection Booker, Bridge Management Specialist, end of the designated time period. This Specialist, Coast Guard; telephone 757– Fifth Coast Guard District, telephone deviation from the operating regulations 398–6587, email 757–398–6227, email is authorized under 33 CFR 117.35. [email protected]. If you

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have questions on viewing the docket, DEPARTMENT OF HOMELAND clearance in the closed position to call Barbara Hairston, Program Manager, SECURITY vessels of 14.2 feet, above mean high Docket Operations, at 202–366–9826. water. Coast Guard Under this temporary deviation, the SUPPLEMENTARY INFORMATION: The drawbridge will be maintained in the Burlington County Bridge Commission, 33 CFR Part 117 closed to navigation position from noon who owns and operates this bascule to 11:59 p.m. on August 5, 2013; the [Docket No. USCG–2013–0601] drawbridge, has requested a temporary bridge will operate under normal deviation from the current operating Drawbridge Operation Regulation; The operating schedule at all other times. regulations to facilitate the resurfacing Straights, Harkers Island, NC The drawbridge normally opens on of the bridge roadway. demand with several small commercial AGENCY: Coast Guard, DHS. The Tacony-Palmyra Bridge (Route and recreational vessels transiting a 73) at mile 107.2, across the Delaware ACTION: Notice of deviation from week. Emergency openings cannot be River, between PA and NJ, has a vertical drawbridge regulation. provided. There are no alternate routes for vessels transiting this section of The clearance in the closed position of 53 SUMMARY: The Coast Guard has issued a Straights, but vessels that require an feet above mean high water (MHW). temporary deviation from the operating opening may proceed before noon and This clearance will be reduced during schedule that governs the swing of the after midnight. Mariners able to pass the resurfacing by approximately three Route 70/Harkers Island Bridge, across under the bridge in the closed position feet, to 50 feet above MHW. The Straights, mile 0.6, Harkers Island, may do so at any time and are advised Under the current operating schedule NC. This deviation is necessary to to proceed with caution. set out in 33 CFR 117.5 and 117.716(b): facilitate coupling repair on the Route The Straights is used by a variety of The regulation requires that the 70/Harkers Island Bridge. This vessels including small commercial and drawbridge must open promptly and temporary deviation allows the swing recreational vessels. The Coast Guard fully for the passage of vessels when a bridge to remain in the closed to has carefully coordinated the navigation position. request or signal to open is given, and restrictions with these waterway users. that the opening not be delayed more DATES: This deviation is effective from The Coast Guard will also inform than five minutes. noon until 11:59 p.m. on August 5, additional waterway users through our 2013. Local and Broadcast Notices to Mariners Under this temporary deviation, the ADDRESSES: of the closure periods for the bridge so bridge will be closed-to-navigation for The docket for this deviation, [USCG–2013–0601] is that vessels can arrange their transits to resurfacing repairs, which will restrict available at http://www.regulations.gov. minimize any impacts caused by the the operation of the draw span from 9 Type the docket number in the temporary deviation. p.m. on August 16, 2013 until 9 p.m. ‘‘SEARCH’’ box and click ‘‘SEARCH.’’ In accordance with 33 CFR 117.35(e), August 30, 2013. Click on Open Docket Folder on the line the drawbridge must return to its regular Vessels that can pass under the bridge associated with this deviation. You may operating schedule immediately at the in the closed position may do so at all also visit the Docket Management end of the designated time period. This times and are advised to proceed with Facility in Room W12–140 on the deviation from the operating regulations caution. Emergency openings cannot be ground floor of the Department of is authorized under 33 CFR 117.35. provided. There are no alternate routes Transportation West Building, 1200 Dated: July 2, 2013. for vessels transiting this section of the New Jersey Avenue SE., Washington, Waverly W. Gregory, Jr., Delaware River. DC 20590, between 9 a.m. and 5 p.m., Bridge Program Manager, Fifth Coast Guard Monday through Friday, except Federal District. The Coast Guard has coordinated this holidays. with the Delaware Pilots, and will [FR Doc. 2013–16809 Filed 7–12–13; 8:45 am] FOR FURTHER INFORMATION CONTACT: BILLING CODE 9110–04–P inform the users of the waterways If through our Local and Broadcast you have questions on this temporary deviation, call or email Mr. Jim Notices to Mariners of the closure Rousseau, Bridge Administration DEPARTMENT OF HOMELAND period for the bridge so that vessels can Branch Fifth District, Coast Guard; SECURITY arrange their transits to minimize any telephone 757–398–6557, email impact caused by the temporary [email protected]. If you Coast Guard deviation. Waterway traffic consists of have questions on viewing the docket, freighters, recreational boats, tugs, and call Barbara Hairston, Program Manager, 33 CFR Part 117 barges. Docket Operations, 202–366–9826. [Docket No. USCG–2013–0599] In accordance with 33 CFR 117.35(e), SUPPLEMENTARY INFORMATION: The North the drawbridge must return to its regular Carolina Department of Transportation, Drawbridge Operation Regulations; operating schedule immediately at the who owns and operates this swing-type The Gut, South Bristol, ME end of the effective period of this bridge, has requested a temporary AGENCY: Coast Guard, DHS. temporary deviation. This deviation deviation from the current operating ACTION: Notice of temporary deviation from the operating regulations is regulations set out in 33 CFR 117.5 to from regulations. authorized under 33 CFR 117.35. facilitate coupling repair. Under the regular operating schedule SUMMARY: The Commander, First Coast Dated: July 3, 2013. for the Route 70/Harkers Island Bridge, Guard District, has issued a temporary Waverly W. Gregory, Jr., across The Straights, mile 0.6, in deviation from the regulation governing Bridge Program Manager, Fifth Coast Guard Harkers Island, NC, the draw must open the operation of the SR129 Bridge across District. promptly and fully for the passage of The Gut, mile 0.2, between Rutherford [FR Doc. 2013–16810 Filed 7–12–13; 8:45 am] vessels when a request or signal to open Island and South Bristol, Maine. The BILLING CODE 9110–04–P is given. The drawbridge has a vertical bridge owner, Maine Department of

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Transportation will be performing test Dated: July 1, 2013. Cleveland, OH, at (216) 902–6049 or borings at the bridge. This deviation Gary Kassof, email him at [email protected]. allows the bridge to delay bridge Bridge Program Manager, First Coast Guard If you have questions on viewing or openings by ten minutes for a four hour District. submitting material to the docket, call period to facilitate scheduled test [FR Doc. 2013–16808 Filed 7–12–13; 8:45 am] Barbara Hairston, Program Manager, borings at the bridge. BILLING CODE 9110–04–P Docket Operations, telephone 202–366– 9826. DATES: This deviation is effective from SUPPLEMENTARY INFORMATION: 10 a.m. through 2 p.m. on July 15, 2013. DEPARTMENT OF HOMELAND Table of Acronyms ADDRESSES: Documents mentioned in SECURITY this preamble as being available in the ACOE U.S. Army Corps of Engineers docket are part of docket USCG–2013– Coast Guard CSSC Chicago Sanitary and Ship Canal 0599 and are available online at CFR Code of Federal Regulations www.regulations.gov, inserting USCG– 33 CFR Part 165 DHS Department of Homeland Security 2013–0599 in the ‘‘Keyword’’ and then [Docket No. USCG–2011–1108] IR Interim Rule NPRM Notice of Proposed Rulemaking clicking ‘‘Search’’. They are also RIN 1625–AA11, 1625–AA00 RNA Regulated Navigation Area available for inspection or copying at the Docket Management Facility (M–30), Safety Zone and Regulated Navigation A. Public Participation and Request for U.S. Department of Transportation, Area; Chicago Sanitary and Ship Comments West Building Ground Floor, Room Canal, Romeoville, IL We encourage you to participate in W12–140, 1200 New Jersey Avenue SE., AGENCY: Coast Guard, DHS. this rulemaking by submitting Washington, DC 20590, between 9 a.m. comments and related materials. All and 5 p.m., Monday through Friday, ACTION: Interim rule with request for comments. comments received will be posted except Federal holidays. without change to http:// FOR FURTHER INFORMATION CONTACT: If SUMMARY: The Coast Guard is issuing www.regulations.gov and will include you have questions on this rule, call or this Interim Rule to address two any personal information you have email Mr. John McDonald, Project omissions from the regulatory text of the provided. Officer, First Coast Guard District, Safety zone and Regulated Navigation 1. Submitting Comments telephone (617) 223–8364, Area in the Chicago Sanitary and Ship If you submit a comment, please [email protected]. If you have Canal, Romeoville, IL. These omissions include requirements for the regulated include the docket number for this questions on viewing the docket, call rulemaking, indicate the specific section Barbara Hairston, Program Manager, navigation area that vessels must be greater than twenty feet in length and of this document to which each Docket Operations, telephone 202–366– comment applies, and provide a reason 9826. must not be a personal or human powered watercraft of any kind (e.g. jet for each suggestion or recommendation. SUPPLEMENTARY INFORMATION: The skis, wave runners, kayaks, row boats, You may submit your comments and SR129 Bridge, across The Gut, mile 0.2, etc.). This revision is intended to make material online (via http:// between Rutherford Island and South the regulatory text consistent with the www.regulations.gov) or by fax, mail, or Bristol, Maine, has a vertical clearance discussion of the rule as originally hand delivery, but please use only one in the closed position of 3 feet above published in the Federal Register on of these means. If you submit a mean high water and 12 feet above December 12, 2011. comment online via www.regulations.gov, it will be mean low water. The bridge operating DATES: This rule will be enforced with regulations are listed at 33 CFR 117.5. considered received by the Coast Guard actual notice from June 19, 2013, until when the comment is successfully The waterway is transited by July 15, 2013. This rule is effective in transmitted; a comment submitted via recreational and commercial fishing the Code of Federal Regulations on July fax, hand delivery, or mail, will be boats. There is an alternate route for 15, 2013. Comments and related considered as having been received by navigation around Rutherford Island material must be received by the Coast the Coast Guard when the comment is and the bridge can be opened as soon Guard on or before August 14, 2013. received at the Docket Management as possible for an emergency situation. ADDRESSES: Documents indicated in this Facility. We recommend that you The bridge owner, Maine Department preamble as being available in the include your name and a mailing of Transportation, requested a docket are part of docket USCG–2011– address, an email address, or a temporary deviation from the normal 1108 and are available online by going telephone number in the body of your operating schedule to facilitate test to www.regulations.gov, inserting document so that we can contact you if boring operations. USCG–2011–1108 in the ‘‘SEARCH’’ we have questions regarding your box, and then clicking ‘‘Search.’’ They Under this temporary deviation the submission. are also available for inspection or To submit your comment online, go to SR129 Bridge may delay bridge copying at the Docket Management http://www.regulations.gov, type the openings by up to ten minutes between Facility (M–30), U.S. Department of docket number in the ‘‘SEARCH’’ box 10 a.m. and 2 p.m. on July 15, 2013 to Transportation, West Building Ground and click ‘‘SEARCH.’’ Click on ‘‘Submit facilitate moving a test boring rig out of Floor, Room W12–140, 1200 New Jersey a Comment’’ on the line associated with the channel. Avenue SE., Washington, DC 20590, this rulemaking. In accordance with 33 CFR 117.35(e), between 9 a.m. and 5 p.m., Monday If you submit your comments by mail the bridge must return to its regular through Friday, except Federal holidays. or hand delivery, submit them in an operating schedule immediately at the FOR FURTHER INFORMATION CONTACT: If unbound format, no larger than 81⁄2 by end of the designated time period. This you have questions on this rule, call 11 inches, suitable for copying and deviation from the operating regulations CDR Scott Anderson, U.S. Coast Guard, electronic filing. If you submit is authorized under 33 CFR 117.35. Ninth District Prevention Department, comments by mail and would like to

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know that they reached the Facility, human powered watercraft of any kind. Guard will consider comments prior to please enclose a stamped, self-addressed Although these requirements were the finalization of this rule. Such postcard or envelope. We will consider adopted and discussed in 76 FR 77121 comments may be submitted by all comments and material received (see Discussion of Rule), they were following the instruction in the Public during the comment period and may omitted from the regulatory text of 33 Participation and Request for Comments change the rule based on your CFR 165.923. To correct this section. comments. discrepancy and conform the regulation Under 5 U.S.C. 553(d)(3), the Coast to established enforcement practice of Guard finds that good cause exists for 2. Viewing Comments and Documents the RNA, the Coast Guard is issuing this making this rule effective less than 30 To view comments, as well as IR. days after publication in the Federal documents mentioned in this preamble The Coast Guard is issuing this IR Register. For the same reasons as being available in the docket, go to without prior notice and opportunity to discussed above about not publishing an http://www.regulations.gov, type the comment pursuant to authority under NPRM, the Coast Guard finds that docket number in the ‘‘SEARCH’’ box section 4(a) of the Administrative waiting for a 30 day notice period to run and click ‘‘SEARCH.’’ Click on ‘‘OPEN Procedure Act (APA) (5 U.S.C. 553(b)). would be unnecessary, impracticable, DOCKET FOLDER’’ on the line This provision authorizes an agency to and contrary to the public interest. associated with this rulemaking. You issue a rule without prior notice and C. Basis and Purpose may also visit the Docket Management opportunity to comment when the Facility in Room W12–140 on the agency for good cause finds that those In response to the threat of Asian carp ground floor of the Department of procedures are ‘‘impracticable, reaching the Great Lakes and Transportation West Building, 1200 unnecessary, or contrary to the public devastating the Great Lakes commercial New Jersey Avenue SE., Washington, interest.’’ Under 5 U.S.C. 553(b)(B), the and sport fishing industries, the ACOE DC 20590, between 9 a.m. and 5 p.m., Coast Guard finds that good cause exists began in 2002 the operation of a series Monday through Friday, except Federal for not publishing a notice of proposed of electrical barriers in the CSSC. These holidays. rulemaking (NPRM) with respect to this barriers are located approximately 30 rule because doing so would be miles from Lake Michigan and create an 3. Privacy Act impracticable and is unnecessary. The electric field in the water by pulsing low Anyone can search the electronic fish barrier remains active and voltage DC current through steel cables form of comments received into any of publishing an NPRM and accepting secured to the bottom of the canal. our dockets by the name of the comments prior to the issuance of an Currently, three electrical barriers are in individual submitting the comment (or effective rule is impracticable because it operation. These barriers are meant to signing the comment, if submitted on inhibits the Coast Guard’s ability to prevent and reduce the dispersal of behalf of an association, business, labor protect vessels less than 20 feet in Asian carp in the CSSC. union, etc.). You may review a Privacy length and personal watercrafts from The Coast Guard’s Ninth District Act notice regarding our public dockets harm. The electrified barriers pose a Commander has determined that the in the January 17, 2008, issue of the significant threat of harm to vessels less electric current radiated from the Federal Register (73 FR 3316). than 20 feet in length and personal electric barriers poses certain safety watercrafts. risks to commercial vessels, recreational 4. Public Meeting Additionally, the RNA restrictions boaters, and people on or in portions of We do not now plan to hold a public that (1) vessels must be greater than the CSSC in the vicinity of the barriers. meeting. You may submit a request for twenty feet in length and (2) must not Consequently, the Coast Guard’s Ninth one using one of the four methods be personal or human powered District Commander has concluded that specified under ADDRESSES. Please watercraft of any kind were subject to a an RNA is necessary to mitigate such explain why you believe a public 30 day comment period in a temporary risks. meeting would be beneficial. If we interim rule establishing the RNA for In addition to safety concerns about determine that one would aid this the CSSC (75 FR 75145), which electric current in the water, concerns rulemaking, we will hold one at a time published on December 2, 2010. The have also been raised about the and place announced by a later notice Coast Guard received no comments on potential transport of carp eggs, in the FR. portions relating to vessels less than 20 gametes, and juvenile fish in bilge, feet or personal watercrafts. Moreover, ballast, or other non-potable water from B. Regulatory History and Information based on the Coast Guard’s south of the barriers to waters north of Since 2005, the Coast Guard has interpretation of that temporary interim the barriers. To address these concerns, established and enforced a series of rule, as discussed in its preamble, the Coast Guard’s Ninth District safety zones and RNAs on the CSSC to vessels less than 20 feet and personal Commander has determined that a address safety risks associated with the watercraft are not allowed to travel safety zone is necessary to mitigate the operation of the ACOE’s electric through the barrier. Because the threat of such transportation. dispersal fields. A summary of this restriction on vessels less than 20 feet For a fuller discussion on the history regulatory history can be found in the and personal watercraft has already of the electrical dispersal barriers and background section of the final rule been the subject public comment and the potential transportation of eggs, establishing the current version of 33 the Coast Guard has interpreted the gametes, and juvenile fish across the CFR 165.923 (76 FR 77121). Notably, the temporary interim rule published at 75 barriers see 70 FR 76694, 75 FR 754, and Coast Guard published a temporary final FR 75145 to exclude these vessels, prior 75 FR 75145, which were published on rule with request for comments in the notice and comment for this interim December 28, 2005, January 6, 2010, and Federal Register on December 2, 2010 rule is unnecessary. December 2, 2010 respectively. (75 FR 75145). This rule established Although the Coast Guard finds that To address the aforesaid safety risks, RNA restrictions for the CSSC, which good cause exists not to publish an the Coast Guard’s Ninth District included requirements that (1) vessels NPRM, comments from the public as to Commander, as discussed in the must be greater than twenty feet in the addition of this provision to the Regulatory History and Information length and (2) must not be personal or regulation text are welcomed. The Coast section, established a series of safety

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zones and RNAs from 2005 to 2010. 1. Regulatory Planning and Review jurisdiction and you have questions Most recently, on December 1, 2011, the This rule is not a significant concerning its provisions or options for Coast Guard’s Ninth District regulatory action under section 3(f) of compliance, please contact the person Commander established a permanent Executive Order 12866, Regulatory listed in the FOR FURTHER INFORMATION RNA on all waters located adjacent to, Planning and Review, as supplemented CONTACT, above. and over, the electrical dispersal by Executive Order 13563, Improving Small businesses may send comments barriers on the CSSC between mile Regulation and Regulatory Review, and on the actions of Federal employees marker 295.5 and mile marker 297.2 (76 does not require an assessment of who enforce, or otherwise determine FR 77121). In the same rule-making, the potential costs and benefits under compliance with Federal regulations to Coast Guard’s Ninth District section 6(a)(3) of Executive Order 12866 the Small Business and Agriculture Commander also established a or under section 1 of Executive Order Regulatory Enforcement Ombudsman permanent safety zone over a smaller 13563. The Office of Management and and the Regional Small Business portion of the same waterway between Budget has not reviewed it under those Regulatory Fairness Boards. The mile marker 296.1 and mile marker Orders. It is not ‘‘significant’’ under the Ombudsman evaluates these actions 296.7. This rule-making represents the regulatory policies and procedures of annually and rates each agency’s current version of 33 CFR 165.923. the Department of Homeland Security responsiveness to small business. If you wish to comment on actions by D. Discussion of Rule (DHS). We conclude that this rule is not a employees of the Coast Guard, call 1– This IR only addresses two significant regulatory action because we 888–REG–FAIR (1–888–734–3247). The requirements in the RNA of 33 CFR anticipate that it will have minimal Coast Guard will not retaliate against 165.923, which although included in impact on the economy, will not small entities that question or complain the Discussion of Rule of 76 FR 77121 interfere with other agencies, will not about this rule or any policy or action were omitted from the regulatory text of adversely alter the budget of any grant of the Coast Guard. 33 CFR 165.923. As previously noted, or loan recipients, and will not raise any 4. Collection of Information these requirements are that (1) vessels novel legal or policy issues. The two must be greater than twenty feet in RNA restrictions are limited in scope to This rule calls for no new collection length and (2) must not be a personal or vessels under twenty feet in length and of information under the Paperwork human powered watercraft of any kind personal watercraft of any kind. Reduction Act of 1995 (44 U.S.C. 3501– (i.e. jet skis, wave runners, kayaks, row 3520). 2. Impact on Small Entities boats, etc.). These requirements, as with 5. Federalism all others included in the 33 CFR The Regulatory Flexibility Act of 1980 165.923, are necessary for safe (RFA), 5 U.S.C. 601–612, as amended, A rule has implications for federalism navigation of the RNA and to ensure the requires federal agencies to consider the under Executive Order 13132, safety of vessels and their personnel as potential impact of regulations on small Federalism, if it has a substantial direct well as the public in general. The entities during rulemaking. The term effect on State or local governments and requirements are also necessary to ‘‘small entities’’ comprises small would either preempt State law or protect against the harms presented by businesses, not-for-profit organizations impose a substantial direct cost of a potential invasion of Asian carp in that are independently owned and compliance on them. We have analyzed Lake Michigan. operated and are not dominant in their this rule under that Order and have Deviation from this final rule is fields, and governmental jurisdictions determined that it does not have prohibited unless specifically with populations of less than 50,000. implications for federalism. The Coast Guard certifies under 5 U.S.C. authorized by the Coast Guard’s Ninth 6. Unfunded Mandates Reform Act 605(b) that this rule will not have a District Commander or his or her The Unfunded Mandates Reform Act designated representatives. For the life significant economic impact on a substantial number of small entities. of 1995 (2 U.S.C. 1531–1538) requires of this RNA, the Coast Guard’s Ninth This rule will affect the following Federal agencies to assess the effects of District Commander designates as his or entities, some of which might be small their discretionary regulatory actions. In her representatives the Captain of the entities: The owners or operators of particular, the Act addresses actions Port, Sector Lake Michigan, and the vessels under 20 feet and personal or that may result in the expenditure by a Commanding Officer, Marine Safety human powered watercraft intending to State, local, or tribal government, in the Unit Chicago. transit the RNA during enforcement. aggregate, or by the private sector of The safety zone and RNA will be This RNA will not have a significant $100,000,000 (adjusted for inflation) or enforced at all times. If, however, economic impact on a substantial more in any one year. Though this rule enforcement of the safety zone or RNA number of small entities for the would not result in such expenditure, is at any time suspended, the Coast following reasons: The RNA restrictions we do discuss the effects of this rule Guard’s Ninth District Commander or in this rule are limited in scope of elsewhere in this preamble. his or her designated representatives vessels under 20 feet and personal or 7. Taking of Private Property will cause notice of the suspension to be human powered watercraft. made by all appropriate means to effect This rule will not affect the taking of the widest publicity among the affected 3. Assistance for Small Entities private property or otherwise have segments of the public. Under section 213(a) of the Small taking implications under Executive E. Regulatory Analyses Business Regulatory Enforcement Order 12630, Governmental Actions and Fairness Act of 1996 (Pub. L. 104–121), Interference with Constitutionally We developed this rule after we want to assist small entities in Protected Property Rights. considering numerous statutes and understanding this rule so that they can executive orders related to rulemaking. better evaluate its effects on them and 8. Civil Justice Reform Below we summarize our analyses participate in the rulemaking process. This rule meets applicable standards based on these statutes or executive If the rule would affect your small in sections 3(a) and 3(b)(2) of Executive orders. business, organization, or governmental Order 12988, Civil Justice Reform, to

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minimize litigation, eliminate 13. Environment (B) Vessels must not be a personal or ambiguity, and reduce burden. We have analyzed this rule under human powered watercraft (i.e. jet skis, 9. Protection of Children Department of Homeland Security wave runners, kayaks, row boats, etc.). Management Directive 023–01 and (C) All up-bound and down-bound We have analyzed this rule under Commandant Instruction M16475.lD, barge tows that consist of barges Executive Order 13045, Protection of which guide the Coast Guard in carrying flammable liquid cargos (Grade Children from Environmental Health complying with the National A through C, flashpoint below 140 Risks and Safety Risks. This rule is not Environmental Policy Act of 1969 degrees Fahrenheit, or heated to within an economically significant rule and (NEPA) (42 U.S.C. 4321–4370f), and does not create an environmental risk to 15 degrees Fahrenheit of flash point) have determined that this action is one must engage the services of a bow boat health or risk to safety that may of a category of actions that do not disproportionately affect children. at all times until the entire tow is clear individually or cumulatively have a of the RNA. 10. Indian Tribal Governments significant effect on the human environment. This rule involves the (D) Vessels engaged in commercial This rule does not have tribal establishment of a regulated navigation service, as defined in 46 U.S.C. 2101(5), implications under Executive Order area, and, therefore it is categorically may not pass (meet or overtake) in the 13175, Consultation and Coordination excluded from further review under RNA and must make a SECURITE call with Indian Tribal Governments, paragraph 34(g) of Figure 2–1 of the when approaching the RNA to because it does not have a substantial Commandant Instruction. An announce intentions and work out direct effect on one or more Indian environmental analysis checklist passing arrangements. tribes, on the relationship between the supporting this determination and a Federal Government and Indian tribes, (E) Commercial tows transiting the Categorical Exclusion Determination are RNA must be made up with only wire or on the distribution of power and available in the docket where indicated responsibilities between the Federal rope to ensure electrical connectivity under ADDRESSES. We seek any between all segments of the tow. Government and Indian tribes. comments or information that may lead (F) All vessels are prohibited from 11. Energy Effects to the discovery of a significant environmental impact from this rule. loitering in the RNA. We have analyzed this rule under (G) Vessels may enter the RNA for the List of Subjects in 33 CFR Part 165 Executive Order 13211, Actions sole purpose of transiting to the other Concerning Regulations That Harbors, Marine safety, Navigation side and must maintain headway Significantly Affect Energy Supply, (water), Reporting and recordkeeping throughout the transit. All vessels and Distribution, or Use. We have requirements, Security measures, persons are prohibited from dredging, determined that it is not a ‘‘significant Waterways. laying cable, dragging, fishing, energy action’’ under that order because For the reasons discussed in the it is not a ‘‘significant regulatory action’’ conducting salvage operations, or any preamble, the Coast Guard amends 33 other activity, which could disturb the under Executive Order 12866 and is not CFR Part 165 as follows: likely to have a significant adverse effect bottom of the RNA. on the supply, distribution, or use of PART 165—REGULATED NAVIGATION (H) Except for law enforcement and energy. The Administrator of the Office AREAS AND LIMITED ACCESS AREAS emergency response personnel, all of Information and Regulatory Affairs personnel on vessels transiting the RNA has not designated it as a significant ■ 1. The authority citation for part 165 should remain inside the cabin, or as energy action. Therefore, it does not continues to read as follows: inboard as practicable. If personnel require a Statement of Energy Effects Authority: 33 U.S.C. 1231; 46 U.S.C. must be on open decks, they must wear under Executive Order 13211. Chapter 701, 3306, 3703; 50 U.S.C. 191, 195; a Coast Guard approved personal 12. Technical Standards 33 CFR 1.05–1, 6.04–1, 6.04–6, and 160.5; flotation device. Pub. L. 107–295, 116 Stat. 2064; Department The National Technology Transfer of Homeland Security Delegation No. 0170.1. (I) Vessels may not moor or lay up on and Advancement Act (NTTAA) (15 the right or left descending banks of the ■ 2. Revise § 165.923(b) to read as RNA. U.S.C. 272 note) directs agencies to use follows: voluntary consensus standards in their (J) Towboats may not make or break regulatory activities unless the agency § 165.923 Safety Zone and Regulated tows if any portion of the towboat or provides Congress, through the Office of Navigation Area, Chicago Sanitary and Ship tow is located in the RNA. Canal, Romeoville, IL. Management and Budget, with an (K) Persons on board any vessel * * * * * explanation of why using these transiting this RNA in accordance with standards would be inconsistent with (b) Regulated Navigation Area. (1) this rule or otherwise are advised they applicable law or otherwise impractical. The following is a regulated navigation do so at their own risk. Voluntary consensus standards are area (RNA): all waters of the Chicago technical standards (e.g., specifications Sanitary and Ship Canal, Romeoville, IL * * * * * of materials, performance, design, or located between mile marker 295.5 and Dated: June 19, 2013. operation; test methods; sampling mile marker 297.2. M.N. Parks, procedures; and related management (2) Regulations. (i) The general Rear Admiral, U.S. Coast Guard, Commander, systems practices) that are developed or regulations contained in 33 CFR 165.13 Ninth Coast Guard District. adopted by voluntary consensus apply. [FR Doc. 2013–16803 Filed 7–12–13; 8:45 am] standards bodies. (ii) Vessels that comply with the This rule does not use technical following restrictions are permitted to BILLING CODE 9110–04–P standards. Therefore, we did not transit the RNA: consider the use of voluntary consensus (A) Vessels must be greater than 20 standards. feet in length.

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DEPARTMENT OF HOMELAND NPRM Notice of Proposed Rulemaking mitigate the aforementioned safety risks. SECURITY TFR Temporary Final Rule Thus, this rule establishes a safety zone A. Regulatory History and Information that encompasses all waters of Coast Guard Milwaukee Harbor, including Lakeshore On May 17, 2013, the Coast Guard inlet and Discovery World Marina, 33 CFR Part 165 published a notice of proposed within the arc of a circle with a 300-foot rulemaking entitled, ‘‘Safety Zone; [Docket No. USCG–2013–0326] radius from the fireworks launch site Discovery World Fireworks, Milwaukee located in approximate position RIN 1625–AA00 Harbor, Milwaukee, Wisconsin’’ in the 43°02′10.7″ N, 087°53′37.5″ W (NAD Federal Register (78 FR 29086). We 83). Safety Zone; Discovery World received 0 comments on the proposed This safety zone is effective from July Fireworks, Milwaukee Harbor, rule. No public meeting was requested, 10, 2013, until October 5, 2013. This Milwaukee, WI and none was held. safety zone will be enforced from 9 p.m. The Coast Guard finds that good cause AGENCY: Coast Guard, DHS. until 11 p.m. on July 10; August 3 and exists under 5 U.S.C. 553(d)(3), for ACTION: Temporary final rule. 22; and October 5, 2013. making this rule effective less than 30 Entry into, transiting, or anchoring SUMMARY: The Coast Guard is days after publication in the Federal within the safety zone is prohibited establishing a temporary safety zone Register. Waiting for a 30 day notice unless authorized by the Captain of the within Milwaukee Harbor, Milwaukee, period to run would be impracticable Port, Lake Michigan, or his designated Wisconsin. This zone is intended to and contrary to the public interest on-scene representative. The Captain of restrict vessels from a portion of because the Coast Guard did not receive the Port or his designated on-scene Milwaukee Harbor due to 4 fireworks the necessary information in time for representative may be contacted via displays at Discovery World Pier. This this regulation to undertake both an VHF Channel 16. NPRM and a 30 day delayed effective safety zone is necessary to protect the D. Regulatory Analyses surrounding public and vessels from the date. The Coast Guard chose to seek hazards associated with these fireworks public comment in the time that We developed this temporary rule displays. remained. Additionally, undergoing a after considering numerous statutes and 30 day delayed effective date would DATES: This rule will be enforced with executive orders related to rulemaking. actual notice from July 10, 2013, until inhibit the Coast Guard’s ability to Below we summarize our analyses July 15, 2013. This rule is effective in protect spectators and vessels from the based on these statutes and executive the Code of Federal Regulations from hazards associated with a maritime orders. July 15, 2013 until October 5, 2013. This fireworks display, which are discussed further below. 1. Regulatory Planning and Review rule will be enforced at the dates and This rule is not a significant times listed in the ‘‘Discussion of B. Basis and Purpose regulatory action under section 3(f) of Comments, Changes, and the Final The legal basis for the rule is the Executive Order 12866, Regulatory Rule’’ section that follows. Coast Guard’s authority to establish Planning and Review, as supplemented ADDRESSES: Documents mentioned in regulated navigation areas and limited by Executive Order 13563, Improving this preamble are part of docket USCG– access areas: 33 U.S.C. 1231; 46 U.S.C. Regulation and Regulatory Review, and 2013–0326. To view documents Chapter 701, 3306, 3703; 50 U.S.C. 191, does not require an assessment of mentioned in this preamble as being 195; 33 CFR 1.05–1, 6.04–1, 6.04–6, potential costs and benefits under available in the docket, go to http:// 160.5; Public Law 107–295, 116 Stat. section 6(a)(3) of Executive Order 12866 www.regulations.gov, type the docket 2064; Department of Homeland Security or under section 1 of Executive Order number in the ‘‘SEARCH’’ box and click Delegation No. 0170.1. 13563. The Office of Management and ‘‘SEARCH.’’ Click on Open Docket Bartolotta Catering Company has Budget has not reviewed it under those Folder on the line associated with this informed the Coast Guard of 4 fireworks Orders. It is not ‘‘significant’’ under the rulemaking. You may also visit the displays planned for 2013. These regulatory policies and procedures of Docket Management Facility in Room displays are scheduled for July 10; the Department of Homeland Security W12–140 on the ground floor of the August 3 and 22; and October 5. Each (DHS). Department of Transportation West display is expected to involve fireworks We conclude that this rule is not a Building, 1200 New Jersey Avenue SE., no larger than 4″ in size and will be significant regulatory action because we Washington, DC 20590, between 9 a.m. fired from the same location on anticipate that it will have minimal and 5 p.m., Monday through Friday, Discovery World Pier. The Captain of impact on the economy, will not except Federal holidays. the Port, Lake Michigan, has determined interfere with other agencies, will not FOR FURTHER INFORMATION CONTACT: If that the likelihood of transiting adversely alter the budget of any grant you have questions on this temporary watercraft during the fireworks displays or loan recipients, and will not raise any rule, contact or email MST1 Joseph presents a significant risk of serious novel legal or policy issues. The safety McCollum, U.S. Coast Guard Sector injuries or fatalities. The safety risks zone created by this rule will be small Lake Michigan, at 414–747–7148 or associated with these displays include and enforced for only two hours on a [email protected]. If you falling debris, accidental detonations, given day. Under certain conditions, have questions on viewing the docket, and the spread of fire among spectator moreover, vessels may still transit call Barbara Hairston, Program Manager, vessels. through the safety zone when permitted Docket Operations, telephone (202) by the Captain of the Port. 366–9826. C. Discussion of Comments, Changes, and the Final Rule 2. Small Entities SUPPLEMENTARY INFORMATION: No comments were received and no Under the Regulatory Flexibility Act Table of Acronyms changes were made. The Captain of the (5 U.S.C. 601–612), we have considered DHS Department of Homeland Security Port, Lake Michigan, has determined the impact of this rule on small entities. FR Federal Register that a safety zone is necessary to The Coast Guard certifies under 5 U.S.C.

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605(b) that this rule will not have a wish to comment on actions by 10. Protection of Children From significant economic impact on a employees of the Coast Guard, call 1– Environmental Health Risks substantial number of small entities. 888–REG–FAIR (1–888–734–3247). The The Coast Guard certifies under 5 U.S.C. Coast Guard will not retaliate against We have analyzed this rule under 605(b) that this rule will not have a small entities that question or complain Executive Order 13045, Protection of significant economic impact on a about this rule or any policy or action Children from Environmental Health substantial number of small entities. of the Coast Guard. Risks and Safety Risks. This rule is not This rule will affect the following an economically significant rule and entities, some of which might be small 4. Collection of Information does not create an environmental risk to entities: The owners or operators of health or risk to safety that may This rule will not call for a new disproportionately affect children. vessels intending to transit or anchor in collection of information under the a portion of Lake Michigan in Paperwork Reduction Act of 1995 (44 11. Indian Tribal Governments Milwaukee Harbor during the times U.S.C. 3501–3520). when this rule is enforced. This rule does not have tribal The Coast Guard certifies under 5 5. Federalism implications under Executive Order U.S.C. 605(b) that this rule would not 13175, Consultation and Coordination have a significant economic impact on A rule has implications for federalism with Indian Tribal Governments, a substantial number of small entities. under Executive Order 13132, because it does not have a substantial This rule will affect the following Federalism, if it has a substantial direct direct effect on one or more Indian entities, some of which might be small effect on the States, on the relationship tribes, on the relationship between the entities: The owners or operators of between the national government and Federal Government and Indian tribes, vessels intending to transit or anchor the States, or on the distribution of or on the distribution of power and within the vicinity of the Discovery power and responsibilities among the responsibilities between the Federal World Marina or Lakeshore inlet during various levels of government. We have Government and Indian tribes. the times that this zone is enforced. analyzed this rule under that Order and This safety zone will not have a determined that this rule does not have 12. Energy Effects implications for federalism. significant economic impact on a This action is not a ‘‘significant substantial number of small entities for 6. Protest Activities energy action’’ under Executive Order the following reasons: This rule will be 13211, Actions Concerning Regulations enforced for a limited time on 4 days. The Coast Guard respects the First That Significantly Affect Energy Supply, This safety zone has been designed to Amendment rights of protesters. Distribution, or Use. allow traffic to pass safely around the Protesters are asked to contact the zone whenever possible and vessels will person listed in the FOR FURTHER 13. Technical Standards be allowed to pass through the zone INFORMATION CONTACT section to This rule does not use technical with the permission of the Captain of coordinate protest activities so that your standards. Therefore, we did not the Port. If you think that your business, message can be received without consider the use of voluntary consensus organization, or governmental jeopardizing the safety or security of standards. jurisdiction qualifies as a small entity people, places or vessels. and that this rule would have a 14. Environment significant economic impact on it, 7. Unfunded Mandates Reform Act We have analyzed this rule under please submit a comment (see The Unfunded Mandates Reform Act ADDRESSES) explaining why you think it Department of Homeland Security of 1995 (2 U.S.C. 1531–1538) requires Management Directive 023–01 and qualifies and how and to what degree Federal agencies to assess the effects of this rule would economically affect it. Commandant Instruction M16475.lD, their discretionary regulatory actions. In which guide the Coast Guard in 3. Assistance for Small Entities particular, the Act addresses actions complying with the National that may result in the expenditure by a Under section 213(a) of the Small Environmental Policy Act of 1969 State, local, or tribal government, in the Business Regulatory Enforcement (NEPA) (42 U.S.C. 4321–4370f), and aggregate, or by the private sector of Fairness Act of 1996 (Pub. L. 104–121), have determined that this action is one $100,000,000 (adjusted for inflation) or we want to assist small entities in of a category of actions that do not more in any one year. Though this rule understanding this rule. If the rule individually or cumulatively have a will not result in such an expenditure, would affect your small business, significant effect on the human we do discuss the effects of this rule organization, or governmental environment. This rule involves the elsewhere in this preamble. jurisdiction and you have questions establishment of a safety zone and, concerning its provisions or options for 8. Taking of Private Property therefore it is categorically excluded compliance, please contact the person from further review under paragraph listed in the FOR FURTHER INFORMATION This rule will not cause a taking of 34(g) of Figure 2–1 of the Commandant CONTACT section above. private property or otherwise have Instruction. An environmental analysis Small businesses may send comments taking implications under Executive checklist supporting this determination on the actions of Federal employees Order 12630, Governmental Actions and and a Categorical Exclusion who enforce, or otherwise determine Interference with Constitutionally Determination are available in the compliance with, Federal regulations to Protected Property Rights. docket where indicated under the Small Business and Agriculture 9. Civil Justice Reform ADDRESSES. Regulatory Enforcement Ombudsman List of Subjects in 33 CFR Part 165 and the Regional Small Business This rule meets applicable standards Regulatory Fairness Boards. The in sections 3(a) and 3(b)(2) of Executive Harbors, Marine safety, Navigation Ombudsman evaluates these actions Order 12988, Civil Justice Reform, to (water), Reporting and record keeping annually and rates each agency’s minimize litigation, eliminate requirements, Security measures, responsiveness to small business. If you ambiguity, and reduce burden. Waterways.

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For the reasons discussed in the Dated: July 1, 2013. the FOR FURTHER INFORMATION CONTACT preamble, the Coast Guard amends 33 M.W. Sibley, section. CFR Part 165 as follows: Captain, U.S. Coast Guard, Captain of the FOR FURTHER INFORMATION CONTACT: John Port, Lake Michigan. Ungvarsky, (415) 972–3963, or by email PART 165—REGULATED NAVIGATION [FR Doc. 2013–16807 Filed 7–12–13; 8:45 am] at [email protected]. AREAS AND LIMITED ACCESS AREAS BILLING CODE 9110–04–P SUPPLEMENTARY INFORMATION: Throughout this document, wherever ■ 1. The authority citation for Part 165 ‘‘we’’, ‘‘us’’ or ‘‘our’’ are used, we mean continues to read as follows: ENVIRONMENTAL PROTECTION EPA. AGENCY Authority: 33 U.S.C. 1231; 46 U.S.C. Table of Contents Chapter 701, 3306, 3703; 50 U.S.C. 191, 195; 40 CFR Part 52 33 CFR 1.05–1, 6.04–1, 6.04–6, and 160.5; I. Summary of EPA’s Proposed Action Pub. L. 107–295, 116 Stat. 2064; Department [EPA–R09–OAR–2012–0799; FRL–9833–2] II. Public Comments of Homeland Security Delegation No. 0170.1. III. EPA’s Final Action Determination of Attainment for the IV. Statutory and Executive Order Reviews ■ 2. Add § 165.T09–0326 to read as Sacramento Nonattainment Area for follows: the 2006 Fine Particle Standard; I. Summary of EPA’s Proposed Action California; Determination Regarding On October 26, 2012 (77 FR 65346), § 165.T09–0326 Safety Zone; Discovery Applicability of Clean Air Act EPA proposed to determine that the World Fireworks, Milwaukee Harbor, Requirements Sacramento nonattainment area in Milwaukee, Wisconsin. California has attained the 2006 24-hour (a) Location. All waters of Milwaukee AGENCY: Environmental Protection NAAQS for fine particles (generally Harbor, including Lakeshore inlet and Agency (EPA). referring to particles less than or equal ACTION Discovery World Marina, within the arc : Final rule. to 2.5 micrometers in diameter, PM2.5). The 2006 24-hour PM2.5 NAAQS is 35 of a circle with a 300-foot radius from SUMMARY: EPA is taking final action to micrograms per cubic meter (mg/m3), the fireworks launch site located in determine that the Sacramento ° ′ ″ based on a 3-year average of the 98th approximate position 43 02 10.7 N, nonattainment area in California has ° ′ ″ percentile of 24-hour concentrations. 087 53 37.5 W (NAD 83). attained the 2006 24-hour fine particle The Sacramento PM nonattainment (PM 2.5 (b) Effective Period. This safety zone 2.5) National Ambient Air Quality area includes Sacramento County, the will be effective from July 10, 2013, Standard (NAAQS or standard). This western portions of El Dorado and until October 5, 2013. This safety zone determination is based upon complete, Placer counties, and the eastern portions will be enforced from 9 p.m. until 11 quality-assured, and certified ambient of Solano and Yolo counties. Other than p.m. on July 10; August 3 and 22; and air monitoring data showing that this the El Dorado County portion of the October 5, 2013. area has monitored attainment of the nonattainment area, the Sacramento 2006 24-hour PM 2.5 NAAQS based on PM nonattainment area lies within the (c) Regulations. (1) In accordance with the 2010–2012 monitoring period. Based 2.5 the general regulations in § 165.23 of Sacramento Valley Air Basin. on the above determination, the In our proposed rule, we explained this part, entry into, transiting, or requirements for this area to submit an anchoring within this safety zone is how EPA makes an attainment attainment demonstration, together with determination for the 2006 24-hour prohibited unless authorized by the reasonably available control measures, a PM2.5 NAAQS by reference to complete, Captain of the Port, Lake Michigan or reasonable further progress (RFP) plan, his designated on-scene representative. quality-assured data gathered at a State and contingency measures for failure to and Local Air Monitoring Station(s) (2) This safety zone is closed to all meet RFP and attainment deadlines are (SLAMS) and entered into EPA’s Air vessel traffic, except as may be suspended for so long as the area Quality System (AQS) database and by permitted by the Captain of the Port, continues to attain the 2006 24-hour reference to 40 CFR 50.13 (‘‘National Lake Michigan or his designated on- PM2.5 NAAQS. primary and secondary ambient air scene representative. DATES: Effective Date: This rule is quality standards for PM2.5’’) and (3) The ‘‘on-scene representative’’ of effective on August 14, 2013. appendix N to [40 CFR] part 50 the Captain of the Port, Lake Michigan ADDRESSES: EPA has established docket (‘‘Interpretation of the National Ambient is any Coast Guard commissioned, number EPA–R09–OAR–2012–0799 for Air Quality Standards for PM2.5’’). EPA warrant or petty officer who has been this action. Generally, documents in the proposed the determination of designated by the Captain of the Port, docket for this action are available attainment for the Sacramento Lake Michigan to act on his behalf. electronically at www.regulations.gov nonattainment area based upon a review and in hard copy at EPA Region IX, 75 of the monitoring network and the (4) Vessel operators desiring to enter Hawthorne Street, San Francisco, ambient air quality data collected at the or operate within the safety zone shall California. While all documents in the monitoring sites during the 2009–2011 contact the Captain of the Port, Lake docket are listed at period. The monitoring network in the Michigan or his on-scene representative www.regulations.gov, some information area is operated by the California Air to obtain permission to do so. The may be publicly available only at the Resources Board (CARB) and three local Captain of the Port, Lake Michigan or hard copy location (e.g., copyrighted air pollution control agencies in the his on-scene representative may be material, large maps, multi-volume area: Sacramento Metropolitan Air contacted via VHF Channel 16. Vessel reports), and some may not be publicly Quality Management District, Placer operators given permission to enter or available in either location (e.g., County Air Pollution Control District, operate in the safety zone must comply Confidential Business Information). To and Yolo-Solano Air Quality with all directions given to them by the inspect the hard copy materials, please Management District. Based on these Captain of the Port, Lake Michigan, or schedule an appointment during normal reviews, EPA found that complete, his on-scene representative. business hours with the contact listed in quality-assured and certified data for the

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Sacramento nonattainment area showed Because we make determinations of 2010–2012 period is less than 35 mg/m3 that the 24-hour design value for the attainment based on the most recent 3 and thus shows that the area has 2009–2011 period was equal to or less years of complete, quality-assured and attained the 2006 24-hour PM2.5 than 35 m/m3 at all five SLAMs monitor certified data, we have updated the standard. Therefore, we are taking final sites. proposed determination of attainment action today to determine that the Since publication of our October 26, (which had been based on 2009–2011 Sacramento nonattainment area has 2012 proposal, CARB and the air data) to reflect the 2010–2012 period. attained the 2006 24-hour PM2.5 districts within the Sacramento Specifically, we have updated table 1 standard based on complete, quality- nonattainment area have entered data (shown below) from the proposed rule assured and certified data for 2010– into AQS for the final two quarters of to reflect the data for 2012, including 2012. Preliminary data for 2013 (not 2012 and the first quarter of 2013, and data from the newly established Auburn 1 shown in table 1 but included in the have certified the data for 2012. Thus, monitoring site. As shown in table 1, the docket for this action) show that the we now have complete, quality-assured design value (31 mg/m3) in the area continues to attain the standard. for 2010–2012. Sacramento nonattainment area for the

TABLE 1—2009–2012 24-HOUR PM2.5 MONITORING SITES AND DESIGN VALUES FOR THE SACRAMENTO NONATTAINMENT AREA c

98th percentile (μg/m3) Design values (μg/m3) Monitoring site AQS Site identi- fication no. 2009 2010 2011 2012 2009– 2011 2010–2012

Auburna ...... 06–061–0003 n/a n/a n/a 15.7 n/a n/a Roseville ...... 06–061–0006 21.3 20.3 23.0 14.9 22 19 Sacramento—Del Paso Manor ...... 06–067–0006 38.7 27.0 39.8 27.1 b35 31 Sacramento—1309 T Street ...... 06–067–0010 27.2 27.3 45.1 20.5 33 31 Sacramento Health Dept—Stockton Blvd ...... 06–067–4001 34.9 26.5 44.8 20.5 a35 31 Woodland ...... 06–113–1003 27.4 18.6 25.8 14.2 24 20 a The Auburn site (AQS ID 06–061–0003) started operating in January, 2012 and, therefore, does not have a valid design value. b The average of the 98th percentile values for 2009–2011 equals 35.2 and 35.4 at the Del Paso Manor and Stockton Blvd. sites, respectively, but consistent with applicable rounding conventions in 40 CFR part 50, Appendix N, section 4.3, 24-hour standard design values are rounded to the nearest 1 μg/m3 (decimals 0.5 and greater are rounded up to the nearest whole number, and any decimal lower than 0.5 is rounded down to the nearest whole number). c Source: Design Value Report, May 30, 2013 (in the docket to this final action).

2 In our proposed rule, based on the hour ozone and PM2.5 NAAQS and in subpart 4, the court did not address the proposed determination of attainment, individual rulemakings for the 1-hour merits of that regulation, nor cast doubt we also proposed to apply EPA’s Clean ozone, PM10 and lead NAAQS. See 77 on EPA’s interpretation of the statutory Data Policy to the 2006 24-hour PM2.5 FR 65346, at 65349 (October 26, 2012). provisions under its Clean Data Policy. NAAQS and thereby suspend the EPA notes that on January 4, 2013, in EPA has taken the Court’s decision requirements for this area to submit an Natural Resources Defense Council v. into consideration in evaluating the attainment demonstration and EPA, the DC Circuit remanded to EPA effects of a determination of attainment associated reasonably available control the ‘‘Final Clean Air Fine Particle for the Sacramento nonattainment area measures (RACM), a reasonable further Implementation Rule’’ (72 FR 20586, under subpart 4, in addition to subpart progress (RFP) plan, and contingency April 25, 2007) and the 1.3 Pursuant to EPA’s Clean Data Policy measures for so long as the area ‘‘Implementation of the New Source interpretation, a determination that the continues to attain the 2006 24-hour Review (NSR) Program for Particulate area has attained the standard suspends PM2.5 NAAQS. See pages 65348–65350 Matter Less than 2.5 Micrometers the State’s obligation to submit of our October 26, 2012 proposed rule. (PM2.5)’’ final rule (73 FR 28321, May attainment-related planning In proposing to apply the Clean Data 16, 2008) (collectively, ‘‘1997 PM2.5 requirements of subpart 4 (as well as the Policy to the 2006 24-hour PM2.5 Implementation Rule’’ or applicable provisions of subpart 1) for NAAQS, we explained how we are ‘‘Implementation Rule’’). 706 F.3d 428 so long as the area continues to attain applying the same statutory (DC Cir. 2013). While the DC Circuit, in the standard. These include interpretation with respect to the its January 4, 2013 decision, remanded requirements to submit an attainment implications of clean data the 1997 PM2.5 Implementation Rule to demonstration, RFP, RACM, and determinations that the Agency has long EPA to re-promulgate the contingency measures, because the applied in regulations for the 1997 8- Implementation Rule pursuant to purpose of these provisions is to help

1 See letter from Sylvia Vanderspek, Chief, Air prescriptive SIP nonattainment area requirements the potential impact of subpart 4 requirements is Quality Data Branch, Planning and Technical than those set forth in subpart 1. limited to those applicable to moderate Support Division, CARB, to Jared Blumenfeld, 3 For the purposes of evaluating the effects of this nonattainment areas. Sections 189(a) and (c) of Regional Administrator, U.S. EPA Region IX, determination of attainment under subpart 4, we are subpart 4 apply to moderate nonattainment areas certifying calendar year 2012 ambient air quality considering Sacramento to be a ‘‘moderate’’ PM2.5 and include: An attainment demonstration (section data and quality assurance data, May 16, 2013. nonattainment area. Under section 188 of the CAA, 189(a)(1)(B)); provisions for RACM (section 2 EPA established the Implementation Rule all areas designated nonattainment areas under 189(a)(1)(C)); and quantitative milestones pursuant to subpart 1 (‘‘Nonattainment Areas in subpart 4 would initially be classified by operation General’’) of part D (‘‘Plan Requirements for of law as ‘‘moderate’’ nonattainment areas, and demonstrating RFP toward attainment by the Nonattainment Areas’’) of title I of the CAA. would remain moderate nonattainment areas unless applicable attainment date (section 189(c)). In Subpart 4 (‘‘Additional Provisions for Particulate and until EPA reclassifies the area as a ‘‘serious’’ addition, EPA also evaluates the applicable Matter Nonattainment Areas’’) includes more nonattainment area. Accordingly, the evaluation of requirements of subpart 1.

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reach attainment, a goal that has already a redesignation to attainment under requirements for the area to submit an been achieved. Thus, under both CAA section 107(d)(3). attainment demonstration and subpart 1 and subpart 4, a determination Please see the October 26, 2012 associated RACM, a RFP plan, of attainment suspends a state’s proposed rule for more detailed contingency measures, and any other obligations to submit attainment-linked information concerning the PM2.5 planning requirements related to planning requirements for so long as the NAAQS, designations of PM2.5 attainment of the 2006 24-hour PM2.5 area continues in attainment. nonattainment areas, the regulatory NAAQS will remain suspended. If after EPA has long applied its Clean Data basis for determining attainment of the today’s action EPA subsequently interpretation under subpart 4 in NAAQS, the Sacramento nonattainment determines, after notice-and-comment 4 implementing the PM10 standard. In area’s PM2.5 monitoring network, and rulemaking in the Federal Register, that EPA’s proposed and final rulemakings EPA’s review and evaluation of the data. the area has violated the 2006 24-hour determining that the San Joaquin Valley II. Public Comments PM2.5 NAAQS, the basis for the nonattainment area attained the PM10 suspension of the attainment planning standard, EPA set forth at length its EPA’s proposed rule provided a requirements for the area would no rationale for applying the Clean Data 30-day public comment period. We longer exist, and the area would Policy to subpart 4. The Ninth Circuit received no comments. thereafter have to address such upheld EPA’s final rulemaking, and III. EPA’s Final Action requirements. specifically EPA’s Clean Data Policy, in For the reasons provided in the IV. Statutory and Executive Order the context of subpart 4. Latino Issues proposed rule and summarized herein, Reviews Forum v. EPA, supra. Nos. 06–75831 EPA is taking final action to determine and 08–71238 (9th Cir.), Memorandum This final action makes a that the Sacramento nonattainment area determination of attainment based on Opinion, March 2, 2009. In rejecting in California has attained the 2006 petitioner’s challenge to the Clean Data air quality and suspends certain federal 24-hour PM2.5 NAAQS based on three Policy under subpart 4 for PM10, the requirements, and thus, this action years of complete, quality-assured, and would not impose additional Ninth Circuit stated, ‘‘As the EPA certified data in AQS for 2010–2012. explained, if an area is in compliance requirements beyond those imposed by Preliminary data for 2013 show that this state law. For this reason, the final with PM10 standards, then further area continues to attain the NAAQS. progress for the purpose of ensuring action: EPA is also taking final action, based • attainment is not necessary.’’ Is not a ‘‘significant regulatory on the above determination of action’’ subject to review by the Office EPA is determining, based on the attainment, to suspend the requirements most recent three years of complete, of Management and Budget under for the Sacramento nonattainment area Executive Order 12866 (58 FR 51735, quality-assured data meeting the to submit an attainment demonstration requirements of 40 CFR part 50, October 4, 1993); and associated RACM, a RFP plan, • Does not impose an information appendix N, that the Sacramento contingency measures, and any other nonattainment area is currently collection burden under the provisions planning SIPs related to attainment of of the Paperwork Reduction Act attaining the 2006 24-hour PM2.5 the 2006 24-hour PM2.5 NAAQS for so (44 U.S.C. 3501 et seq.); NAAQS. In conjunction with and based long as the area continues to attain the • upon our determination that Is certified as not having a 2006 24-hour PM2.5 NAAQS. EPA’s final significant economic impact on a Sacramento nonattainment area has action is consistent and in keeping with attained and is currently attaining the substantial number of small entities its long-held interpretation of CAA under the Regulatory Flexibility Act standard, EPA is also determining that requirements, as well as with EPA’s the obligation to submit the following (5 U.S.C. 601 et seq.); regulations for similar determinations • Does not contain any unfunded attainment-related planning for ozone (see 40 CFR 51.918) for the mandate or significantly or uniquely requirements is not applicable for so 1997 8-hour ozone and in individual affect small governments, as described long as the area continues to attain the rulemakings for the 1-hour ozone, PM10 in the Unfunded Mandates Reform Act PM standard: The part D, subpart 4 2.5 and lead NAAQS. of 1995 (Pub. L. 104–4); obligations to provide an attainment Today’s final action does not • Does not have Federalism demonstration pursuant to section constitute a redesignation of the implications as specified in Executive 189(a)(1)(B); the RACM provisions of Sacramento nonattainment area to Order 13132 (64 FR 43255, August 10, section 189(a)(1)(C); the RFP provisions attainment for the 2006 24-hour PM2.5 1999); of section 189(c); and the related NAAQS under CAA section 107(d)(3) • Is not an economically significant attainment demonstration, RACM, RFP because we have not yet approved a regulatory action based on health or and contingency measure provisions maintenance plan for the Sacramento safety risks subject to Executive Order requirements of subpart 1, section 172. nonattainment area as meeting the 13045 (62 FR 19885, April 23, 1997); This determination does not constitute requirements of section 175A of the • Is not a significant regulatory action CAA or determined that the area has subject to Executive Order 13211 (66 FR 4 See, e.g., 75 FR 6571 (February 10, 2010) (Baton met the other CAA requirements for 28355, May 22, 2001); Rouge, Louisiana area); 71 FR 6352 (February 8, • 2006) (Ajo, Arizona area); 71 FR 13021 (March 14, redesignation. The classification and Is not subject to requirements of 2006) (Yuma, Arizona area); 71 FR 40023 (July 14, designation status in 40 CFR part 81 Section 12(d) of the National 2006) (Weirton, West Virginia area); 71 FR 44920 remain nonattainment for this area until Technology Transfer and Advancement (August 8, 2006) (Rillito, Arizona area); 71 FR such time as EPA determines that Act of 1995 (15 U.S.C. 272 note) because 63642 (October 30, 2006) (San Joaquin Valley, California area); 72 FR 14422 (March 28, 2007) California has met the CAA application of those requirements would (Miami, Arizona area); and 75 FR 27944 (May 19, requirements for redesignating the be inconsistent with the CAA; and 2010) (Coso Junction, California area). Thus EPA Sacramento nonattainment area to • Does not provide EPA with the has established that, under subpart 4, an attainment attainment. discretionary authority to address determination suspends the obligations to submit an attainment demonstration, RACM, RFP, If the Sacramento nonattainment area disproportionate human health or contingency measures, and other measures related continues to monitor attainment of the environmental effects with practical, to attainment. 2006 24-hour PM2.5 NAAQS, the appropriate, and legally permissible

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methods under Executive Order 12898 Subpart F—California time, July 17, 2013, until the end of the (59 FR 7629, February 16, 1994). 2013 fishing season on December 31, In addition, this final action does not ■ 2. Section 52.247 is amended by 2013 or if NMFS announces, via a notice have tribal implications as specified by adding paragraph (c) to read as follows: in the Federal Register, that additional Executive Order 13175 (65 FR 67249, quota is available and the season is November 9, 2000), because the SIP § 52.247 Control Strategy and Regulations: Fine Particle Matter. reopened. obligations discussed herein do not FOR FURTHER INFORMATION CONTACT: apply to Indian Tribes, and thus this * * * * * (c) Determination of Attainment: Karyl Brewster-Geisz or Peter Cooper action will not impose substantial direct 301–427–8503; fax 301–713–1917. costs on tribal governments or preempt Effective August 14, 2013, EPA has determined that, based on 2010 to 2012 SUPPLEMENTARY INFORMATION: The tribal law. Atlantic shark fisheries are managed The Congressional Review Act, 5 ambient air quality data, the Sacramento under the 2006 Consolidated Atlantic U.S.C. 801 et seq., as added by the Small PM2.5 nonattainment area has attained Highly Migratory Species (HMS) Fishery Business Regulatory Enforcement the 2006 24-hour PM2.5 NAAQS. This Management Plan (FMP), its Fairness Act of 1996, generally provides determination suspends the amendments, and its implementing that before a rule may take effect, the requirements for this area to submit an regulations (50 CFR part 635) issued agency promulgating the rule must attainment demonstration, associated under authority of the Magnuson- submit a rule report, which includes a reasonably available control measures, a Stevens Fishery Conservation and copy of the rule, to each House of the reasonable further progress plan, Management Act (16 U.S.C. 1801 et Congress and to the Comptroller General contingency measures, and other seq.). of the United States. EPA will submit a planning SIPs related to attainment for as long as this area continues to attain Under § 635.5(b)(1), sharks that are report containing this action and other first received by dealers from a vessel the 2006 24-hour PM2.5 NAAQS. If EPA required information to the U.S. Senate, must be submitted electronically on a the U.S. House of Representatives, and determines, after notice-and-comment rulemaking, that this area no longer weekly basis through a NMFS-approved the Comptroller General of the United electronic reporting system by the States prior to publication of the rule in meets the 2006 24-hour PM2.5 NAAQS, the corresponding determination of dealer and received by NMFS no later the Federal Register. A major rule than midnight, local time, of the first cannot take effect until 60 days after it attainment for that area shall be withdrawn. Tuesday following the end of the is published in the Federal Register. reporting week unless the dealer is This action is not a ‘‘major rule’’ as [FR Doc. 2013–16785 Filed 7–12–13; 8:45 am] otherwise notified by NMFS. Under defined by 5 U.S.C. 804(2). BILLING CODE 6560–50–P § 635.28(b)(2), when NMFS calculates Under section 307(b)(1) of the CAA, that the landings for any species and/or petitions for judicial review of this management group of a linked group action must be filed in the United States DEPARTMENT OF COMMERCE has reached or is projected to reach 80 Court of Appeals for the appropriate percent of the available quota, NMFS circuit by September 13, 2013. Filing a National Oceanic and Atmospheric will file for publication with the Office petition for reconsideration by the Administration of the Federal Register a notice of Administrator of this final rule does not closure for all of the species and/or affect the finality of this action for the 50 CFR Part 635 management groups in a linked group purposes of judicial review nor does it [Docket No. 120706221–2705–02] that will be effective no fewer than 5 extend the time within which a petition days from date of filing. From the for judicial review may be filed, and RIN 0648–XC748 effective date and time of the closure shall not postpone the effectiveness of until NMFS announces, via a notice in such rule or action. This action may not Atlantic Highly Migratory Species; the Federal Register, that additional be challenged later in proceedings to Commercial Gulf of Mexico quota is available and the season is enforce its requirements. (See section Aggregated Large Coastal Shark and reopened, the fishery for all linked 307(b)(2).) Gulf of Mexico Hammerhead Shark Management Groups species and/or management groups is List of Subjects in 40 CFR Part 52 closed, even across fishing years. AGENCY: National Marine Fisheries Environmental protection, Air On July 3, 2013 (78 FR 40318), NMFS Service (NMFS), National Oceanic and pollution control, Incorporation by announced the final rule for Atmospheric Administration (NOAA), reference, Nitrogen oxides, Particulate Amendment 5a to the Consolidated Commerce. Matter, Sulfur oxides, Reporting and Atlantic Highly Migratory Species recordkeeping requirements. ACTION: Temporary rule; closure. (HMS) Fishery Management Plan (FMP), which, among other things, established Dated: June 28, 2013. SUMMARY: NMFS is closing the new, final adjusted 2013 quotas for Alexis Strauss, commercial management groups for aggregated LCS and hammerhead sharks Acting Regional Administrator, Region IX. aggregated large coastal sharks (LCS) in the Gulf of Mexico region. The Gulf Part 52, Chapter I, Title 40 of the Code and hammerhead sharks in the Gulf of of Mexico aggregated LCS management of Federal Regulations is amended as Mexico region. This action is necessary group quota is 157.5 metric tons (mt) follows: because the commercial landings of Gulf dressed weight (dw) (347,317 lb dw), of Mexico aggregated LCS for the 2012 and the Gulf of Mexico hammerhead PART 52—APPROVAL AND fishing season has exceeded 80 percent shark management group quota is 25.3 PROMULGATION OF of the available commercial quota as of metric tons (mt) dressed weight (dw) IMPLEMENTATION PLANS July 5, 2013. (55,722 lb dw). Dealer reports recently DATES: The commercial Gulf of Mexico received through July 5, 2013, indicate ■ 1. The authority citation for part 52 aggregated LCS and Gulf of Mexico that 128.7 mt dw or 82 percent of the continues to read as follows: hammerhead shark management groups available Gulf of Mexico aggregated LCS Authority: 42 U.S.C. 7401 et seq. are closed effective 11:30 p.m. local quota has been landed, and that 9.2 mt

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dw or 37 percent of the available Gulf this closure, a shark dealer issued a SUMMARY: NMFS is prohibiting retention of Mexico hammerhead shark quota has permit pursuant to § 635.4 may, in of ‘‘other rockfish’’ in the Western been landed. Based on these dealer accordance with state regulations, Regulatory Area of the Gulf of Alaska reports, NMFS estimates that the 80- purchase or receive aggregated LCS and/ (GOA). This action is necessary because percent limit specified for a closure or hammerhead sharks in the Gulf of the 2013 total allowable catch of ‘‘other notice in the regulations has been Mexico region if the sharks were rockfish’’ in the Western Regulatory reached or exceeded. Accordingly, harvested, off-loaded, and sold, traded, Area of the GOA has been reached. NMFS is closing both the commercial or bartered from a vessel that fishes only DATES: Effective 1200 hours, Alaska aggregated LCS and hammerhead in state waters and that has not been local time (A.l.t.), July 9, 2013, through management groups in the Gulf of issued an Atlantic Shark LAP, HMS 2400 hours, A.l.t., December 31, 2013. Mexico region as of 11:30 p.m. local Angling permit, or HMS Charter/ time, July 17, 2013. All other shark Headboat permit pursuant to § 635.4. FOR FURTHER INFORMATION CONTACT: management groups remain open, Steve Whitney, 907–586–7269. Classification except for the commercial porbeagle SUPPLEMENTARY INFORMATION: NMFS shark management group, which did not Pursuant to 5 U.S.C. 553(b)(B), the manages the groundfish fishery in the open in 2013 (78 FR 75896), and the Assistant Administrator for Fisheries, GOA exclusive economic zone commercial Gulf of Mexico blacktip NOAA (AA), finds that providing prior according to the Fishery Management shark management group, which closed notice and public comment for this Plan for Groundfish of the Gulf of on July 7, 2013 (78 FR 40318). action is impracticable and contrary to Alaska (FMP) prepared by the North At § 635.27(b)(1), the boundary the public interest because the fishery is Pacific Fishery Management Council between the Gulf of Mexico region and currently underway and any delay in under authority of the Magnuson- the Atlantic region is defined as a line this action would result in overharvest Stevens Fishery Conservation and beginning on the East Coast of Florida of the quota and be inconsistent with Management Act. Regulations governing ° ′ at the mainland at 25 20.4 N. lat, management requirements and fishing by U.S. vessels in accordance proceeding due east. Any water and objectives. Similarly, affording prior with the FMP appear at subpart H of 50 land to the south and west of that notice and opportunity for public CFR part 600 and 50 CFR part 679. boundary is considered, for the comment on this action is contrary to The 2013 total allowable catch (TAC) purposes of quota monitoring and the public interest because if the quota of ‘‘other rockfish’’ in the Western setting of quotas, to be within the Gulf is exceeded, the stock may be negatively Regulatory Area of the GOA is 44 metric of Mexico region. affected and fishermen ultimately could tons as established by the final 2013 and During the closure, retention of experience reductions in the available 2014 harvest specifications for aggregated LCS and hammerhead sharks quota and a lack of fishing opportunities groundfish of the GOA (78 FR 13162, in the Gulf of Mexico region is in future seasons. For these reasons, the February 26, 2013). prohibited for persons fishing aboard AA also finds good cause to waive the In accordance with § 679.20(d)(2), the vessels issued a commercial shark 30-day delay in effective date pursuant limited access permit under § 635.4— Administrator, Alaska Region, NMFS to 5 U.S.C. 553(d)(3). This action is (Regional Administrator), has unless, that is, the vessel is properly required under § 635.28(b)(2) and is permitted to operate as a charter vessel determined that the 2013 TAC of ‘‘other exempt from review under Executive rockfish’’ in the Western Regulatory or headboat for HMS and is engaged in Order 12866. a for-hire trip, in which case the Area of the GOA has been reached. recreational retention limits for sharks Authority: 16 U.S.C. 1801 et seq. Therefore, NMFS is requiring that and ‘‘no sale’’ provisions apply Dated: July 10, 2013. ‘‘other rockfish’’ caught in the Western (§ 635.22(a) and (c)), or if the vessel Galen Tromble, Regulatory Area of the GOA be treated as prohibited species in accordance possesses a valid shark research permit Acting Deputy Director, Office of Sustainable under § 635.32 and a NMFS-approved Fisheries, National Marine Fisheries Service. with § 679.21(b). observer is onboard. A shark dealer [FR Doc. 2013–16882 Filed 7–12–13; 8:45 am] Classification issued a permit pursuant to § 635.4 may BILLING CODE 3510–22–P not purchase or receive aggregated LCS This action responds to the best and/or hammerhead sharks in the Gulf available information recently obtained of Mexico region from a vessel issued an DEPARTMENT OF COMMERCE from the fishery. The Acting Assistant Atlantic Shark Limited Access Permit Administrator for Fisheries, NOAA (LAP), except that a permitted shark National Oceanic and Atmospheric (AA), finds good cause to waive the dealer or processor may possess Administration requirement to provide prior notice and aggregated LCS and/or hammerhead opportunity for public comment sharks in the Gulf of Mexico region that 50 CFR Part 679 pursuant to the authority set forth at 5 were harvested, off-loaded, and sold, U.S.C. 553(b)(B) as such requirement is [Docket No. 120918468–3111–02] traded, or bartered, prior to the effective impracticable and contrary to the public date of the closure and were held in RIN 0648–XC753 interest. This requirement is storage consistent with § 635.28(b)(5). impracticable and contrary to the public However, a permitted shark dealer or Fisheries of the Exclusive Economic interest as it would prevent NMFS from processor may possess aggregated LCS Zone Off Alaska; ‘‘Other Rockfish’’ in responding to the most recent fisheries and/or hammerhead sharks in the Gulf the Western Regulatory Area of the data in a timely fashion and would of Mexico region that were harvested by Gulf of Alaska delay prohibiting the retention of ‘‘other a vessel issued a valid shark research AGENCY: National Marine Fisheries rockfish’’ in the Western Regulatory fishery permit per § 635.32 with a Service (NMFS), National Oceanic and Area of the GOA. NMFS was unable to NMFS-approved observer onboard Atmospheric Administration (NOAA), publish a notice providing time for during the trip the sharks were taken on Commerce. public comment because the most as long as the non-sandbar shark recent, relevant data only became ACTION: Temporary rule; closure. research fishery remains open. Under available as of July 8, 2013.

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The AA also finds good cause to • Mail: Address written comments to (a)(2)(iii)(D), and to fully utilize the waive the 30-day delay in the effective Glenn Merrill, Assistant Regional 2013 TAC of Atka mackerel in the BSAI, date of this action under 5 U.S.C. Administrator, Sustainable Fisheries NMFS is terminating the previous 553(d)(3). This finding is based upon Division, Alaska Region NMFS, Attn: closure and is opening directed fishing the reasons provided above for waiver of Ellen Sebastian. Mail comments to P.O. for Atka mackerel in the CAI for vessels prior notice and opportunity for public Box 21668, Juneau, AK 99802–1668. participating in the BSAI trawl limited comment. • Hand delivery to the Federal access fishery. This will enhance the This action is required by §§ 679.20 Building: Address written comments to socioeconomic well-being of harvesters and 679.21 and is exempt from review Glenn Merrill, Assistant Regional in this area. The Administrator, Alaska under Executive Order 12866. Administrator, Sustainable Fisheries Region (Regional Administrator) Authority: 16 U.S.C. 1801 et seq. Division, Alaska Region NMFS, Attn: considered the following factors in Ellen Sebastian. Deliver comments to Dated: July 9, 2013. reaching this decision: (1) The current 709 West 9th Street, Room 420A, Kelly Denit, catch of Atka mackerel in the CAI for Juneau, AK. vessels participating in the BSAI trawl Acting Deputy Director, Office of Sustainable Instructions: Comments must be limited access fishery and, (2) the Fisheries, National Marine Fisheries Service. submitted by one of the above methods harvest capacity and stated intent on [FR Doc. 2013–16771 Filed 7–9–13; 4:15 pm] to ensure that the comments are BILLING CODE 3510–22–P received, documented, and considered future harvesting patterns of vessels in by NMFS. Comments sent by any other participating in this fishery. method, to any other address or DEPARTMENT OF COMMERCE Classification individual, or received after the end of National Oceanic and Atmospheric the comment period, may not be This action responds to the best Administration considered. All comments received are available information recently obtained a part of the public record and will from the fishery. The Acting Assistant 50 CFR Part 679 generally be posted for public viewing Administrator for Fisheries, NOAA on www.regulations.gov without change. (AA), finds good cause to waive the [Docket No. 121018563–3148–02] All personal identifying information requirement to provide prior notice and RIN 0648–XC752 (e.g., name, address) submitted opportunity for public comment voluntarily by the sender will be pursuant to the authority set forth at 5 Fisheries of the Exclusive Economic publicly accessible. Do not submit U.S.C. 553(b)(B) and § 679.25(c)(1)(ii) as Zone Off Alaska; Atka Mackerel in the confidential business information, or such requirement is impracticable and Bering Sea and Aleutian Islands otherwise sensitive or protected contrary to the public interest. This Management Area information. NMFS will accept requirement is impracticable and anonymous comments (enter ‘‘N/A’’ in AGENCY: National Marine Fisheries contrary to the public interest as it Service (NMFS), National Oceanic and the required fields if you wish to remain would prevent NMFS from responding Atmospheric Administration (NOAA), anonymous). Attachments to electronic to the most recent fisheries data in a Commerce. comments will be accepted in Microsoft timely fashion and would delay opening Word or Excel, WordPerfect, or Adobe ACTION: Temporary rule; modification of directed fishing for Atka mackerel in the PDF file formats only. closure. CAI by vessels participating in the BSAI FOR FURTHER INFORMATION CONTACT: trawl limited access fishery. NMFS was SUMMARY: NMFS is opening directed Steve Whitney, 907–586–7269. unable to publish a notice providing fishing for Atka mackerel in the Central SUPPLEMENTARY INFORMATION: NMFS time for public comment because the Aleutian district (CAI) of the Bering Sea manages the groundfish fishery in the most recent, relevant data only became and Aleutian Islands Management Area BSAI according to the Fishery available as of July 8, 2013. (BSAI) by vessels participating in the Management Plan for Groundfish of the The AA also finds good cause to BSAI trawl limited access fishery. This Bering Sea and Aleutian Islands waive the 30-day delay in the effective action is necessary to fully use the 2013 Management Area (FMP) prepared by total allowable catch (TAC) of Atka the North Pacific Fishery Management date of this action under 5 U.S.C. mackerel in the CAI by vessels Council under authority of the 553(d)(3). This finding is based upon participating in the BSAI trawl limited Magnuson-Stevens Fishery the reasons provided above for waiver of access fishery. Conservation and Management Act. prior notice and opportunity for public DATES: Effective 1200 hrs, Alaska local Regulations governing fishing by U.S. comment. time (A.l.t.), July 9, 2013, through 2400 vessels in accordance with the FMP Without this inseason adjustment, hrs, A.l.t., December 31, 2013. appear at subpart H of 50 CFR part 600 NMFS could not allow the fishery for Comments must be received on or and 50 CFR part 679. Atka mackerel in the CAI by vessels before July 24, 2013. NMFS closed directed fishing for Atka participating in the BSAI trawl limited ADDRESSES: You may submit comments mackerel in the CAI by vessels access fishery to be harvested in an on this document, identified by NOAA– participating in the BSAI trawl limited expedient manner and in accordance NMFS–2012–0210, by any of the access fishery under § 679.2(d)(1)(iii) on with the regulatory schedule. Under following methods: June 11, 2013 (78 FR 35771, June 14, § 679.25(c)(2), interested persons are • Electronic Submission: Submit all 2013). invited to submit written comments on electronic public comments via the As of July 8, 2013, NMFS has this action to the above address until Federal e-Rulemaking Portal. Go to determined that TAC of Atka mackerel July 24, 2013. www.regulations.gov/ in the CAI for vessels participating in #!docketDetail;D=NOAA-NMFS-2012- the BSAI trawl limited access fishery This action is required by §§ 679.20 0210, click the ‘‘Comment Now!’’ icon, remains to support directed fishing. and 679.25 and is exempt from review complete the required fields, and enter Therefore, in accordance with under Executive Order 12866. or attach your comments. § 679.25(a)(1)(i), (a)(2)(i)(C) and Authority: 16 U.S.C. 1801 et seq.

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Dated: July 9, 2013. 709 West 9th Street, Room 420A, northern rockfish and dusky rockfish in Kelly Denit, Juneau, AK. the Western Regulatory Area of the Acting Deputy Director, Office of Sustainable Instructions: Comments must be GOA, effective 1200 hrs, A.l.t., July 12, Fisheries, National Marine Fisheries Service. submitted by one of the above methods 2013. The Administrator, Alaska Region [FR Doc. 2013–16764 Filed 7–9–13; 4:15 pm] to ensure that the comments are (Regional Administrator) considered the BILLING CODE 3510–22–P received, documented, and considered following factors in reaching this by NMFS. Comments sent by any other decision: (1) the current catch of method, to any other address or northern rockfish and dusky rockfish in DEPARTMENT OF COMMERCE individual, or received after the end of the Western Regulatory Area of the GOA the comment period, may not be National Oceanic and Atmospheric and, (2) the harvest capacity and stated considered. All comments received are intent on future harvesting patterns of Administration a part of the public record and will vessels in participating in this fishery. generally be posted for public viewing 50 CFR Part 679 on www.regulations.gov without change. Classification All personal identifying information [Docket No. 120918468–3111–02] (e.g., name, address) submitted This action responds to the best available information recently obtained RIN 0648–XC756 voluntarily by the sender will be publicly accessible. Do not submit from the fishery. The Assistant Fisheries of the Exclusive Economic confidential business information, or Administrator for Fisheries, NOAA Zone Off Alaska; Northern Rockfish otherwise sensitive or protected (AA), finds good cause to waive the and Dusky Rockfish in the Western information. NMFS will accept requirement to provide prior notice and Regulatory Area of the Gulf of Alaska anonymous comments (enter ‘‘N/A’’ in opportunity for public comment the required fields if you wish to remain pursuant to the authority set forth at 5 AGENCY: National Marine Fisheries anonymous). Attachments to electronic U.S.C. 553(b)(B) as such requirement is Service (NMFS), National Oceanic and comments will be accepted in Microsoft impracticable and contrary to the public Atmospheric Administration (NOAA), Word or Excel, WordPerfect, or Adobe interest. This requirement is Commerce. PDF file formats only. impracticable and contrary to the public ACTION: Temporary rule; modification of FOR FURTHER INFORMATION CONTACT: interest as it would prevent NMFS from closure. Steve Whitney, 907–586–7269. responding to the most recent fisheries SUMMARY: NMFS is opening directed SUPPLEMENTARY INFORMATION: NMFS data in a timely fashion and would fishing for northern rockfish and dusky manages the groundfish fishery in the delay the opening of directed fishing for rockfish for 48 hours in the Western GOA exclusive economic zone northern rockfish and dusky rockfish in Regulatory Area of the Gulf of Alaska according to the Fishery Management the Western Regulatory Area of the (GOA). This action is necessary to fully Plan for Groundfish of the Gulf of GOA. Immediate notification is use the total allowable catch (TAC) of Alaska (FMP) prepared by the North necessary to allow for the orderly northern rockfish and dusky rockfish in Pacific Fishery Management Council conduct and efficient operation of these the Western Regulatory Area of the under authority of the Magnuson- fisheries, to allow the industry to plan GOA. Stevens Fishery Conservation and for the fishing season, and to avoid Management Act. Regulations governing DATES: Effective 1200 hrs, Alaska local potential disruption to the fishing fleet fishing by U.S. vessels in accordance and processors. NMFS was unable to time (A.l.t.), July 10, 2013, through 1200 with the FMP appear at subpart H of 50 publish a notice providing time for hrs, A.l.t., July 12, 2013. Comments CFR part 600 and 50 CFR part 679. public comment because the most must be received on or before July 25, NMFS closed directed fishing for 2013. northern rockfish and dusky rockfish in recent, relevant data only became ADDRESSES: You may submit comments the Western Regulatory Area of the GOA available as of July 8, 2013. on this document, identified by NOAA– under § 679.20(d)(1)(iii) on July 3, 2013 The AA also finds good cause to NMFS–2012–0180, by any of the (78 FR 40638 July 8, 2013). waive the 30-day delay in the effective following methods: As of July 8, 2013, NMFS has date of this action under 5 U.S.C. • Electronic Submission: Submit all determined that approximately 1,000 553(d)(3). This finding is based upon electronic public comments via the metric tons of northern rockfish and 260 the reasons provided above for waiver of Federal e-Rulemaking Portal. Go to metric tons of dusky rockfish TAC prior notice and opportunity for public www.regulations.gov/ remain in the Western Regulatory Area comment. #!docketDetail;D=NOAA–NMFS–2012– of the GOA. Therefore, in accordance Without this inseason adjustment, 0180, click the ‘‘Comment Now!’’ icon, with § 679.25(a)(1)(i), (a)(2)(i)(C), and complete the required fields, and enter (a)(2)(iii)(D), and to fully utilize the TAC NMFS could not allow pollock fishery or attach your comments. of northern rockfish and dusky rockfish in Statistical Area 630 of the GOA to be • Mail: Address written comments to in the Western Regulatory Area of the harvested in an expedient manner and Glenn Merrill, Assistant Regional GOA, NMFS is terminating the previous in accordance with the regulatory Administrator, Sustainable Fisheries closure and is reopening directed schedule. Under § 679.25(c)(2), Division, Alaska Region NMFS, Attn: fishing for northern rockfish and dusky interested persons are invited to submit Ellen Sebastian. Mail comments to P.O. rockfish in the Western Regulatory Area written comments on this action to the Box 21668, Juneau, AK 99802–1668. of the GOA, effective 1200 hrs, A.l.t., above address until July 25, 2013. • Hand delivery to the Federal July 10, 2013. This action is required by § 679.25 Building: Address written comments to In accordance with § 679.20(d)(1)(iii), and is exempt from review under Glenn Merrill, Assistant Regional the Regional Administrator finds that Executive Order 12866. Administrator, Sustainable Fisheries this directed fishing allowance will be Division, Alaska Region NMFS, Attn: reached after 48 hours. Consequently, Authority: 16 U.S.C. 1801 et seq. Ellen Sebastian. Deliver comments to NMFS is prohibiting directed fishing for

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Dated: July 10, 2013. James P. Burgess, Acting Deputy Director, Office of Sustainable Fisheries, National Marine Fisheries Service. [FR Doc. 2013–16876 Filed 7–10–13; 4:15 pm] BILLING CODE 3510–22–P

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Proposed Rules Federal Register Vol. 78, No. 135

Monday, July 15, 2013

This section of the FEDERAL REGISTER Bethesda, MD 20814; telephone (301) To support their request for contains notices to the public of the proposed 504–7923. rulemaking, petitioners detail the issuance of rules and regulations. The Instructions: All submissions received history of the voluntary standards purpose of these notices is to give interested must include the agency name and process for window coverings since persons an opportunity to participate in the 1985. Petitioners argue that although the rule making prior to the adoption of the final docket number for this notice. All rules. comments received may be posted first voluntary standard, ANSI/WCMA without change, including any personal A100.1–1996, issued in 1996, addressed identifiers, contact information, or other some hazards associated with outer cord CONSUMER PRODUCT SAFETY personal information provided, to: loops, the manner in which this hazard COMMISSION http://www.regulations.gov. Do not was addressed did not fully resolve the submit confidential business strangulation and asphyxiation risk. The 16 CFR Chapter II information, trade secret information, or voluntary standard was subsequently other sensitive or protected information updated in 2002, 2007, 2009, and 2010, [Docket No. CPSC–2013–0028] that you do not want to be available to following CPSC recalls for unaddressed the public. If furnished at all, such hazards related to rear inner cord Petition for Rulemaking To Eliminate information should be submitted in fatalities on roman shades and lifting Accessible Cords on Window Covering writing. loops on roll-up shades. Petitioners Products Docket: For access to the docket to argue that these efforts also had limited read background documents or success, detailing additional fatalities AGENCY: Consumer Product Safety and injuries. Petitioners assert that the Commission. comments received, go to: http:// www.regulations.gov, and insert the most recent version of the ANSI ACTION: Notice of petition for docket number, CPSC–2013–0028, into standard, approved on November 28, rulemaking. the ‘‘Search’’ box, and follow the 2012, still fails to adequately address SUMMARY: The Consumer Product Safety prompts. A copy of the petition is the strangulation hazard posed by Commission (CPSC or Commission) available at http://www.regulations.gov accessible cords on window coverings, received a petition requesting the under Docket No. CPSC–2013–0028, despite increased international Commission to: promulgate a mandatory Supporting and Related Materials. governmental and retailer pressure to standard that prohibits any window FOR FURTHER INFORMATION CONTACT: address the hazard. covering cords, when a feasible cordless Rockelle Hammond, Office of the Petitioners assert that the voluntary alternative exists; and require that all Secretary, U.S. Consumer Product standard is inadequate. They analyzed window covering cords be made Safety Commission, Room 820, 4330 the incidents associated with window inaccessible through the use of a passive East West Highway, Bethesda, MD covering cords between 1996 and 2012 guardian device when a feasible 20814; telephone (301) 504–6833. to determine what characteristic of the cordless alternative does not exist. The SUPPLEMENTARY INFORMATION: The cord was involved in each incident. Of Commission invites written comments Consumer Product Safety Commission the 293 incidents that occurred during concerning the petition. (CPSC or Commission) received a that period, enough data to determine DATES: The Office of the Secretary must petition requesting initiation of a the cord characteristic involved was receive comments on the petition by rulemaking to promulgate a mandatory available in 250 of the incidents. September 13, 2013. standard to eliminate accessible cords Petitioners conclude that 102 of these ADDRESSES: You may submit comments, on window covering products. The 250 incidents, or 40%, would not have identified by Docket No. CPSC–2013– petition was filed by nine organizations been prevented by adherence to the 0028, by any of the following methods: representing consumer groups, safety current 2012 voluntary standard. Electronic Submissions: Submit consultants, and legal counsel: Parents Petitioners also detail characteristics of electronic comments to the Federal for Window Blind Safety; Consumer newer window covering designs that eRulemaking Portal at: http:// Federation of America; Consumers meet the voluntary standard but that www.regulations.gov. Follow the Union; Kids in Danger; Public Citizen; Petitioners argue are more dangerous instructions for submitting comments. U.S. PIRG; Independent Safety than traditional corded blinds. The Commission does not accept Consulting; Safety Behavior Analysis, Petitioners assert that substantial comments submitted by electronic mail Inc.; and Onder, Shelton, O’Leary & noncompliance with the voluntary (email), except through Peterson (collectively petitioners). CPSC standard is demonstrated by CPSC’s 16 www.regulations.gov. The Commission has docketed the petition (CP13–2). recalls involving blinds that purportedly encourages you to submit electronic The petition asserts that a mandatory complied with the voluntary standard comments by using the Federal rule is necessary because attempts to since 2007. Petitioners state that CPSC eRulemaking Portal, as described above. develop a voluntary standard that found numerous other violations of the Written Submissions: Submit written adequately mitigates the risk of injury voluntary standard when evaluating submissions in the following way: Mail/ associated with window covering cords roman shades and roll-up shades, Hand delivery/Courier (for paper, disk, have failed. Petitioners state that, based including looped pull cords, no inner or CD–ROM submissions), preferably in on CPSC’s data, between 1985 and 2012, cord stops, no tension devices, and five copies, to: Office of the Secretary, 324 children have been killed, and 122 failure to attach tension devices to a Consumer Product Safety Commission, have been injured by window covering continuous loop cord. Petitioners assert Room 820, 4330 East West Highway, cords. that many of these products had been on

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the market for years before the defects advance proposed rule published May then converted to and expressed as an were detected and recalled. 8, 2013, 78 FR 26727. Written comments estimated lifetime stream of payments. Petitioners ask the Commission to must be received by the Department on The comment period for the ANPRM issue a mandatory standard to eliminate or before August 7, 2013. is scheduled to close on July 8, 2013. A the hazard posed by accessible cords in ADDRESSES: You may submit comments, substantial number of stakeholders are window coverings. The petition identified by RIN 1210–AB20, by one of concerned that the original 60-day specifically requests that the the following methods: comment period is not sufficient to Commission: (1) Promulgate a Federal eRulemaking Portal: http:// provide well thought out and useful mandatory standard that prohibits any www.regulations.gov. Follow the feedback to the Department on the window covering cords when a feasible instructions for submitting comments. complex matters raised in the ANPRM. cordless alternative exists; and (2) Email: [email protected]. Include RIN Accordingly, to ensure that all require that all cords be made 1210–AB20 in the subject line of the interested persons have the opportunity inaccessible through the use of a passive message. to prepare and submit comments, EBSA guardian device when a feasible Mail: Office of Regulations and extends the comment period from July cordless alternative does not exist. Interpretations, Employee Benefits 8 to August 7, 2013. By this notice, the Commission seeks Security Administration, Room N–5655, Signed at Washington, DC, this 8th day of comments concerning this petition. U.S. Department of Labor, 200 July, 2013. Interested parties may obtain a copy of Constitution Avenue NW., Washington, Phyllis C. Borzi, the petition by writing or calling the DC 20210, Attention: Pension Benefit Assistant Secretary, Employee Benefits Office of the Secretary, U.S. Consumer Statements Project. Security Administration, Department of Product Safety Commission, Room 820, Comments received will be available Labor. 4330 East West Highway, Bethesda, MD for public inspection in the Public [FR Doc. 2013–16739 Filed 7–12–13; 8:45 am] 20814; telephone (301) 504–7923. A Disclosure Room of the Employee BILLING CODE 4510–29–P copy of the petition also will be made Benefits Security Administration, U.S. available for viewing under ‘‘Supporting Department of Labor, Room N–1513, and Related Materials’’ in 200 Constitution Avenue NW., DEPARTMENT OF HOMELAND www.regulations.gov under this docket Washington, DC 20210. They also will SECURITY number. be available online at Dated: July 3, 2013. www.regulations.gov and www.dol.gov/ Coast Guard ebsa, at no charge. Warning: Do not Todd A. Stevenson, include any personally identifiable 33 CFR Part 165 Secretary, U.S. Consumer Product Safety information (such as name, address, or Commission. [Docket No. USCG–2013–0476] other contact information), or [FR Doc. 2013–16403 Filed 7–12–13; 8:45 am] confidential business information, that RIN 1625–AA00 BILLING CODE 6355–01–P you do not want publicly disclosed. All comments may be posted on the Internet Safety Zone; San Diego Bayfair; and can be retrieved by most Internet Mission Bay, San Diego, CA DEPARTMENT OF LABOR search engines. AGENCY: Coast Guard, DHS. Employee Benefits Security FOR FURTHER INFORMATION CONTACT: ACTION: Notice of proposed rulemaking. Administration Suzanne Adelman or Tom Hindmarch at (202) 693–8500. This is not a toll free SUMMARY: The Coast Guard is proposing a temporary safety zone on the 29 CFR Part 2520 number. navigable waters of Mission Bay in San SUPPLEMENTARY INFORMATION: On May 8, RIN 1210–AB20 2013, the Department of Labor Diego, CA for the San Diego Bayfair power boat races from September 13, Proposed Amendment To Advance (Department) published at 78 FR 26727 an advance notice of proposed 2013, until September 15, 2013. The Notice of Proposed Rulemaking for safety zone as proposed would be in Pension Benefit Statements rulemaking (ANPRM) regarding the pension benefit statement requirements effect from 7 a.m. to 5:30 p.m. daily AGENCY: Employee Benefits Security under section 105 of the Employee during this timeframe. This temporary Administration, U.S. Department of Retirement Income Security Act of 1974, safety zone is necessary to provide for Labor. as amended (ERISA). The ANPRM the safety of the participants, crew, spectators, participating vessels, and ACTION: Notice of Extension of Comment requested comments on specific other vessels and users of the waterway. Period for Advance Notice of Proposed language and concepts the Department Persons and vessels would be Rulemaking. is considering as part of proposed regulations currently under prohibited from entering into, transiting SUMMARY: The Department of Labor is development. through or anchoring within this safety extending until August 7, 2013, the The ANPRM provides that the zone unless authorized by the Captain comment period for an advance notice Department is considering a rule that of the Port or his designated of proposed rulemaking focusing on would require a participant’s ‘‘total representative. lifetime income illustrations given to benefits accrued’’ to be expressed on his DATES: Comments and related material participants in defined contribution pension benefit statement as an must be received by the Coast Guard on pension plans, such as 401(k) and estimated lifetime stream of payments, or before August 14, 2013. 403(b) plans. The ANPRM serves as a in addition to being presented as an Requests for public meetings must be request for comments on specific account balance. The ANPRM also received by the Coast Guard on or before language and concepts in advance of a states that the Department is July 29, 2013. proposed regulation. considering a rule that would require a ADDRESSES: You may submit comments DATES: The Department of Labor is participant’s account balance to be identified by docket number using any extending the comment period of an projected to his retirement date and one of the following methods:

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(1) Federal eRulemaking Portal: that you include your name and a B. Basis and Purpose http://www.regulations.gov. mailing address, an email address, or a (2) Fax: 202–493–2251. telephone number in the body of your The San Diego Bayfair power boat (3) Mail or Delivery: Docket document so that we can contact you if races occur annually over a weekend in Management Facility (M–30), U.S. we have questions regarding your September after the Labor Day weekend. Department of Transportation, West submission. This temporary safety zone Building Ground Floor, Room W12–140, To submit your comment online, go to encompassing a portion of Mission Bay 1200 New Jersey Avenue SE., http://www.regulations.gov, type the is necessary to provide for the safety of Washington, DC 20590–0001. Deliveries docket number [USCG–2013–0476] in the participants, crew, spectators, accepted between 9 a.m. and 5 p.m., the ‘‘SEARCH’’ box and click participating vessels, and other vessels Monday through Friday, except federal ‘‘SEARCH.’’ Click on ‘‘Submit a and users of the waterway. Persons and holidays. The telephone number is 202– Comment’’ on the line associated with vessels would be prohibited from 366–9329. this rulemaking. entering into, transiting through or See the ‘‘Public Participation and anchoring within this safety zone unless If you submit your comments by mail Request for Comments’’ portion of the authorized by the Captain of the Port or or hand delivery, submit them in an SUPPLEMENTARY INFORMATION section his designated representative. As an unbound format, no larger than 81⁄2 by below for further instructions on annual event, permitted by the City of 11 inches, suitable for copying and submitting comments. To avoid San Diego, it is well advertised, electronic filing. If you submit duplication, please use only one of supported by the community, and comments by mail and would like to these three methods. includes numerous safety support boats. know that they reached the Facility, FOR FURTHER INFORMATION CONTACT: If please enclose a stamped, self-addressed The Ports and Waterways Safety Act you have questions on this rule, call or postcard or envelope. We will consider (33 U.S.C. sections 1221 et seq.) email Lieutenant John Bannon, all comments and material received authorizes the Coast Guard to establish Waterways Management, U.S. Coast during the comment period and may safety zones. Thunderboats Unlimited Guard Sector San Diego; telephone (619) change the rule based on your Inc. is sponsoring San Diego Bayfair, 278–7261, email comments. which is held on the navigable waters [email protected]. If you have of Mission Bay in San Diego, CA. The questions on viewing or submitting 2. Viewing comments and documents proposed temporary safety zone is material to the docket, call Barbara To view comments, as well as necessary to provide for the safety of the Hairston, Program Manager, Docket documents mentioned in this preamble participants, crew, spectators, sponsor Operations, telephone (202) 366–9826. as being available in the docket, go to vessels, and other vessels and users of SUPPLEMENTARY INFORMATION: http://www.regulations.gov, type the the waterway. This event involves approximately 200 various power boats Table of Acronyms docket number (USCG–2013–0476) in the ‘‘SEARCH’’ box and click racing on a predetermined course. The DHS Department of Homeland Security ‘‘SEARCH.’’ Click on Open Docket sponsor will provide thirty seven patrol FR Federal Register and rescue vessels to help facilitate the NPRM Notice of Proposed Rulemaking Folder on the line associated with this rulemaking. You may also visit the event and ensure public safety. A. Public Participation and Request for Docket Management Facility in Room C. Discussion of Proposed Rule Comments W12–140 on the ground floor of the We encourage you to participate in Department of Transportation West The Coast Guard is proposing a this rulemaking by submitting Building, 1200 New Jersey Avenue SE., temporary safety zone that would be comments and related materials. All Washington, DC 20590, between 9 a.m. enforced from 7 a.m. to 5:30 p.m. from comments received will be posted and 5 p.m., Monday through Friday, September 13, 2013, through September without change to http:// except Federal holidays. 15, 2013. This safety zone is necessary to provide for the safety of the crews, www.regulations.gov and will include 3. Privacy Act any personal information you have spectators, participants, and other provided. Anyone can search the electronic vessels and users of the waterway. form of comments received into any of Persons and vessels would be 1. Submitting comments our dockets by the name of the prohibited from entering into, transiting If you submit a comment, please individual submitting the comment (or through, or anchoring within this safety include the docket number for this signing the comment, if submitted on zone unless authorized by the Captain rulemaking, indicate the specific section behalf of an association, business, labor of the Port, or his designated of this document to which each union, etc.). You may review a Privacy representative. The limits of the safety comment applies, and provide a reason Act notice regarding our public dockets zone will be the navigable waters of for each suggestion or recommendation. in the January 17, 2008, issue of the Mission Bay bound by the following You may submit your comments and Federal Register (73 FR 3316). coordinates; 32°47′32″ N, 117°13′25″ W material online at http:// to 32°47′32″ N, 117°13′00″ W to 4. Public meeting www.regulations.gov, or by fax, mail, or 32°47′20″ N, 117°13′00″ W then west to hand delivery, but please use only one We do not now plan to hold a public 32°46′45″ N, 117°14′09″ W to 32°46′11″ of these means. If you submit a meeting. But you may submit a request N, 117°14′01″ W. Before the effective comment online, it will be considered for one, using one of the methods period, the Coast Guard will publish a received by the Coast Guard when you specified under ADDRESSES. Please Local Notice to Mariners (LNM). successfully transmit the comment. If explain why you believe a public D. Regulatory Analyses you fax, hand deliver, or mail your meeting would be beneficial. If we comment, it will be considered as determine that one would aid this We developed this proposed rule after having been received by the Coast rulemaking, we will hold one at a time considering numerous statutes and Guard when it is received at the Docket and place announced by a later notice executive orders related to rulemaking. Management Facility. We recommend in the Federal Register. Below we summarize our analyses

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based on a number of these statutes or qualifies and how and to what degree 8. Taking of Private Property executive orders. this rule would economically affect it. This proposed rule would not cause a 1. Regulatory Planning and Review 3. Assistance for Small Entities taking of private property or otherwise have taking implications under This proposed rule is not a significant Under section 213(a) of the Small Executive Order 12630, Governmental regulatory action under section 3(f) of Business Regulatory Enforcement Actions and Interference with Executive Order 12866, Regulatory Fairness Act of 1996 (Pub. L. 104–121), Planning and Review, as supplemented Constitutionally Protected Property we want to assist small entities in by Executive Order 13563, Improving Rights. understanding this proposed rule. If the Regulation and Regulatory Review, and rule would affect your small business, 9. Civil Justice Reform does not require an assessment of organization, or governmental This proposed rule meets applicable potential costs and benefits under jurisdiction and you have questions standards in sections 3(a) and 3(b)(2) of section 6(a)(3) of Executive Order 12866 concerning its provisions or options for Executive Order 12988, Civil Justice or under section 1 of Executive Order compliance, please contact the person Reform, to minimize litigation, 13563. The Office of Management and listed in the FOR FURTHER INFORMATION eliminate ambiguity, and reduce Budget has not reviewed it under those burden. Orders. This determination is based on CONTACT, above. The Coast Guard will the size and location of the safety zone. not retaliate against small entities that 10. Protection of Children From Commercial vessels will not be question or complain about this Environmental Health Risks hindered by the safety zone. proposed rule or any policy or action of the Coast Guard. We have analyzed this proposed rule Recreational vessels will be allowed to under Executive Order 13045, transit through the designated safety 4. Collection of Information Protection of Children from zone during specified times, but can Environmental Health Risks and Safety This proposed rule will not call for a transit safely around the safety zone. Risks. This rule is not an economically new collection of information under the Additionally, before the effective significant rule and would not create an Paperwork Reduction Act of 1995 (44 period, the Coast Guard will publish a environmental risk to health or risk to U.S.C. 3501–3520.). Local Notice to Mariners (LNM). safety that might disproportionately 2. Impact on Small Entities 5. Federalism affect children. The Regulatory Flexibility Act of 1980 A rule has implications for federalism 11. Indian Tribal Governments (RFA), 5 U.S.C. 601–612, as amended, under Executive Order 13132, This proposed rule does not have requires federal agencies to consider the Federalism, if it has a substantial direct tribal implications under Executive potential impact of regulations on small effect on the States, on the relationship Order 13175, Consultation and entities during rulemaking. The term between the national government and Coordination with Indian Tribal ‘‘small entities’’ comprises small the States, or on the distribution of Governments, because it would not have businesses, not-for-profit organizations power and responsibilities among the a substantial direct effect on one or that are independently owned and various levels of government. We have more Indian tribes, on the relationship operated and are not dominant in their analyzed this proposed rule under that between the Federal Government and fields, and governmental jurisdictions Order and determined that this rule Indian tribes, or on the distribution of with populations of less than 50,000. does not have implications for power and responsibilities between the The Coast Guard certifies under 5 U.S.C. federalism. Federal Government and Indian tribes. 605(b) that this proposed rule will not have a significant economic impact on 6. Protest Activities 12. Energy Effects a substantial number of small entities. The Coast Guard respects the First This proposed rule is not a This rule will affect the following ‘‘significant energy action’’ under entities, some of which may be small Amendment rights of protesters. Protesters are asked to contact the Executive Order 13211, Actions entities: Owners or operators of vessels Concerning Regulations That intending to transit or anchor in this person listed in the FOR FURTHER INFORMATION CONTACT section to Significantly Affect Energy Supply, portion of Mission Bay from September Distribution, or Use. 13–15, 2013, from 7 a.m. to 5:30 p.m. coordinate protest activities so that your This safety zone will not have a message can be received without 13. Technical Standards significant economic impact on a jeopardizing the safety or security of This proposed rule does not use substantial number of small entities for people, places or vessels. technical standards. Therefore, we did the following reasons. Vessel traffic can 7. Unfunded Mandates Reform Act not consider the use of voluntary pass safely around the zone, and may consensus standards. transit through the safety zone if they The Unfunded Mandates Reform Act obtain permission from the Captain of of 1995 (2 U.S.C. 1531–1538) requires 14. Environment the Port or his designated Federal agencies to assess the effects of We have analyzed this proposed rule representative. Before the effective their discretionary regulatory actions. In under Department of Homeland period, the Coast Guard will issue particular, the Act addresses actions Security Management Directive 023–01 broadcast notice to mariners alerts via that may result in the expenditure by a and Commandant Instruction marine channel 16 VHF. State, local, or tribal government, in the M16475.lD, which guide the Coast If you think that your business, aggregate, or by the private sector of Guard in complying with the National organization, or governmental $100,000,000 (adjusted for inflation) or Environmental Policy Act of 1969 jurisdiction qualifies as a small entity more in any one year. Though this (NEPA)(42 U.S.C. 4321–4370f), and and that this rule would have a proposed rule would not result in such have made a preliminary determination significant economic impact on it, an expenditure, we do discuss the that this action is one of a category of please submit a comment (see effects of this rule elsewhere in this actions that do not individually or ADDRESSES) explaining why you think it preamble. cumulatively have a significant effect on

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the human environment. This proposed (1) Entry into, transit through or minimum flow values and the operating rule involves establishing a temporary anchoring within this safety zone is limits from the rule will make it safety zone. This rule is categorically prohibited unless authorized by the unnecessary to amend the regulations excluded from further review under Captain of the Port of San Diego or his each time the values are modified in the paragraph 34(g) of Figure 2–1 of the designated representative. operating plan in the future. Commandant Instruction. A preliminary (2) Mariners can request permission to DATES: Submit comments on or before environmental analysis checklist transit through the safety zone from the September 13, 2013. Patrol Commander. The Patrol supporting this determination and a ADDRESSES: You may submit comments, Categorical Exclusion Determination are Commander can be contacted on VHF– identified by docket number COE– available in the docket where indicated FM channels 16 and 23. 2013–0008, by any of the following (3) All persons and vessels shall under ADDRESSES. We seek any methods: comply with the instructions of the comments or information that may lead Federal eRulemaking Portal: http:// Coast Guard Captain of the Port or his to the discovery of a significant www.regulations.gov. Follow the environmental impact from this designated representative. (4) Upon being hailed by U.S. Coast instructions for submitting comments. proposed rule. Email: [email protected] Guard patrol personnel by siren, radio, and [email protected]. List of Subjects in 33 CFR Part 165 flashing light, or other means, the Include the docket number, COE–2013– operator of a vessel shall proceed as Harbors, Marine safety, Navigation 0008 in the subject line of the message. directed. (water), Reporting and recordkeeping Mail: U.S. Army Corps of Engineers, requirements, Security measures, (5) The Coast Guard may be assisted by other federal, state, or local agencies. Attn: CECW–CE (Chandra S. Pathak), Waterways. 441 G Street NW., Washington, DC For the reasons discussed in the Dated: June 27, 2013. 20314–1000. preamble, the Coast Guard proposes to S.M. Mahoney, Hand Delivery/Courier: Due to amend 33 CFR part 165 as follows: Captain, U.S. Coast Guard, Captain of the security requirements, we cannot Port San Diego. receive comments by hand delivery or PART 165—REGULATED NAVIGATION [FR Doc. 2013–16806 Filed 7–12–13; 8:45 am] courier. AREAS AND LIMITED ACCESS AREAS BILLING CODE 9110–04–P Instructions: Direct your comments to ■ 1. The authority citation for part 165 docket number COE–2013–0008. All continues to read as follows: comments received will be included in DEPARTMENT OF DEFENSE the public docket without change and Authority: 33 U.S.C. 1231; 46 U.S.C. may be made available on-line at Chapter 701, 3306, 3703; 50 U.S.C. 191, 195; Department of the Army, Corps of http://www.regulations.gov, including 33 CFR 1.05–1, 6.04–1, 6.04–6, and 160.5; Engineers Pub. L. 107–295, 116 Stat. 2064; Department any personal information provided, of Homeland Security Delegation No. 0170.1. unless the commenter indicates that the 33 CFR Part 207 comment includes information claimed ■ 2. Add § 165.T11–578 to read as to be Confidential Business Information follows: Reservoirs at Headwaters of the (CBI) or other information whose Mississippi River; Use and § 165.T11–578 Safety zone; San Diego disclosure is restricted by statute. Do Bayfair; Mission Bay, San Diego, CA. Administration not submit information that you (a) Location. The limits of the safety AGENCY: U.S. Army Corps of Engineers, consider to be CBI, or otherwise zone will be the navigable waters of DoD. protected, through regulations.gov or Mission Bay bound by the following ACTION: Notice of proposed rulemaking email. The regulations.gov Web site is coordinates; 32°47′32″ N, 117°13′25″ W and request for comments. an anonymous access system, which to 32°47′32″ N, 117°13′00″ W to means we will not know your identity 32°47′20″ N, 117°13′00″ W then west to SUMMARY: The U.S. Army Corps of or contact information unless you 32°46′45″ N, 117°14′09″ W to 32°46′11″ Engineers is proposing to amend the provide it in the body of your comment. N, 117°14′01″ W. rules regarding use and administration If you send an email directly to the (b) Enforcement Period. This section of the reservoirs at the headwaters of the Corps without going through will be enforced from 7 a.m. to 5:30 p.m. Mississippi River by deleting from the regulations.gov, your email address will on September 13, 14, and 15, 2013. Code of Federal Regulations all be automatically captured and included Before the effective period, the Coast references to minimum discharges and as part of the comment that is placed in Guard will publish a Local Notice to to operating limits for the reservoirs. the public docket and made available on Mariners (LNM). If the event concludes Following extensive public input and the Internet. If you submit an electronic prior to the scheduled termination time, environmental review, the St. Paul comment, we recommend that you the Captain of the Port will cease District of the Corps of Engineers include your name and other contact enforcement of this safety zone and will recently adopted an updated operating information in the body of your announce that fact via Broadcast Notice plan for the Mississippi River comment and with any disk or CD–ROM to Mariners. Headwaters reservoirs containing you submit. If we cannot read your (c) Definitions. The following minimum flow values that differ from comment because of technical definition applies to this section: those currently codified in the Code of difficulties and cannot contact you for Designated representative, means any Federal Regulations. Deleting all clarification, we may not be able to commissioned, warrant, or petty officer references to minimum flows in the consider your comment. Electronic of the Coast Guard on board Coast regulations will eliminate the current comments should avoid the use of any Guard, Coast Guard Auxiliary, and discrepancy between the regulations special characters, any form of local, state, and federal law enforcement and the approved operating plan for the encryption, and be free of any defects or vessels who have been authorized to act reservoirs. The operating limits are also viruses. on the behalf of the Captain of the Port. contained in the operating plan for the Docket: For access to the docket to (d) Regulations. reservoirs, and eliminating both the read background documents or

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comments received, go to Background River Headwaters reservoirs in 2009, we regulations.gov. All documents in the The Rivers and Harbors Acts of June completed a study known as the docket are listed. Although listed in the 14, 1880, and August 2, 1882, Mississippi River Headwaters Reservoir index, some information is not publicly authorized the construction of dams at Operating Plan Evaluation (ROPE). The available, such as CBI or other each of the six Mississippi River primary purpose of the ROPE was to information whose disclosure is Headwaters lakes for the purpose of evaluate alternative operating plans for restricted by statute. Certain other augmenting Mississippi River flow for the Headwaters reservoirs in an attempt material, such as copyrighted material, navigation. The lakes affected by these to improve the operation of the system is not placed on the Internet and will be acts are Winnibigoshish, Leech, while balancing tribal trust obligations, publicly available only in hard copy Pokegama, Sandy, Cross (Pine River), flood risk reduction, environmental form. and Gull. Following authorization of the concerns, water quality, water supply, FOR FURTHER INFORMATION CONTACT: Mr. reservoirs, the Secretary of War recreation, navigation, hydropower, and Jerry W. Webb, Headquarters, U.S. Army prescribed regulations governing other public interests. Corps of Engineers, Engineering and operation of the reservoirs on February On January 19, 2010, after thoroughly Construction Community of Practice, 11, 1931, which were codified at 33 CFR assessing potential environmental Washington, DC at 202–761–0673; Mr. 207.340. The current regulations list impacts and involving the public in the Chandra S. Pathak, Headquarters, U.S. minimum discharges for each reservoir process, the District Engineer for the St. Army Corps of Engineers, Engineering at 33 CFR 207.340(d)(2). The current Paul District signed a Record of and Construction Community of regulations also list minimum operating Decision approving the ROPE’s Practice, Washington, DC at 202–761– limits, or the lowest level at which the recommended operating plan for the 4668; or Mr. Kenton Spading, U.S. Army Corps may operate each reservoir, at 33 Headwaters reservoirs. The ROPE’s Corps of Engineers, St. Paul District, at CFR 207.340(d)(7). recommended plan adopts minimum The Corps’ procedure adopting and 651–290–5623. discharges that were scientifically publishing regulations related to developed using a habitat in-stream SUPPLEMENTARY INFORMATION: reservoirs has changed since the flow analysis (Tenant 1976), as aforementioned regulations were Executive Summary described in the ROPE. The minimum originally codified in 1931. The present- discharges in the ROPE’s recommended The purpose of this action is to amend day practice is to include minimum plan differ from the minimum the current rule regarding minimum flow values, operating limits and other discharges listed in 33 CFR 207.340 as discharges and minimum operating related information in Water Control it is currently written. We are in the limits of the reservoirs at the headwaters Manuals that are adopted following an of the Mississippi River to ensure that extensive public and environmental process of updating the Water Control the regulations do not conflict with the review process, as outlined in Engineer Manuals for the Headwaters reservoirs current operating plan for those Regulation (ER) 1110–2–240. Moreover, to implement the recommendations reservoirs. the operating limits in the Water Control from the 2009 ROPE. Once the Water The Corps’ authority to amend the Manuals prescribe not only the Control Manuals are revised, the minimum flow values and minimum minimum level at which a reservoir may minimum discharge values in the operating limits for the reservoirs of the operate but also the absolute upper limit revised Water Control Manuals will also headwaters of the Mississippi River is on reservoir operations, effectively be in conflict with 33 CFR 207.340 if the Section 7 of the Rivers and Harbors Act providing a band within which the regulation is not amended. of 1917 (40 Stat. 266; 33 U.S.C. 1) and Corps may operate a reservoir. Table No. 1 illustrates the differences Section 216 of the Flood Control Act of As a precursor to updating the Water between the current regulations and the 1970 (84 Stat. 1830; 33 U.S.C. 549a). Control Manuals for the Mississippi 2009 ROPE study minimum flows.

TABLE 1—MISSISSIPPI RIVER HEADWATER RESERVOIR SYSTEM OPERATING LIMITS AND CFR VERSUS ROPE MINIMUM DISCHARGES

Cross L. Winni-bigoshish Leech Pokegama Sandy Pine R. Gull

Total Operating Limit ...... 1294.94– 1292.70– 1270.42– 1214.31– 1225.32– 1192.75– 1303.14. 1297.94. 1278.42. 1221.31. 1235.30. 1194.75 Minimum Flow: 33 CFR 207.340 150 cfs ...... 70 cfs ...... 200 cfs ...... 80 cfs ...... 90 cfs ...... 30 cfs Minimum Flow: 2009 ROPE ...... ≥1294.94 ...... ≥1292.70 ...... ≥1273.17 ...... ≥1214.31 ...... ≥1225.32 ...... ≥1192.75 100 cfs ...... 120 cfs ...... 200 cfs ...... 20 cfs ...... 30 cfs ...... 20 cfs <1294.94 ...... <1292.70 ...... <1273.17 ...... <1214.31 ...... <1225.32 ...... <1192.75 50 cfs ...... 60 cfs ...... Sum of Flow 10 cfs ...... 15 cfs ...... 10 cfs From Winni- bigoshish plus Leech.

We are proposing to amend the propose to remove the minimum in accordance with the guidance regulations to delete all references to operating limits from the regulations. provided in ER 1110–2–240 after public minimum flows to eliminate any Any future changes to the minimum input and any necessary environmental conflict between the regulations and the flows or the operating limits of the reviews. The proposed change to the Water Control Manuals that guide Headwaters reservoirs will be handled rule will eliminate the necessity of operations at the Mississippi River through revisions to the Water Control amending the Code of Federal Headwaters reservoirs. We further Manuals, which will be accomplished

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Regulations each time a Water Control Executive Order 13132 After considering the economic Manual is updated. Executive Order 13132, entitled impacts of the proposed rule on small entities, we believe that this action will Administrative Requirements ‘‘Federalism’’ (64 FR 43255, August 10, 1999), requires the Corps to develop an not have a significant economic impact Plain Language accountable process to ensure on a substantial number of small ‘‘meaningful and timely input by State entities. The proposed rule is consistent In compliance with the principles in with current agency practice, does not the President’s Memorandum of June 1, and local officials in the development of regulatory policies that have Federalism impose new substantive requirements, 1998, (63 FR 31855) regarding plain and therefore would not have a implications.’’ The phrase ‘‘policies that language, this preamble is written using significant economic impact on a have Federalism implications’’ is plain language. The use of ‘‘we’’ in this substantial number of small entities. notice refers to the Corps. We have also defined in the Executive Order to used the active voice, short sentences, include regulations that have Unfunded Mandates Reform Act and common everyday terms except for ‘‘substantial direct effects on the States, Title II of the Unfunded Mandates necessary technical terms. on the relationship between the national Reform Act of 1995 (UMRA), Public government and the States, or on the Paperwork Reduction Act Law 104–4, establishes requirements for distribution of power and Federal agencies to assess the effects of This proposed action will not impose responsibilities among the various their regulatory actions on State, local, any new information collection burden levels of government.’’ and Tribal governments and the private under the provisions of the Paperwork The proposed rule does not have sector. Under Section 202 of the UMRA, Production Act (44 U.S.C. 3501 et seq.). Federalism implications. We do not the agencies generally must prepare a The proposed modification would believe that amending the regulation to written statement, including a cost- eliminate minimum flow values and eliminate references to minimum flow benefit analysis, for proposed and final operating limits from the rule. Since the values and operating limits for the rules with ‘‘Federal mandates’’ that may proposed rule does not involve any Mississippi River Headwaters reservoirs result in expenditures to State, local, additional collection of information will have substantial direct effects on and Tribal governments, in the from the public, this action is not the States, on the relationship between aggregate, or to the private sector, of subject to the Paperwork Reduction Act. the Federal government and the States, $100 million or more in any one year. or on the distribution of power and Before promulgating a rule for which a Executive Order 12866 responsibilities among the various written statement is needed, Section 205 Under Executive Order 12866 (58 FR levels of government. The proposed rule of the UMRA generally requires the 51735, October 4, 1993), the Corps must does not impose new substantive agencies to identify and consider a determine whether the regulatory action requirements. In addition, the proposed reasonable number of regulatory is ‘‘significant’’ and therefore subject to changes will not impose any additional alternatives and adopt the least costly, review by OMB and the requirements of substantive obligations on State or local most cost-effective, or least burdensome the Executive Order. The Executive governments. Therefore, Executive alternative that achieves the objectives Order defines ‘‘significant regulatory Order 13132 does not apply to this of the rule. The provisions of section action’’ as one that is likely to result in proposed rule. 205 do not apply when they are a rule that may: Regulatory Flexibility Act, as Amended inconsistent with applicable law. (1) Have an annual effect on the by the Small Business Regulatory Moreover, section 205 allows an agency economy of $100 million or more or Enforcement Fairness Act of 1996, 5 to adopt an alternative other than the adversely affect in a material way the U.S.C. 601 et seq. least costly, most cost-effective, or least economy, a sector of the economy, burdensome alternative if the agency The Regulatory Flexibility Act productivity, competition, jobs, the publishes with the final rule an generally requires an agency to prepare environment, public health or safety, or explanation why that alternative was a regulatory flexibility analysis of any State, local, or Tribal governments or not adopted. Before an agency rule subject to notice-and-comment communities; establishes any regulatory requirements rulemaking requirements under the that may significantly or uniquely affect (2) Create a serious inconsistency or Administrative Procedure Act or any small governments, including Tribal otherwise interfere with an action taken other statute unless the agency certifies governments, it must have developed, or planned by another agency; that the rule will not have a significant under Section 203 of the UMRA, a small (3) Materially alter the budgetary economic impact on a substantial government agency plan. The plan must impact of entitlements, grants, user fees, number of small entities. Small entities provide for notifying potentially or loan programs or the rights and include small businesses, small affected small governments, enabling obligations of recipients thereof; or organizations and small governmental officials of affected small governments (4) Raise novel legal or policy issues jurisdictions. to have meaningful and timely input in arising out of legal mandates, the For purposes of assessing the impacts the development of regulatory proposals President’s priorities, or the principles of this proposed rule on small entities, with significant Federal set forth in the Executive Order. a small entity is defined as: (1) A small intergovernmental mandates, and Pursuant to the terms of Executive business based on Small Business informing, educating, and advising Order 12866, we have determined that Administration size standards; (2) a small governments on compliance with the proposed rule is not a ‘‘significant small governmental jurisdiction that is a the regulatory requirements. regulatory action’’ because it does not government of a city, county, town, We have determined that the meet any of these four criteria. The school district, or special district with a proposed rule does not contain a proposed rule modifies the regulations population of less than 50,000; or (3) a Federal mandate that may result in to be consistent with an approved, small organization that is any not-for- expenditures of $100 million or more updated operating plan for the profit enterprise which is independently for State, local, and Tribal governments, Mississippi River Headwaters owned and operated and is not in the aggregate, or the private sector in reservoirs. dominant in its field. any one year. The proposed rule is

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consistent with current agency practice, governments, on the relationship justice part of its mission. Executive does not impose new substantive between the Federal government and Order 12898 provides that each Federal requirements and therefore does not the Indian tribes, or on the distribution agency conduct its programs, policies, contain a Federal mandate that may of power and responsibilities between and activities that substantially affect result in expenditures of $100 million or the Federal government and Indian human health or the environment in a more for State, local, and Tribal tribes. It is generally consistent with manner that ensures that such programs, governments, in the aggregate, or the current agency practice and does not policies, and activities do not have the private sector in any one year. impose new substantive requirements. effect of excluding persons (including Therefore, the proposed rule is not Therefore, Executive Order 13175 does populations) from participation in, subject to the requirements of Sections not apply to this proposed rule. denying persons (including 202 and 205 of the UMRA. For the same Environmental Documentation populations) the benefits of, or reasons, we have determined that the subjecting persons (including proposed rule contains no regulatory The purpose of this proposed populations) to discrimination under requirements that might significantly or rulemaking is to make the Code of such programs, policies, and activities uniquely affect small governments. Federal Regulations consistent with the because of their race, color, or national Therefore, the proposed rule is not current operating plan for the origin. subject to the requirements of Section Mississippi River Headwaters The proposed rule is not expected to 203 of UMRA. Reservoirs. This action is solely negatively impact any community, and administrative in nature. There is no Executive Order 13045 therefore is not expected to cause any intended change in the use or operation disproportionately high and adverse Executive Order 13045, ‘‘Protection of of the reservoirs as a result of this impacts to minority or low-income Children from Environmental Health action. The substantive change in communities. Risks and Safety Risks’’ (62 FR 19885, reservoir operations has already April 23, 1997), applies to any rule that: occurred as a consequence of the Executive Order 13211 (1) is determined to be ‘‘economically adoption of an updated operating plan, The proposed rule is not a significant’’ as defined under Executive as approved in the Record of Decision ‘‘significant energy action’’ as defined in Order 12866, and (2) concerns an for Mississippi River Headwaters Executive Order 13211, ‘‘Actions environmental health or safety risk that Reservoir Operating Plan Evaluation Concerning Regulations That we have reason to believe may have a dated January 19, 2010. The potential Significantly Affect Energy Supply, disproportionate effect on children. If environmental impacts of the updated Distribution, or Use’’ (66 FR 28355, May the regulatory action meets both criteria, operating plan were thoroughly assessed 22, 2001) because it is not likely to have we must evaluate the environmental in the Final Integrated Reservoir a significant adverse effect on the health or safety effects of the proposed Operating Plan Evaluation and supply, distribution, or use of energy. rule on children, and explain why the Environmental Impact Statement dated The proposed rule is consistent with regulation is preferable to other September 2009. Because the present current agency practice, does not potentially effective and reasonably action is merely administrative and an impose new substantive requirements feasible alternatives. environmental analysis was completed and therefore will not have a significant The proposed rule is not subject to at the time the substantive changes to adverse effect on the supply, this Executive Order because it is not the operating plan were adopted, no distribution, or use of energy. economically significant as defined in additional environmental Executive Order 12866. In addition, it documentation will be required at this List of Subjects in 33 CFR Part 207 does not concern an environmental or time. Navigation (water), Penalties, safety risk that we have reason to Reporting and recordkeeping Congressional Review Act believe may have a disproportionate requirements, Waterways. The Congressional Review Act, 5 effect on children. Dated: July 3, 2013. U.S.C. 801 et seq., as added by the Small Executive Order 13175 Business Regulatory Enforcement Approved By: Executive Order 13175, entitled Fairness Act of 1996, generally provides James R. Hannon, ‘‘Consultation and Coordination with that before a rule may take effect, the Chief of Operations. Indian Tribal Governments’’ (65 FR agency promulgating the rule must For the reasons stated in the 67249, November 6, 2000), requires submit a rule report, which includes a preamble, the Corps proposes to amend agencies to develop an accountable copy of the rule, to each House of the 33 CFR part 207 as follows: process to ensure ‘‘meaningful and Congress and to the Comptroller General timely input by tribal officials in the of the United States. We will submit a PART 207—NAVIGATION development of regulatory policies that report containing this rule and other REGULATIONS have tribal implications.’’ The phrase required information to the U.S. Senate, ■ ‘‘policies that have tribal implications’’ the U.S. House of Representatives, and 1. The authority citation for part 207 is defined in the Executive Order to the Comptroller General of the United continues to read as follows: include regulations that have States. A major rule cannot take effect Authority: 40 Stat. 266 (33 U.S.C. 1). ‘‘substantial direct effects on one or until 60 days after it is published in the ■ 2. Revise § 207.340 to read as follows: more Indian tribes, on the relationship Federal Register. The proposed rule is between the Federal government and not a ‘‘major rule’’ as defined by 5 § 207.340 Reservoirs at headwaters of the the Indian tribes, or on the distribution U.S.C. 804(2). Mississippi River; use and administration. of power and responsibilities between (a) Description. These reservoirs the Federal government and Indian Executive Order 12898 include Winnibigoshish, Leech Lake, tribes.’’ Executive Order 12898 requires that, Pokegama, Sandy Lake, Pine River and The proposed rule does not have to the greatest extent practicable and Gull Lake. tribal implications. It will not have permitted by law, each Federal agency (b) Penalties. The River and Harbor substantial direct effects on tribal must make achieving environmental Act approved August 11, 1888 (25 Stat.

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419, 33 U.S.C. 601) includes the (f) Obstructions to flow of water. No CART, etc.) by email: [email protected] following provisions as to the person shall place floating bodies in a or phone: 202–418–0530 or TTY: 202– administration of the headwater stream or pond above or below a 418–0432. reservoirs: reservoir dam when, in the opinion of For detailed instructions for And it shall be the duty of the the officer in charge, such act would submitting comments and additional Secretary of War to prescribe such rules prevent the necessary flow of water to information on the rulemaking process, and regulations in respect to the use and or from such dam, or in any way injure see the SUPPLEMENTARY INFORMATION administration of said reservoirs as, in the dam and its appurtenances, its dikes section of this document. his judgment, the public interest and and embankments; and should floating FOR FURTHER INFORMATION CONTACT: necessity may require; which rules and bodies lying above or below a dam Gregory Haledjian, Wireline regulations shall be posted in some constitute at any time an obstruction or Competition Bureau, Pricing Policy conspicuous place or places for the menace as beforesaid, the owners of said Division, (202) 418–1520 or information of the public. And any floating bodies will be required to [email protected]. person knowingly and willfully remove them immediately. SUPPLEMENTARY INFORMATION: This is a violating such rules and regulations (g) Trespass. No one shall trespass on summary of the Commission’s Public shall be liable to a fine not exceeding any reservoir dam, dike, embankment or Notice, WC Docket No. 12–375; DA 13– five hundred dollars, or imprisonment upon any property pertaining thereto. 1445, released June 26, 2013. The not exceeding six months, the same to [FR Doc. 2013–16877 Filed 7–12–13; 8:45 am] complete text of this document is be enforced by prosecution in any BILLING CODE 3720–58–P available for inspection and copying district court of the United States within during normal business hours in the whose territorial jurisdiction such offense may have been committed. FCC Reference Information Center, (c) Previous regulations now revoked. FEDERAL COMMUNICATIONS Portals II, 445 12th Street SW., Room In accordance with the above act, the COMMISSION CY–A257, Washington DC 20554. The Secretary of War prescribed regulations document may also be purchased from 47 CFR Part 64 for the use and administration of the the Commission’s duplicating reservoirs at the headwaters of the [WC Docket No. 12–375; DA 13–1445] contractor, Best Copy and Printing, Inc., Mississippi River under date of 445 12th Street SW., Room CY–B402, February 11, 1931, which together with More Data Sought on Extra Fees Washington, DC 20554, telephone (800) all subsequent amendments are hereby Levied on Inmate Calling Services 378–3160 or (202) 863–2893, facsimile revoked and the following substituted (202) 863–2898, or via Internet at AGENCY: Federal Communications http://www.bcpiweb.com. therefor. Commission. (d) Authority of officer in charge of The Bureau requests that parties the reservoirs. The accumulation of ACTION: Proposed rule. provide data and information about water in, and discharge of water from such fees. Specifically, we request that SUMMARY: In this document, the parties identify any ancillary ICS fees the reservoirs, including that from one Wireline Competition Bureau (Bureau) reservoir to another, shall be under the that ICS providers charge in connection seeks additional comment on certain with the provision of interstate ICS, the direction of the U.S. District Engineer, fees related to inmate calling services St. Paul, Minnesota, and of his level of each fee, the total amount of (ICS). The record to date indicates that revenue received from each fee, and the authorized agents subject to the ICS providers may charge ICS account following restrictions and cost of providing the service for which holders fees that appear ancillary to the fee recovers. We also request that considerations: making calls, such as account setup (1) Notwithstanding any other parties identify any portion of ancillary fees, account replenishment fees, provision of this section, the discharge service costs that are shared or common account refund fees, and account from any reservoir may be varied at any to the provision of other services, and inactivity fees. time as required to permit inspection of, explain how these costs, and recovery of or repairs to, the dams, dikes or their DATES: Comments due on or before July them, are apportioned among the appurtenances, or to prevent damage to 17, 2013; reply comments due on or services to which they are shared or lands or structures above or below the before July 24, 2013. common. To evaluate how costs dams. ADDRESSES: You may submit comments, associated with providing ancillary (2) During the season of navigation on identified by WC Docket No. 12–375, by services relate to ICS providers’ overall the upper Mississippi River, the volume any of the following methods: costs, we request that costs that are of water discharged from the reservoirs • Federal Communications shared or common to the provision of shall be so regulated by the officer in Commission’s Web site: http:// ancillary ICS services be identified, and charge as to maintain as nearly as fjallfoss.fcc.gov/ecfs2/. Follow the that parties explain how such costs are practicable, until navigation closes, a instructions for submitting comments. apportioned to and recovered by ICS sufficient stage of water in the navigable • Mail: Commercial overnight mail rates. Providers submitting joint and reaches of the upper Mississippi and in (other than U.S. Postal Service Express common costs are requested to provide those of any tributary thereto that may Mail and Priority Mail) must be sent to both per-minute rates and fixed charges be navigated and on which a reservoir 9300 East Hampton Drive, Capitol associated with interstate ICS and is located. Heights, MD 20743. intrastate ICS and information on the (e) Passage of logs and other floating • U.S. Postal Service first-class, costs of providing ICS, including but not bodies. Logs and other floating bodies Express, and Priority mail must be limited to Customer Premise Equipment may be sluiced or locked through the addressed to 445 12th Street SW., or CPE, installation, specific security dams, but prior authority for the Washington DC 20554. enhancements (such as monitoring and sluicing of logs must be obtained from • People with Disabilities: Contact the call blocking), labor, maintenance, the District Engineer when this FCC to request reasonable interconnection fees, and any other cost operation necessitates a material change accommodations (accessible format recovered by ICS rates. In addition to in discharge. documents, sign language interpreters, per-minute or incremental costs, we

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seek information on fixed costs, memoranda, or other filings (specifying • Commercial overnight mail (other including recovered and unrecovered the relevant page and/or paragraph than U.S. Postal Service Express Mail costs, historic and projected demand, numbers where such data or arguments and Priority Mail) must be sent to 9300 and information on how such costs are can be found) in lieu of summarizing East Hampton Drive, Capitol Heights, recovered. them in the memorandum. Documents MD 20743. shown or given to Commission staff • U.S. Postal Service first-class, Procedural Matters during ex parte meetings are deemed to Express, and Priority mail must be Initial Regulatory Flexibility Act be written ex parte presentations and addressed to 445 12th Street SW., Analysis must be filed consistent with rule Washington DC 20554. 1.1206(b). In proceedings governed by People with Disabilities: To request As discussed above, the Public Notice materials in accessible formats for seeks comment on certain issues raised rule 1.49(f) or for which the Commission has made available a people with disabilities (Braille, large in the Rates for Interstate Inmate Calling print, electronic files, audio format), Services NPRM that is intended to method of electronic filing, written ex parte presentations and memoranda send an email to [email protected] or call refresh the record regarding rates for the Consumer & Governmental Affairs interstate ICS calling. The Initial summarizing oral ex parte presentations, and all attachments Bureau at (202) 418–0530 (voice) or Regulatory Flexibility Analysis (IRFA) (202) 418–0432 (tty). for that proceeding is found at thereto, must be filed through the electronic comment filing system The proceeding the Public Notice Appendix C of the Rates for Interstate refers to shall be treated as a ‘‘permit- Inmate Calling Services NPRM, 78 FR available for that proceeding, and must be filed in their native format (e.g., .doc, but-disclose’’ proceeding in accordance 4369–01 (January 22, 2013). In addition, with the Commission’s ex parte rules. we invite comment on the IRFA in light .xml, .ppt, searchable .pdf). Participants in this proceeding should familiarize Persons making ex parte presentations of developments since the issuance of must file a copy of any written the original IRFA. themselves with the Commission’s ex parte rules. presentation or a memorandum Paperwork Reduction Act summarizing any oral presentation Filing Requirements within two business days after the As discussed above, this Public presentation (unless a different deadline Notice seeks comment on certain issues Pursuant to §§ 1.415 and 1.419 of the Commission’s rules, 47 CFR 1.415, applicable to the Sunshine period raised in the Rates for Interstate Inmate applies). Persons making oral ex parte 1.419, interested parties may file Calling Services NPRM that is intended presentations are reminded that comments on or before the date to refresh the record regarding rates for memoranda summarizing the indicated on the first page of this interstate ICS calling. The Initial presentation must (1) list all persons document. Comments may be filed Regulatory Flexibility Analysis (IRFA) attending or otherwise participating in using the Commission’s Electronic for that proceeding is found at the meeting at which the ex parte Comment Filing System (ECFS). See Appendix C of the Rates for Interstate presentation was made, and (2) Electronic Filing of Documents in Inmate Calling Services NPRM, 78 FR summarize all data presented and Rulemaking Proceedings, 63 FR 24121 4369–01 (January 22, 2013). In addition, arguments made during the we invite comment on the IRFA in light (1998). • presentation. If the presentation of developments since the issuance of Electronic Filers: Comments may be consisted in whole or in part of the the original IRFA. filed electronically using the Internet by presentation of data or arguments accessing the ECFS: http:// Ex Parte Requirements already reflected in the presenter’s fjallfoss.fcc.gov/ecfs2/. written comments, memoranda or other • This proceeding shall be treated as a Paper Filers: Parties who choose to filings in the proceeding, the presenter ‘‘permit-but-disclose’’ proceeding in file by paper must file an original and may provide citations to such data or accordance with the Commission’s ex one copy of each filing. If more than one arguments in his or her prior comments, parte rules. Persons making ex parte docket or rulemaking number appears in memoranda, or other filings (specifying presentations must file a copy of any the caption of this proceeding, filers the relevant page and/or paragraph written presentation or a memorandum must submit two additional copies for numbers where such data or arguments summarizing any oral presentation each additional docket or rulemaking can be found) in lieu of summarizing within two business days after the number. them in the memorandum. Documents presentation (unless a different deadline Filings can be sent by hand or shown or given to Commission staff applicable to the Sunshine period messenger delivery, by commercial during ex parte meetings are deemed to applies). Persons making oral ex parte overnight courier, or by first-class or be written ex parte presentations and presentations are reminded that overnight U.S. Postal Service mail. All must be filed consistent with rule memoranda summarizing the filings must be addressed to the § 1.1206(b). In proceedings governed by presentation must (1) list all persons Commission’s Secretary, Office of the rule § 1.49(f) or for which the attending or otherwise participating in Secretary, Federal Communications Commission has made available a the meeting at which the ex parte Commission. method of electronic filing, written ex presentation was made, and (2) • All hand-delivered or messenger- parte presentations and memoranda summarize all data presented and delivered paper filings for the summarizing oral ex parte arguments made during the Commission’s Secretary must be presentations, and all attachments presentation. If the presentation delivered to FCC Headquarters at 445 thereto, must be filed through the consisted in whole or in part of the 12th Street SW., Room TW–A325, electronic comment filing system presentation of data or arguments Washington, DC 20554. The filing hours available for that proceeding, and must already reflected in the presenter’s are 8:00 a.m. to 7:00 p.m. All hand be filed in their native format (e.g., .doc, written comments, memoranda or other deliveries must be held together with .xml, .ppt, searchable .pdf). Participants filings in the proceeding, the presenter rubber bands or fasteners. Any in this proceeding should familiarize may provide citations to such data or envelopes and boxes must be disposed themselves with the Commission’s ex arguments in his or her prior comments, of before entering the building. parte rules.

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Federal Communications Commission. participate in prior auction events for Members of the public should note Kalpak Gude, any permit in which an interest is that from the time a Notice of Proposed Division Chief, Pricing Policy Division, expressed. Rule Making is issued until the matter Wireline Competition Bureau. is no longer subject to Commission DATES: Comments must be filed on or consideration or court review, all ex [FR Doc. 2013–16776 Filed 7–12–13; 8:45 am] before August 5, 2013, and reply parte contacts are prohibited in BILLING CODE 6712–01–P comments on or before August 20, 2013. Commission proceedings, such as this ADDRESSES: Secretary, Federal one, which involve channel allotments. FEDERAL COMMUNICATIONS Communications Commission, 445 See 47 CFR 1.1204(b) for rules COMMISSION Twelfth Street SW., Washington, DC governing permissible ex parte contacts. 20554. For information regarding proper 47 CFR Part 73 FOR FURTHER INFORMATION CONTACT: filing procedures for comments, see 47 [MB Docket No. 13–156; DA 13–1377] Rolanda F. Smith, Media Bureau, (202) CFR 1.415 and 1.420. 418–2700. List of Subjects in 47 CFR Part 73 Radio Broadcasting Services; Port SUPPLEMENTARY INFORMATION: This is a Lions, AK, De Beque, CO, Benjamin, Radio, Radio broadcasting. synopsis of the Commission’s Notice of Cisco, Rule, and Shamrock, TX Proposed Rule Making, MB Docket No. Federal Communications Commission. Nazifa Sawez, AGENCY: Federal Communications 13–156, adopted June 13, 2013, and Commission. released June 14, 2013. The full text of Assistant Chief, Audio Division, Media Bureau. ACTION: Proposed rule. this Commission decision is available for inspection and copying during For the reasons discussed in the SUMMARY: The Audio Division, on its normal business hours in the FCC’s preamble, the Federal Communications own motion, proposes the deletion of Reference Information Center at Portals Commission proposes to amend 47 CFR six vacant allotments in various II, CY–A257, 445 Twelfth Street SW., Part 73 as follows: communities in Alaska, Colorado, and Washington, DC 20554. This document Texas. We tentatively conclude that it is may also be purchased from the PART 73—RADIO BROADCAST in the public interest to delete six FCC- Commission’s duplicating contractors, SERVICES held permits that have been offered in Best Copy and Printing, Inc., 445 12th two FM auctions. No bids were entered Street SW., Room CY–B402, ■ 1. The authority citation for part 73 for these allotments in the recently Washington, DC 20554, continues to read as follows: completed FM Auction 94 and these telephone 1–800–378–3160 or via email Authority: 47 U.S.C. 154, 303, 334, 336, allotments are now considered unsold www.BCPIWEB.com. This document and 339. permits. Deletion of these allotments does not contain proposed information § 73.202 [Amended] may create other opportunities in collection requirements subject to the nearby communities for new FM Paperwork Reduction Act of 1995, ■ 2. Amend § 73.202(b) Table of FM allotments or upgrades of existing Public Law 104–13. In addition, Allotments as follows: stations. Therefore, we believe that the therefore, it does not contain any ■ a. Remove Port Lions, under Alaska, proposed deletion of these vacant proposed information collection burden Channel 221C0 allotments may promote a more ‘‘for small business concerns with fewer ■ b. Remove De Beque, under Colorado, effective and efficient use of the FM than 25 employees,’’ pursuant to the Channel 247C3. broadcast spectrum. Interested parties Small Business Paperwork Relief Act of ■ c. Remove Benjamin, under Texas, must file comments expressing an 2002, Public Law 107–198, see 44 U.S.C. Channel 237C3; Cisco, Channel 261C3; interest in the vacant allotments to 3506(c)(4). Rule, Channel 288C2; and Shamrock, prevent their removal. Moreover, Provisions of the Regulatory Channel 225C2. interested parties must provide an Flexibility Act of l980 do not apply to [FR Doc. 2013–16888 Filed 7–12–13; 8:45 am] explanation as to why they did not this proceeding. BILLING CODE 6712–01–P

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Notices Federal Register Vol. 78, No. 135

Monday, July 15, 2013

This section of the FEDERAL REGISTER use current Census infrastructure to weeks before the start of data collection, contains documents other than rules or research (1) removing households from alerting residents about the upcoming proposed rules that are applicable to the the NRFU interviewer workload using study. For the treatments in which public. Notices of hearings and investigations, administrative records and (2) administrative records are employed to committee meetings, agency decisions and employing an adaptive contact strategy reduce the NRFU workload (Treatments rulings, delegations of authority, filing of petitions and applications and agency tailored to each household. This pre-test 1 and 3), the Census Bureau will remove statements of organization and functions are will inform the use of administrative housing units from this data collection examples of documents appearing in this records and future NRFU contact whose prenotice letters are not returned section. strategies tested during the 2020 with ‘‘undeliverable as addressed’’ Research and Testing Program. The United States Postal Service information results from this pre-test are necessary and that have record evidence of DEPARTMENT OF COMMERCE to reduce the risks associated with a occupancy. These housing units will be larger scale implementation of an classified as ‘‘occupied’’ for purposes of Submission for OMB Review; adaptive contact strategy component, the study. In these treatments, the Comment Request which is planned for the 2014 Census Census Bureau also will remove housing Test. The Department of Commerce will units from this data collection whose The Census Bureau will conduct the prenotice letters are returned with submit to the Office of Management and 2013 Census Test on 2,000 housing Budget (OMB) for clearance the ‘‘undeliverable as addressed’’ United units in the Philadelphia metropolitan States Postal Service information and following proposal for collection of area. To simulate a NRFU data information under the provisions of the that have no other record evidence of collection environment, the sample will occupancy. These housing units will be Paperwork Reduction Act (44 U.S.C. consist of housing units that did not chapter 35). classified as ‘‘vacant’’ for purposes of mail back a self-response form in the the study. Agency: U.S. Census Bureau. 2010 decennial census based on the Title: 2013 Census Test. The Census Bureau will not employ 2010 Census NRFU universe. Data administrative records to reduce OMB Control Number: None. collection will begin in October 2013 Form Number(s): The automated workload in Treatments 2 and 4. and end in November 2013. Instead, administrative records will survey instrument will have no form The sampled housing units will be number. prioritize cases for contact in the divided across four treatments: adaptive design condition (Treatment Type of Request: New collection. • (Treatment 1) use of administrative 4). Burden Hours: 334. records to reduce workload and a fixed The Census Bureau will match NRFU Number of Respondents: 2,000. contact strategy, in which all cases have housing units to cell and landline Average Hours per Response: 10 the same contact strategy until telephone numbers. In the fixed contact minutes. enumerated, Needs and Uses: The U.S. • (Treatment 2) no use of strategy treatments (Treatments 1 and Constitution gives the Census Bureau administrative records to reduce 2), the Census Bureau will instruct the authority to enumerate the U.S. workload and a fixed contact strategy, computer-assisted personal interviewing population every ten years. In 2010, the • (Treatment 3) use of administrative (CAPI) interviewers to telephone Census Bureau encouraged housing records to reduce workload and an housing units before performing units in areas that received a mailed adaptive contact strategy, in which personal visits. Interviewers will 2010 Census form to fill out and mail cases are assigned unique contact attempt to contact housing units back this Census questionnaire. In total, strategies determined by response without telephone numbers via personal 47,197,405 housing units did not mail likelihood and cost models, and visits. If an interviewer cannot complete back their form and were included in • (Treatment 4) no use of an interview, they will be instructed to Nonresponse Followup (NRFU), which administrative records to reduce obtain a proxy interview. employed enumerators to obtain workload (records used only to In the adaptive contact strategy information from each occupied prioritize cases) and an adaptive contact treatments (Treatments 3 and 4), the housing unit included in the NRFU strategy. Census Bureau will send telephone workload. This activity cost After mailing a pre-notice asking for numbers to a computer-assisted $1,589,397,886. participation in this study, the Census telephone interviewing (CATI) In preparation for the 2020 Census, Bureau will employ administrative operation where interviewers will the Census Bureau is testing self- records in Treatments 1 and 3 to remove attempt to contact and to interview response strategies to decrease the occupied housing units from the NRFU housing units for two weeks. At the end NRFU workload and contact strategies workload, if there are records for these of these two weeks, nonresponding to decrease the cost of NRFU. This pre- units containing sufficient information CATI cases will be moved to CAPI test will examine the use of to enumerate them. The suitability of interviewers who will attempt personal administrative records and an adaptive records for enumerating these housing visits (Housing units without telephone contact strategy tailored to each units is determined through the Census numbers will be sent straight to CAPI household to reduce the NRFU Bureau’s research on matching interviewers during these two weeks). workload and to increase NRFU administrative records information to CAPI interviewers in the adaptive production rates, while attempting to 2010 Census NRFU housing units. contact strategy treatments will be told maintain or to increase the level of data The Census Bureau will mail all on a daily basis which cases are priority quality. Specifically, this pre-test will housing units a prenotice letter two for contact and when to perform proxy

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interviews, as determined by response Bureau and is incorporated into the DEPARTMENT OF COMMERCE likelihood and cost models. clearance process required by the The Census Bureau will use existing Paperwork Reduction Act. [Docket No.: 130520483–3598–02] staff and office infrastructure for this Data from the test will be included in pre-test. Where necessary, the Census reports with clear statements about the Privacy Act New System of Records Bureau will modify existing systems test’s methodology and limitations. and field procedures. AGENCY: Department of Commerce. The Census Bureau will use the 2013 Reports will state that the data were Census Test to test operational produced for decision-making and ACTION: Notice; COMMERCE/DEPT–23, procedures that might increase NRFU exploratory research, not for official Information Collected Electronically in efficiency. Secondary goals of the estimates. Research results may be Connection with Department of research include gaining an initial prepared for presentations at Commerce Activities, Events, and measurement of the cost savings professional meetings or in publications Programs. associated with using administrative in professional journals to promote records and an adaptive design contact discussion within the larger survey and SUMMARY: The Department of Commerce strategy to enumerate simulated non- statistical community and to encourage (Commerce) publishes this notice to responding housing units and further research and refinement. All announce the effective date of a Privacy measuring the quality of data produced presentations or publications will Act system of records entitled by these approaches. provide clear descriptions of the test’s COMMERCE/DEPT–23, Information The primary goal of the test will be to methodology and its limitations. assess whether the Census Bureau can Collected Electronically in Connection implement a simulated NRFU data The Census Bureau published a notice with Department of Commerce collection using adaptive design and in the Federal Register on September 6, Activities, Events, and Programs. 2012 (Vol. 77, No. 173, pp. 54887– administrative records during DATES: The system of records becomes 54889) announcing its intention to production. Secondary goals will effective on July 15, 2013. measure the cost and data quality conduct a test of alternative contact between two sets of groups. One strategies in a census environment. The ADDRESSES: For a copy of the system of analysis will compare operational 2013 Census Test is being submitted as records please mail requests to Brenda efficiency, cost, and data quality a component of and a precursor to that Dolan, U.S. Department of Commerce, between treatments that use and that do larger test to be conducted in 2014 (the Suite A300, Room A326, 1401 not use administrative records to reduce 2014 Census Test). In the notice, we Constitution Avenue NW., Washington, the NRFU workload. Another analysis requested 36,167 burden hours. The DC 20230, 202–482–3258. will compare operational efficiency, 2013 Census Test will use 334 of that FOR FURTHER INFORMATION CONTACT: cost, and data quality between total. The 2014 Census Test will use the Brenda Dolan, U.S. Department of treatments that use an adaptive design remainder of this amount. contact strategy versus a fixed contact Commerce, Suite A300, Room A326, Affected Public: Individuals or 1401 Constitution Ave. NW., strategy. The Census Bureau will also households. examine the interaction of adaptive Washington, DC 20230, 202–482–3258. Frequency: One Time. design and the use of administrative SUPPLEMENTARY INFORMATION: On June 5, records on operational efficiency, cost, Respondent’s Obligation: Mandatory. 2013, Commerce published and and data quality. Legal Authority: Title 13 U.S.C., requested comments on a proposed The 2013 Census Test will inform Privacy Act system of records entitled future 2020 Census NRFU tests, which Sections 141 and 193. includes a test of administrative records OMB Desk Officer: Brian Harris- COMMERCE/DEPT–23, Information and self-response and NRFU contact Kojetin, (202) 395–7314. Collected Electronically in Connection with Department of Commerce strategies in 2014. Data will not be Copies of the above information Activities, Events, and Programs. No released as Census Bureau data products collection proposal can be obtained by comments were received in response to or be used for official estimates. Rather, calling or writing Jennifer Jessup, the request for comments. results will aid in determining how to Departmental Paperwork Clearance test the use of administrative records Officer, (202) 482–0336, Department of By this notice, the Department is and an adaptive contact strategy in Commerce, Room 6616, 14th and adopting the proposed system as final future, larger tests. Results will also Constitution Avenue NW., Washington, without changes effective July 15, 2013. inform the infrastructure required to DC 20230 (or via the Internet at support using administrative records Dated: July 9, 2013. [email protected]). and a centralized CATI system to Brenda Dolan, enumerate a NRFU population, as well Written comments and U.S. Department of Commerce, Departmental as an operational control system (OCS) recommendations for the proposed Freedom of Information and Privacy Act that enables real-time case prioritization information collection should be sent Officer. and mode switching. within 30 days of publication of this [FR Doc. 2013–16813 Filed 7–12–13; 8:45 am] The Census Bureau plans to make the notice to Brian Harris-Kojetin, OMB BILLING CODE 3510–25–P aggregated results of this study available Desk Officer either by fax (202–395– to the public. Information quality is an 7245) or email ([email protected]). integral part of the pre-dissemination Dated: July 9, 2013. review of the information disseminated by the Census Bureau (fully described in Gwellnar Banks, the Census Bureau’s Information Management Analyst, Office of the Chief Quality Guidelines). Information quality Information Officer. is also integral to the information [FR Doc. 2013–16822 Filed 7–12–13; 8:45 am] collections conducted by the Census BILLING CODE 3510–07–P

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DEPARTMENT OF COMMERCE certified that it had no sales of subject 0.10 percent of molybdenum, or merchandise during the POR.3 0.10 percent of niobium, or International Trade Administration 0.15 percent of vanadium, or Scope of the Order 0.15 percent of zirconium. [A–570–865] The products covered by the order are All products that meet the physical certain hot-rolled carbon steel flat and chemical description provided Certain Hot-Rolled Carbon Steel Flat products of a rectangular shape, of a above are within the scope of the order Products From the People’s Republic width of 0.5 inch or greater, neither unless otherwise excluded. The of China: Preliminary Results of 2011– clad, plated, nor coated with metal and following products, for example, are 2012 Antidumping Duty Administrative whether or not painted, varnished, or outside or specifically excluded from Review coated with plastics or other non- the scope of the order: metallic substances, in coils (whether or • Alloy hot-rolled steel products in AGENCY: Import Administration, not in successively superimposed which at least one of the chemical International Trade Administration, layers), regardless of thickness, and in elements exceeds those listed above Department of Commerce. straight lengths of a thickness of less (including, e.g., American Society for SUMMARY: The Department of Commerce than 4.75 mm and of a width measuring Testing and Materials (‘‘ASTM’’) (‘‘Department’’) is conducting an at least 10 times the thickness. specifications A543, A387, A514, A517, administrative review of the Universal mill plate (i.e., flat-rolled A506). antidumping duty order on certain hot- products rolled on four faces or in a • Society of Automotive Engineers rolled carbon steel flat products (‘‘hot- closed box pass, of a width exceeding (‘‘SAE’’)/American Iron & Steel Institute rolled steel’’) from the People’s Republic 150 mm, but not exceeding 1,250 mm, (‘‘AISI’’) grades of series 2300 and of China (‘‘PRC’’),1 covering the period and of a thickness of not less than 4.0 higher. • of review (‘‘POR’’) November 1, 2011 mm, not in coils and without patterns Ball bearing steels, as defined in the through October 31, 2012. The in relief) of a thickness not less than 4.0 HTSUS. • Department preliminarily determines mm is not included within the scope of Tool steels, as defined in the the order. Specifically included within HTSUS. that Baosteel Group Corporation, • Shanghai Baosteel International the scope of the order are vacuum Silico-manganese (as defined in the Economic & Trading Co., Ltd., and degassed, fully stabilized (commonly HTSUS) or silicon electrical steel with a silicon level exceeding 2.25 percent. Baoshan Iron and Steel Co., Ltd. referred to as interstitial-free (‘‘IF’’)) • (collectively, ‘‘Baosteel’’) had no steels, high strength low alloy (‘‘HSLA’’) ASTM specifications A710 and shipments of subject merchandise to the steels, and the substrate for motor A736. • USS abrasion-resistant steels (USS United States during the POR. lamination steels. IF steels are recognized as low carbon steels with AR 400, USS AR 500). DATES: Effective Date: July 15, 2013. • All products (proprietary or micro-alloying levels of elements such FOR FURTHER INFORMATION CONTACT: otherwise) based on an alloy ASTM as titanium or niobium (also commonly Steven Hampton, AD/CVD Operations, specification (sample specifications: referred to as columbium), or both, Office 9, Import Administration, ASTM A506, A507). added to stabilize carbon and nitrogen International Trade Administration, • Non-rectangular shapes, not in elements. HSLA steels are recognized as U.S. Department of Commerce, 14th coils, which are the result of having steels with micro-alloying levels of Street and Constitution Avenue NW., been processed by cutting or stamping elements such as chromium, copper, Washington, DC 20230; telephone (202) and which have assumed the character niobium, vanadium, and molybdenum. 482–0116. of articles or products classified outside The substrate for motor lamination SUPPLEMENTARY INFORMATION: chapter 72 of the HTSUS. steels contains micro-alloying levels of The merchandise subject to the order Background elements such as silicon and aluminum. is classified in the HTSUS at Steel products included in the scope of subheadings: 7208.10.15.00, The Department is conducting an the order, regardless of definitions in administrative review of the 7208.10.30.00, 7208.10.60.00, the Harmonized Tariff Schedule of the 7208.25.30.00, 7208.25.60.00, antidumping duty order on hot-rolled United States (‘‘HTSUS’’), are products steel from the PRC. On November 29, 7208.26.00.30, 7208.26.00.60, in which: (i) Iron predominates, by 7208.27.00.30, 7208.27.00.60, 2001, the Department published in the weight, over each of the other contained Federal Register an antidumping duty 7208.36.00.30, 7208.36.00.60, elements; (ii) the carbon content is two 7208.37.00.30, 7208.37.00.60, order on hot-rolled steel from the PRC. percent or less, by weight; and, (iii) On December 31, 2012, the Department 7208.38.00.15, 7208.38.00.30, none of the elements listed below 7208.38.00.90, 7208.39.00.15, published a notice of initiation of an exceeds the quantity, by weight, administrative review of the 7208.39.00.30, 7208.39.00.90, respectively indicated: 7208.40.60.30, 7208.40.60.60, antidumping duty order on hot-rolled 1.80 percent of manganese, or steel from the PRC covering the period 2.25 percent of silicon, or 7208.53.00.00, 7208.54.00.00, November 1, 2011, to October 31, 2012, 1.00 percent of copper, or 7208.90.00.00, 7211.14.00.90, for one company, Baosteel.2 On January 0.50 percent of aluminum, or 7211.19.15.00, 7211.19.20.00, 28, 2013, in response to the 1.25 percent of chromium, or 7211.19.30.00, 7211.19.45.00, Department’s Initiation Notice, Baosteel 0.30 percent of cobalt, or 7211.19.60.00, 7211.19.75.30, 0.40 percent of lead, or 7211.19.75.60, and 7211.19.75.90. 1 See Notice of Antidumping Duty Order: Certain 1.25 percent of nickel, or Certain hot-rolled carbon steel flat Hot-Rolled Carbon Steel Flat Products from the 0.30 percent of tungsten, or products covered by the order, People’s Republic of China, 66 FR 59561 (November including: Vacuum degassed fully 29, 2001). 3 See Letter from Baosteel regarding Certain Hot- stabilized; high strength low alloy; and 2 See Initiation of Antidumping and Rolled Carbon Steel Flat Products from the People’s the substrate for motor lamination steel Countervailing Duty Administrative Reviews and Republic of China/No Sales Certification, dated Request for Revocation in Part, 77 FR 77017 January 28, 2013 (‘‘Baosteel No Sales may also enter under the following tariff (December 31, 2012) (‘‘Initiation Notice’’). Certification’’). numbers: 7225.11.00.00, 7225.19.00.00,

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7225.30.30.50, 7225.30.70.00, Disclosure and Public Comment exporter’s rate) will be liquidated at the 7225.40.70.00, 7225.99.00.90, Pursuant to 19 CFR 351.309(c), PRC-wide rate.11 7226.11.10.00, 7226.11.90.30, interested parties may submit cases Cash Deposit Requirements 7226.11.90.60, 7226.19.10.00, briefs no later than 30 days after the 7226.19.90.00, 7226.91.50.00, date of publication of this notice. The following cash deposit 7226.91.70.00, 7226.91.80.00, and Rebuttal briefs, limited to issues raised requirements will be effective upon 7226.99.00.00. Subject merchandise in the case briefs, may be filed not later publication of the final results of this may also enter under 7210.70.30.00, than five days after the date for filing administrative review for all shipments 7210.90.90.00, 7211.14.00.30, case briefs.7 Parties who submit case of the subject merchandise from the PRC 7212.40.10.00, 7212.40.50.00, and briefs or rebuttal briefs in this entered, or withdrawn from warehouse, 7212.50.00.00. Although the HTSUS proceeding are encouraged to submit for consumption on or after the subheadings are provided for with each argument: (1) A statement of publication date, as provided by section the issue; (2) a brief summary of the convenience and customs purposes, the 751(a)(2)(C) of the Act: (1) For Baosteel, argument; and (3) a table of authorities.8 written description of the merchandise which claimed no shipments, the cash subject to the order is dispositive. Case and rebuttal briefs should be filed electronically via the Import deposit rate will remain unchanged Preliminary Determination of No Administration’s Antidumping and from the rate assigned to the company Shipments Countervailing Duty Centralized in the most recently completed review Electronic Service System (‘‘IA of the company; (2) for previously As noted in the ‘‘Background’’ section ACCESS’’).9 investigated or reviewed PRC and non- above, Baosteel has submitted a timely- Pursuant to 19 CFR 351.310(c), PRC exporters not listed above that have filed certification indicating that it had interested parties who wish to request a separate rates, the cash deposit rate will no sales of subject merchandise to the hearing, or to participate if one is continue to be the exporter-specific rate United States during the POR.4 In requested, must submit a written published for the most recent period; (3) addition, in response to our request for request to the Assistant Secretary for for all PRC exporters of subject information on entries of subject Import Administration, filed merchandise which have not been merchandise during the POR, U.S. electronically via IA ACCESS. An found to be entitled to a separate rate, Customs and Border Protection (‘‘CBP’’) electronically filed document must be the cash deposit rate will be the PRC- did not provide any evidence received successfully in its entirety by wide rate of 90.83 percent; and (4) for contradicting Baosteel’s claim of no the Department’s electronic records all non-PRC exporters of subject sales. Further on June 5, 2013, the system, IA ACCESS, by 5 p.m. Eastern merchandise which have not received Department released to interested Standard Time within 30 days after the 10 their own rate, the cash deposit rate will parties the results of the CBP used to date of publication of this notice. be the rate applicable to the PRC Requests should contain: (1) The party’s corroborate Baosteel’s no sales claim exporter(s) that supplied that non-PRC name, address and telephone number; which indicated that there were no exporter. These deposit requirements, (2) the number of participants; and (3) entries of subject merchandise during a list of issues to be discussed. Issues when imposed, shall remain in effect the POR from any exporter, including raised in the hearing will be limited to until further notice. Baosteel.5 The Department received no those raised in the respective case Notification to Importers comments from any interested parties briefs. concerning the results of the CBP query. The Department will issue the final This notice also serves as a Based on the certification of Baosteel results of this administrative review, preliminary reminder to importers of and our analysis of CBP information, the including the results of its analysis of their responsibility under 19 CFR Department preliminarily determines the issues raised in any written briefs, 351.402(f)(2) to file a certificate that Baosteel did not have any not later than 120 days after the date of regarding the reimbursement of reviewable transactions during the POR. publication of this notice, pursuant to antidumping duties prior to liquidation In addition, consistent with the section 751(a)(3)(A) of the Tariff Act of of the relevant entries during this Department’s refinement to its 1930, as amended (‘‘Act’’). review period. Failure to comply with assessment practice in non-market Assessment Rates this requirement could result in the Department’s presumption that economy (‘‘NME’’) cases, the Upon issuance of the final results, the reimbursement of antidumping duties Department finds that it is appropriate Department will determine, and CBP not to rescind the review in these shall assess, antidumping duties on all occurred and the subsequent assessment circumstances but rather, to complete appropriate entries. The Department of double antidumping duties. the review with respect to Baosteel and intends to issue assessment instructions The Department is issuing and issue appropriate instructions to CBP to CBP 15 days after the date of publishing these results in accordance based on the final results of the review.6 publication of the final results of with sections 751(a)(1) and 777(i)(1) of review. Pursuant to the refinement to its the Act. 4 See Baosteel No Sales Certification. assessment practice in NME cases, if the Dated: July 8, 2013. 5 See Memorandum to the File from Steven Department continues to determine that Hampton, International Trade Analyst, Office 9, an exporter under review had no Paul Piquado, Import Administration regarding 2011–2012 Assistant Secretary for Import Administrative Review of Certain Hot-Rolled shipments of subject merchandise, any Carbon Steel Flat Products from the People’s suspended entries that entered under Administration. Republic of China: CBP confirmation of No Sales that exporter’s case number (i.e., at that [FR Doc. 2013–16896 Filed 7–12–13; 8:45 am] with respect to Baosteel, dated June 5, 2013. BILLING CODE 3510–DS–P 6 See Non-Market Economy Antidumping 7 Proceedings: Assessment of Antidumping Duties, 76 See 19 CFR 351.309(d). FR 65694, 65694–95 (October 24, 2011) and the 8 See 19 CFR 351.309(c)(2) and (d)(2). 11 For a full discussion of this practice, see ‘‘Assessment Rates’’ section, below (‘‘Assessment 9 See 19 CFR 351.303. Assessment Practice Refinement, 76 FR at 65694– Practice Refinement’’). 10 See 19 CFR 351.310(c). 95.

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DEPARTMENT OF COMMERCE DEPARTMENT OF COMMERCE DATES: Written, telefaxed, or email comments must be received on or before International Trade Administration International Trade Administration August 14, 2013. ADDRESSES: The application and related Travel and Tourism Trade Mission to U.S. Healthcare Trade Mission to documents are available for review by Taiwan, Japan, and Korea Russia, October 21–25, 2013; selecting ‘‘Records Open for Public Correction AGENCY: International Trade Comment’’ from the Features box on the Administration, Department of AGENCY: International Trade Applications and Permits for Protected Commerce. Administration, Department of Species home page, https:// ACTION: Notice. Commerce. apps.nmfs.noaa.gov, and then selecting ACTION: Notice; Cancellation. File No. 17115 from the list of available SUMMARY: The United States Department applications. of Commerce, International Trade SUMMARY: The United States Department These documents are also available Administration, U.S. and Foreign of Commerce, International Trade upon written request or by appointment Commercial Service is amending notice Administration, U.S. and Foreign in the following offices: for the Travel and Tourism Trade Commercial Service published a Permits and Conservation Division, Mission to Taiwan, Japan and Korea document in the Federal Register of Office of Protected Resources, NMFS, scheduled for March 10–14, 2014, May 30, 2013 regarding the U.S. 1315 East-West Highway, Room 13705, published at 78 FR 34344, June 7, 2013, Healthcare Trade Mission to Russia, Silver Spring, MD 20910; phone (301) to identify the mission as an Executive- October 21–25, 2013. This mission has 427–8401; fax (301) 713–0376; and led Trade Mission. been cancelled. Please update the Southwest Region, NMFS, 501 West FOR FURTHER INFORMATION CONTACT: existing notice with a note that this Ocean Blvd., Suite 4200, Long Beach, Frank Spector, Office of Domestic mission is cancelled as of July 8, 2013. CA 90802–4213; phone (562) 980–4001; fax (562) 980–4018. Operations, Trade Promotion Programs, Cancellation Notice Phone: 202–482–2054; Fax: 202–482– Written comments on this application 9000, email: [email protected]. In the Federal Register of December 4, should be submitted to the Chief, Permits and Conservation Division, at SUPPLEMENTARY INFORMATION: The 2012, in 78 FR 32369 on page 32369, title, note a top of page, correct the the address listed above. Comments may International Trade Administration will also be submitted by facsimile to (301) have a senior executive lead the Travel subject heading of the notice to read: U.S. Healthcare Trade Mission to Russia 713–0376, or by email to and Tourism Trade Mission to Taiwan, [email protected]. Please Japan and Korea, March 10–14, 2014, has been Cancelled, Oct 21–25, 2013. FOR FURTHER INFORMATION CONTACT: include File No. 17115 in the subject published at 78 FR 34344, June 7, 2013. line of the email comment. As previously published, the notice did Jessica Dulkadir, Commercial Service Trade Missions Program, Tel: 202–482– Those individuals requesting a public not specify that a senior executive will hearing should submit a written request be leading the mission. 2026, Fax: 202–482–9000, email: [email protected] to the Chief, Permits and Conservation Amendments Division at the address listed above. The Dated: May 30, 2013. request should set forth the specific For these reasons, the Mission Elnora Moye, reasons why a hearing on this Description of the Notice of the Travel Trade Program Assistant. application would be appropriate. and Tourism Trade Mission to Taiwan, Japan, and Korea is amended to read as [FR Doc. 2013–16814 Filed 7–12–13; 8:45 am] FOR FURTHER INFORMATION CONTACT: follows: BILLING CODE 3510–FP–P Amy Sloan, (301) 427–8401. The United States Department of SUPPLEMENTARY INFORMATION: The subject amendment to Permit No. Commerce, International Trade DEPARTMENT OF COMMERCE Administration, U.S. & Foreign 17115–00 is requested under the Commercial Service, is organizing an National Oceanic and Atmospheric authority of the Marine Mammal Executive-led Trade Mission to Taiwan, Administration Protection Act of 1972, as amended (16 Japan, and Korea March 10–14, 2014. U.S.C. 1361 et seq.), and the regulations The purpose of the mission is to help governing the taking and importing of RIN 0648–XC100 U.S. firms in the travel and tourism marine mammals (50 CFR part 216). industry find business partners and sell Marine Mammals; File No. 17115 Permit No. 17115–00, issued on services in Taipei, Taiwan; Seoul, September 24, 2012 (77 FR 63296), Korea; and Tokyo, Japan. The targeted AGENCY: National Marine Fisheries authorizes the permit holder to study sector for participation in this mission Service (NMFS), National Oceanic and the prevalence of leptospirosis in wild is travel and tourism, including U.S.- Atmospheric Administration (NOAA), California sea lions (Zalophus based travel and tourism suppliers, Commerce. californianus) in California. Up to 80 destination marketing organizations ACTION: Notice; receipt of application for California sea lions may be taken (i.e., convention and visitors bureaus), permit amendment. annually on An˜ o Nuevo Island by travel promotion organizations and capture (including restraint and other travel and tourism entities SUMMARY: Notice is hereby given that anesthesia); marking and measuring; promoting and selling travel to the James Lloyd-Smith, Department of sampling (blood, urine, vibrissae); and United States including trade Ecology and Evolutionary Biology, release. A limited number of non-target associations. University of California, Los Angeles, sea lions may be captured and released 610 Charles E. Young Dr. South, Box without sampling. Up to 5,000 sea lions, Frank Spector, 723905, Los Angeles, CA 90095–7239, 3,000 northern elephant seals (Mirounga Senior International Trade Specialist. has applied for an amendment to angustirostris), and 60 harbor seals [FR Doc. 2013–16815 Filed 7–12–13; 8:45 am] Scientific Research Permit No. 17115– (Phoca vitulina) may be taken by BILLING CODE 3510–FP–P 00. incidental disturbance annually. Four

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unintentional mortalities of California DEPARTMENT OF COMMERCE amended (MMPA; 16 U.S.C. 1361 et sea lions are authorized. The permit seq.) directs the Secretary of Commerce expires September 30, 2017. National Oceanic and Atmospheric to authorize, upon request, the Administration The permit holder is requesting the incidental, but not intentional, taking of permit be amended to expand the scope RIN 0648–XC486 small numbers of marine mammals of a species or population stock, by United of the study and include authorization Taking of Marine Mammals Incidental States citizens who engage in a specified for capture, sampling, and release of to Specified Activities; U.S. Marine activity (other than commercial fishing) California sea lions as described above Corps Training Exercises at Air Station within a specified geographical region at two additional sampling sites in Cherry Point if, after notice of a proposed California (160 animals at San Nicolas authorization to the public for review AGENCY: Island and 80 animals at Monterey Bay). National Marine Fisheries and public comment: (1) We make A limited number of non-target sea lions Service, National Oceanic and certain findings; and (2) the taking is may be captured and released without Atmospheric Administration (NOAA), limited to harassment. Commerce. sampling. The permit holder also We shall grant authorization for the requests incidental disturbance at each ACTION: Notice; issuance of incidental incidental taking of small numbers of of the new sites for the following harassment authorization. marine mammals if we find that the species: California sea lions (6,000 on SUMMARY: In accordance with the taking will have a negligible impact on San Nicolas Island; and 3,000 in Marine Mammal Protection Act the species or stock(s), and will not have Monterey Bay); Northern elephant seals (MMPA) regulation, we hereby give an unmitigable adverse impact on the (2,000 on San Nicolas; and 100 in notification that we have issued an availability of the species or stock(s) for Monterey Bay); and Pacific harbor seals Incidental Harassment Authorization subsistence uses (where relevant). The (100 on San Nicolas, and 50 in (Authorization) to take marine mammals authorization must set forth the Monterey Bay). The permit holder incidental to various training exercises permissible methods of taking; other proposes to disentangle and mark/ at Marine Corps Air Station (MCAS) means of effecting the least practicable sample a limited number of California Cherry Point Range Complex, North adverse impact on the species or stock sea lions encountered during the Carolina for a period of one year. The and its habitat; and requirements research activities. Permission to U.S. Marine Corps’ activities are pertaining to the mitigation, monitoring increase the number of mortalities of military readiness activities pursuant to and reporting of such taking. We have California sea lions from four to eight the Marine Mammal Protection Act defined ‘‘negligible impact’’ in 50 CFR over the duration of the permit is (MMPA), as amended by the National 216.103 as ‘‘. . . an impact resulting requested. The applicant also requests Defense Authorization Act (NDAA) for from the specified activity that cannot be reasonably expected to, and is not to extend the maximum number of Fiscal Year 2004. reasonably likely to, adversely affect the sampling years from four to five over the DATES: Effective June 17, 2013 through species or stock through effects on duration of the permit. June 14, 2014. ADDRESSES: To obtain an electronic annual rates of recruitment or survival.’’ In compliance with the National copy of the Authorization, write to P. Section 101(a)(5)(D) of the MMPA Environmental Policy Act of 1969 (42 Michael Payne, Chief, Permits and established an expedited process by U.S.C. 4321 et seq.), an initial Conservation Division, Office of which citizens of the United States can determination has been made that the Protected Resources, National Marine apply for an authorization to activity proposed is categorically Fisheries Service, 1315 East-West incidentally take small numbers of excluded from the requirement to Highway, Silver Spring, MD 20910– marine mammals by harassment. prepare an environmental assessment or 3225 or download an electronic copy at: Section 101(a)(5)(D) of the MMPA environmental impact statement. http://www.nmfs.noaa.gov/pr/permits/ establishes a 45-day time limit for our Concurrent with the publication of incidental.htm#applications. review of an application followed by a this notice in the Federal Register, The following associated document is 30-day public notice and comment period on any proposed authorizations NMFS is forwarding copies of this also available at the same internet address: The Marine Corps’ for the incidental harassment of small application to the Marine Mammal Environmental Assessment (EA) titled, numbers of marine mammals. Within 45 Commission and its Committee of ‘‘Environmental Assessment MCAS days of the close of the public comment Scientific Advisors. Cherry Point Range Operations,’’ for period, we must either issue or deny the Dated: July 9, 2013. their federal action of supporting and authorization and must publish a notice P. Michael Payne, conducting current and emerging in the Federal Register within 30 days Chief, Permits and Conservation Division, training operations. Their EA evaluates of our determination to issue or deny Office of Protected Resources, National the effects of the proposed training the authorization. Marine Fisheries Service. operations on the human environment The National Defense Authorization [FR Doc. 2013–16766 Filed 7–12–13; 8:45 am] including impacts to marine mammals Act of 2004 (NDAA; (Pub. L. 108–136)) and their 2009 Finding of No Significant amended section 101(a)(5)(A) of the BILLING CODE 3510–22–P Impact (FONSI) for the activities. MMPA by removing the small numbers FOR FURTHER INFORMATION CONTACT: and specified geographic region Jeannine Cody, National Marine provisions; revising the definition of Fisheries Service, Office of Protected harassment as it applies to a military Resources, (301) 427–8401. readiness activity; and explicitly SUPPLEMENTARY INFORMATION: requiring that our determination of ‘‘least practicable adverse impact’’ Background include consideration of: (1) Personnel Section 101(a)(5)(D) of the Marine safety; (2) the practicality of Mammal Protection Act of 1972, as implementation; and (3) impact on the

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effectiveness of the military readiness Description of the Specified Activity two categories here based on delivery activity. The Marine Corps plan to conduct method: (1) Surface-to-surface gunnery The NDAA’s definition of harassment weapon delivery training at two and (2) air-to-surface bombing. Active as it applies to a military readiness bombing targets: Brant Island Target sonar is not a component of these activity is: (i) Any act that injures or has (BT–9) and Piney Island Bombing Range specified training exercises. the significant potential to injure a (BT–11) within MCAS Cherry Point Exercises may occur year round, day marine mammal or marine mammal Range Complex, located within Pamlico or night (approximately 15 percent of stock in the wild [Level A Harassment]; Sound, North Carolina. The two targets training occurs at night). The Marine or (ii) any act that disturbs or is likely are located at the convergence of the Corps would conduct all inert and live- to disturb a marine mammal or marine Neuse River and Pamlico Sound. fire exercises so that all ammunition mammal stock in the wild by causing Training at BT–9 would involve air- and other ordnances strike and/or fall disruption of natural behavioral to-surface (from aircraft to in-water on the land or water based target or patterns, including, but not limited to, targets) and surface-to-surface (from within the existing danger zones or migration, surfacing, nursing, breeding, vessels to in-water targets) warfare water restricted areas. feeding, or sheltering, to a point where training, including bombing, strafing, Acoustic stimuli (i.e., increased such behavioral patterns are abandoned special (laser systems) weapons; surface underwater sound) generated during the or significantly altered [Level B fires using non-explosive and explosive training exercises, may have the Harassment]. ordnance; and mine laying exercises potential to cause behavioral Summary of Request (inert). Training at BT–11 would involve disturbance for marine mammals in BT– air- to-surface exercises to provide 9 and BT–11. This is the principal We received a request from the training in the delivery of conventional means of marine mammal taking Marine Corps on January 28, 2013, (non-explosive) and special (laser associated with these activities. We requesting that we issue an Incidental systems) weapons. Surface-to-surface expect these disturbances to be Harassment Authorization training by small military watercraft temporary and result in a temporary (Authorization) for the take, by Level B would also be executed here. The types modification in behavior and/or low- harassment only, of small numbers of of ordnances proposed for use at BT–9 level physiological effects (Level B Atlantic bottlenose dolphins (Tursiops and BT–11 include small arms, large harassment only) of small numbers of truncatus) incidental to air-to-surface arms, bombs, rockets, missiles, and certain species of marine mammals. and surface-to-surface training exercises pyrotechnics. All munitions used at BT– conducted around two bombing targets 11 are inert, practice rounds and no live We have outlined the purpose of the within southern Pamlico Sound, North firing would occur at BT–11. Training program in a previous notice for the Carolina, at Marine Corps Air Station for any activity may occur year-round. proposed Authorization (78 FR 19224, Cherry Point. We received a complete The Marine Corps requested Friday, March 29, 2013). Refer to the and adequate application on March 19, authorization to harass bottlenose notice of the proposed Authorization 2013 and released the application for dolphins from firing exercises (78 FR 19224, Friday, March 29, 2013), public comment (see ADDRESSES) for conducted at two bombing targets the application, and the Marine Corps’ consideration of issuing an within MCAS Cherry Point Range EA for a more detailed description of Authorization to the USMC. To date, we Complex, located within Pamlico the authorized action. have issued two, 1-year Authorizations Sound, North Carolina at the The amounts of all ordnance to be to the Marine Corps for the conduct of convergence of the Neuse River and expended at BT–9 and BT–11 (both the same activities from 2010 to 2012 Pamlico Sound. These activities include surface-to-surface and air-to-surface) are (75 FR 72807, November 26, 2010; 77 gunnery; mine laying; bombing; or 1,225,815 and 1,254,684 rounds, FR January 3, 2012). rocket exercises and are classified into respectively (see Table 1 and 2).

TABLE 1—LEVEL OF LIVE AND INERT MUNITIONS THAT COULD BE EXPENDED AT BT–9 2013–2014

Estimated Estimated number of explo- Net explosive Estimated munitions 1 total sive rounds No. of rounds having an impact weight (lb) on the water

Small arms rounds excluding .50 cal ...... 525,610 NA NA Small arms—.50 Cal ...... 568,515 NA NA Large arms rounds—40 mm (live) ...... 5,000 5,000 0.1199 Large arms rounds—40 mm (inert) ...... 117,051 NA NA Rocket—2.57″ (live) ...... 48 48 4.8 Rockets—5.0″ (live) ...... 20 20 15.0 Rockets—2.75″ and 5″ (inert) ...... 876 NA N/A Bombs and G911 grenades (live) ...... 0 NA 0.5 Bombs and grenades (inert) ...... 4,199 NA NA Missile—TOW ...... 0 NA NA Missile—Hellfire ...... 0 NA NA Pyrotechnics ...... 4,496 N/A NA

Total ...... 1,225,815 ...... N/A 1 Munitions may be expended from aircraft or small boats.

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TABLE 2—LEVEL OF MUNITIONS THAT (1) For the energy metrics, they developing an automated signal detector COULD BE EXPENDED AT BT–11 calculate the impact area of a burst (a software program) to recognize the 2013–2014 using a source energy spectrum that is whistles of dolphins at BT–9 and BT– the source spectrum for a single 11 and second assembling and Proposed detonation scaled by the number of deploying a prototype for real time total num- Proposed munitions 1 rounds in a burst. monitoring. Phase II is currently in ber of (2) For the pressure metrics, they progress and the success of this effort rounds calculate the impact area for a burst as will help direct future monitoring Small arms rounds excluding .50 equal to the impact area of a single initiatives and activities within the cal ...... 610,957 round. MCAS Cherry Point Range Complex. Small arms—.50 Cal ...... 366,775 (3) For all metrics, the cumulative The passive acoustic monitoring unit Large arms rounds—20 mm impact area of an event consisting of (N) remains in prototype until the through 81 mm (inert) ...... 240,334 bursts is the product of the impact area contractors have completed all testing Rockets—2.75″ and 5″ (inert) ...... 5,592 of a single burst and the number of and the Marine Corps are able to Bombs and grenades (inert) ...... 22,114 bursts, as would be the case if the bursts establish a baseline of information to Pyrotechnics ...... 8,912 are sufficiently spaced in time or develop standard operating procedures location as to insure that each burst is Total ...... 1,254,684 for future activities. affecting a different set of marine Comment 4: The Commission 1 Munitions may be expended from aircraft wildlife. Last, they model each recommends the NMFS require the or small boats. explosive event for potential impacts to USMC to use either direct strike or Comments and Responses a derived density of marine mammals dynamic Monte Carlo models to within the influence area. They sum the determine the probability of ordnance We published a notice of receipt of results of all individual events over the strike. the Marine Corps’ application and year to obtain their take estimate. Response: The Commission proposed Authorization in the Federal Comment 2: The Commission also recommended ‘‘direct strike or dynamic Register on Friday, March 29, 2013 (78 requested that we require the Marine Monte Carlo methods’’ while noting that FR 19224). During the 30-day public Corps to implement a plan to evaluate the result of using a new risk probability comment period, we received comments the effectiveness of all of its mitigation model would likely provide negligible from the Marine Mammal Commission and monitoring measures before changes from the model described in the (Commission) and four private citizens. initiating or, at the very latest, in application. Because any change would These comments are online at: http:// conjunction with the exercises covered be negligible, we do not agree that this www.nmfs.noaa.gov/pr/permits/ by the incidental harassment alternative method of modeling is incidental.htm. Following are the authorization (i.e., night vision necessary for purposes of issuing an comments and our responses. technology, remote-camera system, MMPA incidental take authorization at Comment 1: The Commission visual observations during range sweeps this time. recommended that we require the and cold passes). Marine Corps to: (1) Describe in detail Response: We have worked closely Description of Marine Mammals in the the method by which it determined the with the Marine Corps over the past two Area of the Specified Activity zones of exposure for gunnery exercises Authorization cycles to develop proper Forty marine mammal species occur that use large arms; and (2) specify if mitigation, monitoring, and reporting within the nearshore and offshore multiple types of rounds or ordnance requirements designed to minimize and waters of North Carolina; however, the would be used within a single exercise detect impacts from the specified majority of these species are solely and describe in detail how it activities. In order to ensure that we can oceanic in distribution. Of the 40 determined the zones of exposure for make the findings necessary for species, only one marine mammal those exercises prior to issuing the issuance of an Authorization, we have species, the bottlenose dolphin incidental harassment authorization. worked with the Marine Corps to (Tursiops truncatus), routinely Response: The Marine Corps’ develop comprehensive and acceptable frequents Pamlico Sound. The application, as well as subsequent mitigation, monitoring, and reporting endangered West Indian manatee responses provided to the Commission requirements including a Marine (Trichechus manatus), under the describe how they derived safety zones Mammal and Protected Species jurisdiction of the U.S. Fish and for gunnery exercises. The method to Monitoring Plan (Plan). We have Wildlife Service, rarely occurs in the estimate the number of marine determined that the current Plan and area (Lefebvre et al, 2001; DoN 2003). mammals potentially taken by the required monitoring and mitigation Based on the best available data, the specified activities is based on dolphin measures within the Authorization are Marine Corps does not expect to density, the amount and type of adequate to satisfy the requirements of encounter the following species because ordnance proposed, and distances to our the MMPA. of these species rare and/or extralimital harassment threshold criteria. Comment 3: The Commission also occurrence in the survey area including Briefly, the Marine Corps estimate the requested that we require the Marine the North Atlantic right whale zones of exposure based on impulse, Corps to use the passive acoustic (Eubalaena glacialis); Atlantic spotted peak pressure, and sound exposure level monitoring system to supplement its dolphin (Stenella frontalis) and thresholds (based on our explosive visual observations as soon as common dolphin (Delphinus delphis). harassment criteria). During a gunnery practicable. Of the 40 species that may be exercise using large arms rounds, a Response: The Marine Corps has encountered, most are oceanic in person can fire munitions as individual contracted Duke University to develop distribution and do not venture into the rounds spaced in time, or rapid fire as and test a real-time passive acoustic shallow, brackish waters of southern a burst of individual rounds. Due to the monitoring system that will allow Pamlico Sound. No suitable habitat tight spacing in time, the Marine Corps automated detection of bottlenose exists for large whale species in the treats the individual rounds within a dolphin whistles. Duke University shallow Pamlico Sound or bombing burst as a single detonation. performed the work in two phases. First target vicinity. Accordingly, we did not

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consider these other species in greater Potential Effects of the Specified noise levels and the associated direct detail. The specified activity has the Activity on Marine Mammal Habitat effects on marine mammals, previously potential to affect only one marine We provided a detailed discussion of discussed. mammal species under our jurisdiction: the potential effects of this action on Summary of Previous Monitoring The bottlenose dolphin. We refer the marine mammal habitat in the notice for public to the previous Federal Register The Marine Corps complied with the the proposed Authorization (78 FR mitigation and monitoring required notice for the proposed Authorization 19224, Friday, March 29, 2013). (78 FR 19224, Friday, March 29, 2013) under the previous authorizations Detonations of live ordnance would (2010–2012). In accordance with the where we present information on this result in temporary changes to the water species. 2010–11 IHA, USMC submitted a final environment. Munitions would hit the monitoring report, which described the Potential Effects of the Specified targets and not explode in the water. activities conducted and observations Activity on Marine Mammals However, because the targets are over made. USMC did not record As mentioned previously, with the water (i.e., a ship’s hull on a shoal), observations of any marine mammals respect to military readiness activities, in water explosions could occur. An during training exercises. The only Section 3(18)(B) of the MMPA defines underwater explosion from these recorded observations—which were of ‘‘harassment’’ as: (i) Any act that injures weapons could send a shock wave and bottlenose dolphins—were on two or has the significant potential to injure blast noise through the water, release occasions by maintenance vessels a marine mammal or marine mammal gaseous by-products, create an engaged in target maintenance. No stock in the wild [Level A Harassment]; oscillating bubble, and cause a plume of marine mammals were observed during or (ii) any act that disturbs or is likely water to shoot up from the water range sweeps, air to ground activities, to disturb a marine mammal or marine surface. However, these effects would be surface to surface activities (small mammal stock in the wild by causing temporary and not expected to last more boats), or ad hoc via range cameras. We disruption of natural behavioral than a few seconds. refer the reader to the notice for the patterns, including, but not limited to, Similarly, no long term impacts with proposed Authorization (78 FR 19224, migration, surfacing, nursing, breeding, regard to hazardous constituents are Friday, March 29, 2013) for a full feeding, or sheltering, to a point where expected to occur. MCAS Cherry Point discussion of the previous monitoring such behavioral patterns are abandoned has an active Range Environmental results. The Marine Corps will submit a or significantly altered [Level B Vulnerability Assessment (REVA) monitoring report for the 2012 training Harassment]. program in place to monitor impacts to season which expired on December 31, We have determined that Level B habitat from its activities. One goal of 2012, to us by June 31, 2013. We will harassment to marine mammals REVA is to determine the horizontal and post the monitoring report on our Web (specifically bottlenose dolphins) could vertical concentration profiles of heavy site http://www.nmfs.noaa.gov/pr/ occur incidental to noise and metals, explosives constituents, permits/incidental.htm#applications. detonations from munitions firing (all perchlorate nutrients, and dissolved military readiness activities) at the salts in the sediment and seawater Mitigation bombing targets. These military surrounding BT–9 and BT–11. The In order to issue an incidental take readiness activities will result in Marine Corps has sampled the explosive authorization under section 101(a)(5)(D) increased noise levels, explosions, and constituents (e.g., trinitrotoluene (TNT), of the MMPA, we must set forth the munitions debris within bottlenose cyclotrimethylenetrinitramine (RDX), permissible methods of taking pursuant dolphin habitat. In the absence of and hexahydro-trinitro-triazine (HMX) to such activity, and other means of planned mitigation and monitoring in the sediment or water sample effecting the least practicable adverse measures, it is possible that injury or surrounding the BTs as described in impact on such species or stock and its mortality of bottlenose dolphins could Hazardous Constituents [Subchapter habitat, paying particular attention to occur; however, due to the 3.2.7.2] of the MCAS Cherry Point rookeries, mating grounds, and areas of implementation of the planned Range Operations EA. At present, they similar significance, and the availability measures, we do not anticipate that have not detected these constituents in of such species or stock for taking for harassment would rise to the level of the sediment or water. Metals were not certain subsistence uses. injury (Level A harassment), serious present above toxicity screening values. The NDAA of 2004 amended the injury, or mortality. Therefore, the Perchlorate was detected in a few MMPA as it relates to military-readiness Authorization solely authorizes Level B sediment samples above the detection activities and the incidental take (behavioral) harassment incidental to limit (0.21 ppm), but below the authorization process such that ‘‘least the Marine Corp’s training activities. We reporting limit (0.6 ppm). The ongoing practicable adverse impact’’ shall anticipate that bottlenose dolphins may REVA would continue to evaluate include consideration of personnel undergo temporary threshold shift, potential munitions constituent safety, practicality of implementation, masking, stress response, and altered migration from operational range areas and impact on the effectiveness of the behavioral patterns (e.g., traveling, to off-range areas and MCAS Cherry military readiness activity. The training resting, opportunistic foraging). The Point. activities described in the Marine Corp’s notice for the proposed Authorization While we anticipate that the specified application are military readiness (78 FR 19224, Friday, March 29, 2013) activity may result in marine mammals activities. provided complete description of these avoiding certain areas due to temporary We have evaluated the applicant’s impacts. In addition, we refer the reader ensonification, this impact to habitat proposed mitigation measures and to our proposed and final rulemaking and prey resources is temporary and considered other measures in the for the Navy Cherry Point Range reversible and considered in notice for context of ensuring that we prescribe Complex (74 FR 11057, March 16, 2009 the proposed Authorization (78 FR the means of effecting the least and 74 FR 28370, June 15, 2009 for a 19224, Friday, March 29, 2013), as practicable adverse impact on the full assessment of marine mammal behavioral modification. The main affected marine mammal species and responses and disturbances when impact associated with the proposed stocks and their habitat. Our evaluation exposed to anthropogenic sound. activity would be temporarily elevated of potential measures included

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consideration of the following factors in notification to range operators. The Bay at BT–11. This mitigation applies to relation to one another: (1) The manner PEDRO aircraft would remain in the both air-to-surface and surface-to- in which, and the degree to which, the area of a sighting until clear if possible surface exercises. successful implementation of the or as mission requirements dictate. (4) Range Camera Use: To increase measure is expected to minimize If the crew sights marine mammals the safety of persons or property near adverse impacts to marine mammals; during a range sweep, they would the targets, Range Operation and Control (2) the proven or likely efficacy of the collect sighting data and enter it into the personnel monitor the target area specific measure to minimize adverse U.S. Marine Corps sighting database, through two tower mounted safety and impacts as planned; and (3) the web-interface, or report generator. They surveillance cameras. The remotely practicability of the measure for would relay this information to the operated range cameras are high applicant implementation, including training Commander. Sighting data resolution and, according to range consideration of personnel safety, includes the following (collected to the personnel, allow a clear visual of a duck practicality of implementation, and best of the observer’s ability): (1) floating near the target. The cameras impact on the effectiveness of the Species identification; (2) group size; (3) allow viewers to see animals at the military readiness activity. We have the behavior of marine mammals (e.g., surface and breaking the surface, but not determined that the mitigation measures milling, travel, social, foraging); underwater. The camera system has described provide the means of effecting (4) location and relative distance from night vision (IR) capabilities with the least practicable adverse impacts on the BT; (5) date, time and visual resolution levels almost as good as marine mammal species or stocks and conditions (e.g., Beaufort sea state, during daytime. Lenses on the camera their habitat, paying particular attention weather) associated with each system have a focal length of 250 mm to rookeries, mating grounds, and areas observation; (6) direction of travel to 1500 mm, with view angle of (2.2° x of similar significance while also relative to the BT; and (7) duration of 1.65° in wide-view) and (0.55° x 41° in considering personnel safety, the observation. narrow-view) respectively. Using the practicality of implementation, and (2) Cold Passes: All aircraft night-time capabilities, with a narrow impact on the effectiveness of the participating in an air-to-surface view, an observer could identify a 1 x military readiness activity. exercise would be required to perform a 1 meter target out to three kilometers. The Marine Corps, in collaboration ‘‘cold pass’’ immediately prior to Again, in the event that a marine with us, has worked to identify ordnance delivery at the BTs both day mammal is sighted within 1000 yards potential practicable and effective and night. That is, prior to granting a (914 m) of the BT–9 target, or anywhere mitigation measures, which include a ‘‘First Pass Hot’’ (use of ordnance), within Rattan Bay, the target would be careful balancing of the likely benefit of pilots would be directed to perform a declared fouled. Operations may any particular measure to the marine low, cold (no ordnance delivered) first commence in the fouled area after the mammals with the likely effect of that pass which serves as a visual sweep of animal(s) have moved 1000 yards (914 measure on personnel safety, the targets prior to ordnance delivery to m) from the BT–9 target and/or out of practicality of implementation, and determine if unauthorized civilian Rattan Bay. impact on the ‘‘military-readiness vessels or personnel, or protected (5) Vessel Operation: All vessels used activity.’’ These mitigation measures species, are present. They conduct the during training operations would abide include: cold pass with the aircraft (helicopter or by the Service’s Southeast Regional (1) Range Sweeps: The VMR–1 fixed-winged) flying straight and level at Viewing Guidelines designed to prevent squadron, stationed at MCAS Cherry altitudes of 200–3000 feet over the target harassment to marine mammals (http:// Point, includes three specially equipped area. The viewing angle is www.nmfs.noaa.gov/pr/education/ HH–46D helicopters. The primary approximately 15 degrees. A blind spot southeast/). mission of these aircraft, known as exists to the immediate rear of the (6) Stranding Network Coordination: PEDRO, is to provide search and rescue aircraft. Based upon prevailing The Marine Corps would coordinate for downed 2nd Marine Air Wing visibility, a pilot can see more than one with the local NMFS Stranding aircrews. On-board are a pilot, co-pilot, mile forward upon approach. The Coordinator for any unusual marine crew chief, search and rescue swimmer, aircrew and range personnel make every mammal behavior and any stranding, and a medical corpsman. Each crew attempt to ensure clearance of the area beached live/dead, or floating marine member has received extensive training via visual inspection and remotely mammals that may occur at any time in search and rescue techniques, and is operated camera operations (see during training activities or within 24 therefore particularly capable at spotting Monitoring and Reporting section). The hours after completion of training. objects floating in the water. Range Controller may deny or approve Monitoring and Reporting PEDRO crew would conduct a range the First Pass Hot clearance as sweep the morning of each exercise day conditions warrant. In order to issue an Authorization for prior to the commencement of range (3) Delay of Exercises: The Marine an activity, section 101(a)(5)(D) of the operations. The primary goal of the pre- Corps would consider an active range MMPA states that we must set forth exercise sweep is to ensure that the ‘‘fouled’’ and not available for use if a ‘‘requirements pertaining to the target area is clear of fisherman, other marine mammal is present within 1,000 monitoring and reporting of such personnel, and protected species. The yards (914 m) of the target area at BT– taking.’’ The MMPA implementing sweeps occur at 100–300 meters above 9 or anywhere within Rattan Bay (BT– regulations at 50 CFR 216.104 (a)(13) the water surface, at airspeeds between 11). Therefore, if they observe a marine indicate that requests for Incidental 60–100 knots. The path of the sweep mammal within 1,000 yards (914 m) of Harassment Authorizations must runs down the western side of BT–11, the target at BT–9 or anywhere within include the suggested means of circles around BT–9 and then continues Rattan Bay at BT–11 during the cold accomplishing the necessary monitoring down the eastern side of BT–9 before pass or from range camera detection, and reporting that will result in leaving. The sweep typically takes 20– they would delay training until the increased knowledge of the species and 30 minutes to complete. The PEDRO marine mammal moves beyond and on of the level of taking or impacts on crew communicates directly with range a path away from 1,000 yards (914 m) populations of marine mammals that are personnel and can provide immediate from the BT–9 target or out of Rattan expected to be present.

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Monitoring measures prescribed by us monitoring, sighting data identical to associated with Cherry Point training should accomplish one or more of the those collected by PEDRO crew would operations. following general goals: (a) An increase be recorded. Marine Corps personnel will ensure in our understanding of how many (3) Long-Term Monitoring: The that we are notified immediately or as marine mammals are likely to be Marine Corps has awarded Duke soon as clearance procedures allow if an exposed to munitions noise and University Marine Lab (Duke) a contract injured, stranded, or dead marine explosions that we associate with to obtain abundance, group dynamics mammal is found during or shortly specific adverse effects, such as (e.g., group size, age census), behavior, after, and in the vicinity of, any training behavioral harassment, threshold shift; habitat use, and acoustic data on the operations. The Marine Corps will (b) an increase in our understanding of bottlenose dolphins which inhabit provide us with species or description how individual marine mammals Pamlico Sound, specifically those of the animal(s), the condition of the respond (behaviorally or around BT–9 and BT–11. Duke began animal(s) (including carcass condition if physiologically) to gunnery and conducting boat-based surveys and the animal is dead), location, time of bombing exercises (at specific received passive acoustic monitoring of first discovery, observed behaviors (if levels) expected to result in take; (c) an bottlenose dolphins in Pamlico Sound alive), and photo or video (if available). increase in our understanding of how in 2000 (Read et al., 2003) and In the event that an injured, stranded, anticipated takes of individuals (in specifically at BT–9 and BT–11 in 2003 or dead marine mammal is found by different ways and to varying degrees) (Mayer, 2003). To date, boat-based Marine Corps personnel that is not in may impact the population, species, or surveys indicate that bottlenose the vicinity of, or found during or stock (specifically through effects on dolphins may be resident to Pamlico shortly after operations, the Marine annual rates of recruitment or survival); Sound and use BT restricted areas on a Corps personnel will report the same (d) an increased knowledge of the frequent basis. Passive acoustic information as listed above as soon as affected species; (e) an increase in our monitoring (PAM) provides more operationally feasible and clearance understanding of the effectiveness of detailed insight into how dolphins use procedures allow. certain mitigation and monitoring the two ranges, by monitoring for their measures; (f) a better understanding and vocalizations year-round, regardless of General Notification of a Ship Strike record of the manner in which the weather conditions or darkness. In In the event of a vessel strike, at any authorized entity complies with the addition to these surveys, Duke time or place, the Marine Corps shall do Authorization; and (g) an increase in the scientists are testing a real-time passive the following: probability of detecting marine acoustic monitoring system at BT–9 that • Immediately report to us the species mammals, both within the safety zone will allow automated detection of identification (if known), location (lat/ (thus allowing for more effective bottlenose dolphin whistles, providing long) of the animal (or the strike if the implementation of the mitigation) and yet another method of detecting animal has disappeared), and whether in general. dolphins prior to training operations. the animal is alive or dead (or The suggested means of Although it is unlikely this PAM system unknown); accomplishing the necessary monitoring would be active for purposes of • Report to us as soon as and reporting that will result in implementing mitigation measures operationally feasible the size and increased knowledge of the species and before an exercise prior to expiration of length of the animal, an estimate of the of the level of taking or impacts on the proposed Authorization, it could be injury status (e.g., dead, injured but populations of marine mammals operational for future MMPA incidental alive, injured and moving, unknown, expected to be present within the action take authorizations and would be etc.), vessel class/type and operational area are as follows: evaluated for effectiveness at the status; (1) Protected Species Observer appropriate time. • Report to us the vessel length, Training: Pilots, operators of small (4) Reporting: The Marine Corps will speed, and heading as soon as feasible; boats, and other personnel monitoring submit a report to us within 90 days and for marine mammals would be required after expiration of the Authorization or, • Provide us a photo or video, if to take the Marine Species Awareness if a subsequent incidental take equipment is available. Training (Part 1 and 2), provided by the authorization is requested, within 120 Estimated Take by Incidental U.S. Navy. This training would make days prior to expiration of the Harassment personnel knowledgeable of marine Authorization. The report will mammals, protected species, and visual summarize the type and amount of The following provides the Marine cues related to the presence of marine training exercises conducted, all marine Corps’ model for take of dolphins from mammals and protected species. mammal observations made during explosives (without consideration of (2) Weekly and Post-Exercise monitoring, and if mitigation measures mitigation and the conservative Monitoring: The Marine Corps would were implemented. The report will also assumption that all explosives would conduct post-exercise monitoring the address the effectiveness of the land in the water and not on the targets morning following an exercise, unless monitoring plan in detecting marine or land) and potential for direct hits and an exercise occurs on a Friday, in which mammals. our analysis of potential harassment case the post-exercise sweep would take from small vessel and aircraft place the following Monday. Weekly General Notification of Injured or Dead operations. monitoring events would include a Marine Mammals The method to estimate the number of maximum of five pre-exercise and four The Marine Corps will systematically marine mammals potentially taken by post-exercise sweeps. The maximum observe training operations for injured the specified activities is based on number of days that would elapse or disabled marine mammals. In bottlenose dolphin density, the amount between pre- and post-exercise addition, the Marine Corps would and type of ordnance proposed, and monitoring events would be monitor the principal marine mammal distances to our harassment threshold approximately three days, and would stranding networks and other media to criteria. We refer the reader to the notice normally occur on weekends. If marine correlate analysis of any dolphin for the proposed Authorization (78 FR mammals are observed during this strandings that could potentially be 19224, Friday, March 29, 2013) for a

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description of the acoustic criteria for underwater detonations (Table 3).

TABLE 3—EFFECTS, CRITERIA, AND THRESHOLDS FOR IMPULSIVE SOUNDS

Effect Criteria Metric Threshold Effect

Mortality ...... Onset of Extensive Lung In- Goertner modified positive im- indexed to 30.5 psi-msec (as- Mortality. jury. pulse. sumes 100 percent small animal at 26.9 lbs). Injurious Physiological ...... 50 percent Tympanic Mem- Energy flux density ...... 1.17 in-lb/in2 (about 205 dB re Level A. brane Rupture. 1 microPa2-sec). Injurious Physiological ...... Onset Slight Lung Injury ...... Goertner modified positive im- indexed to 13 psi-msec (as- Level A. pulse. sumes 100 percent small animal at 26.9 lbs). Non-injurious Physiological .... TTS ...... Greatest energy flux density 182 dB re 1 microPa2-sec ...... Level B. level in any 1⁄3-octave band (>100 Hertz (Hz) for toothed whales and >10 Hz for baleen whales)—for total energy over all exposures. Non-injurious Physiological .... TTS ...... Peak pressure over all expo- 23 psi ...... Level B. sures. Non-injurious Behavioral ...... Multiple Explosions Without Greatest energy flux density 177 dB re 1 microPa2-sec ...... Level B. TTS. level in any 1⁄3-octave (>100 Hz for toothed whales and >10 Hz for baleen whales)—for total energy over all exposures (multiple explosions only).

Take From Explosives frequently the case that the explosion used at BT–9, including net explosive The Marine Corps conservatively may breech the surface with some of the weight (NEW), peak one-third-octave modeled that all explosives would acoustic energy escaping the water (OTO) source level, the approximate detonate at a 1.2 m (3.9 ft) water depth column. The source levels presented in frequency at which the peak occurs, and despite the training goal of hitting the the table above have not been adjusted rounds per burst are described in Table target, resulting in an above water or on for possible venting nor does the 9. Refer to Table 10 for distances to our land explosion. For sources that are subsequent analysis take this into harassment threshold levels from these detonated at shallow depths, it is account. Properties of explosive sources sources.

TABLE 4—SOURCE WEIGHTS AND PEAK SOURCE LEVELS

Rounds per Source type NEW Peak OTO SL Frequency of peak OTO SL burst

2.75-inch Rocket ...... 4.8 pounds (lbs) ...... 223.9 dB re: 1μPa ...... ∼ 1500 Hertz (Hz) ...... 1 5-inch Rocket ...... 15.0 lbs ...... 228.9 dB re: 1μPa ...... ∼ 1000 Hz ...... 1 40 mm ...... 0.1199 lbs ...... 227.8 dB re: 1μPa ...... ∼ 1100 Hz ...... 5

TABLE 5—DISTANCES TO OUR HARASSMENT THRESHOLDS FROM EXPLOSIVE ORDNANCES

Behavioral disturbance TTS Level A Mortality (177 dB energy) (23 psi) (13 psi-msec) (31 psi-ms)

2.75-inch Rocket HE ...... 326.6 meter (m) (1,071 172 m (564 ft) ...... 47 m (154 ft) ...... 27 m (89 ft). feet (ft)). 5″ Rocket HE ...... 397.7 m 1,034 ft ...... 255 m (837 ft) ...... 61 m (200 ft) ...... 39 m (128 ft). 40 mm HE ...... 144 m (472 ft) ...... N/A ...... 10 m (33 ft) ...... 5 m (16 ft).

In order to calculate take, the Marine Because the goal of training is to hit the monitoring and mitigation measures are Corps considered the distances to which targets and not the water, we consider anticipated to further negate this animals could be harassed along with these take estimates based on 100 potential. Accordingly, we are not dolphin density. They used the density percent water detonation of munitions proposing to issue these levels of take. estimate from Read et al. (2003) to to be conservative. In total, from firing of explosive calculate take from munitions firing Based on dolphin density and amount ordnances, the Marine Corps has (0.183/square kilometer (km2)) and of munitions expended, there is very requested, and we propose to issue, the based take calculations for munitions low potential for Level A harassment, incidental take of 25 bottlenose firing on 100 percent water detonation. serious injury, and mortality and

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dolphins from Level B harassment (Table 6).

TABLE 6—NUMBER OF DOLPHINS POTENTIALLY TAKEN FROM EXPOSURE TO EXPLOSIVES BASED ON THRESHOLD CRITERIA

Level B— Level A— Level B—TTS Injurious (205 dB Mortality Ordnance type Behavioral (177dB re (23 psi) re 1microPa2-s (30.5 psi) 1microPa2-s) or 13 psi)

2.75″ Rocket HE ...... 0.71 0.99 0.05 0.01 5″ Rocket HE ...... 0.41 0.64 0.05 0.01 40 mm HE ...... 9.46 11.07 0.16 0.0

Total ...... 10.58 12.71 0.26 0.02

Take From Direct Hit commercial (fishing, daily ferry service, may approach as low as 152 m (500 ft) tugs, etc.), and military (including the to drop a bomb this is not the norm and As described in the notice for the Navy, Air Force, and Coast Guard) would never been done around marine proposed Authorization (78 FR 19224, vessels year-round. The NMFS’ mammals. Regional whale watching Friday, March 29, 2013), we estimate Southeast Regional Office has guidelines advise aircraft to maintain a that the potential risk of a direct hit to developed marine mammal viewing minimum altitude of 300 m (1,000 ft) an animal in the target area is guidelines to educate the public on how above all marine mammals, including discountable. The probability of hitting to responsibly view marine mammals in small odontocetes, and to not circle or a bottlenose dolphin at the BTs can be the wild and avoid causing a take hover over the animals to avoid derived as follows: Probability = (http://www.nmfs.noaa.gov/pr/ harassment. Our approach regulations dolphin’s dorsal surface area times the education/southeast). The guidelines limit aircraft from flying below 300 m density of dolphins. The estimated recommend that vessels should remain (1,000 ft) over a humpback whale dorsal surface area of a bottlenose (Megaptera novaeangliae) in Hawaii, a 2 a minimum of 50 yards from a dolphin, dolphin is 1.425 m (or the average operate vessels in a predictable manner, known calving ground, and limit aircraft length of 2.85 m times the average body avoid excessive speed or sudden from flying over North Atlantic right width of 0.5 m). Thus, using Read et al. changes in speed or direction in the whales closer than 460 m (1,509 ft). (2003)’s density estimate of 0.183 vicinity of animals, and not to pursue, Given that Marine Corps aircraft would 2 dolphins/km , without consideration of chase, or separate a group of animals. not fly below 300 m (984 ft) on the mitigation and monitoring The Marine Corps would abide by these approach, would not engage in hovering implementation, the probability of a guidelines to the fullest extent or circling the animals, and would not dolphin being hit within BT–9 is 2.61 x practicable. The Marine Corps would drop to the minimal altitude of 152 m ¥7 ¥8 10 and within BT–11 is 9.4 x 10 . not engage in high speed exercises (500 ft) if a marine mammal is in the Using the proposed levels of ordnance should a marine mammal be detected area, we believe it unlikely that the expenditures at each in-water BT (78 FR within the immediate area of the BTs operation of aircraft, as described above, 19224, Friday, March 29, 2013) and prior to training commencement and will result in take of bottlenose dolphins taking into account that only 36 percent would never closely approach, chase, or in Pamlico Sound in any manner. of the ordnance deployed at BT–11 is pursue dolphins. Detection of marine Negligible Impact Analysis and over water, as described in the mammals would be facilitated by Determination application, the estimated potential personnel monitoring on the vessels and number of ordnance strikes on a marine those marking success rate of target hits Pursuant to our regulations mammal per year is 0.263 at BT–9 and and monitoring of remote camera on the implementing the MMPA, an applicant 0.034 at BT–11. It would take BTs (see Monitoring and Reporting is required to estimate the number of approximately three years of ordnance section). animals that will be ‘‘taken’’ by the deployment at the BTs before it would Based on the description of the action, specified activities (i.e., takes by be likely or probable that one bottlenose the other activities regularly occurring harassment only, or takes by dolphin would be struck by deployed in the area, the species that may be harassment, injury, and/or death). This inert ordnance. Again, these estimates exposed to the activity and their estimate informs the analysis that we are without consideration to proposed observed behaviors in the presence of must perform to determine whether the monitoring and mitigation measures. vessel traffic, and the implementation of activity will have a ‘‘negligible impact’’ The Marine Corps proposed three measures to avoid vessel strikes, we on the species or stock. We have defined methods of exercise monitoring (i.e., determined that it is unlikely that the ‘‘negligible impact’’ in 50 CFR 216.103 PEDRO, cold pass, and range cameras). operation of vessels during surface-to- as: ‘‘an impact resulting from the When considering the implementation surface maneuvers will result in the take specified activity that cannot be of the mitigation and monitoring of any marine mammals, in the form of reasonably expected to, and is not measures, the chance of a marine either behavioral harassment, injury, reasonably likely to, adversely affect the mammal being taken by direct hit is serious injury, or mortality. species or stock through effects on discountable. Aircraft would move swiftly through annual rates of recruitment or survival.’’ the area and would typically fly A negligible impact finding is based on Take From Vessel and Aircraft Presence approximately 914 m (2,998.7 ft) from the lack of likely adverse effects on Interactions with vessels are not a the water’s surface before dropping annual rates of recruitment or survival new experience for bottlenose dolphins unguided munitions and above 4,572 m (i.e., population-level effects). An in Pamlico Sound. Pamlico Sound is (2.8 miles) for precision-guided estimate of the number and manner of heavily used by recreational, munitions bombing. While the aircraft takes, alone, is not enough information

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on which to base a negligible impact that dolphins use the areas around the Point, North Carolina. The BiOp, which determination. We must also consider BTs more frequently than other portions is still in effect, concluded that that the other factors, such as the likely nature of Pamlico Sound (Maher, 2003) despite USMC’s proposed action will not result of any responses (their intensity, the Marine Corps actively training in a in adverse impacts to any ESA-listed duration, etc.), the context of any manner identical to the specified marine mammals and is not likely to responses (critical reproductive time or activities described here for years. jeopardize the continued existence of location, migration, etc.), or any of the As described in the Affected Species the endangered green turtle (Chelonia other variables mentioned in the first section of this notice, bottlenose mydas), leatherback turtle (Dermochelys dolphin stock segregation is complex paragraph (if known), as well as the coriacea), Kemp’s ridley turtle with stocks overlapping throughout the number and nature of estimated Level A (Lepidochelys kempii), or threatened takes, the number of estimated coastal and estuarine waters of North loggerhead turtle (Caretta caretta). The mortalities, and effects on habitat. Carolina. It is not possible for the The Marine Corps has conducted Marine Corps to determine to which Authorization will not result in effects gunnery and bombing training exercises stock any individual dolphin taken beyond those considered in the 2002 at BT–9 and BT–11 for several years during training activities belong as this BiOp and we do not anticipate the need and, to date, the monitoring reports can only be accomplished through for further Section 7 consultation for the indicate that no dolphin injury, serious genetic testing. However, it is likely that Authorization or the underlying injury, or mortality has been attributed many of the dolphins encountered activities proposed by the Marine Corps. to these military training exercises. The would belong to the Northern or No critical habitat has been designated Marine Corps has a history of notifying Southern North Carolina Estuarine for these species in the action area; the NMFS stranding network when any System stocks. These stocks have therefore, none will be affected. injured or stranded animal comes abundance estimates of 950 and 2,454, ashore or is spotted by personnel on the respectively. We authorize 25 takes of National Environmental Policy Act water. Therefore, stranded animals have bottlenose dolphins in total; therefore, (NEPA) been examined by stranding responders, this number represents 2.6 and 1.0 On February 11, 2009, the Marine further confirming that it is unlikely percent, respectively, of those Corps issued a Finding of No Significant training contributes to marine mammal populations. This species is not listed as Impact for its Environmental injuries or deaths. Due to the threatened or endangered under the Assessment (EA) on MCAS Cherry Point implementation of the aforementioned ESA. proposed mitigation measures, no take Based on the analysis contained Range Operations. Based on the analysis by Level A harassment or serious injury herein of the likely effects of the of the EA, the Marine Corps determined or mortality is anticipated nor would specified activity on marine mammals that the proposed action will not have any be authorized in the IHA. We are and their habitat, and taking into a significant impact on the human proposing, however, to authorize 25 consideration the implementation of the environment. We adopted the Marine Level B harassment takes associated mitigation and monitoring measures, we Corps’ EA and signed a Finding of No with training exercises. find that the specified USMC Air Significant Impact on August 31, 2010. The Marine Corps has proposed a Station Cherry Point BT–9 and BT–11 We have again reviewed the proposed 1,000 yard (914 m) safety zone around training activities would result in the application and public comments and BT–9 despite the fact that the distance incidental take of marine mammals, by determined that there are no substantial to our explosive Level B harassment Level B harassment only, and that the changes to the proposed action or new threshold is 228 yards (209 m). They total taking from would have a environmental impacts or concerns. also would consider an area fouled if negligible impact on the affected species Therefore, we have determined that a any dolphins are spotted within Raritan or stocks. new or supplemental EA or Bay (where BT–11 is located)— Subsistence Harvest of Marine Environmental Impact Statement is triggering a shutdown of activities in unnecessary. The EA referenced above that area. The Level B harassment takes Mammals is available for review at http:// allowed for in the Authorization would Marine mammals are not taken for www.nmfs.noaa.gov/pr/permits/ be of very low intensity and would subsistence uses within Pamlico Sound; incidental.htm. likely result in dolphins being therefore, issuance of an IHA to the temporarily behaviorally affected by USMC for MCAS Cherry Point training Authorization bombing or gunnery exercises. In exercises would not have an addition, takes may be attributed to unmitigable adverse impact on the We have issued an Incidental animals not using the area when availability of the affected species or Harassment Authorization to the Marine exercises are occurring; however, this is stocks for subsistence use. Corps for the take of marine mammals difficult to calculate. Instead, we look if incidental to various training exercises Endangered Species Act (ESA) the specified activities occur during and at Marine Corps Air Station (MCAS) within habitat important to vital life No ESA-listed marine mammals are Cherry Point Range Complex, North functions to better inform its negligible known to occur within the action area. Carolina, July 1, 2013 through June 30, impact determination. Therefore, there is no requirement for us 2014, provided the previously Read et al. (2003) concluded that to consult under Section 7 of the ESA mentioned mitigation, monitoring, and dolphins rarely occur in open waters in on the issuance of an Authorization reporting requirements are incorporated. the middle of North Carolina sounds under section 101(a)(5)(D) of the and large estuaries, but instead are MMPA. However, ESA-listed sea turtles Dated: July 10, 2013. concentrated in shallow water habitats may be present within the action area. Donna S. Wieting, along shorelines. However, no specific On September 27, 2002, NMFS issued Director, Office of Protected Resources, areas have been identified as vital a Biological Opinion (BiOp) on Ongoing National Marine Fisheries Service. reproduction or foraging habitat. Ordnance Delivery at Bombing Target 9 [FR Doc. 2013–16878 Filed 7–12–13; 8:45 am] (BT–9) and Bombing Target 11 (BT–11) Scientific boat based surveys conducted BILLING CODE 3510–22–P throughout Pamlico Sound conclude at Marine Corps Air Station, Cherry

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CORPORATION FOR NATIONAL AND above, between 9:00 a.m. and 4:00 p.m. Goal 3: Maximize the value we add to COMMUNITY SERVICE Eastern Time, Monday through Friday, grantees, partners and participants. except Federal holidays. Goal 4: Fortify management Proposed Revision of the Corporation (3) By fax to: (202) 606–3462, operations and sustain a capable, for National and Community Service Attention: Marlene Zakai, Director of responsive and accountable Strategic Plan; Request for Input Strategic Initiatives. organization. (4) Electronically through In updating its Strategic Plan, CNCS AGENCY: Corporation for National and www.regulations.gov. is seeking to be even more effective in Community Service (CNCS). Individuals who use a achieving Goals 1–4 and its impact in ACTION: Request for Input on Proposed telecommunications device for the deaf the six priority focus areas. Specifically, Update of the CNCS Strategic Plan. (TTY–TDD) may call 1–800–833–3722 CNCS is requesting comments in the between 8:00 a.m. and 8:00 p.m. Eastern SUMMARY: The Corporation for National following areas: • and Community Service (CNCS) is Time, Monday through Friday. How might the Strategic Plan be revising its Strategic Plan. The current FOR FURTHER INFORMATION CONTACT: updated to reflect current community CNCS Strategic Plan was approved in Questions regarding this revision of the priorities? • 2011. All Federal Agencies are required Strategic Plan should be directed to What is working well and should be to publish an updated Strategic Plan, Marlene Zakai by email at further enhanced? • concurrent with the publication of the [email protected]. Persons What has shown promise and FY 2015 President’s Budget in February with hearing or speech impairments should have a more prominent place in 2014. After the February 2014 may contact CNCS via TTY by calling the updated plan? • publication of a strategic plan, agencies the Federal Information Relay Service at What is less relevant in today’s will next issue a new Strategic Plan in (800) 877–8339. environment, allowing resources to be focused elsewhere? February 2018. CNCS’s updated Description of Requested Input Strategic Plan will reflect the broad, Dated: July 8, 2013. CNCS is inviting formal input from long term outcomes that the CNCS Marlene Zakai, aspires to achieve by implementing its the public concerning the update of the current CNCS Strategic Plan. The goal of Director of Strategic Initiatives. mission. [FR Doc. 2013–16775 Filed 7–12–13; 8:45 am] We invite grantees, partners, future the Strategic Plan update is to BILLING CODE 6050–28–P partners, and the public to submit accurately reflect CNCS’s strategic and written comments, as described below. programmatic priorities for the next 4 Please see the Supplementary years. CNCS’ current Strategic Plan [http:// Information section below for DEPARTMENT OF DEFENSE information on developing your www.nationalservice.gov/about/ strategic-plan] leverages the strength of comments. The goal of this public Office of the Secretary comment process is solicit input on grantees, participants, programs, state service commissions and the American CNCS’s updated Strategic Plan in [Transmittal Nos. 13–26] accordance with CNCS’s commitment to public to build a network of programs maintain high standards of transparency that offer effective solutions in the six 36(b)(1) Arms Sales Notification priority areas: and openness. • As appropriate, public input received Disaster Services AGENCY: Department of Defense, Defense • Economic Opportunity will be included in the updated Security Cooperation Agency. • Education ACTION: Notice. Strategic Plan, however CNCS will be • Environmental Stewardship able not provide individual responses to • Healthy Futures SUMMARY: The Department of Defense is the public comments that are received. • Veterans and Military Families publishing the unclassified text of a DATES: Written comments must be We will produce these results by section 36(b)(1) arms sales notification. submitted to the individual and office investing in effective local initiatives, This is published to fulfill the listed in the ADDRESSES section by engaging more Americans in service, requirements of section 155 of Public August 14, 2013. supporting evidence-based programs, Law 104–164 dated July 21, 1996. ADDRESSES: You may submit comments and leveraging public-private FOR FURTHER INFORMATION CONTACT: Ms. by any of the following methods: partnerships. In addition to these B. English, DSCA/DBO/CFM, (703) 601– (1) Electronically through the priority focus areas, CNCS has four 3740. Corporation’s email system: strategic goals, with accompanying The following is a copy of a letter to [email protected]. priority measures: (2) By mail sent to: Corporation for Goal 1: Increase the impact of the Speaker of the House of National and Community Service; national service on community needs in Representatives, Transmittals 13–26 Marlene Zakai, Director of Strategic communities served by CNCS-supported with attached transmittal and policy Initiatives, 1201 New York Avenue programs. justification. NW., Washington, DC 20525. Goal 2: Strengthen national service so Dated: July 10, 2013. (2) By hand delivery or by courier to that participants engaged in CNCS- Aaron Siegel, the CNCS mailroom at Room 8100 at the supported programs consistently find Alternate OSD Federal Register Liaison mail address given in paragraph (1) satisfaction, meaning and opportunity. Officer, Department of Defense.

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Transmittal No. 13–26 (iii) Description and Quantity or (vii) Sensitivity of Technology Quantities of Articles or Services under Contained in the Defense Article or Notice of Proposed Issuance of Letter of Consideration for Purchase: 30 Mark V Defense Services Proposed to be Sold: Offer Pursuant to Section 36(b)(1) of the patrol boats, 32 27mm guns, spare and None Arms Export Control Act, as amended repair parts, support equipment, (viii) Date Report Delivered to (i) Prospective Purchaser: Kingdom of personnel training and training Congress: 9 July 2013 Saudi Arabia equipment, publications and technical POLICY JUSTIFICATION documentation, U.S. Government and (ii) Total Estimated Value: contractor engineering, technical, and Kingdom of Saudi Arabia—Mark V Major Defense Equipment* $0.0 billion. logistics support services, and other Patrol Boats Other ...... 1.2 billion. related elements of logistics support. The Kingdom of Saudi Arabia has (iv) Military Department: Navy (SBR) requested a possible sale of 30 Mark V Total ...... 1.2 billion. (v) Prior Related Cases, if any: None patrol boats, 32 27mm guns, spare and * as defined in Section 47(6) of the Arms Export Control Act. (vi) Sales Commission, Fee, etc., Paid, repair parts, support equipment, Offered, or Agreed to be Paid: None personnel training and training

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equipment, publications and technical DEPARTMENT OF DEFENSE annual assessment of the USU documentation, U.S. Government and President. contractor engineering, technical, and Office of the Secretary Meeting Accessibility: Pursuant to logistics support services, and other Federal statute and regulations (5 U.S.C. Board of Regents, Uniformed Services related elements of logistics support. 552b and 41 CFR 102–3.140 through University of the Health Sciences; The estimated cost is $1.2 billion. 102–3.165) and the availability of space, Quarterly Meeting Notice the meeting is open to the public from This proposed sale will contribute to 8:00 a.m. to 11:30 a.m. Seating is on a the foreign policy and national security AGENCY: Uniformed Services University of the Health Sciences (USU), DoD. first-come basis. Members of the public of the United States by helping to wishing to attend the meeting should ACTION: Quarterly meeting notice. improve the security of Saudi Arabia contact S. Leeann Ori at the address and which has been, and continues to be, an SUMMARY: Under the provisions of the phone number in FOR FURTHER important force for stability in the Federal Advisory Committee Act of INFORMATION CONTACT. Mrs. Ori can also Middle East. This sale of Mark V patrol 1972 (5 U.S.C., Appendix, as amended), provide base access procedures. boats will give the Royal Saudi Naval the Government in the Sunshine Act of Pursuant to 5 U.S.C. 552b(c)(2) and 5 Forces (RSNF) an effective combat and 1976 (5 U.S.C. 552b, as amended), and U.S.C. 552b(c)(6), the Department of threat deterrent capability to protect 41 CFR 102–3.150, the Department of Defense has determined that a portion of maritime infrastructure in the Saudi Defense announces the following the meeting shall be closed to the littorals. This acquisition will enhance meeting of the Board of Regents, public. The Under Secretary of Defense the stability and security operations for Uniformed Services University of the (Personnel and Readiness), in boundaries and territorial areas Health Sciences. consultation with the Office of the DoD General Counsel, has determined in encompassing the Saudi Arabian DATES: Tuesday, July 30, 2013, from coastline. 8:00 a.m. to 11:30 a.m. (Open Session) writing that a portion of the committee’s meeting will be closed as it contains The purchase of Mark V patrol boats and 11:30 a.m. to 1:00 p.m. (Closed Session). information related solely to the internal represents an upgrade and personnel rules and practices of the modernization of the RSNF’s existing ADDRESSES: Everett Alvarez Jr. Board of agency and the subject matter involves patrol boat capability. The proposed Regents Room (D3001), Uniformed personal and private observations. sale will enhance interoperability Services University of the Health Written Statements: Interested between the U.S. and the Kingdom of Sciences, 4301 Jones Bridge Road, persons may submit a written statement Saudi Arabia and will contribute to the Bethesda, Maryland 20814. for consideration by the Board of stability in the Kingdom of Saudi Arabia FOR FURTHER INFORMATION CONTACT: S. Regents. Individuals submitting a and the region. The Mark V patrol boats Leeann Ori, Designated Federal Officer, written statement must submit their will provide additional capability to 4301 Jones Bridge Road, Bethesda, statement to the Designated Federal rapidly identify, engage, and defeat Maryland 20814; telephone 301–295– Officer at the address listed in FOR maritime security threats in the near- 3066. FURTHER INFORMATION CONTACT. If such offshore region of the Saudi littorals. SUPPLEMENTARY INFORMATION: Purpose of statement is not received at least 5 The boats will be used primarily to the Meeting: The purpose of the meeting calendar days prior to the meeting, it patrol and interdict intruders in Saudi is to review the operations of USU, may not be provided to or considered by territorial seas, and recognized particularly the academic affairs and the Board of Regents until its next open economic exclusion zones. Saudi Arabia provide advice to the USU President meeting. The Designated Federal Officer will have no difficulty absorbing these and the Director of Tricare Management will compile all timely submissions additional boats. Activity. These actions are necessary for with the Board of Regents Chairman and ensure such submissions are provided The proposed sale of this equipment the University to pursue its mission, which is to provide outstanding to Board of Regents Members before the and support will not alter the basic meeting. military balance in the region. healthcare practitioners and scientists to the uniformed services, and to obtain Dated: July 10, 2013. The principal contractor for this effort institutional accreditation. Aaron Siegel, has not yet been determined. There are Agenda: The actions that will take Alternate OSD Federal Register Liaison no known offset agreements proposed in place include the approval of minutes Officer, Department of Defense. connection with this potential sale. from the Board of Regents Meeting held [FR Doc. 2013–16862 Filed 7–12–13; 8:45 am] Implementation of this proposed sale May 17, 2013; recommendations BILLING CODE 5001–06–P will require an additional three to four regarding the approval of faculty U.S. Government and contractor appointments and promotions in the representatives to Saudi Arabia for a School of Medicine; recommendations DEPARTMENT OF DEFENSE period of seven years to provide regarding the awarding of master’s and Office of the Secretary logistics and technical support and doctoral degrees in the biomedical sciences and public health; approval of warranty work during delivery of the Meeting of the Department of Defense boats. awards and honors; a review of the USU mission, vision and values; and a Board Military Family Readiness Council There will be no adverse impact on recommendation regarding the DoD (MFRC) U.S. defense readiness as a result of this civilian hiring freeze. The President, AGENCY: Department of Defense. proposed sale. USU will provide a report and ACTION: Notice. [FR Doc. 2013–16893 Filed 7–12–13; 8:45 am] information from both academic and BILLING CODE 5001–06–P administrative University officials will SUMMARY: Under the provisions of the be presented during the meeting. A Federal Advisory Committee Act of closed session will be held to discuss 1972 (5 U.S.C. Appendix, as amended), personnel actions and to conduct the the Government in the Sunshine Act of

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1976 (5 U.S.C. 552b, as amended), and Overview of Military Financial program activities under 10 U.S.C. 2391 41 CFR 102–3.150, the Department of Readiness Programs and Executive Order 12788, as Defense announces a Federal advisory Closing Remarks amended. committee meeting of the Department of Note: Exact order may vary. On December 31, 2008, OEA Defense Military Family Readiness published a Federal Funding Council. The purpose of the Council Dated: July 10, 2013. Opportunity in the Federal Register (73 meeting is to review and make Aaron Siegel, FR 80369–80371), and through a recommendations to the Secretary of Alternate OSD Federal Register Liaison competitive process selected the Defense regarding policy and plans; Officer, Department of Defense. University of Illinois—Chicago monitor requirements for the support of [FR Doc. 2013–16875 Filed 7–12–13; 8:45 am] (University) to provide economic data for 56 Defense-impacted communities. military family readiness by the BILLING CODE 5001–06–P Department of Defense; and evaluate The University conducted a multi-phase and assess the effectiveness of the approach to provide data and analysis military family readiness programs and DEPARTMENT OF DEFENSE for these communities. Phase I entailed activities of the Department of Defense. identification, collection, and Pursuant to 5 U.S.C. 552b and 41 CFR Office of the Secretary preliminary analysis of baseline 102–3.140 through 102–3.165, this indicators that collectively formed the meeting is open to the public, subject to Office of Economic Adjustment; Notice backbone of the project. Phase II the availability of space. Persons of Cooperative Agreement entailed reaching out to communities desiring to attend may contact Ms. and refining the baseline data indicators Federal Funding Opportunity Title: based on community needs. The Melody McDonald at 571–372–0880 or Research and Technical Assistance. email [email protected] University also produced a broad array Announcement Type: Cooperative of reports and analytical products; no later than 5:00 p.m., on Friday, July Agreement. 19, 2013 to arrange for escort inside the developed tools for the systematic Catalog of Federal Domestic analysis of communities’ development Pentagon to the Conference Room area. Assistance (CFDA) Number: 12.615. Pursuant to 41 CFR 102–3.105(j) and trends and challenges; and provided Key Dates: The proposal submission detailed customized data and reports to 102–3.140, and section 10(a)(3) of the deadline is thirty (30) days after the Federal Advisory Committee Act of communities. The University designed, publication of this notice. manages, and hosts on their server the 1972, interested persons may submit a Executive Summary: This notice written statement for consideration by Web site announces the opportunity to enter into www.defensecommunitydata.com, to the Council. Persons desiring to submit a cooperative agreement with the Office share the baseline data tracked through a written statement to the Council must of Economic Adjustment (OEA) for the current cooperative agreement with notify the point of contact listed in FOR Research and Technical Assistance the target communities, as well as FURTHER INFORMATION CONTACT no later (RTA) and invites proposals to continue Federal, state, and local agencies. than 5:00 p.m., Friday, July 19, 2013. to provide economic data to Defense- 1. Description of opportunity— DATES: August 5, 2013, from 1:30 p.m. impacted communities. The OEA is Pursuant to the Research and Technical to 4:00 p.m. authorized by 10 U.S.C. 2391 to make Assistance program, OEA is soliciting ADDRESSES: Pentagon Conference Center grants to, or conclude cooperative proposals that will result in a B6 (escorts will be provided from the agreements or enter into contracts with, cooperative agreement to provide Pentagon Metro entrance). a State or local government or any economic indicators on a recurring basis private entity to conduct research and FOR FURTHER INFORMATION CONTACT: Ms. to approximately 80 Defense-impacted provide technical assistance in support Melody McDonald or Ms. Betsy Graham, locations engaged in defense economic of the Defense Economic Adjustment Office of the Deputy Assistant Secretary adjustment. OEA works with Program, and to assist communities, of Defense (Military Community & communities/regions experiencing base businesses and workers responding to Family Policy), 4800 Mark Center Drive closure, realignment, and reductions in Defense changes under 10 U.S.C. 2391 Alexandria, VA 22350–2300, Room or cancellations of DoD spending. and Executive Order 12788, as 3G15. Telephones (571) 372–0880; (571) Implementation of a community’s plan amended. OEA is the Department of 372–0881 and/or email: to redevelop surplus property (base Defense’s primary source for assisting [email protected]. closure) or address reductions in communities that are adversely defense procurement may be impacted SUPPLEMENTARY INFORMATION: The impacted by Defense program changes, by changing economic conditions, purpose of this meeting is to refine the including base closures or realignments including, but not limited to, declining Council recommendations that will be and contract or program reductions or home values, rising unemployment, included in the 2013 Military Family cancellations. Awards provided under declining tax revenue, and housing/ Readiness Council report to the this announcement support the Defense business starts. Specifically, OEA is congressional defense committees and Economic Adjustment Program by seeking proposals to continue to provide the Secretary of Defense. providing: (1) Analysis and information to its program customer Monday, August 5, 2013—Meeting dissemination of information; and (2) base on: (1) Adjusted monthly and Agenda support to innovative approaches. quarterly economic data for approximately 80 communities with Welcome & Administrative Remarks I. Funding Opportunity Description Defense impacts; and (2) a national Overview of the DoD efforts to make OEA, a Department of Defense (DoD) baseline for identified economic Military Family Programs accessible Field Activity, is authorized to make indicators. This information was and to the National Guard, Reserve and grants to, or conclude cooperative will continue to be developed with and geographically dispersed military agreements or enter into contracts with, for the affected communities, and members and their families state or local governments or any private posted on the Internet to further assist Update on the Quality of Life working entity, to conduct research and provide OEA’s community, state, and other group technical assistance in support of its customers in the coordination and

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delivery of adjustment assistance. OEA Base name State advertised solicitation period (thirty desires that the successful respondent (30) days). host on their server and post on the Naval Supply Corps School Athens .... GA The proposals must include a cover or Internet: (1) A seamless continuation of Naval Support Activity New Orleans ... LA transmittal letter and accompanying text regional data for the following listed Naval Weapons Station Seal Beach CA that shall consist of no more than 10 installations starting October 1, 2013; Concord Detachment. pages (single-sided), comprising: and (2) similar regional data for Newport Chemical Depot ...... IN • An abstract of the proposed Onizuka Air Force Station ...... CA additional Defense-impacted research or technical assistance; Red River Army Depot/Lone Star TX • communities (to be determined by OEA) Army Ammunition Plant. A description of the scope of work to be posted on the Internet within 30 Riverbank Army Ammunition Plant ..... CA required to provide economic indicators days of OEA notification to the Rock Island Arsenal ...... IL on a recurring basis to include: successful recipient. Data developed Selfridge Army Activity ...... MI Æ Specific economic indicators under the current cooperative agreement Sheppard Air Force Base ...... TX continued from the current cooperative will be made available to the selected Umatilla Army Depot ...... OR agreement to reflect near real-time recipient and can be viewed at Walter Reed Army Medical Center ..... DC economic conditions; www.defensecommunitydata.com. OEA Æ methods for obtaining or reserves the right to continue this effort II. Award Information developing the indicators; Æ with the selected recipient for up to 3 OEA is accepting proposals for a the respondent’s plan for engaging additional years without further Research and Technical Assistance the impacted communities for each of competition, subject to the availability award. The proposals should pertain to the listed installations, and of funds and successful performance. the identified areas of interest and will approximately 50 additional 2. Additional Information—The be rated on content (relevance and communities as may be designated by respondent must continue to track the appropriateness to OEA’s core OEA from time to time, during existing data from the current functions, qualifications of project development of the information and for cooperative agreement. These specific personnel, responsiveness to this evaluating the usefulness of information data elements can be obtained from the announcement, and budget). OEA will provided; and, Data section of any community page on Æ invite the successful respondent(s) to methods for distributing the www.defensecommunitydata.com or enter into a cooperative agreement information to the impacted from the agency contact noted in under this announcement following a communities. Section VII. The research and data must • A proposed budget and review of the proposals and be dynamic, in that it must be updated accompanying budget justification; determination of eligible respondents, on a recurring basis to reflect current • Detailed description of the project which will commence after the 31st day local economic situations across a team and their relevant experience; following publication of this portfolio of regions. The respondent will • A project schedule for completion announcement. be expected to engage the identified of the work that meets OEA’s desired communities and provide specific III. Eligibility Information timelines for provision of the data; information developed by the project • A point of contact. Eligible respondents include any State directly to the respective communities. Proposals must be provided to: or local government or private entity. OEA encourages the respondent to Director, Office of Economic consider partnering with public, private, Eligible activities include research Adjustment, electronically to: and higher education sources for and technical assistance in support of [email protected]; or by mail to: 2231 existing economic data or techniques for Defense Economic Adjustment Program Crystal Drive Suite 520, Arlington, VA, adjusting economic data to reflect local activities under 10 U.S.C. 2391 and 22202. conditions. Executive Order 12788, as amended, to 3. List of BRAC 2005 military assist communities, businesses, and V. Application Review Information installations with a continuing need for workers adversely affected by Defense 1. Selection Criteria—In reviewing regional economic data. OEA reserves changes. OEA specifically seeks proposals under this notice, OEA the right to add to or change this list and proposals to: considers and weights equally each of • to identify approximately 50 additional Maintain/develop and present local the following factors as a basis for Defense-impacted communities for economic indicator data for regions evaluating an application: future data collection. impacted by Defense downsizing to • Overall conformance with proposal include regions impacted by reductions requirements and desired timelines for Base name State in or cancellations of DoD spending, provision of the data; based on the two elements identified in • Overall quality of proposed Army Reserve Personnel Command MO section I, subsection 1 of this research; St. Louis. announcement. Respondents must • Overall expertise, experience, Brooks City Base ...... TX present how their proposal will cost Buckley Air Force Base Annex ...... CO qualifications and ability of Deseret Chemical Depot ...... UT effectively support the information investigators; and Fort Gillem ...... GA available at • Overall cost. Fort McPherson ...... GA www.defensecommunitydata.com and 2. Review and Selection Process— Fort Monmouth ...... NJ be an on-call resource for government OEA will assign a Project Manager and Fort Monroe ...... VA data needs. notify the respondent(s) as soon as General Mitchell Air Reserve Station .. WI Proposals outside the identified areas practicable following its review of the Grand Forks Air Force Base ...... ND of interest will not be considered. proposals and determination of Kansas Army Ammunition Plant ...... KS eligibility, to advise and assist with the Naval Air Station Brunswick ...... ME IV. Application and Submission preparation of an application. The Naval Air Station Corpus Christi/Naval TX Information Station Ingleside. application will be reviewed for its Naval Air Station Willow Grove ...... PA The process requires the respondents completeness and accuracy, and, to the Naval Station Pascagoula ...... MS to submit proposals within the extent possible, an award notification

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will be issued within fourteen (14) days • A comparison of actual DATES: Interested persons are invited to of the receipt of a complete application. accomplishments to the objectives submit comments on or before August established for the reporting period; 14, 2013. VI. Award Administration Information • Reasons for slippage if established ADDRESSES: Comments submitted in 1. Award Notices—To the extent objectives were not met; response to this notice should be • possible, successful applicants will be Additional pertinent information submitted electronically through the notified within fourteen (14) days of the when appropriate; Federal eRulemaking Portal at http:// • receipt at OEA of a complete application A comparison of actual and www.regulations.gov by selecting whether or not they will receive an projected expenditures for the period; Docket ID number ED–2013–ICCD– award. Upon notification of an award, and 0064, or via postal mail, commercial • applicants will receive an award The amount of awarded funds on delivery, or hand delivery. Please note agreement, signed by the Director of hand at the beginning and end of the that comments submitted by fax or OEA on behalf of DoD. Awardees must reporting period. email and those submitted after the review the award agreement and The final performance report must comment period will not be accepted. indicate their consent to its terms by contain a summary of activities for the Written requests for information or signing and returning it to OEA. entire award period. All remaining comments submitted by postal mail or required deliverables should be delivery should be addressed to the 2. Administrative and National Policy submitted with the final performance Requirements— Director of the Information Collection report. The final SF 269A, ‘‘Financial Clearance Division, U.S. Department of The Awardee and any consultant/ Status Report,’’ must be submitted to Education, 400 Maryland Avenue SW., contractor operating under the terms of OEA within ninety (90) days after the LBJ, Washington, DC 20202–4537. a grantor cooperative agreement shall end date of the award. Any funds comply with all Federal, State, and local actually advanced and not needed for FOR FURTHER INFORMATION CONTACT: laws applicable to its activities award purposes shall be returned Electronically mail including the following: 32 CFR part 33, immediately to OEA. [email protected]. Please do not ‘‘Uniform Administrative Requirements OEA will provide a schedule for send comments here. for Grants and Cooperative Agreements reporting periods and report due dates SUPPLEMENTARY INFORMATION: The to State and Local Governments’’; 2 CFR in the Award Agreement. Department of Education (ED), in part 225, ‘‘Cost Principles for State, accordance with the Paperwork Local, and Indian Tribal Governments VII. Agency Contacts Reduction Act of 1995 (PRA) (44 U.S.C. (OMB Circular A–87)’’; OMB Circular For further information, to answer 3506(c)(2)(A)), provides the general A–133, ‘‘Audits of States, Local questions, or for help with problems, public and Federal agencies with an Governments, and Non-Profit contact: opportunity to comment on proposed, Organizations,’’ and 31 U.S.C. 7502(h) Nia Hope, Office of Economic revised, and continuing collections of ‘‘Requirements for Single Audits’’; 2 Adjustment, 2231 Crystal Drive Suite information. This helps the Department CFR part 180, ‘‘OMB Guidelines to 520, Arlington, VA 22202. O: (571) 213– assess the impact of its information Agencies on Government-wide 6791. collection requirements and minimize Debarment and Suspension Email: [email protected]. the public’s reporting burden. It also (Nonprocurement)’’; and 2 CFR part helps the public understand the VIII. Other Information 1125, ‘‘Nonprocurement Debarment and Department’s information collection Suspension,’’; 32 CFR part 26, subpart The Office of Economic Adjustment requirements and provide the requested B, ‘‘Requirements for Recipients Other Internet address is http://www.oea.gov. data in the desired format. ED is Than Individuals’’; 32 CFR part 26, Dated: July 9, 2013. soliciting comments on the proposed ‘‘Government wide Requirements for Aaron Siegel, information collection request (ICR) that Drug-Free Workplace (Financial Alternate OSD Federal Register Liaison is described below. The Department of Assistance)’’; 32 CFR part 32, Officer, Department of Defense. Education is especially interested in ‘‘Administrative Requirements for public comment addressing the [FR Doc. 2013–16880 Filed 7–12–13; 8:45 am] Grants and Agreements with Institutions following issues: (1) Is this collection BILLING CODE 5001–06–P of Higher Education, Hospitals, and necessary to the proper functions of the Other Non-Profit Organizations’’; 32 Department; (2) will this information be CFR part 34, ‘‘Administrative processed and used in a timely manner; Requirements for Grants and DEPARTMENT OF EDUCATION (3) is the estimate of burden accurate; Agreements with For-Profit (4) how might the Department enhance Organizations’’; OMB Circular A–21, [Docket No.: ED–2013–ICCD–0064] the quality, utility, and clarity of the ‘‘Cost Principles for Educational information to be collected; and (5) how Institutions’’; OMB Circular A–122, Agency Information Collection might the Department minimize the ‘‘Cost Principles for Non-Profit Activities; Submission to the Office of burden of this collection on the Organizations’’; 32 CFR part 28, ‘‘New Management and Budget for Review respondents, including through the use Restrictions on Lobbying’’; 2 CFR part and Approval; Comment Request; of information technology. Please note 25, ‘‘Universal Identifier and Central Guaranty Agency Financial Report that written comments received in Contractor Registration’’ (now found in AGENCY: Federal Student Aid (FSA), response to this notice will be the System for Award Management Department of Education (ED). considered public records. (SAM) at www.sam.gov). Title of Collection: Guaranty Agency ACTION: Notice. 3. Reporting—OEA requires interim Financial Report. performance reports and one final SUMMARY: In accordance with the OMB Control Number: 1845–0026. performance report for each award. The Paperwork Reduction Act of 1995, ED is Type of Review: Extension without performance reports will contain proposing an extension of a previously change of an existing collection of information on the following: approved information collection. information.

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Respondents/Affected Public: State, 0051, or via postal mail, commercial form serves as the means by which a Local, or Tribal Governments. delivery, or hand delivery. Please note Federal Family Education Loan (FFEL), Total Estimated Number of Annual that comments submitted by fax or Perkins, or Direct Loan borrower Responses: 744. email and those submitted after the requests a military service deferment Total Estimated Number of Annual comment period will not be accepted. and/or post-active duty student Burden Hours: 40,920. Written requests for information or deferment and provides his or her loan Abstract: The Guaranty Agency comments submitted by postal mail or holder with the information needed to Financial Report (GAFR), ED Form delivery should be addressed to the determine whether the borrower meets 2000, is used by the thirty-one (31) Director of the Information Collection the applicable deferment eligibility guaranty agencies under the Federal Clearance Division, U.S. Department of requirements. The form also serves as Family Education Loan (FFEL) program, Education, 400 Maryland Avenue SW., the means by which the U.S. authorized by Title IV, Part B of the LBJ, Washington, DC 20202–4537. Department of Education identifies Higher Education Act of 1965, as FOR FURTHER INFORMATION CONTACT: Direct Loan borrowers who qualify for amended. Guaranty agencies use the Electronically mail the Direct Loan Program’s no accrual of Guaranty Agency Financial Report to: [email protected]. Please do not interest benefit for active duty service (1) Request reinsurance from the send comments here. members. Department of Education; (2) request SUPPLEMENTARY INFORMATION: The Dated: July 9, 2013. payment on death, disability, closed Department of Education (ED), in school, and false certification claims Stephanie Valentine, accordance with the Paperwork Acting Director, Information Collection paid to lenders; (3) remit refunds to the Reduction Act of 1995 (PRA) (44 U.S.C. Department for rehabilitated loans and Clearance Division, Privacy, Information and 3506(c)(2)(A)), provides the general Records Management Services, Office of consolidation loans; (4) remit to the public and Federal agencies with an Management. Department default and wage opportunity to comment on proposed, [FR Doc. 2013–16796 Filed 7–12–13; 8:45 a.m.] garnishment collections. The revised, and continuing collections of BILLING CODE 4000–01–P Department of Education also uses information. This helps the Department report data to monitor the guaranty assess the impact of its information agency’s financial activities (agency collection requirements and minimize DEPARTMENT OF EDUCATION federal fund and agency operating fund) the public’s reporting burden. It also and each agency’s federal receivable helps the public understand the National Assessment Governing balance. Department’s information collection Board; Meeting Dated: July 9, 2013. requirements and provide the requested Stephanie Valentine, data in the desired format. ED is AGENCY: National Assessment Acting Director, Information Collection soliciting comments on the proposed Governing Board, ED. Clearance Division, Privacy, Information and information collection request (ICR) that ACTION: Notice of open and closed Records Management Services, Office of is described below. The Department of meeting sessions. Management. Education is especially interested in [FR Doc. 2013–16800 Filed 7–12–13; 8:45 am] public comment addressing the SUMMARY: This notice sets forth the BILLING CODE 4000–01–P following issues: (1) Is this collection schedule and proposed agenda for the necessary to the proper functions of the upcoming meeting of the National Department; (2) will this information be DEPARTMENT OF EDUCATION Assessment Governing Board (Board) processed and used in a timely manner; and also describes the specific functions [Docket No.: ED–2013–ICCD–0051] (3) is the estimate of burden accurate; of the Board. Notice of this meeting is (4) how might the Department enhance required under Section 10(a)(2) of the Agency Information Collection the quality, utility, and clarity of the Federal Advisory Committee Act. This Activities; Submission to the Office of information to be collected; and (5) how notice is issued to provide members of Management and Budget for Review might the Department minimize the the general public with an opportunity and Approval; Comment Request; burden of this collection on the to attend and/or provide comments. FFEL/Direct Loan/Perkins Military respondents, including through the use Individuals who will need special Service Deferment/Post-Active Duty of information technology. Please note accommodations in order to attend the Student Deferment Request that written comments received in meeting (e.g. interpreting services, response to this notice will be assistive listening devices, materials in AGENCY: Federal Student Aid (FSA), considered public records. Department of Education (ED). alternative format) should notify Munira Title of Collection: FFEL/Direct Loan/ Mwalimu at 202–357–6938 or at ACTION: Notice. Perkins Military Service Deferment/ [email protected] no later than Post-Active Duty Student Deferment SUMMARY: In accordance with the July 26, 2013. We will attempt to meet Request. Paperwork Reduction Act of 1995, ED is requests after this date but cannot OMB Control Number: 1845–0080. proposing an extension of a previously guarantee availability of the requested Type of Review: Extension without accommodation. The meeting site is approved information collection. change of an existing collection of DATES: Interested persons are invited to accessible to individuals with information. disabilities. submit comments on or before August Respondents/Affected Public: 14, 2013. Individuals or Households. DATES: August 1–August 3, 2013. ADDRESSES: Comments submitted in Total Estimated Number of Annual response to this notice should be Responses: 16,000. Times submitted electronically through the Total Estimated Number of Annual August 1: Committee Meetings Federal eRulemaking Portal at http:// Burden Hours: 8,000. www.regulations.gov by selecting Abstract: The Military Service/Post- Assessment Development Committee: Docket ID number ED–2013–ICCD– Active Duty Student Deferment request Closed Session: 8:00 a.m.–1:45 p.m.

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Ad Hoc Committee on NAEP Science assessment; (2) Science Hands- On August 2, 2013, the full Board will Background Information: 2:00 p.m.–4:00 on Tasks (HOTs) at grades 4, 8, and 12 meet in open session from 8:30 a.m. to p.m. for the 2014 pilot test, in preparation for 9:45 a.m., followed by a closed session Executive Committee: Open Session: the 2015 NAEP Science assessment; and from 12:45 p.m. to 1:45 p.m., and in 4:30 p.m.–5:15 p.m.; Closed Session: (3) Computer-based tasks and items at open session from 2:00 p.m. to 5:00 p.m. 5:15 p.m.–6:30 p.m. grade 8 for the 2014 Technology and On August 2, 2013, from 8:30 a.m. to Engineering Literacy (TEL) assessment. 9:45 a.m., the Board will review and August 2: Full Board and Committee The review of these materials must be approve the August 2–3, 2013 Board Meetings conducted in closed session because the meeting agenda and meeting minutes Full Board: Open Session: 8:30 a.m.– ADC members will be provided with from the May 17–18, 2013 Quarterly 9:45 a.m.; Closed Session: 12:45 p.m.– secure items and materials which are Board meeting. Thereafter, the 1:45 p.m.; Open Session: 2:00 p.m.–5:00 not yet available for release to the Chairman will open the meeting and p.m. general public. Premature disclosure of introduce the Maryland State Committee Meetings: the secure test items and materials Superintendent Lillian Lowery who will Reporting and Dissemination would compromise the integrity and then provide welcome remarks and Committee (R&D): Open Session: 10:00 substantially impede implementation of address the Governing Board. Following a.m.–12:30 p.m. the secure NAEP assessments and is her remarks, Governing Board Member Assessment Development Committee therefore protected by exemption 9(B) of and Former CEO of Baltimore City (ADC): Closed Session: 10:00 a.m.–12:30 section 552b(c) of Title 5 of the United Public Schools Andres Alonso will p.m. States Code. welcome the Board and provide Committee on Standards, Design and welcome remarks. On August 1, 2013, the Ad Hoc This session will be followed by a Methodology (COSDAM): Open Session: Committee on NAEP Background 10:00 a.m.–11:20 a.m.; Closed Session: report from the Executive Director of the Information will meet in open session Governing Board, and updates from the 11:20 a.m.–12:25 p.m.; Open session: from 2:00 p.m. to 4:00 p.m. Thereafter, 12:25 p.m.–12:30 p.m. Commissioner of the National Center for the Executive Committee will convene Education Statistics (NCES) and the August 3: Full Board and Committee in open session from 4:30 p.m. to 5:15 Director of the Institute of Education Meetings p.m. and in closed session from 5:15 Sciences (IES). Thereafter, the Board p.m. to 6:30 p.m. During the closed will recess for Committee meetings from Nominations Committee: Closed session, the Executive Committee will Session: 7:30 a.m.–8:15 a.m. 10:00 a.m. to 12:30 p.m. The Reporting receive and discuss costs for specific and Dissemination Committee will meet Full Board: Open Session: 8:30 a.m.– activities under individual and 12:00 p.m. in open session from 10:00 a.m. to 12:30 collective current contracts, and p.m. Location: Royal Sonesta Harbor Court, independent government cost estimates 550 Light Street, Baltimore, MD 21202. The Assessment Development from the National Center for Education Committee (ADC) will meet in closed FOR FURTHER INFORMATION CONTACT: Statistics (NCES) staff on various session from 10:00 a.m. to 12:30 p.m. to Munira Mwalimu, Executive Officer, options for proposed item development, continue its review of secure NAEP test National Assessment Governing Board, data collection, scoring and analysis, materials in three areas: (1) Science 800 North Capitol Street NW., Suite 825, and reporting of the National Interactive Computer Tasks (ICTs) at Washington, DC, 20002–4233, Assessment of Educational Progress grades 4, 8, and 12 for the 2014 pilot Telephone: (202) 357–6938. (NAEP) for 2013–2017, and the test, in preparation for the 2015 NAEP SUPPLEMENTARY INFORMATION: The implications of the cost estimates and Science assessment; (2) Science Hands- National Assessment Governing Board the available funds on future NAEP on Tasks (HOTs) at grades 4, 8, and 12 (Board) is established under section 412 activities. The costs of specific activities for the 2014 pilot test, in preparation for of the National Education Statistics Act budgeted under current contracts would the 2015 NAEP Science assessment; and of 1994, as amended. disclose financial information that is (3) Computer-based tasks and items at The Board is established to formulate proprietary, protected under Section grade 8 for the 2014 Technology and policy guidelines for the National 552b(c) (4) of Title 5 U.S.C. The Engineering Literacy (TEL) assessment. Assessment of Educational Progress discussion of independent government The review of these materials must be (NAEP). The Board’s responsibilities cost estimates for the NAEP 2013–2017 conducted in closed session because the include the following: selecting subject contracts is necessary for ensuring that ADC members will be provided with areas to be assessed, developing NAEP contracts meet congressionally secure items and materials which are assessment frameworks and mandated goals and adhere to Board not yet available for release to the specifications, developing appropriate policies on NAEP assessments available general public. Premature disclosure of student achievement levels for each at www.nagb.org/policies.html. This the secure test items and materials grade and subject tested, developing part of the meeting must be conducted would compromise the integrity and standards and procedures for interstate in closed session because public substantially impede implementation of and national comparisons, developing disclosure of this information would the secure NAEP assessments and is guidelines for reporting and likely have an adverse financial effect therefore protected by exemption 9(B) of disseminating results, and releasing on the NAEP program by providing section 552b(c) of Title 5 of the United initial NAEP results to the public. contractors attending an unfair States Code. On August 1, 2013, the Assessment advantage in procurement and contract Following this review, the Committee Development Committee (ADC) will negotiations for NAEP. Discussion of will also receive an update on the TEL meet in closed session from 8:00 a.m. to this information would be likely to 2013 pilot test at grade 8 with 1:45 p.m. to review secure NAEP test significantly impede implementation of preliminary data analyses and secure materials in three areas: (1) Science a proposed agency action if conducted items shared at the session, followed by Interactive Computer Tasks (ICTs) at in open session. Such matters are an update on reporting information from grades 4, 8, and 12 for the 2014 pilot protected by exemption 9(B) of section the 2012 grade 4 computer-based test, in preparation for the 2015 NAEP 552b of Title 5 U.S.C. Writing pilot. This presentation will

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include a demonstration of a Web site On August 3, 2013, the Nominations Dated: July 9, 2013. to convey the results, which have not Committee will meet in closed session Cornelia S. Orr, yet been released to the public. from 7:30 a.m. to 8:15 a.m. to discuss Deputy Executive Director, National Premature disclosure of the secure test the status of potential candidates for Assessment Governing Board (NAGB), U.S. items and materials that have not yet Board terms beginning October 1, 2013, Department of Education. been released to the public would followed by discussions on the 2014 [FR Doc. 2013–16795 Filed 7–12–13; 11:15 am] compromise the integrity and nominations cycle. The Committee’s BILLING CODE 4000–01–P substantially impede implementation of discussions on Board nominations the secure NAEP assessments and is pertain solely to internal personnel therefore protected by exemption 9(B) of rules and practices of an agency and DEPARTMENT OF ENERGY section 552b(c) of Title 5 of the United information of a personal nature where States Code. disclosure would constitute an Federal Energy Regulatory The Committee on Standards, Design unwarranted invasion of personal Commission and Methodology (COSDAM) will meet privacy. As such, the discussions are in open session from 10:00 a.m. to 11:20 Combined Notice of Filings protected by exemptions 2 and 6 of a.m., in closed session from 11:20 a.m. section 552b(c) of Title 5 of the United to 12:25 p.m., and thereafter in open Take notice that the Commission has session from 12:25 p.m. to 12:30 p.m. States Code. received the following Natural Gas During the closed session, COSDAM On August 3, 2013, from 8:30 a.m. to Pipeline Rate and Refund Report filings: members will receive a briefing on 9:30 a.m. the full Board will receive a Filings Instituting Proceedings briefing on how NAEP survey questions statistical analyses of results from the Docket Numbers: RP13–1044–000. NAEP Technology and Engineering are developed and used. Following Applicants: Algonquin Gas Literacy (TEL) pilot assessment. These these discussions, from 9:30 a.m. to Transmission, LLC. data have not yet been released and 10:30 a.m., the Board will discuss topics Description: Correct Typographical therefore cannot be disclosed to the related to future initiatives and the draft Error in Exhibit B to AFT–CL Service general public at this time. Premature policy statement on the conduct and Agreement to be effective 8/1/2013. disclosure of these secure data would reporting of NAEP. The Board is Filed Date: 7/3/13. significantly impede implementation of scheduled to receive reports from the Accession Number: 20130703–5041. the NAEP program, and is therefore standing Committees and take action on Comments Due: 5 p.m. e.t. 7/15/13. protected by exemption 9(B) of section Committee recommendations from Docket Numbers: RP13–1045–000. 552b(c) of Title 5 U.S.C. From 12:25 10:45 a.m. to 12:00 p.m. The August 3, Applicants: Gulf South Pipeline p.m. to 12:30 p.m. in open session, 2013 meeting is scheduled to adjourn at Company, LP. COSDAM will identify future agenda 12:00 p.m. Description: Amendment to Neg Rate items for discussion. A verbatim transcript of the meeting, Agmt (FPL 40097–4) to be effective 7/2/ Following the Committee sessions, 2013. consistent with the policy of section 5 the full Board will meet in closed Filed Date: 7/3/13. session from 12:45 p.m. to 1:45 p.m. to U.S.C. 552b(c) will be available to the Accession Number: 20130703–5068. receive a briefing on the NAEP 2013 public within 14 days of the meeting. Comments Due: 5 p.m. e.t. 7/15/13. Records are kept of all Board Reading and Mathematics results for Docket Numbers: RP13–1046–000. Grades 4 and 8. The Board will receive proceedings and are available for public Applicants: Dominion Transmission, an embargoed briefing on preliminary inspection at the U.S. Department of Inc. results which will include secure test Education, National Assessment Description: DTI—July 3, 2013 items, embargoed assessment data, and Governing Board, Suite #825, 800 North Nonconforming Service Agreement to be results that cannot be discussed in an Capitol Street NW., Washington, DC, effective 8/1/2013. open meeting prior to their official from 9:00 a.m. to 5:00 p.m. Eastern Filed Date: 7/3/13. approval and release. Premature Time, Monday through Friday. Accession Number: 20130703–5131. disclosure of these results would Electronic Access to This Document: Comments Due: 5 p.m. e.t. 7/15/13. significantly impede implementation of You may view this document, as well as Docket Numbers: RP13–1047–000. the NAEP assessment program, and is all other documents of this Department Applicants: Northwest Pipeline LLC. therefore protected by exemption 9(B) of published in the Federal Register, in Description: NWP Name Change section 552b(c) of Title 5 United States text or Adobe Portable Document Filing to be effective 7/12/2013. Code. Format (PDF) on the Internet at the Filed Date: 7/3/13. After this closed session briefing, the following site: http://www.ed.gov/news/ Accession Number: 20130703–5133. Board will meet in open session from Comments Due: 5 p.m. e.t. 7/15/13. fedregister/index.html. 2:00 p.m. to 5:00 p.m. From 2:00 p.m.– Any person desiring to intervene or 2:45 p.m. the Board will receive a report To use PDF you must have Adobe protest in any of the above proceedings of the Ad Hoc Committee on NAEP Acrobat Reader, which is available free must file in accordance with Rules 211 Background Information. From 2:45 at this site. If you have questions about and 214 of the Commission’s p.m. to 3:45 p.m., the Board will receive using PDF, call the U.S. Government Regulations (18 CFR 385.211 and a briefing and have discussions on the Printing Office (GPO), toll free at 1–866– 385.214) on or before 5:00 p.m. Eastern Common Core State Assessment 512–1800; or in the Washington, DC, time on the specified comment date. Consortia. From 4:00 p.m. to 5:00 p.m., area at (202) 512–0000. Note: The Protests may be considered, but the Board will have policy discussions official version of this document is the intervention is necessary to become a on Interpreting NAEP Results Using document published in the Federal party to the proceeding. Preparedness Research Findings Register. Free Internet access to the available at http://www.nagb.gov/what- official edition of the Federal Register Filings in Existing Proceedings we-do/preparedness-research.html. The and the Code of Federal Regulations is Docket Numbers: RP12–15–006. August 2, 2013 Board meeting is available on GPO Access at: Applicants: Gas Transmission scheduled to adjourn at 5:00 p.m. www.gpoaccess.gov/nara/index.html. Northwest LLC.

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Description: Compliance to RP12–15– ER11–2056–009; ER11–2056–010; Exelon Framingham, LLC, Exelon 004 to be effective 11/11/2011. ER11–2056–011; ER10–2178–012; Energy Company, Criterion Power Filed Date: 7/3/13. ER10–2178–015; ER10–2179–016; Partners, LLC, CR Clearing, LLC, Cow Accession Number: 20130703–5132. ER10–2178–017; ER10–2174–012; Branch Wind Power, L.L.C., Comments Due: 5 p.m. e.t. 7/15/13. ER10–2174–015; ER10–2174–016; Constellation Power Source Generation Docket Numbers: RP13–940–001. ER10–2174–017; ER11–2014–009; Inc., Constellation NewEnergy, Inc., Applicants: Elba Express Company, ER11–2014–012; ER11–2014–013; Constellation Mystic Power, LLC, L.L.C. ER11–2014–014; ER11–2013–009; Constellation Energy Commodities Description: Net Monthly Imbalance ER11–2013–012; ER11–2013–013; Group Maine, LLC, Commonwealth Clarification Compliance Filing to be ER11–2013–014; ER10–3308–011; Edison Company, CER Generation II, effective 7/1/2013. ER10–3308–014; ER10–3308–015; LLC, CER Generation, LLC, Cassia Gulch Filed Date: 7/3/13. ER10–3308–016; ER10–1017–008; Wind Park, LLC, Beebe Renewable Accession Number: 20130703–5040. ER10–1020–008; ER10–1020–011; Energy, LLC, Baltimore Gas and Electric Comments Due: 5 p.m. e.t. 7/15/13. ER10–1020–012; ER10–1020–013; Company, AV Solar Ranch 1, LLC, R.E. Any person desiring to protest in any ER10–1145–008; ER10–1145–011; Ginna Nuclear Power Plant, LLC, of the above proceedings must file in ER10–1145–012; ER10–1145–013; Baltimore Gas and Electric Company, accordance with Rule 211 of the ER10–1144–007; ER10–1144–010; High Mesa Energy, LLC, Tuana Springs Commission’s Regulations (18 CFR ER10–1144–011; ER10–1144–012; Energy, LLC, Calvert Cliffs Nuclear 385.211) on or before 5:00 p.m. Eastern ER10–1078–008; ER10–1078–011; Power Plant, LLC, Nine Mine Point time on the specified comment date. ER10–1078–012; ER10–1078–013; Nuclear Station, LLC. The filings are accessible in the ER10–1079–008; ER10–1080–008; Description: Revised Appendix B to Commission’s eLibrary system by ER10–1080–011; ER10–1080–012; October 12, 2012, January 31, March 8 clicking on the links or querying the ER10–1080–013; ER11–2010–009; and April 26, 2013 Change in Status docket number. ER11–2010–012; ER11–2010–013; Filings of Exelon Entities. eFiling is encouraged. More detailed ER11–2010–014; ER10–1081–008; Filed Date: 7/3/13. information relating to filing ER10–1081–011; ER10–1081–012; Accession Number: 20130703–5188. requirements, interventions, protests, ER10–1081–013; ER10–2180–015; Comments Due: 5 p.m. e.t. 7/24/13. service, and qualifying facilities filings ER10–2180–016; ER10–2180–017; Docket Numbers: ER13–1901–000. can be found at: http://www.ferc.gov/ ER11–2011–007; ER11–2011–011; Applicants: Midcontinent docs-filing/efiling/filing-req.pdf. For ER11–2011–012; ER11–2011–013; Independent System Operator, Inc. other information, call (866) 208–3676 ER12–2201–002; ER12–2201–004; Description: 07–08–2013 SA 2477 (toll free). For TTY, call (202) 502–8659. ER12–2201–005; ER12–2201–006; Corn Belt-MidAm GFA 477 to be ER12–2528–003; ER12–2528–004; effective 7/9/2013. Dated: July 5, 2013. ER12–2528–005; ER11–2009–008; Filed Date: 7/8/13. Nathaniel J. Davis, Sr., ER11–2009–011; ER11–2009–012; Accession Number: 20130708–5017. Deputy Secretary. ER11–2009–013; ER11–3989–007; Comments Due: 5 p.m. e.t. 7/29/13. [FR Doc. 2013–16835 Filed 7–12–13; 8:45 am] ER11–3989–009; ER11–3989–010; Docket Numbers: ER13–1902–000. BILLING CODE 6717–01–P ER11–3989–011; ER10–1143–008; Applicants: Midcontinent ER10–1143–011; ER10–1143–012; Independent System Operator, Inc. ER10–1143–013; ER11–2780–006; Description: 07–08–2013 SA 2527 DEPARTMENT OF ENERGY ER11–2780–009; ER11–2780–010; ITC-Consumers GIA (J161) to be ER11–2780–013; ER12–1829–004; effective 7/9/2013. Federal Energy Regulatory ER12–1829–005; ER12–1829–006; Filed Date: 7/8/13. Commission ER11–2007–007; ER11–2007–010; Accession Number: 20130708–5018. Comments Due: 5 p.m. e.t. 7/29/13. Combined Notice of Filings #2 ER11–2007–011; ER11–2007–012; ER12–1223–006; ER12–1223–009; Docket Numbers: ER13–1903–000. Take notice that the Commission ER12–1223–010; ER12–1223–011; Applicants: MET New York Trading received the following electric rate ER11–2005–009; ER11–2005–012; LLC. filings: ER11–2005–013; ER11–2005–014; Description: Application for Market- Docket Numbers: ER12–2178–001; ER10–2179–014; ER10–2179–016; Based Rate Authority to be effective 9/ ER12–2178–004; ER12–2178–005; ER10–2179–017; ER10–2179–018; 3/2013. ER12–2178–006; ER10–2172–012; ER10–2181–014; ER10–2181–016; Filed Date: 7/8/13. ER10–2172–014; ER10–2172–016; ER10–2181–017; ER10–2181–018; Accession Number: 20130708–5064. ER10–2172–017; ER12–2311–003; ER10–2182–014; ER10–2182–016; Comments Due: 5 p.m. e.t. 7/29/13. ER12–2311–004; ER12–2311–005; ER10–2182–017; ER10–2182–018. Docket Numbers: ER13–1904–000. ER12–2311–006; ER11–2016–007; Applicants: Wind Capital Holdings, Applicants: MET West Trading LLC. ER11–2016–010; ER11–2016–011; LLC, Wildcat Wind, LLC, Tuana Springs Description: Application for Market- ER11–2016–012; ER10–2184–012; Energy, LLC, Shooting Star Wind Based Rate Authority to be effective 9/ ER10–2184–015; ER10–2184–017; Project, LLC, Safe Harbor Water Power 3/2013. ER10–2184–016; ER10–2183–009; Corporation, PECO Energy Company, Filed Date: 7/8/13. ER10–2183–012; ER10–2183–013; Michigan Wind 1, LLC, Michigan Wind Accession Number: 20130708–5070. ER10–2183–014; ER10–1048–009; 2, LLC, Harvest II Wind Farm, LLC, Comments Due: 5 p.m. e.t. 7/29/13. ER10–1048–012; ER10–1048–013; Harvest WindFarm, LLC, Handsome Docket Numbers: ER13–1905–000. ER10–1048–014; ER10–2176–013; Lake Energy, LLC, Exelon Wyman, LLC, Applicants: New York Independent ER10–2176–016; ER10–2176–017; Exelon Wind 4, LLC, Exelon West System Operator, Inc. ER10–2176–018; ER10–2192–012; Medway, LLC, Exelon New Boston, LLC, Description: New York Independent ER10–2192–015; ER10–2192–016; Exelon Generation Company, LLC, System Operator, Inc. submits NYISO ER10–2192–017; ER11–2056–006; Exelon Generation Company, LLC, Joint Amended Restated LGIA No. 1774

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Among NYISO, NYPA, and Marble Accession Number: 20130703–5112. Accession Number: 20130705–5075. River to be effective 6/19/2013. Comments Due: 5 p.m. e.t. 7/24/13. Comments Due: 5 p.m. e.t. 7/26/13. Filed Date: 7/8/13. Docket Numbers: ER13–1893–000. Accession Number: 20130708–5086. Applicants: Twin Buttes Wind LLC. The filings are accessible in the Comments Due: 5 p.m. e.t. 7/29/13. Description: Feeder Line Ownership Commission’s eLibrary system by The filings are accessible in the Agreement to be effective 7/4/2013. clicking on the links or querying the Commission’s eLibrary system by Filed Date: 7/3/13. Docket number. clicking on the links or querying the Accession Number: 20130703–5113. Any person desiring to intervene or Docket number. Comments Due: 5 p.m. e.t. 7/24/13. protest in any of the above proceedings Any person desiring to intervene or Docket Numbers: ER13–1894–000. must file in accordance with Rules 211 protest in any of the above proceedings Applicants: Southern California and 214 of the Commission’s must file in accordance with Rules 211 Edison Company. Regulations (18 CFR 385.211 and and 214 of the Commission’s Description: Amended Serv Agmt 385.214) on or before 5:00 p.m. Eastern Regulations (18 CFR 385.211 and with San Gorgonio Farms for Devers- time on the specified comment date. 385.214) on or before 5:00 p.m. Eastern Mirage Project to be effective 6/1/2013. Protests may be considered, but time on the specified comment date. Filed Date: 7/3/13. intervention is necessary to become a Protests may be considered, but Accession Number: 20130703–5125. party to the proceeding. intervention is necessary to become a Comments Due: 5 p.m. e.t. 7/24/13. party to the proceeding. eFiling is encouraged. More detailed Docket Numbers: ER13–1895–000. information relating to filing eFiling is encouraged. More detailed Applicants: Midcontinent information relating to filing requirements, interventions, protests, Independent System Operator, Inc. service, and qualifying facilities filings requirements, interventions, protests, Description: 07–03–2013 CFTC Filing service, and qualifying facilities filings can be found at: http://www.ferc.gov/ to be effective 9/2/2013. docs-filing/efiling/filing-req.pdf. For can be found at: http://www.ferc.gov/ Filed Date: 7/3/13. docs-filing/efiling/filing-req.pdf. For other information, call (866) 208–3676 Accession Number: 20130703–5143. (toll free). For TTY, call (202) 502–8659. other information, call (866) 208–3676 Comments Due: 5 p.m. e.t. 7/24/13. (toll free). For TTY, call (202) 502–8659. Docket Numbers: ER13–1896–000. Dated: July 8, 2013. Dated: July 8, 2013. Applicants: AEP Generation Nathaniel J. Davis, Sr., Nathaniel J. Davis, Sr., Resources Inc. Deputy Secretary. Deputy Secretary. Description: Application of AEP [FR Doc. 2013–16833 Filed 7–12–13; 8:45 am] [FR Doc. 2013–16834 Filed 7–12–13; 8:45 am] Generation Resources Inc. for Market- BILLING CODE 6717–01–P BILLING CODE 6717–01–P Based Rate Authority to be effective 1/1/2014. Filed Date: 7/5/13. DEPARTMENT OF ENERGY DEPARTMENT OF ENERGY Accession Number: 20130705–5033. Comments Due: 5 p.m. e.t. 7/26/13. Federal Energy Regulatory Federal Energy Regulatory Docket Numbers: ER13–1897–000. Commission Commission Applicants: SWG Arapahoe, LLC. Description: Notice of Succession to Combined Notice of Filings #1 [Docket No. OR13–26–000] be effective 7/6/2013. Take notice that the Commission Filed Date: 7/5/13. Notice of Complaint; Chevron received the following electric rate Accession Number: 20130705–5038. Products Company v. Enterprise TE filings: Comments Due: 5 p.m. e.t. 7/26/13. Products Pipeline Company, LLC Docket Numbers: ER13–1895–001. Docket Numbers: ER13–1898–000. Applicants: Midcontinent Applicants: ITC Midwest LLC. Take notice that on July 3, 2013, Independent System Operator, Inc. Description: Filing of Joint Use Pole pursuant to sections 13(1), 15(1) and Description: 07–04–2013 CFTC Agreement with Grundy County to be 16(1) of the Interstate Commerce Act Amendment Filing to be effective effective 9/4/2013. (ICA), 49 USC app. 8, 13(1), 15(1), and 9/2/2013. Filed Date: 7/5/13. 16(1), Rule 206 of the Rules of Practice Filed Date: 7/5/13. Accession Number: 20130705–5042. and Procedure of the Federal Energy Accession Number: 20130705–5000. Comments Due: 5 p.m. e.t. 7/26/13. Regulatory Commission (Commission), Comments Due: 5 p.m. e.t. 7/26/13. Docket Numbers: ER13–1899–000. 18 CFR 385.206, and Rules 343.1(a) and Docket Numbers: ER13–1891–000. Applicants: Southern California 343.2(c) of the Commission’s Procedural Applicants: Twin Buttes Wind LLC, Edison Company. Rules Applicable to Oil Pipeline Pacific Wind Development, LLC, Description: IFA and Distribution Proceedings, 18 CFR 343.1(a) and Colorado Green Holdings LLC. Service Agreement with Dillon Wind to 343.2(c), Chevron Products Company Description: Feeder Line Ownership be effective 6/1/2013. (Complainant) filed a formal complaint Agreement to be effective 7/4/2013. Filed Date: 7/5/13. against Enterprise TE Products Pipeline Filed Date: 7/3/13. Accession Number: 20130705–5065. Company, LLC (Respondent) Accession Number: 20130703–5109. Comments Due: 5 p.m. e.t. 7/26/13. challenging the lawfulness of the Comments Due: 5 p.m. e.t. 7/24/13. Docket Numbers: ER13–1900–000. Respondent’s FERC Tariff No. 55.28.0. Docket Numbers: ER13–1892–000. Applicants: Southern California Specifically, the Complainant alleges Applicants: Pacific Wind Edison Company. that Tariff 55.28.0, in providing that Development, LLC. Description: IFA and Distribution Respondent will no longer accept Description: Feeder Line Ownership Service Agreement with Wildflower nominations for the transportation of Agreement to be effective 7/4/2013. Energy to be effective 6/1/2013. distillates, violates the Settlement Filed Date: 7/3/13. Filed Date: 7/5/13. Agreement signed by the Respondent in

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Docket No. IS12–203–000 and approved DEPARTMENT OF ENERGY entitled ‘‘An Interstate Natural Gas by the Commission on May 31, 2013.1 Facility On My Land? What Do I Need Federal Energy Regulatory The Complainant certifies that copies To Know?’’. This fact sheet addresses a Commission of the complaint were served on the number of typically-asked questions, persons listed as the Issuer and [Docket No. CP13–477–000] including the use of eminent domain and how to participate in the Compiler of the Respondent’s Tariff No. Columbia Gas Transmission, LLC; Commission’s proceedings. It is also 55.28.0. Notice of Intent to Prepare an available for viewing on the FERC Web Any person desiring to intervene or to Environmental Assessment and site (www.ferc.gov). protest this filing must file in Request for Comments on Summary of the Proposed Project accordance with Rules 211 and 214 of Environmental Issues for the Proposed the Commission’s Rules of Practice and Smithfield III Expansion Project Columbia states that the Project Procedure (18 CFR 385.211, 385.214). would increase its transportation The staff of the Federal Energy Protests will be considered by the capacity by 444 MDth per day. Regulatory Commission (FERC or Commission in determining the The Project would consist of the Commission) will prepare an appropriate action to be taken, but will following facilities: environmental assessment (EA) that will • not serve to make protestants parties to New compressor station (Redd discuss the environmental impacts of Farm Compressor Station) on the proceeding. Any person wishing to the Smithfield III Expansion Project become a party must file a notice of Columbia’s existing Line 1570 in (Project) involving construction and Washington County, PA. intervention or motion to intervene, as operation of aboveground facilities by • appropriate. The Respondent’s answer Modifications at the Hero-Jollytown Columbia Gas Transmission, LLC Valve Setting which would involve a and all interventions, or protests must (Columbia) in Greene and Washington new regulation setting; be filed on or before the comment date. Counties, Pennsylvania; and • Modifications to the Smithfield The Respondent’s answer, motions to Monongalia, Wetzel, Gilmer, Roane, and Compressor Station consisting of intervene, and protests must be served Kanawha Counties, West Virginia. The upgrades to the existing reciprocating on the Complainants. Commission will use this EA in its engine/compressor building ventilation The Commission encourages decision-making process to determine systems, existing gas coolers, and electronic submission of protests and whether the project is in the public installation of new gas coolers; interventions in lieu of paper using the convenience and necessity. • Modifications to the Glenville This notice announces the opening of ‘‘eFiling’’ link at http://www.ferc.gov. Compressor Station by installing two the scoping process the Commission gas-fired turbines, each rated at 7,800 Persons unable to file electronically will use to gather input from the public horsepower (HP), and other auxiliary should submit an original and 5 copies and interested agencies on the project. equipment; and of the protest or intervention to the Your input will help the Commission • Modifications at the Pigeon Valve Federal Energy Regulatory Commission, staff determine what issues they need to Setting by removing and replacing the 888 First Street NE., Washington, DC evaluate in the EA. Please note that the crossover piping and valve to enable gas 20426. scoping period will close on August 7, to flow south. This filing is accessible on-line at 2013. The general location of the Project http://www.ferc.gov, using the Comments on the Project may be facilities is shown in Appendix 1.1 ‘‘eLibrary’’ link and is available for submitted in written form or review in the Commission’s Public electronically, as described in the Public Land Requirements for Construction Reference Room in Washington, DC. Participation section of this notice. This notice is being sent to the Commission’s Construction of the proposed facilities There is an ‘‘eSubscription’’ link on the would disturb about 17.6 acres of land Web site that enables subscribers to current environmental mailing for this Project. State and local government including the temporary workspace receive email notification when a representatives are asked to notify their areas for all aboveground facility sites. document is added to a subscribed constituents of this proposed Project With the exception of the construction docket(s). For assistance with any FERC and encourage them to comment on of the Redd Farm compressor Station, Online service, please email their areas of concern. Columbia would utilize areas within the [email protected], or call If you are a landowner receiving this fenced boundaries of the existing (866) 208–3676 (toll free). For TTY, call notice, a pipeline company facilities for materials staging and (202) 502–8659. representative may contact you about construction activities, or previously Comment Date: 5:00 p.m. Eastern the acquisition of an easement to cleared land immediately adjacent to Time on July 15, 2013. construct, operate, and maintain the these facilities. proposed facilities. The company would Dated: July 5, 2013. The EA Process seek to negotiate a mutually acceptable Kimberly D. Bose, agreement. However, if the Commission The National Environmental Policy Secretary. approves the project, that approval Act (NEPA) requires the Commission to [FR Doc. 2013–16804 Filed 7–12–13; 8:45 am] conveys with it the right of eminent take into account the environmental impacts that could result from an action BILLING CODE 6717–01–P domain. Therefore, if easement negotiations fail to produce an 1 The appendices referenced in this notice will agreement, the pipeline company could not appear in the Federal Register. Copies of initiate condemnation proceedings appendices were sent to all those receiving this where compensation would be notice in the mail and are available at www.ferc.gov determined in accordance with state using the link called ‘‘eLibrary’’ or from the Commission’s Public Reference Room, 888 First law. Street NE., Washington, DC 20426, or call (202) 1 Enterprise TE Products Pipeline Company LLC, Columbia provided landowners with 502–8371. For instructions on connecting to 143 FERC ¶ 61,197 (2013). a fact sheet prepared by the FERC eLibrary, refer to the last page of this notice.

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whenever it considers the issuance of a Consultations Under Section 106 of the on the Commission’s Web site Certificate of Public Convenience and National Historic Preservation Act (www.ferc.gov) under the link to 2 Necessity. NEPA also requires us to In accordance with the Advisory Documents and Filings. With eFiling, discover and address concerns the Council on Historic Preservation’s you can provide comments in a variety public may have about proposals. This implementing regulations for section of formats by attaching them as a file process is referred to as ‘‘scoping.’’ The 106 of the National Historic with your submission. New eFiling main goal of the scoping process is to Preservation Act, we are using this users must first create an account by focus the analysis in the EA on the notice to initiate consultation with clicking on ‘‘eRegister.’’ You must select important environmental issues. By this applicable State Historic Preservation the type of filing you are making. If you notice, the Commission requests public Office (SHPO), and to solicit their views are filing a comment on a particular comments on the scope of the issues to and those of other government agencies, project, please select ‘‘Comment on a address in the EA. We will consider all interested Indian tribes, and the public Filing’’; or filed comments during the preparation on the Project’s potential effects on (3) You can file a paper copy of your of the EA. historic properties.4 We will define the comments by mailing them to the In the EA we will discuss impacts that project-specific Area of Potential Effects following address: Kimberly D. Bose, could occur as a result of the (APE) in consultation with the SHPO as Secretary, Federal Energy Regulatory construction and operation of the the project develops. On natural gas Commission, 888 First Street NE., Room proposed project under these general facility projects, the APE at a minimum 1A, Washington, DC 20426. headings: encompasses all areas subject to ground Environmental Mailing List • Geology and soils; disturbance (examples include The environmental mailing list • Land use; construction right-of-way, contractor/ includes federal, state, and local • Water resources, fisheries, and pipe storage yards, compressor stations, government representatives and wetlands; and access roads). Our EA for this agencies; elected officials; • Cultural resources; Project will document our findings on environmental and public interest the impacts on historic properties and • Vegetation and wildlife; groups; Native American Tribes; other • summarize the status of consultations interested parties; and local libraries Air quality and noise; under section 106. • Endangered and threatened species; and newspapers. This list also includes • Cumulative impacts; and Public Participation all affected landowners (as defined in • Public safety. You can make a difference by the Commission’s regulations) who are potential right-of-way grantors, whose We will also evaluate reasonable providing us with your specific property may be used temporarily for alternatives to the proposed Project or comments or concerns about the Project. project purposes, or who own homes portions of the Project, and make Your comments should focus on the within certain distances of aboveground recommendations on how to lessen or potential environmental effects, facilities, and anyone who submits avoid impacts on the various resource reasonable alternatives, and measures to comments on the Project. We will areas. avoid or lessen environmental impacts. The more specific your comments, the update the environmental mailing list as The EA will present our independent the analysis proceeds to ensure that we analysis of the issues. The EA will be more useful they will be. To ensure that your comments are timely and properly send the information related to this available in the public record through environmental review to all individuals, eLibrary. Depending on the comments recorded, please send your comments so that the Commission receives them in organizations, and government entities received during the scoping process, we interested in and/or potentially affected may also publish and distribute the EA Washington, DC on or before August 7, 2013. by the proposed project. to the public for an allotted comment If the EA is published for distribution, period. We will consider all comments For your convenience, there are three methods which you can use to submit copies will be sent to the environmental on the EA before making our your comments to the Commission. In mailing list for public review and recommendation to the Commission. To all instances please reference the project comment. If you would prefer to receive ensure your comments are considered, docket number (CP13–477–000) with a paper copy of the document instead of please carefully follow the instructions your submission. The Commission the CD version or would like to remove in the Public Participation section encourages electronic filing of your name from the mailing list, please beginning on page 4. comments and has expert staff available return the attached Information Request With this notice, we are asking to assist you at (202) 502–8258 or (Appendix 2). agencies with jurisdiction by law and/ [email protected]. Becoming an Intervenor or special expertise with respect to the (1) You can file your comments environmental issues of this project to electronically using the eComment In addition to involvement in the EA formally cooperate with us in the feature on the Commission’s Web site scoping process, you may want to 3 preparation of the EA. Agencies that (www.ferc.gov) under the link to become an ‘‘intervenor’’ which is an would like to request cooperating Documents and Filings. This is an easy official party to the Commission’s agency status should follow the method for interested persons to submit proceeding. Intervenors play a more instructions for filing comments brief, text-only comments on a project; formal role in the process and are able provided under the Public Participation (2) You can file your comments to file briefs, appear at hearings, and be section of this notice. electronically using the eFiling feature heard by the courts if they choose to appeal the Commission’s final ruling. 2 ‘‘We,’’ ‘‘us,’’ and ‘‘our’’ refer to the 4 The Advisory Council on Historic Preservation’s An intervenor formally participates in environmental staff of the Commission’s Office of regulations are at Title 36, Code of Federal the proceeding by filing a request to Energy Projects. Regulations, Part 800. Those regulations define intervene. Instructions for becoming an 3 The Council on Environmental Quality historic properties as any prehistoric or historic regulations addressing cooperating agency district, site, building, structure, or object included intervenor are in the User’s Guide under responsibilities are at Title 40, Code of Federal in or eligible for inclusion in the National Register the ‘‘e-filing’’ link on the Commission’s Regulations, § 1501.6. of Historic Places. Web site.

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Additional Information entities (including law enforcement), 5. Project 2009–1—Disturbance and Additional information about the and requires reporting of threshold Sabotage Reporting was initiated in project is available from the events within a 24 hour period. NERC April 2009, by PJM Interconnection, Commission’s Office of External Affairs, requests that Reliability Standard EOP– LLC, as a request for revision to existing 5 at (866) 208–FERC, or on the FERC Web 004–2 become effective the first day of standard CIP–001–1. The standard site at www.ferc.gov using the the first calendar quarter beginning six drafting team developed EOP–004–2, ‘‘eLibrary’’ link. Click on the eLibrary months following the effective date of a Event Reporting, as a means of link, click on ‘‘General Search’’ and final order in this proceeding, and that combining the requirements of EOP– it replace currently-effective Reliability 004–1 and CIP–001 into a single enter the docket number, excluding the 6 last three digits in the Docket Number Standards EOP–004–1—Disturbance reporting standard. field (i.e., CP13–477). Be sure you have Reporting and CIP–001–2a—Sabotage II. Proposed Reliability Standard EOP– selected an appropriate date range. For Reporting. 004–2 and NERC’s Petition 2. As explained below, pursuant to assistance, please contact FERC Online 6. NERC explains in its Petition that Support at [email protected] section 215(d) of the Federal Power Act (FPA),1 we approve Reliability Standard currently-effective Reliability Standard or toll free at (866) 208–3676, or for EOP–004–1 contains the requirements TTY, contact (202) 502–8659. The EOP–004–2, and find that it is just, reasonable, not unduly discriminatory for reporting and analyzing eLibrary link also provides access to the disturbances, while CIP–001–2a texts of formal documents issued by the or preferential, and in the public interest. We further approve NERC’s addresses sabotage reporting. NERC Commission, such as orders, notices, states that proposed Reliability Standard and rulemakings. requested effective date for EOP–004–2, along with the retirement of existing EOP–004–2 merges EOP–004–1 and In addition, the Commission now CIP–001–2a, and represents a significant offers a free service called eSubscription Reliability Standards EOP–004–1 and CIP–001–2a. improvement in the identification and which allows you to keep track of all reporting of events.7 According to formal issuances and submittals in I. Background NERC, proposed Reliability Standard specific dockets. This can reduce the EOP–004–2 provides a comprehensive amount of time you spend researching 3. The Commission certified NERC as the Electric Reliability Organization approach to reporting disturbances and proceedings by automatically providing events that have the potential to impact you with notification of these filings, (ERO), as defined in section 215 of the FPA, in July 2006.2 In Order No. 693, the reliability of the bulk electric system document summaries, and direct links in accordance with several Commission to the documents. Go to www.ferc.gov/ the Commission reviewed an initial set of Reliability Standards as developed directives.8 esubscribenow.htm. 7. As proposed, EOP–004–2 would Finally, public meetings or site visits and submitted for review by NERC, and approved 83 standards as mandatory require the following: will be posted on the Commission’s • Responsible entities must have an calendar located at www.ferc.gov/ and enforceable, including the currently-effective Disturbance operating plan for reporting applicable EventCalendar/EventsList.aspx along events to NERC and others (e.g., with other related information. Reporting Reliability Standard, EOP– 004–1.3 Regional Entities, applicable reliability Dated: July 9, 2013. 4. In Order No. 693, the Commission coordinators, and law enforcement), Kimberly D. Bose, also approved Reliability Standard CIP– including procedures for reporting the Secretary. 001–1—Sabotage Reporting. In addition, specific events at thresholds identified [FR Doc. 2013–16850 Filed 7–12–13; 8:45 am] the Commission directed that NERC in Attachment 1 (Requirement R1); • Responsible entities must report BILLING CODE 6717–01–P develop certain modifications to the standard, to further define the term events as defined in their operating plan sabotage and provide guidance on ‘‘within 24 hours of recognition of DEPARTMENT OF ENERGY triggering events, specify baseline meeting an event type threshold for requirements for recognizing sabotage reporting,’’ or by the end of the next Federal Energy Regulatory events, incorporate periodic review of business day if the event occurs on a Commission sabotage reporting procedures, and weekend (Requirement R2); and • Responsible entities must validate [Docket No. RD13–3–000] require that applicable entities contact contact information contained in the appropriate governmental authorities operating plan on an annual basis Before Commissioners: Jon within a specified time period.4 Wellinghoff, Chairman; Philip D. (Requirement R3). 8. Reliability Standard EOP–004–2 Moeller, John R. Norris, Cheryl A. 1 16 U.S.C. 824o(d) (2006). LaFleur, and Tony Clark; Order 2 North American Electric Reliability Corp., 116 includes two attachments. Attachment 1 Approving Reliability Standard: North FERC ¶ 61,062, order on reh’g and compliance, 117 (Reportable Events) identifies types of American Electric Reliability FERC ¶ 61,126 (2006), order on compliance, 118 events and thresholds for reporting, FERC ¶ 61,190, order on reh’g 119 FERC ¶ 61,046 such as damage or destruction of a Corporation (2007), aff’d sub nom. Alcoa Inc. v. FERC, 564 F.3d 1342 (D.C. Cir. 2009). facility, physical threats to facilities, 1. On December 31, 2012, as amended 3 Mandatory Reliability Standards for the Bulk- firm load loss, and generation loss. on January 4, 2013, the North American Power System, Order No. 693, FERC Stats. & Regs. Attachment 2 is a standardized form for Electric Reliability Corporation (NERC) ¶ 31,242 at P 617, order on reh’g, Order No. 693– event reporting. NERC notes that in an submitted a petition for approval of A, 120 FERC ¶ 61,053 (2007). 4 Order No. 693, FERC Stats. & Regs. ¶ 31,242 at for ERCOT to add transmission owners and Reliability Standard EOP–004–2—Event P 471. The Commission subsequently approved an generator owners as responsible entities). Thus, the Reporting (Petition). Reliability interpretation of CIP–001–1 (Letter Order issued on currently-effective version of the sabotage reporting Feb. 2, 2011 in Docket No. RR10–11–000, accepting Standard EOP–004–2 identifies types of standard is CIP–001–2a. NERC’s clarification regarding the ‘‘appropriate reportable events and thresholds for 5 parties’’ to which reports of a sabotage event must NERC Petition at 7. reporting, requires responsible entities be made), as well as a regional modification to CIP– 6 Id. at 8. to have an operating plan for reporting 001–1a (Letter Order issued on August 2, 2011 in 7 Id. at 5. applicable events to NERC and other Docket RD11–6–000, approving a regional variance 8 Id. at 3.

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effort to minimize administrative Proposed Rulemaking would not issue ambiguities. Joint ISOs/RTOs provide burden, U.S. entities may elect to use in the docket after the January 30, 2013 one example of such ambiguity, DOE Form OE–417 (Emergency Incident close of the intervention and comment claiming that, while Attachment 1 and Disturbance Report), rather than period. Joint ISOs/RTOs maintain that requires reporting when ‘‘[d]amage or Attachment 2, to report under EOP– their late comments will not prejudice destruction of a Facility . . . results in 004–2.9 NERC because ISOs and RTOs raised actions to avoid a BES emergency,’’ 9. NERC asserts that the results-based similar comments during the standards reliability coordinators and balancing approach of EOP–004–2 includes clear development process, and that late authorities take actions on a daily basis criteria for reporting and consistent intervention will not prejudice any to ‘‘avoid a BES Emergency’’ without reporting timelines. NERC also explains other party or otherwise disrupt this knowing whether the underlying system that the proposed reporting proceeding as the Commission has not conditions resulted from damage or requirements will ‘‘allow governmental yet issued a dispositive order. destruction to a facility. According to authorities and critical infrastructure 13. Joint ISOs/RTOs assert that event Joint ISOs/RTOs, the reliability members the opportunity to react in a reporting does not provide for ‘‘reliable coordinator or balancing authority will meaningful manner’’ to disturbance or operations’’ and, therefore, should not often not have the information to other event information, thereby be incorporated in mandatory determine whether to submit a report. ‘‘support[ing] reliability principles and Reliability Standards. Joint ISOs/RTOs Finally, Joint ISOs/RTOs assert that a ultimately help[ing] to protect against contend that event reporting is ‘‘an ex strict 24-hour reporting obligation is future malicious physical attacks.’’ 10 post activity’’ that provides only overly-stringent and provides no 10. NERC notes, however, that the prospective benefits to system reliability benefit since registered revised Reliability Standard does not reliability.14 Joint ISOs/RTOs argue that entities would have separately mitigated further define the term ‘‘sabotage’’ as the Commission should ‘‘distinguish the event. directed in Order No. 693. NERC between an obligation that is a IV. Discussion explains that the standard drafting team ‘requirement . . . to provide for reliable determined that such a definition could operation of the bulk-power system,’ as A. Procedural Matters those terms are defined in Section 215, be ambiguous and ‘‘inherently 15. Pursuant to Rule 214 of the 11 and those obligations that do not, such subjective.’’ NERC explains that the Commission’s Rules of Practice and as administrative record-keeping and standard drafting team elected instead Procedure, 18 CFR 385.214, the timely, ex-post reporting tasks.’’ 15 Joint ISOs/ to develop a specific list of reportable unopposed motion to intervene filed by RTOs further maintain that the event events and thresholds (Attachment 1 of AMP serves to make it a party to this reporting requirements in EOP–004–2 the standard), as a means of meeting the proceeding. Pursuant to Rule 214(d) of are redundant to other federal Commission’s directive to provide the Commission’s Rules of Practice and regulations, and that they expose guidance on reportable events. NERC Procedure, 18 CFR 385.214(d) (2012), registered entities to unnecessary asserts that the development of a list of we will also grant Joint ISOs/RTOs’ late- liability and burden.16 Based on these reportable events and thresholds is an filed motion to intervene given their arguments, Joint ISOs/RTOs take the equally effective and efficient means of interest in the proceeding, the early position that the Commission should addressing the Commission’s directive stage of the proceeding, and the absence 12 not only reject EOP–004–2, but should in Order No. 693. of undue prejudice or delay. also consider retiring or otherwise III. Notice of Filing, Interventions and revisiting the existing Reliability B. Commission Determination Comments Standards governing disturbance and 16. Pursuant to section 215(d) of the 11. Notices of NERC’s Petition and its sabotage reporting (EOP–004–1 and FPA, we approve Reliability Standard errata were issued on January 2 and CIP–001–2a). EOP–004–2 as just, reasonable, not January 7, 2013, respectively, with 14. Joint ISOs/RTOs argue, in the unduly discriminatory or preferential, alternative, that if the Commission comments, protests and motions to and in the public interest.19 We also approves EOP–004–2, the Commission intervene due on or before February 4, approve NERC’s proposed should direct certain modifications.17 2013. American Municipal Power, Inc. In implementation plan for the revised (AMP) filed a timely motion to particular, Joint ISOs/RTOs advocate (1) standard, including the retirement of intervene, on January 30, 2013. limiting reportable events ‘‘to those that existing Reliability Standards EOP–004– 12. On March 7, 2013, seven give third parties the opportunity to act 1 and CIP–001–2a when EOP–004–2 Independent System Operators and to mitigate the impact of the event’’ 18 becomes effective. Finally, we approve Regional Transmission Organizations such as vandalism; and (2) limiting the proposed violation risk factors and (Joint ISOs/RTOs) filed a joint motion to the scope of entities to receive reports violation severity levels incorporated in intervene out-of-time and comments on to those that can act to mitigate the 13 Reliability Standard EOP–004–2. NERC’s Petition. In support of their actual event. Joint ISOs/RTOs further 17. We find that EOP–004–2 enhances request for leave to intervene out-of- maintain that certain thresholds for the reliability of the Bulk-Power System time, Joint ISOs/RTOs maintain that reportable events in Attachment 1 by requiring timely reporting of specific they only learned that a Notice of should be modified to remove system disturbance or sabotage events, allowing for both a real-time operational 9 Id. at 16. 14 Comments of Joint ISOs/RTOs at 6. 10 Id. at 4. 15 Id. at 5 (quoting from FPA section 215). benefit for near-term mitigation of the 11 Id. at 8–9. 16 See id. at 7. event, as well as a prospective benefit 12 Id. at 9. 17 Id. at 8–14. Joint ISOs/RTOs acknowledge that, through subsequent analysis and 13 Joint ISOs/RTOs are the California Independent ‘‘[i]f the Commission disagrees with the Joint ISOs/ investigation, including dissemination System Operator Corporation; Electric Reliability RTOs’ position that event reporting should not be of lessons learned from the event. We Council of Texas, Inc.; Ontario’s Independent included in the Reliability Standards . . ., proposed conclude that EOP–004–2 represents an Electricity System Operator; ISO New England Inc.; standard EOP–004–2 is an improvement over the Midwest Independent Transmission System two events reporting standards it would replace improvement over the currently- Operator, Inc.; New York Independent System . . . .’’ Id. at 8. Operator, Inc.; and Southwest Power Pool, Inc. 18 Id. at 9. 19 16 U.S.C. 824o(d)(2).

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effective Reliability Standards, CIP– 20. Moreover, EOP–004–2 has been reporting window is too stringent. As 001–2a and EOP–004–1, in that it designed to minimize redundancies and indicated by the Attachment 2 provides a comprehensive approach to multiple reporting obligations to the standardized Event Reporting Form, reporting disturbances and events that extent possible, by allowing responsible entities are only required to provide have the potential to impact the entities to report an event either through limited, specified information reliability of the Bulk-Power System and submission of its Attachment 2 or DOE pertaining to an event. No underlying provides greater clarity concerning Form OE–417.22 investigation or analysis is required. If reportable events. Further, we find that 21. Nor are we persuaded by Joint Joint ISOs/RTOs believe that NERC has adequately addressed the ISOs/RTOs that EOP–004–2, if adopted, improvements can be made to EOP– Commission’s directives pertaining to requires modification. We find no 004–2, through clarifying language or event reporting, including requiring the reason to require NERC to limit other modifications as the industry periodic update of reporting procedures. reportable events to those that give third gains experience with EOP–004–2’s With regard to the Order No. 693 parties time to act to mitigate the event, revised reporting requirements, they can directives that NERC further refine the or to limit the recipients of such reports seek to do so through NERC’s standard definition of ‘‘sabotage’’ and provide to those that can act to mitigate actual, development process. guidance on events that trigger real-time events. It is unclear that such 24. Accordingly, we approve reporting,20 we find that NERC’s events could be readily identified, Reliability Standard EOP–004–2 development of Attachment 1, which leading to greater confusion concerning pursuant to FPA section 215(d)(2), as we lists specific types of reportable events reporting requirements and a possible find that it is just, reasonable, not and thresholds for reporting, represents loss of information about those unduly discriminatory or preferential, an equally efficient and effective mitigable events. More importantly, as and in the public interest. We also approach to address our underlying noted above, we do not agree that FPA approve the associated violation risk concern. section 215 limits the scope of factors and violation severity levels, 18. In addition, we are not persuaded Reliability Standards to those that NERC’s requested effective date for by Joint ISOs/RTOs’ arguments in directly affect real-time operations, and EOP–004–2, and the retirement of support of their request that we either therefore do not agree with the existing Reliability Standards EOP–004– reject or direct modification of the underlying basis for Joint ISOs/RTOs’ 1 and CIP–001–2a. proposed standard. proposed modification. V. Information Collection Statement 19. First, we reject Joint ISOs/RTOs’ 22. Further, based on the one example argument that event reporting is not a provided by Joint ISOs/RTOs, we are 25. The Office of Management and proper subject for Reliability Standards not persuaded that the triggering events Budget (OMB) regulations require because it is prospective in nature and delineated in Attachment 1 require approval of certain information collection requirements imposed by is not directly related to or otherwise clarification. Joint ISOs/RTOs contend agency action.24 Upon approval of a supportive of ‘‘reliable operations’’ as that, while Attachment 1 requires collection(s) of information, OMB will that term is used in FPA section 215. reporting when ‘‘[d]amage or assign an OMB control number and an The prospective benefits from certain destruction of a Facility . . . results in expiration date. Respondents subject to aspects of the reporting requirements actions to avoid a BES emergency,’’ the filing requirements of this Order are not only valuable, but also a reliability coordinators and balancing will not be penalized for failing to sufficient basis for imposition of a authorities may take actions to avoid a respond to these collections of mandatory and enforceable reliability BES Emergency without knowing information unless the collections of requirement. Events reporting allows whether the underlying system information display a valid OMB entities to gain an early understanding conditions resulted from damage or of the scope of an event, enabling control number. destruction to a facility. Requirement R2 26. The Commission will submit these requests for assistance from other of EOP–004–2 requires reporting of an entities within the industry with reporting and recordkeeping event ‘‘within 24 hours of recognition of requirements to OMB for its review and appropriate expertise and from other meeting an event type threshold. . . .’’ governmental agencies who otherwise approval under section 3507(d) of the NERC explains that the language of Paperwork Reduction Act. This order is might not know about the event. While Requirement R2 is based on assistance would not always be in real effective immediately; however, the ‘‘recognition’’ of an event threshold revised information collection time, operational planning and system because ‘‘an entity may not be planning can benefit from outside requirements will not be effective or immediately aware of destruction or enforceable until OMB approves the expertise to support planning for damage to a remote piece of equipment’’ physical and cyber security, and even to information collection changes and ‘‘requiring Responsible Entities to described in this order. Comments are support and improve day-ahead and constantly monitor all equipment and week-ahead operational planning. solicited within 60 days of the date this property for destruction or damage order is published in the Federal Moreover, patterns of simple events can would be a waste of resources. . . .’’ 23 trigger further analysis and recognition Register on the Commission’s need for We agree that NERC has developed a this information, whether the of the possibility that corrective practical solution to reporting that, measures should be taken to prevent information will have practical utility, rather than creating ambiguity, provides the accuracy of provided burden even more egregious events that might a more clear and rational trigger for ensue if left unchecked.21 estimates, ways to enhance the quality, reporting. utility, and clarity of the information to 23. Finally, we reject Joint ISOs/ 20 be collected, and any suggested methods Order No. 693, FERC Stats. & Regs. ¶ 31,242 at RTOs’ objection that the 24-hour P 471. for minimizing the respondent’s burden, 21 We have previously approved Reliability including the use of automated Standards that do not affect ‘‘real-time operations’’ qualifications (PER); transmission planning (TPL); information techniques. Submit yet still support the reliable operation of the Bulk- and facility connection and coordination (FAC–001 Power System, including Reliability Standards and FAC–002). comments following the Commission’s within the several different transmission categories 22 See NERC Petition at 16. including personnel performance, training and 23 NERC Petition at 13. 24 5 CFR 1320.11.

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submission guidelines at http:// because the existing Reliability requirements of EOP–004–2 for the first www.ferc.gov/help/submission- Standard applies to transmission time.25 guide.asp and reference Docket No. operators and generator operators, 29. The number of annual reports RD13–3. which includes the majority of the required could vary widely based on the 27. Rather than creating entirely new entities registered as transmission individual entity and the extent of its obligations to report a system owners and generator owners. disturbance, the revised Reliability 28. Burden Estimate: Our estimate facilities. The estimate below is based Standard, EOP–004–2, primarily below regarding the number of on an assumption that, on average, 25 clarifies the thresholds that can trigger respondents is based on the NERC percent of the entities covered by EOP– a reporting obligation, and reduces the compliance registry as of March 2013. 004–2 will have one reportable event reporting burden for certain individual According to the registry, there are 7 per year. As demonstrated below, the respondents due to the use of a transmission owners that are not also primary increase in cost associated with simplified form in Attachment 2. transmission operators, 128 generator the revised standard is expected in Year However, the revised Reliability owners that are not also generator 1, when newly covered entities must Standard would increase the reporting operators, and 101 distribution develop an operating plan for reporting. burden for some individual entities, providers that are not also registered as In Years 2 and 3, an overall reduction because it would apply for the first time another functional entity covered by the in reporting and recordkeeping burden to transmission owners and generator current event reporting standards. Thus, is expected, due to the simplified owners. We do not anticipate a large we estimate that a total of 236 entities reporting form: increase in the number of respondents may be subject to the event reporting

Number of Average Type of Reporting/record- Number of responses per Total number burden hours Estimated total Estimated total respondent keeping req’t respondents respondent of responses per response annual burden annual cost

(A) (B) (A) × (B) = (C) (D) (C) × (D) (see below)

New Entities (GO, Developing Oper- 236 1 236 8 1888 $113,280.00 TO, DP). ating Plan (Yr 1 Only). Reporting Event 59 1 59 0.17 10.03 601.80 (Yr 1, 2, and 3). Entities Subject to Conforming Oper- 1164 1 1164 2 2328 139,680.00 Existing Report- ating Plan to ing Require- New Thresh- ments. olds (Yr 1 Only). Reporting Event 291 1 291 ¥0.33 ¥96.03 (5,761.80) (using new form) (Yrs 1, 2, and 3).

Total for Year ...... 4,130 247,800 1 26. Total for each ...... (81 ) (5,160 ) of Years 2 & 3.

The estimated breakdown of annual entities * 1 response/entity * (2 response * $60/hour) = $601.80. cost is as follows: hours/response * $60/hour) = Æ Old Entities, Using ‘‘Event • Year 1 $139,680. Reporting Form’’: 291 entities * 1 Æ Æ New Entities, Development of Current Responsible Entities, Event response/entity * [(.17 hours/ Operating Plan: 236 entities * 1 Reporting Using New Event response ¥ .5 hours/response) * response/entity * (8 hours/response Reporting Form: 291 entities * 1 $60/hour] = ($5,761.80). * $60/hour 27) = $113,280. response/entity * [(.17 hours/ 28 Title: FERC–725A, Mandatory Æ New Entities, Event Reporting: 59 response ¥ .5 hours/response) * Reliability Standards for the Bulk Power entities * 1 response/entity * (.17 $60/hour] = ($5,761.80). System. hours/response * $60/hour) = • Year 2 and ongoing $601.80. Æ New Entities, Using ‘‘Event Action: Proposed collection of Æ Current Responsible Entities, Reporting Form’’: 59 entities * 1 information. Conforming Operating Plan: 1164 response/entity * (.17 hours/ OMB Control No: 1902–0244.

25 Although distribution providers are included first time, plus the cost for entities that are currently Loaded costs are BLS rates divided by 0.703 and as responsible entities under the revised Reliability subject to NERC event reporting requirements to rounded to the nearest dollar (http://www.bls.gov/ Standard, their reporting obligations will be de review and make changes to their existing plans. news.release/ecec.nr0.htm). minimis, as explained in the Guidelines and The Year 1 total also includes the savings from the 28 It is estimated that the average time to complete Technical Basis attached to the revised standard. reduction in reporting time due to the new Event See NERC Petition, Ex. B at 13. For purposes of this Reporting Form. the required event report under Reliability Standard analysis, however, we included distribution 27 For the burden categories above, the estimated EOP–004–1 is 30 minutes, versus an estimated 10 providers as part of the assumed number of reports hourly loaded cost (salary plus benefits) for an minutes under the proposed Reliability Standard, per year. engineer was assumed to be $60/hour, based on EOP–004–2. 26 Year 1 costs include implementation costs for salaries as reported by the Bureau of Labor Statistics entities that must comply with the standard for the (BLS) (http://bls.gov/oes/current/naics2_22.htm).

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Respondents: Business or other for approved, including the retirement of off-the-record communication will not profit, and/or not for profit institutions. existing Reliability Standards EOP–004– be considered by the Commission in Frequency of Responses: On occasion. 1 and CIP–001–2a when EOP–004–2 reaching its decision. Parties to a Necessity of the Information: goes into effect. proceeding may seek the opportunity to Reliability Standard EOP–004–2 Issued: June 20, 2013. respond to any facts or contentions satisfies certain prior directives of the By the Commission. made in a prohibited off-the-record Commission, including a requirement to communication, and may request that Kimberly D. Bose, provide further guidance and specificity the Commission place the prohibited about reportable incidents of sabotage. Secretary. communication and responses thereto The revised Reliability Standard [FR Doc. 2013–16805 Filed 7–12–13; 8:45 am] in the decisional record. The requires reporting of specified system BILLING CODE 6717–01–P Commission will grant such a request disturbances and potential events of only when it determines that fairness so sabotage in a timely manner, thereby requires. Any person identified below as allowing NERC as the Electric DEPARTMENT OF ENERGY having made a prohibited off-the-record Reliability Organization, governmental Federal Energy Regulatory communication shall serve the authorities and relevant electric Commission document on all parties listed on the industry entities the opportunity to official service list for the applicable react. The revised standard accordingly [Docket No. RM98–1–000] proceeding in accordance with Rule enhances reliability in real-time through 2010, 18 CFR 385.2010. the opportunity to mitigate the impact Records Governing Off-the-Record Exempt off-the-record of a disturbance, and in the future Communications; Public Notice communications are included in the through investigation, analysis, and decisional record of the proceeding, dissemination of lessons learned. This constitutes notice, in accordance with 18 CFR 385.2201(b), of the receipt unless the communication was with a 30. Interested persons may obtain cooperating agency as described by 40 information on the reporting of prohibited and exempt off-the-record communications. CFR 1501.6, made under 18 CFR requirements by contacting: Federal 385.2201(e)(1)(v). Energy Regulatory Commission, 888 Order No. 607 (64 FR 51222, First Street NE., Washington, DC 20426 September 22, 1999) requires The following is a list of off-the- [Attention: Ellen Brown, Office of the Commission decisional employees, who record communications recently Executive Director, email: make or receive a prohibited or exempt received by the Secretary of the [email protected], Phone: (202) off-the-record communication relevant Commission. The communications 502–8663, fax: (202) 273–0873]. to the merits of a contested proceeding, listed are grouped chronologically, in to deliver to the Secretary of the ascending order. These filings are VI. Effective Date Commission, a copy of the available for review at the Commission 31. This order will become effective communication, if written, or a in the Public Reference Room or may be upon issuance. summary of the substance of any oral viewed on the Commission’s Web site at The Commission orders: communication. http://www.ferc.gov using the eLibrary (A) Reliability Standard EOP–004–2 is Prohibited communications are link. Enter the docket number, hereby approved as just, reasonable, not included in a public, non-decisional file excluding the last three digits, in the unduly discriminatory, and in the associated with, but not a part of, the docket number field to access the public interest. decisional record of the proceeding. document. For assistance, please contact (B) NERC’s proposed Violation Risk Unless the Commission determines that FERC, Online Support at Factors and Violation Severity Levels the prohibited communication and any [email protected] or toll and implementation plan for Reliability responses thereto should become a part free at (866)208–3676, or for TTY, Standard EOP–004–2 are hereby of the decisional record, the prohibited contact (202)502–8659.

Docket No. Filed date Presenter or requester

CP13–83–000 ...... 06–10–13 Susan Thornton, Ph.D.1 Exempt: 1. P–13590–000 ...... 05–28–13 FERC Staff.2 2. P–10808–000 ...... 06–17–13 Hon. Sander Levin. 3. ER12–959–000 ...... 06–18–13 Hon. Frank D. Lucas. 4. P–10808–000 ...... 06–18–13 Hon. Dave Camp.3 5. P–10808–000 ...... 06–27–13 Hon. Dave Camp. 6. CP09–30–000 ...... 07–03–13 Hon. Rodney P. Frelinghuysen. 7. EC13–114–000 ...... 07–08–13 Gov. Edmund G. Brown Jr. 1 Email record. 2 Email records dated 5/28, 5/30 and 6/11/2013. Phone records dated 6/3 and 6/5/2013. 3 Email record.

Dated: July 9, 2013. Nathaniel J. Davis, Sr., Deputy Secretary. [FR Doc. 2013–16836 Filed 7–12–13; 8:45 am] BILLING CODE 6717–01–P

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ENVIRONMENTAL PROTECTION education. This appointment is a four- (A) Subject to the limitation contained AGENCY year term which may be renewed once in the final sentence of subsection (d) for an additional four years pending herein, to encourage, accept, leverage, [FRL–9833–8] successful re-election by the NEEF and administer private gifts for the Announcement of the Board of nominating committee. benefit of, or in connection with, the Directors for the National This appointee will join the current environmental education and training Environmental Education Foundation Board members which include: activities and services of the United • Arthur Gibson (NEEF Chair), Vice States Environmental Protection AGENCY: Office of External Affairs and President, Environment, Health and Agency; Environmental Education, Safety, Baxter Healthcare Corporation (B) to conduct such other Environmental Protection Agency • JL Armstrong (NEEF Vice Chair), environmental education activities as (EPA). National Manager, Toyota Motor Sales, will further the development of an ACTION: Notice. USA, Inc. environmentally conscious and • Kenneth Strassner (NEEF responsible public, a well-trained and SUMMARY: The National Environmental Treasurer), Vice President, Global environmentally literate workforce, and Education Foundation (NEEF) was Environment, Safety, Regulatory and an environmentally advanced created by Section 10 of Public Law Scientific Affairs, Kimberly-Clark educational system; 101–619, the National Environmental Corporation • (C) to participate with foreign entities Education Act of 1990. It is a private Diane Wood (NEEF Secretary), and individuals in the conduct and 501(c)(3) non-profit organization President, National Environmental coordination of activities that will established to promote and support Education Foundation • further opportunities for environmental education and training as necessary Decker Anstrom, Former CEO, The education and training to address tools to further environmental Weather Channel Companies • environmental issues and problems protection and sustainable, Raymond Ban, Executive Vice involving the United States and Canada environmentally sound development. It President, The Weather Channel or Mexico. provides the common ground upon • Holly Cannon, Principal, Beveridge The Foundation develops, supports, which leaders from business and and Diamond, P.C. and/or operates programs and projects industry, all levels of government, • Megan Reilly Cayton, Co-Founder to educate and train educational and public interest groups, and others can and CEO, Catrinka, LLC environmental professionals, and to work cooperatively to expand the reach • Phillipe Cousteau, Co-Founder and assist them in the development and of environmental education and training CEO, EarthEcho International delivery of environmental education programs beyond the traditional • Manuel Alberto Diaz, Partner, and training programs and studies. classroom. The Foundation supports a Lydecker Diaz, L.L.P. • The Foundation has a governing grant program that promotes innovative Trish Silber, President, Aliniad Board of Directors (hereafter referred to environmental education and training Consulting Partners, Inc. • in this section as ‘the Board’), which programs; it also develops partnerships Bradley Smith, Dean, Huxley consists of 13 directors, each of whom with government and other College of the Environment, Western shall be knowledgeable or experienced organizations to administer projects that Washington University • in the environment, education and/or promote the development of an Wonya Lucas, Former CEO, TV One training. The Board oversees the environmentally literate public. The Background: Section 10(a) of the activities of the Foundation and assures Administrator of the U.S. National Environmental Education Act that the activities of the Foundation are Environmental Protection Agency, as of 1990 mandates a National consistent with the environmental and required by the terms of the Act, Environmental Education Foundation. education goals and policies of the announces the following appointment to The Foundation is established in order Environmental Protection Agency and the National Environmental Education to extend the contribution of with the intents and purposes of the Foundation Board of Trustees. The environmental education and training to Act. The membership of the Board, to appointee is Shannon Schuyler, meeting critical environmental the extent practicable, represents Corporate Responsibility Leader and protection needs, both in this country diverse points of view relating to Senior Managing Director of and internationally; to facilitate the environmental education and training. PricewaterhouseCoopers. cooperation, coordination, and contribution of public and private Members of the Board are appointed by FOR FURTHER INFORMATION CONTACT: For resources to create an environmentally the Administrator of the Environmental information regarding this Notice of advanced educational system; and to Protection Agency. Appointment, please contact Mrs. foster an open and effective partnership Within 90 days of the date of the Stephanie Owens, Deputy Associate among Federal, State, and local enactment of the National Administrator, Office of External Affairs government, business, industry, Environmental Education Act, and as and Environmental Education (1701A), academic institutions, community based appropriate thereafter, the U.S. EPA 1200 Pennsylvania Ave. NW., environmental groups, and international Administrator will publish in the Washington, DC 20460. General organizations. Federal Register an announcement of information concerning NEEF can be The Foundation is a charitable and appointments of Directors of the Board. found on their Web site at: http:// nonprofit corporation whose income is Such appointments become final and www.neefusa.org. exempt from tax, and donations to effective 90 days after publication in the SUPPLEMENTARY INFORMATION: which are tax deductible to the same Federal Register. The directors are Additional Considerations: Great care extent as those organizations listed appointed for terms of 4 years. The has been taken to assure that this new pursuant to section 501(c) of the Administrator shall appoint an appointee not only has the highest Internal Revenue Code of 1986. The individual to serve as a director in the degree of expertise and commitment, Foundation is not an agency or event of a vacancy on the Board within but also brings to the Board diverse establishment of the United States. The 60 days of said vacancy in the manner points of view relating to environmental purposes of the Foundation are— in which the original appointment was

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made. No individual may serve more work cooperatively to expand the reach • Manuel Alberto Diaz, Partner, than 2 consecutive terms as a director. of environmental education and training Lydecker Diaz, L.L.P. • Dated: June 28, 2013. programs beyond the traditional Trish Silber, President, Aliniad classroom. The Foundation supports a Bob Perciasepe, Consulting Partners, Inc. grant program that promotes innovative • Bradley Smith, Dean, Huxley Acting Administrator. environmental education and training College of the Environment, Western Shannon L. Schuyler programs; it also develops partnerships Washington University with government and other • Ms. Schuyler has been Corporate Wonya Lucas, Former CEO, TV One organizations to administer projects that Responsibility Leader and Senior Background: Section 10(a) of the promote the development of an Managing Director of National Environmental Education Act environmentally literate public. The PricewaterhouseCoopers since 2007. of 1990 mandates a National Administrator of the U.S. Ms. Schuyler was Alumni Relations Environmental Education Foundation. Environmental Protection Agency, as Managing Director of The Foundation is established in order required by the terms of the Act, PricewaterhouseCoopers since 2005, to extend the contribution of announces the following appointment to National HR Director since 2002, ABAS environmental education and training to the National Environmental Education HR Leader since 2000, GRMS HR Leader meeting critical environmental Foundation Board of Trustees. The protection needs, both in this country since 1999, National Recruiting Leader appointee is Carlos Alcazar, Chief since 1998, Cluster Recruiting Leader of and internationally; to facilitate the Executive Officer of Hispanic cooperation, coordination, and Coopers & Lybrand LLP since 1996, Communications Network. Executive Recruiter of Jacobson contribution of public and private FOR FURTHER INFORMATION CONTACT: Associates since 1995 and Freelance For resources to create an environmentally information regarding this Notice of Communications work since 1994. advanced educational system; and to She serves on the board of the Society Appointment, please contact Mrs. foster an open and effective partnership Stephanie Owens, Deputy Associate for Human Resource Management, among Federal, State, and local Administrator, Office of External Affairs Leadership Greater Chicago 2010 government, business, industry, and Environmental Education (1701A), Fellow, MIND Resource Institute academic institutions, community based U.S. EPA, 1200 Pennsylvania Ave. NW., National Advisory Board, Women and environmental groups, and international Washington, DC 20460. General the Green Economy Advisory Board, organizations. information concerning NEEF can be Boston College Center for Corporate The Foundation is a charitable and found on their Web site at: http:// Citizenship Advisory Committee, SAP nonprofit corporation whose income is www.neefusa.org. Sustainability Executive Advisory exempt from tax, and donations to Council and Taproot Board. SUPPLEMENTARY INFORMATION: which are tax deductible to the same Ms. Schuyler earned a bachelor’s Additional Considerations: Great care extent as those organizations listed degree in Arts—English at University of has been taken to assure that this new pursuant to section 501(c) of the Michigan. appointee not only has the highest Internal Revenue Code of 1986. The degree of expertise and commitment, Foundation is not an agency or [FR Doc. 2013–16900 Filed 7–12–13; 8:45 am] but also brings to the Board diverse establishment of the United States. The BILLING CODE 6560–50–P points of view relating to environmental purposes of the Foundation are— education. This appointment is a four- (A) Subject to the limitation contained ENVIRONMENTAL PROTECTION year term which may be renewed once in the final sentence of subsection (d) AGENCY for an additional four years pending herein, to encourage, accept, leverage, successful re-election by the NEEF and administer private gifts for the [FRL–9833–9] nominating committee. benefit of, or in connection with, the This appointee will join the current environmental education and training Announcement of the Board of Board members which include: activities and services of the United Directors for the National • Arthur Gibson (NEEF Chair), Vice States Environmental Protection Environmental Education Foundation President, Environment, Health and Agency; Safety, Baxter Healthcare Corporation AGENCY: Office of External Affairs and (B) to conduct such other • JL Armstrong (NEEF Vice Chair), Environmental Education, environmental education activities as National Manager, Toyota Motor Sales, Environmental Protection Agency will further the development of an USA, Inc. environmentally conscious and (EPA). • Kenneth Strassner (NEEF responsible public, a well-trained and ACTION: Notice. Treasurer), Vice President, Global environmentally literate workforce, and Environment, Safety, Regulatory and SUMMARY: The National Environmental an environmentally advanced Scientific Affairs, Kimberly-Clark Education Foundation (NEEF) was educational system; Corporation created by Section 10 of Public Law • Diane Wood (NEEF Secretary), (C) to participate with foreign entities 101–619, the National Environmental President, National Environmental and individuals in the conduct and Education Act of 1990. It is a private Education Foundation coordination of activities that will 501(c)(3) non-profit organization • Decker Anstrom, Former CEO, The further opportunities for environmental established to promote and support Weather Channel Companies education and training to address education and training as necessary • Raymond Ban, Executive Vice environmental issues and problems tools to further environmental President, The Weather Channel involving the United States and Canada protection and sustainable, • Holly Cannon, Principal, Beveridge or Mexico. environmentally sound development. It and Diamond, P.C. The Foundation develops, supports, provides the common ground upon • Megan Reilly Cayton, Co-Founder and/or operates programs and projects which leaders from business and and CEO, Catrinka, LLC to educate and train educational and industry, all levels of government, • Phillipe Cousteau, Co-Founder and environmental professionals, and to public interest groups, and others can CEO, EarthEcho International assist them in the development and

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delivery of environmental education ENVIRONMENTAL PROTECTION protected through www.regulations.gov and training programs and studies. AGENCY or email. The www.regulations.gov Web The Foundation has a governing site is an ‘‘anonymous access’’ system, [EPA–HQ–OAR–2007–0268; FRL–9833–5] Board of Directors (hereafter referred to which means the EPA will not know in this section as ‘the Board’), which Updates to Protective Action Guides your identity or contact information consists of 13 directors, each of whom Manual: Protective Action Guides unless you provide it in the body of shall be knowledgeable or experienced (PAGs) and Planning Guidance for your comment. If you send an email in the environment, education and/or Radiological Incidents comment directly to the Agency without training. The Board oversees the going through www.regulations.gov your activities of the Foundation and assures AGENCY: Environmental Protection email address will be automatically that the activities of the Foundation are Agency (EPA). captured and included as part of the consistent with the environmental and ACTION: Proposed guidance; extension of comment that is placed in the public education goals and policies of the comment period. docket and made available on the Environmental Protection Agency and Internet. If you submit an electronic with the intents and purposes of the SUMMARY: The U.S. Environmental comment, the EPA recommends that Act. The membership of the Board, to Protection Agency is announcing an you include your name and other the extent practicable, represents extension of the public comment period contact information in the body of your diverse points of view relating to for the proposed guidance ‘‘PAG comment and with any disk or CD–ROM environmental education and training. Manual: Protective Action Guides you submit. If the EPA cannot read your Members of the Board are appointed by (PAGs) and Planning Guidance for comment due to technical difficulties the Administrator of the Environmental Radiological Incidents’’ (the proposed and cannot contact you for clarification, Protection Agency. guidance is hereinafter referred to as the Agency may not be able to consider Within 90 days of the date of the ‘‘PAGs’’). The EPA published the your comment. Electronic files should enactment of the National proposed guidance in the Federal avoid the use of special characters, any Environmental Education Act, and as Register, which included a request for form of encryption, and be free of any appropriate thereafter, the comment, on April 15, 2013. The public defects or viruses. For additional Administrator will publish in the comment period was to end on July 15, information about the Agency’s public Federal Register an announcement of 2013. The purpose of this notice is to docket visit the EPA Docket Center appointments of Directors of the Board. extend the public comment period an homepage at http://www.epa.gov/ Such appointments become final and additional 60 days. epahome/dockets.htm. For additional effective 90 days after publication in the DATES: Written comments must be instructions on submitting comments, Federal Register. The directors are received on or before September 16, please refer to the notice of proposed appointed for terms of 4 years. The 2013. rulemaking (Section XI, Public Administrator shall appoint an ADDRESSES: Submit your comments, Participation, of the SUPPLEMENTARY individual to serve as a director in the identified by Docket ID No. EPA–HQ– INFORMATION section of the proposed event of a vacancy on the Board within OAR–2007–0268, by one of the rulemaking document). 60 days of said vacancy in the manner following methods: Docket: All documents in the docket in which the original appointment was • www.regulations.gov: Follow the are listed in the www.regulations.gov made. No individual may serve more on-line instructions for submitting index. Although listed in the index, than 2 consecutive terms as a director. comments. some information is not publicly Dated: June 28, 2013. • Email: [email protected]. available, e.g., CBI or other information Bob Perciasepe, • Mail: Air and Radiation Docket and whose disclosure is restricted by statute. Acting Administrator. Information Center, U.S. Environmental Certain other material, such as Protection Agency, Mailcode: 2822T, copyrighted material, will be publicly Carlos Alcazar 1200 Pennsylvania Ave. NW., available only in hard copy. Publicly Mr. Alcazar has been Chief Executive Washington, DC 20460. available docket materials are available Officer and Executive Creative Director • Hand Delivery: EPA Docket Center, either electronically in of Hispanic Communications Network EPA West Building, Room 3334, 1301 www.regulations.gov or in hard copy at since 2005. Mr. Alcazar was Vice Constitution Ave. NW., Washington, DC the Air and Radiation Docket and President of Pearson, plc since 2001, 20460. Such deliveries are only Information Center, EPA/DC, EPA West, Vice President, International of Viacom accepted during the Docket’s normal Room 3334, 1301 Constitution Ave. since 1992, and Technology Instructor hours of operation, and special NW., Washington, DC. The Public and Bilingual Teacher at Los Angeles arrangements should be made for Reading Room is open from 8:30 a.m. to Unified School District since 1990. deliveries of boxed information. 4:30 p.m., Monday through Friday, He serves on the board of the National Instructions: Direct your comments to excluding legal holidays. The telephone Fatherhood Initiative, World Affairs Docket ID No. EPA–HQ–OAR–2007– number for the Public Reading Room is Council, Boy Scouts of America, 0268. The EPA’s policy is that all (202) 566–1744, and the telephone Alliance for the Family, the Ready to comments received will be included in number for the Air Docket is (202) 566– Learn Partnership and the Latino the public docket without change and 1742. Advisory Council of the Boys and Girls may be made available online at FOR FURTHER INFORMATION CONTACT: Sara Club of America. www.regulations.gov, including any DeCair, Radiation Protection Division, Mr. Alcazar earned a bachelor’s personal information provided, unless Center for Radiological Emergency degree in business administration in the comment includes information Management, Mail Code 6608J, U.S. Political Science and Communications claimed to be Confidential Business Environmental Protection Agency, 1200 from University of California. He speaks Information (CBI) or other information Pennsylvania Avenue NW., Washington, Spanish and French. whose disclosure is restricted by statute. DC 20460; telephone number: (202) [FR Doc. 2013–16903 Filed 7–12–13; 8:45 am] Do not submit information that you 343–9108 ; fax number: (202) 343–2304; BILLING CODE 6560–50–P consider to be CBI or otherwise email: [email protected].

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SUPPLEMENTARY INFORMATION: In response to requests for an competition with the exportation of extension, we are extending the public goods or provision of services by a A. What should I consider as I prepare comment period for the PAGs updates United States industry. my comments for the EPA? through September 16, 2013. This Parties 1. Submitting Confidential Business extension will provide the public Information (CBI). Do not submit this additional time to provide comment on Principal Supplier: information to the EPA through the proposed guidance. • Space Exploration Technologies Corp. of Hawthorne, California. www.regulations.gov or email. Clearly Dated: July 8, 2013. mark all of the information that you • Marsh Space Projects, New York, Gina McCarthy, claim to be CBI. For CBI information in New York. a disk or CD ROM that you mail to the Assistant Administrator, Office of Air and • ATK Space Systems Inc., Goleta, Radiation. EPA, mark the outside of the disk or CD California. ROM as CBI and then identify [FR Doc. 2013–16898 Filed 7–12–13; 8:45 am] Obligor: Space-Communication electronically within the disk or CD BILLING CODE 6560–50–P Limited. ROM the specific information that is Guarantor(s): None. claimed as CBI. In addition to one Description of Items Being Exported complete version of the comment that EXPORT-IMPORT BANK OF THE includes information claimed as CBI, a UNITED STATES To finance the construction of solar arrays, U.S. launch services, and launch copy of the comment that does not [Public Notice: 2013–0034] contain the information claimed as CBI insurance. must be submitted for inclusion in the Application for Final Commitment for a Information on Decision: Information public docket. Information marked as Long-Term Loan or Financial on the final decision for this transaction CBI will not be disclosed except in Guarantee in Excess of $100 Million: will be available in the ‘‘Summary accordance with procedures set forth in AP087586XX Minutes of Meetings of Board of 40 CFR part 2. Directors’’ on http://exim.gov/ AGENCY: Export-Import Bank of the 2. Tips for Preparing Your Comments. newsandevents/boardmeetings/board/. United States. Confidential Information: Please note When submitting comments, remember that this notice does not include to: ACTION: Notice. confidential or proprietary business • Identify the rulemaking by docket SUMMARY: This Notice is to inform the information; information which, if number, subject heading, Federal public, in accordance with Section disclosed, would violate the Trade Register date and page number. 3(c)(10) of the Charter of the Export- Secrets Act; or information which • Follow directions—the EPA may Import Bank of the United States (‘‘Ex- would jeopardize jobs in the United ask you to respond to specific questions Im Bank’’), that Ex-Im Bank has received States by supplying information that or organize comments by referencing the an application for final commitment for competitors could use to compete with chapter number. a long-term loan or financial guarantee • companies in the United States. Explain why you agree or disagree; in excess of $100 million (as calculated suggest alternatives and substitute DATES: Comments must be received on in accordance with Section 3(c)(10) of or before August 9, 2013 to be assured language for your requested changes. the Charter). Comments received within • of consideration before final Describe any assumptions and the comment period specified below provide any technical information and/ consideration of the transaction by the will be presented to the Ex-Im Bank Board of Directors of Ex-Im Bank. or data that you used. Board of Directors prior to final action ADDRESSES: Comments may be • If you estimate potential costs or on this Transaction. submitted through Regulations.gov at burdens, explain how you arrived at Reference: AP087586XX. your estimate in sufficient detail to WWW.REGULATIONS.GOV. To submit allow it to be reproduced. Purpose and Use a comment, enter EIB–2013–0034 under • Illustrate your concerns with Brief description of the purpose of the the heading ‘‘Enter Keyword or ID’’ and specific examples and suggest transaction: select Search. Follow the instructions alternatives. A direct loan to an Israel-based provided at the Submit a Comment • Explain your views as clearly as company to support the procurement of screen. Please include your name, possible, avoiding the use of profanity U.S. manufactured solar arrays as well company name (if any) and EIB–2013– or personal threats. as U.S. launch services and launch 0034 on any attached document. • Make sure to submit your insurance. Cristopolis A. Dieguez, comments by the comment period Brief non-proprietary description of Program Specialist, Office of the General deadline identified. the anticipated use of the items being Counsel. exported: B. How can I get copies of this [FR Doc. 2013–16783 Filed 7–12–13; 8:45 am] The loan will enable the Israeli based BILLING CODE 6690–01–P document, the proposed rule and other company to finance the solar arrays, related information? launch, and insurance in support of a The EPA has established a docket for manufactured satellite. The satellite is FEDERAL COMMUNICATIONS this action under Docket ID No. EPA– expected to provide additional capacity COMMISSION HQ–OAR–2007–0268. The EPA has also to broadcasting and telecommunications developed a Web site for the proposed companies in the company’s existing [DA 13–1519] PAGs updates at: http://www.epa.gov/ customer base in Central and Eastern radiation/rert/pags.html. Please refer to Europe, Africa, and the Middle East. Consumer Advisory Committee the original Federal Register notice on To the extent that Ex-Im Bank is AGENCY: Federal Communications the proposed guidance for detailed reasonably aware, the item(s) being Commission. information on accessing information exported are not expected to produce ACTION: Notice. related to the proposal. exports or provide services in

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SUMMARY: The Commission announces with your web browser to make ADDRESSES: Interested parties are the next meeting date, time, and agenda presentations accessible to people with invited to submit written comments. All of its Consumer Advisory Committee disabilities. You can listen to the audio comments should refer to the name of (hereinafter the ‘‘Committee’’). The and use a screen reader to read the collection. Comments may be purpose of the Committee is to make displayed documents. You can also submitted by any of the following recommendations to the Commission watch the video with open captioning. methods: regarding matters within the jurisdiction The Web site to access Accessible Event • http://www.fdic.gov/regulations/ of the Commission and to facilitate the is http://accessibleevent.com. The Web laws/federal/notices.html. participation of all consumers in page prompts for an Event Code which • Email: [email protected]. proceedings before the Commission. is 005202376. To learn about the • Mail: Leneta G. Gregorie DATES: The next meeting of the features of Accessible Event, consult its (202.898.3719), Counsel, Federal Committee will take place on Friday, User’s Guide at: http:// Deposit Insurance Corporation, 550 17th August 2, 2013, 9:00 a.m. to 4:00 p.m., accessibleevent.com/doc/user_guide/. Street NW., Room NY–5050, at the Commission’s Headquarters Other reasonable accommodations for Washington, DC 20429. Building, Commission Meeting Room people with disabilities are available • Hand Delivery: Comments may be TW–C305. upon request. The request should hand-delivered to the guard station at ADDRESSES: Federal Communications include a detailed description of the the rear of the 550 17th Street Building Commission, 445 12th Street SW., accommodation needed and contact (located on F Street), on business days Washington, DC 20554. information. Please provide as much between 7:00 a.m. and 5:00 p.m. FOR FURTHER INFORMATION CONTACT: advance notice as possible; last minute A copy of the comments may also be Scott Marshall, Consumer and requests will be accepted, but may be submitted to the FDIC Desk Officer, Governmental Affairs Bureau, (202) impossible to fill. Send an email to Office of Information and Regulatory 418–2809 (voice or Relay), or email [email protected] or call the Consumer Affairs, Office of Management and [email protected]. and Governmental Affairs Bureau at Budget, New Executive Office Building, 202–418–0530 (voice), 202–418–0432 Room 10235, Washington, DC 20503. SUPPLEMENTARY INFORMATION: This is a (TTY). FOR FURTHER INFORMATION CONTACT: For summary of the Commission’s further information about this document DA 13–1519 released July 3, Federal Communications Commission. information collection, please contact 2013 announcing the agenda, date and Mark Stone, Leneta G. Gregorie, by telephone at time of the Committee’s next meeting. Deputy Bureau Chief, Consumer and Governmental Affairs Bureau. (202) 898–3719 or by mail at the address Meeting Agenda [FR Doc. 2013–16889 Filed 7–12–13; 8:45 am] identified above. At its August 2, 2013 meeting, the BILLING CODE 6712–01–P SUPPLEMENTARY INFORMATION: Committee will consider a further The FDIC is requesting OMB approval recommendation regarding inmate to renew the following information calling rates. The Committee may also collection: consider other recommendations from FEDERAL DEPOSIT INSURANCE Title: Occasional Qualitative Surveys. its working groups, and may also CORPORATION OMB Number: 3064–0127. receive briefings from FCC staff and Estimated number of surveys per year: outside speakers on matters of interest Proposed Agency Information 15. to the Committee. A limited amount of Collection Activities: Submission for Estimated response time per survey: 1 time will be available on the agenda for OMB Review; Comment Request Re hour. comments from the public. The public Occasional Qualitative Surveys Estimated number of respondents per may ask questions of presenters via survey: 850. AGENCY: Federal Deposit Insurance email [email protected] or via Total Annual Burden: 12,500 hours. Corporation (FDIC). Twitter using the hashtab #fcclive. In General Description of Collection: The addition, the public may also follow the ACTION: Notice and request for comment. information collected in these surveys is meeting on Twitter @fcc or via the anecdotal in nature, that is, samples are SUMMARY: The FDIC, as part of its Commission’s Facebook page at not necessarily random, the results are continuing effort to reduce paperwork www.facebook.com/fcc. Alternatively, not necessarily representative of a larger and respondent burden, invites the members of the public may send written class of potential respondents, and the general public and other Federal comments to: Scott Marshall, goal is not to produce a statistically agencies to take this opportunity, as Designated Federal Officer of the valid and reliable database. Rather, the required by the Paperwork Reduction Committee at the address provided surveys are expected to yield anecdotal Act of 1995 (44 U.S.C. chapter 35), to above. information about the particular The meeting is open to the public and comment on renewal of an existing experiences and opinions of members of the site is fully accessible to people information collection as required by the public, primarily staff at respondent using wheelchairs or other mobility the PRA. On May 10, 2013 (78 FR banks or bank customers. The aids. Sign language interpreters, open 27388), the FDIC solicited public information is used to improve the way captioning, assistive listening devices, comment for a 60-day period on renewal FDIC relates to its clients, to develop and Braille copies of the agenda and without change of its information agendas for regulatory or statutory handouts will be provided on site. collection entitled, ‘‘Occasional change, and in some cases to simply Meetings are also broadcast live with Qualitative Surveys’’ (OMB No. 3064– learn how particular policies or open captioning over the Internet from 0127). No comments were received. programs are working, or are perceived the FCC Live Web page at www.fcc.gov/ Therefore, the FDIC hereby gives notice in particular cases. live/. of submission of its request for renewal Simultaneous with the webcast, the to OMB for review. Request for Comment meeting will be available through DATES: Comments must be submitted on Comments are invited on: (a) Whether Accessible Event, a service that works or before August 14, 2013. these collections of information are

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necessary for the proper performance of President) 1000 Peachtree Street NE., Dated: July 11, 2013. the FDIC’s functions, including whether Atlanta, Georgia 30309: James B. Petrick, the information has practical utility; (b) 1. Banco De Credito E Inversiones, Secretary, Federal Retirement Thrift the accuracy of the estimate of the Empresas Juan Yarur S.A.C., Investment Board. burden of the information collection, Inversiones Petro S.A. Inversiones [FR Doc. 2013–17019 Filed 7–11–13; 4:15 pm] including the validity of the Baquio LTDA, Inversiones, Nueve, BILLING CODE 6760–01–P methodology and assumptions used; (c) LTDA, and Administraciones Baquio ways to enhance the quality, utility, and LTDA, all of Santiago, Chile; to become clarity of the information to be bank holding companies by acquiring DEPARTMENT OF DEFENSE collected; and (d) ways to minimize the 100 percent of the voting shares of CM burden of the information collection on Florida Holdings, Inc., Coral Gables, GENERAL SERVICES respondents, including through the use Florida, and City Nation Bank of ADMINISTRATION of automated collection techniques or Florida, Miami, Florida. other forms of information technology. B. Federal Reserve Bank of Kansas NATIONAL AERONAUTICS AND All comments will become a matter of City (Dennis Denney, Assistant Vice SPACE ADMINISTRATION public record. President) 1 Memorial Drive, Kansas [OMB Control No. 9000–0034; Docket 2013– Dated at Washington, DC, this 10th day of City, Missouri 64198–0001: 0077; Sequence 1] July, 2013. 1. B.O.E. Bancshares, Inc., and B.O.E. Federal Deposit Insurance Corporation. Chickasha Corp, both in Lawton, Federal Acquisition Regulation; Robert E. Feldman, Oklahoma, to acquire Chickasha Information Collection; Examination of Executive Secretary. Bancshares, Inc., and thereby indirectly Records by Comptroller General and [FR Doc. 2013–16840 Filed 7–12–13; 8:45 am] acquire Chickasha Bank & Trust Contract Audit BILLING CODE 6714–01–P Company, both in Chickasha, Oklahoma. AGENCY: Department of Defense (DOD), General Services Administration (GSA), Board of Governors of the Federal Reserve and National Aeronautics and Space FEDERAL RESERVE SYSTEM System, July 9, 2013. Administration (NASA). Michael J. Lewandowski, Formations of, Acquisitions by, and ACTION: Notice of request for an Associate Secretary of the Board. Mergers of Bank Holding Companies extension to an existing OMB clearance. [FR Doc. 2013–16768 Filed 7–12–13; 8:45 am] The companies listed in this notice BILLING CODE 6210–01–P SUMMARY: Under the provisions of the have applied to the Board for approval, Paperwork Reduction Act, the pursuant to the Bank Holding Company Regulatory Secretariat will be Act of 1956 (12 U.S.C. 1841 et seq.) submitting to the Office of Management (BHC Act), Regulation Y (12 CFR part FEDERAL RETIREMENT THRIFT and Budget (OMB) a request to review 225), and all other applicable statutes INVESTMENT BOARD and approve an extension of a and regulations to become a bank previously approved information holding company and/or to acquire the Sunshine Act; Notice of Meeting collection requirement concerning the assets or the ownership of, control of, or examination of records by comptroller the power to vote shares of a bank or TIME AND DATE: 8:30 a.m. (Eastern Time) general and contract audit. July 22, 2013. bank holding company and all of the DATES: Submit comments on or before banks and nonbanking companies PLACE: 10th Floor Board Meeting Room, September 13, 2013. owned by the bank holding company, 77 K Street NE., Washington, DC 20002. ADDRESSES: Submit comments including the companies listed below. STATUS: Parts will be open to the public identified by Information Collection The applications listed below, as well and parts closed to the public. as other related filings required by the 9000–0034 by any of the following Board, are available for immediate MATTERS TO BE CONSIDERED: methods: • Regulations.gov: http:// inspection at the Federal Reserve Bank Parts Open to the Public indicated. The applications will also be www.regulations.gov. Submit comments available for inspection at the offices of 1. Approval of the Minutes of the June via the Federal eRulemaking portal by the Board of Governors. Interested 24, 2013 Board Member Meeting. searching for OMB Control No. 9000– persons may express their views in 2. Thrift Savings Plan Activity 0034. Follow the instructions provided writing on the standards enumerated in Reports by the Executive Director. at the ‘‘Submit a Comment’’ screen. the BHC Act (12 U.S.C. 1842(c)). If the a. Monthly Participant Activity Please include your name, company proposal also involves the acquisition of Report. name (if any), and ‘‘Information a nonbanking company, the review also b. Monthly Investment Policy Collection 9000–0034, Examination of includes whether the acquisition of the Report. Records by Comptroller General and nonbanking company complies with the c. Legislative Report. Contract Audit’’ on your attached document. standards in section 4 of the BHC Act 3. Quarterly Vendor Financials. • Fax: 202–501–4067. (12 U.S.C. 1843). Unless otherwise 4. Investment Manager. noted, nonbanking activities will be • Mail: General Services conducted throughout the United States. Parts Closed to the Public Administration, Regulatory Secretariat (MVCB), 1800 F Street NW., Unless otherwise noted, comments 5. Security. regarding each of these applications Washington, DC 20405. ATTN: Hada 5. Litigation Review. must be received at the Reserve Bank Flowers/IC 9000–0034, Examination of indicated or the offices of the Board of 6. Personnel. Records by Comptroller General and Governors not later than August 8, 2013. CONTACT PERSON FOR MORE INFORMATION: Contract Audit. A. Federal Reserve Bank of Atlanta Kimberly Weaver, Director, Office of Instructions: Please submit comments (Chapelle Davis, Assistant Vice External Affairs (202) 942–1640. only and cite Information Collection

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9000–0034, in all correspondence B. Annual Reporting Burden Regulatory Secretariat (MVCB), 1800 F related to this collection. All comments For this information collection Street NW., Washington, DC 20405, received will be posted without change requirement data from Fiscal Year (FY) telephone 202–501–4755. Please cite to http://www.regulations.gov, including 2012 was retrieved from the Federal OMB Control Number 9000–0034, any personal and/or business Procurement Data System—Next Examination of Records by Comptroller confidential information provided. Generation (FPDS–NG). General and Contract Audit, in all correspondence. FOR FURTHER INFORMATION CONTACT: Mr. The parameters for this information Michael O. Jackson, Procurement collection were based on the Dated: July 9, 2013. Analyst, Contract Policy Branch, GSA, prescription from each of the applicable Karlos Morgan, 202–208–4949 or email clauses. Resulting from a thorough Acting Director, Federal Acquisition Policy, [email protected]. review of each clause prescription, it Office of Governmentwide Acquisition Policy, was determined that the type of Office of Acquisition Policy, Office of SUPPLEMENTARY INFORMATION: contracts associated with this Governmentwide Policy. information collection are: Negotiated [FR Doc. 2013–16918 Filed 7–12–13; 8:45 am] A. Purpose awards over the simplified acquisition BILLING CODE 6820–EP–P threshold (SAT) using commercial The objective of this information procedures; Negotiated awards over the collection, for the examination of SAT using other than commercial records by Comptroller General and DEPARTMENT OF HEALTH AND procedures; and, Sealed bid awards over HUMAN SERVICES contract audit, is to require contractors $700,000. For negotiated awards over to maintain certain records and to the SAT using commercial procedures, Centers for Disease Control and ensure the Comptroller General and/or FPDS–NG shows 18,709 contracts (7,797 Prevention agency have access to, and the right to, of those were awarded to unique [60Day–13–13YQ] examine and audit records, which vendors). For negotiated awards over includes: books, documents, accounting the SAT using other than commercial Proposed Data Collections Submitted procedures and practices, and other procedures, FPDS–NG shows 14,085 data, regardless of type and regardless of for Public Comment and contracts (6,731 of those were awarded Recommendations whether such items are in written form, to unique vendors). For sealed bid in the form of computer data, or in any awards over $700,000, FPDS–NG shows In compliance with the requirement other form, for a period of three years 1,602 contracts (809 of those were of Section 3506(c)(2)(A) of the after final payment. This information is awarded to unique vendors). This Paperwork Reduction Act of 1995 for necessary for examination and audit of equates to a total of 34,396 total actions opportunity for public comment on contract surveillance, verification of and a total of 15,337 unique vendors proposed data collection projects, the contract pricing, and to provide after you drill down the 34,396 actions Centers for Disease Control and reimbursement of contractor costs, looking only for the unique Data Prevention (CDC) will publish periodic where applicable. The records retention Universal Numbering System (DUNS) summaries of proposed projects. To period is required by the statutory number. The 15,337 actions will be used request more information on the authorities at 10 U.S.C. 2313, 41 U.S.C. as the number of estimated respondents proposed projects or to obtain a copy of 254, and 10 U.S.C. 2306, and are per year. the data collection plans and implemented through the following It is estimated that number of instruments, call 404–639–7570 or send clauses: Audit and Records— responses per respondent is ten. This is comments to LeRoy Richardson, 1600 Negotiation clause, 52.215–2; Contract derived by dividing the number of Clifton Road, MS–D74, Atlanta, GA Terms and Conditions Required to contract actions by the number of 30333 or send an email to [email protected]. Implement Statutes or Executive unique vendors (2.2 contracts), plus an Comments are invited on: (a) Whether Orders—Commercial Items clause, average of three subcontracts per the proposed collection of information 52.212–5; and Audit and Records— contract (considering the applicable is necessary for the proper performance Sealed Bidding clause, 52.214–26. This clauses flows down to subcontractors). of the functions of the agency, including information collection does not require It is further estimated that the time whether the information shall have contractor’s to create or maintain any required to read and prepare a response practical utility; (b) the accuracy of the records that the contractor does not is 60 minutes. agency’s estimate of the burden of the normally maintain in its usual course of Respondents: 15,337. proposed collection of information; (c) business. Responses per Respondent: 10. ways to enhance the quality, utility, and Total number of responses: 153,370. clarity of the information to be Public Comments Hours per Response: 1.0. collected; and (d) ways to minimize the Total Burden Hours: 153,370. burden of the collection of information Public comments are particularly The 153,370 burden hours represent a on respondents, including through the invited on: Whether this collection of significant increase over the 63,934 use of automated collection techniques information is necessary for the proper hours that was published in the or other forms of information performance of functions of the Federal information collection notice in the technology. Written comments should Acquisition Regulation (FAR), and Federal Register at 75 FR 10268 on be received within 60 days of this whether it will have practical utility; March 5, 2010, due to the increase in notice. whether our estimate of the public the estimated hours per response, by burden of this collection of information fifty minutes, from ten minutes to 1 Proposed Project is accurate, and based on valid hour. Institutional Awareness and assumptions and methodology and ways Obtaining Copies of Proposals: Commitment to Ensuring Safe, Stable, to enhance the quality, utility, and Requesters may obtain a copy of the and Nurturing Relationships and clarity of the information to be information collection documents from Environments for Children and collected. the General Services Administration, Prevention Child Maltreatment—New—

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National Center for Injury Prevention requests OMB approval for two years to SurveyMonkey® site. In turn, the and Control (NCIPC)—Centers for collect information that will establish grantee will send a personalized Disease Control and Prevention (CDC). the baseline level of state health advance notification letter, followed by departments’ and partners’ awareness an email with a link to the Background and Brief Description and commitment to ensuring safe, SurveyMonkey® site to each new Safe, stable, nurturing relationships stable, and nurturing relationships and partner throughout the funding period. and environments set children on a environments for children and The goal of the data collection is to positive trajectory for optimal child preventing child maltreatment. assess awardee awareness and development and health, provide a This information will be collected commitment so that CDC may establish buffer against the effects of adverse from staff at health departments soon state health departments’ and partners’ child experiences, are fundamental to after receiving their award and from level of commitment at the start of the healthy brain development and have a their partners at the start of each new funding. This information will be positive impact on a broad range of partnership. Respondents will be 3 staff compared to post-funding awareness health problems across the life course. members from 5 health departments and commitment data which, along with Promoting safe, stable, nurturing receiving funding and 3 staff members other data sources (i.e., changes in relationships and environments may at approximately 11 organizations or public awareness and commitment, and also reduce child maltreatment which is agencies the health departments choose changes in policies and programs), will a significant public health problem to partner with. Information will be allow CDC to establish the success of affecting physical and emotional health collected once using SurveyMonkey®, this funding announcement. throughout the lifespan. an electronic web-based interface which NCIPC is funding five state health is a secure Web site that meets the Safe Given five health departments with 10 departments in Fiscal Year 2012 to Harbor and European Union data partner organizations each and 3 staff at coordinate and manage existing and protection requirements. This ICR will each organization responding, the total new partnerships with other sectors to only collect data pertaining to number of respondents for this project promote safe, stable, nurturing organizations. No individual is 165 (83 respondents per year). Total relationships and environments for identifiable information will be project burden over the two years of children; and work with partners to requested. data collection is 78 hours (39 hours per identify strategies across sectors that Each grantee will receive a year). promote safe, stable, nurturing personalized advance notification letter, There are no costs to respondents relationships and environments. CDC followed by an email with a link to the other than their time.

ESTIMATED ANNUALIZED BURDEN HOURS

Average Type of Number of Number of burden per Total burden respondents Form name respondents responses per response (in hrs.) respondent (in hrs.)

Grantees and their partners ...... Institutional awareness and commit- 83 1 28/60 39 ment survey. 39

Leroy A. Richardson, Prevention (CDC) will publish periodic Proposed Project Chief, Information Collection Review Office, summaries of proposed projects. To Office of Scientific Integrity, Office of the request more information on the Case Studies to Explore Interventions Associate Director for Science, Office of the proposed projects or to obtain a copy of to Support, Build, and Provide Legacy Director, Centers for Disease Control and the data collection plans and Awareness for Young Breast Cancer Prevention. instruments, call 404–639–7570 or send Survivors—New—National Center for [FR Doc. 2013–16769 Filed 7–12–13; 8:45 am] comments to LeRoy Richardson, 1600 Chronic Disease Prevention and Health BILLING CODE 4163–18–P Clifton Road, MS D–74, Atlanta, GA Promotion (NCCDPHP), Centers for 30333 or send an email to [email protected]. Disease Control and Prevention (CDC). Comments are invited on: (a) Whether Background and Brief Description DEPARTMENT OF HEALTH AND the proposed collection of information HUMAN SERVICES is necessary for the proper performance Young breast cancer survivors (YBCS, of the functions of the agency, including defined as women diagnosed with Centers for Disease Control and whether the information shall have breast cancer under 45 years old) may Prevention practical utility; (b) the accuracy of the have a more difficult time coping with agency’s estimate of the burden of the breast cancer treatment and aftercare [60Day 13–13ZC] proposed collection of information; (c) when compared to older breast cancer Proposed Data Collections Submitted ways to enhance the quality, utility, and survivors. For example, breast cancer for Public Comment and clarity of the information to be can be more serious, treatment is often Recommendations collected; and (d) ways to minimize the multimodal and more toxic, and side burden of the collection of information effects can be more severe for YBCS In compliance with the requirement on respondents, including through the than for older women. As part of the of Section 3506(c)(2)(A) of the use of automated collection techniques Patient Protection and Affordable Care Paperwork Reduction Act of 1995 for or other forms of information Act (H.R. 3590, 2010), Congress passed opportunity for public comment on technology. Written comments should the Education and Awareness Requires proposed data collection projects, the be received within 60 days of this Learning Young (EARLY) Act, Sec. Centers for Disease Control and notice. 10413. The EARLY Act directed CDC to

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develop and implement national analysis. Information will be collected the DP11–1111 cooperative agreement, campaigns to educate young women from up to 12 organizations: Seven case (2) implementation of YBCS (particularly those at increased risk) and studies will be conducted with interventions, including barriers and health care providers about breast organizations that receive funding facilitators to implementation, and (3) cancer risk and early diagnosis. As a through CDC’s DP11–1111 cooperative similarities and differences among result of the EARLY Act, CDC agreement, and up to five case studies organizations serving YBCS. Case study established the Funding Opportunity will be conducted with other findings will be compiled and Announcement, DP11–1111, Developing organizations that are implementing summarized in site-specific and cross- Support and Educational Awareness for similar YBCS-focused activities and site reports to CDC. Information Young (< 45 years of age) Breast Cancer interventions but do not receive funding collected will help to enhance existing Survivors in the United States. under DP11–1111. Information will be efforts to provide educational resources Subsequently, CDC awarded a three- collected during a single site visit to and support services to YBCS and year cooperative agreement to seven each selected organization to conduct inform replication of promising YBCS organizations that demonstrated a in-person interviews with key interventions in other settings. capacity to (1) reach YBCS, health care programmatic staff and to record on-site providers, and caregivers/families, (2) observations of program planning and Case study selection is based on a implement interventions that seek to implementation activities. purposeful selection of CDC-funded and provide support services, and (3) Case studies are intended to serve as non-CDC funded organizations that develop educational communication an exploration of implementation support YBCS populations through and awareness resources to support activities, as well as to provide the educational or service programs. YBCS. context for implementation. Potential organizations for this project Other establishments within the U.S., Specifically, case study findings will include local or national not-for-profit such as local and national not-for-profit help CDC to identify areas in which organizations and academic institutions. organizations and academic institutions, CDC can build upon existing and Information will be collected using on- implement similar YBCS-focused emerging efforts to provide support site observations and in-depth interventions without funding from services and educational resources to interviews (IDI) with each organization’s CDC’s DP11–1111 cooperative YBCS, highlight barriers and facilitating key informants, such as Principal agreement. Although these entities are factors to implementing interventions Investigators, Program Managers, not funded through CDC, they plan, targeting YBCS, determine the added Program Staff, and Program Partners. develop, and employ similar tools, value of providing the DP11–1111 IDIs will last 1–2 hours each. Case study strategies, and interventions to reach or cooperative agreement (e.g., funding, findings will be compiled and benefit these targeted young cancer- technical assistance) to various entities, summarized in site-specific and cross- survivor populations. identify lessons learned that can be site reports to CDC. Information will be CDC proposes to conduct exploratory applied to future implementation of collected approximately two years after case studies of organizations that YBCS interventions, and better initiation of CDC’s cooperative provide support services and/or understand the sustainability of YBCS agreement, DP11–1111. OMB approval educational resources to YBCS, health interventions following/in the absence care providers, and/or caregivers/ of CDC funding. is requested for 12 months. families. Each selected organization will CDC will be able to gain a deeper There are no costs to respondents serve as a unique case and the unit of understanding of (1) implementation of other than their time.

ESTIMATED ANNUALIZED BURDEN HOURS

Number of Total Type of respondents Form name Number of responses per Avg. burden burden respondents respondent per response (in hrs)

Organizations that Receive CDC IDI Guide for Program Directors/ 7 1 2 14 Funding. Principal Investigators. IDI Guide for Program Managers ..... 7 1 1 7 IDI Guide for Program Staff Mem- 35 1 1 35 bers. IDI Guide for Program Partners ...... 21 1 1 21 Organizations that do not Receive IDI Guide for Program Directors/ 5 1 2 10 CDC Funding. Principal Investigators. IDI Guide for Program Managers ..... 5 1 1 5 IDI Guide for Program Staff Mem- 25 1 1 25 bers. IDI Guide for Program Partners ...... 15 1 1 15

Total ...... 132

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Leroy A. Richardson, 0457 Expiration 09/30/2013— Aggregate report of screening and Chief, Information Collection Review Office, Extension—National Center for HIV/ preventive therapy for tuberculosis Office of Scientific Integrity, Office of the AIDS, Viral Hepatitis, STD, and TB infection (OMB No. 0920–0457). The Associate Director for Science, Office of the Prevention (NCHHSTP), Centers for respondents for these reports are the 68 Director, Centers for Disease Control and Disease Control and Prevention (CDC). Prevention. state and local tuberculosis control programs receiving federal cooperative [FR Doc. 2013–16770 Filed 7–12–13; 8:45 am] Background and Brief Description agreement funding through DTBE. BILLING CODE 4163–18–P CDC, NCHHSTP, Division of These reports emphasize treatment Tuberculosis Elimination (DTBE) outcomes, high-priority target proposes extension of the Aggregate DEPARTMENT OF HEALTH AND populations vulnerable to tuberculosis, Reports for Tuberculosis Program HUMAN SERVICES and programmed electronic report entry, Evaluation, previously approved under which transitioned to the National OMB No. 0920–0457. This request is for Centers for Disease Control and Tuberculosis Indicators Project (NTIP), a Prevention a 3-year clearance. There are no revisions to the report forms, data secure web-based system for program [30Day–13–0457] definitions, or reporting instructions. evaluation data, in 2010. No other Changes within this information federal agency collects this type of Agency Forms Undergoing Paperwork collection request (ICR) reflect an national tuberculosis data, and the Reduction Act Review increase in the annual cost to the Aggregate report of follow-up for government. The increased cost is due contacts of tuberculosis, and Aggregate The Centers for Disease Control and report of screening and preventive Prevention (CDC) publishes a list of to increases in salaries of personnel therapy for tuberculosis infection are information collection requests under conducting data collection and analysis review by the Office of Management and since the last ICR approval. the only data source about latent Budget (OMB) in compliance with the DTBE is the lead agency for tuberculosis infection for monitoring Paperwork Reduction Act (44 U.S.C. tuberculosis elimination in the United national progress toward tuberculosis Chapter 35). To request a copy of these States. To ensure the elimination of elimination with these activities. CDC requests, call (404) 639–7570 or send an tuberculosis in the United States, CDC provides ongoing assistance in the email to [email protected]. Send written monitors indicators for key program preparation and utilization of these comments to CDC Desk Officer, Office of activities, such as finding tuberculosis reports at the local and state levels of Management and Budget, Washington, infections in recent contacts of cases public health jurisdiction. CDC also DC 20503 or by fax to (202) 395–5806. and in other persons likely to be provides respondents with technical Written comments should be received infected and providing therapy for support for NTIP access (Electronic— within 30 days of this notice. latent tuberculosis infection. In 2000, 100%, Use of Electronic Signatures— CDC implemented two program Proposed Project No). The annual burden to respondents evaluation reports for annual is estimated to be 226 hours. Aggregate Reports for Tuberculosis submission: Aggregate report of follow- Program Evaluation (OMB No. 0920– up for contacts of tuberculosis, and

ESTIMATED ANNUALIZED BURDEN HOURS

Average Number of Number of burden per Type of respondent Form name respondents responses per response respondent (in hours)

Data clerks and Program Managers ...... Follow-up and Treatment of Contacts to 100 1 (electronic)...... 30/60 Tuberculosis Cases Form. Program Managers ...... Follow-up and Treatment of Contacts to 18 1 (manual)...... 30/60 Tuberculosis Cases Form. Data clerks ...... Follow-up and Treatment of Contacts to 18 1 (manual)...... 3 Tuberculosis Cases Form. Data clerks and Program Managers ...... Targeted Testing and Treatment for La- 100 1 (electronic)...... 30/60 tent Tuberculosis Infection. Program Managers ...... Targeted Testing and Treatment for La- 18 1 (manual)...... 30/60 tent Tuberculosis Infection. Data clerks ...... Targeted Testing and Treatment for La- 18 1 (manual)...... 3 tent Tuberculosis Infection.

Leroy A. Richardson, Chief, Information Collection Review Office, Office of Scientific Integrity, Office of the Associate Director for Science, Office of the Director, Centers for Disease Control and Prevention. [FR Doc. 2013–16824 Filed 7–12–13; 8:45 am] BILLING CODE 4163–18–P

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DEPARTMENT OF HEALTH AND Austin Independent School District and in which no dating violence prevention HUMAN SERVICES demonstrated promising results in an services are available. We will recruit uncontrolled program evaluation, 1,800 students (300 per year from Centers for Disease Control and suggesting a controlled evaluation is intervention schools and 300 per year Prevention warranted to more rigorously examine from control schools) over three waves [30Day–13–0861] program effects. of data collection. Of the 1,800 students This extension request is the recruited, we anticipate 1,200 will have Agency Forms Undergoing Paperwork controlled evaluation of ERSG, which complete data at the end of the study Reduction Act Review began in September 2010; it has one period. Control schools have been primary aim and two exploratory aims. selected that have characteristics (e.g., The Centers for Disease Control and The primary aim is to evaluate the risk status, socio-economic status) Prevention (CDC) publishes a list of effectiveness of ERSG to prevent and similar to the Austin Independent information collection requests under reduce teen dating violence and School District intervention schools. review by the Office of Management and increase healthy conflict resolution Survey items collect information Budget (OMB) in compliance with the skills reported by at-risk male and about emotional, physical, and sexual Paperwork Reduction Act (44 U.S.C. female middle and high school students peer and dating violence victimization Chapter 35). To request a copy of these compared to at-risk students in control and perpetration, use of healthy requests, call (404) 639–7570 or send an schools who do not receive ERSG. The relationship skills, relationships email to [email protected]. Send written exploratory aims are: (1) To evaluate characteristics, peer relationships, comments to CDC Desk Officer, Office of whether or not the effectiveness of demographics, and use of other teen Management and Budget, Washington, ERSG is enhanced by the presence of a dating violence prevention services, DC or by fax to (202) 395–5806. Written universal, school-wide prevention social desirability, and attitudes toward comments should be received within 30 programs, and (2) To examine dating violence. These measures were days of this notice. moderators and mediators of targeted developed in collaboration with Proposed Project and universal teen dating violence scientists at the Centers for Disease A Controlled Evaluation of Expect interventions, such as biological sex and Control and Prevention and (1) are Respect Support Groups (ERSG): history of abuse at intake. Completion of adapted from validated measures of teen Preventing and Interrupting Teen Dating this study and examination of the dating violence, and (2) reflect the Violence among At-Risk Middle and primary and exploratory aims associated behaviors of interest and theory of High School Students (0920–0861, with it will help to fill a research gap change of Expect Respect. The Reactive Expiration 8/31/2013)—Extension— by adding results to the evidence base Proactive Questionnaire (Raine et al., National Center for Injury Prevention regarding whether ERSG is a promising 2006) has also been included in the and Control (NCIPC), Division of program for reducing the prevalence of instrument packet and will be used to Violence Prevention (DVP), Centers for teen dating violence and increasing determine if subtype of aggression Disease Control and Prevention (CDC). knowledge of healthy relationship moderates response to intervention. skills. Participation in this study is Background and Brief Description The purpose of this request is to voluntary and intrusions to the The prevalence and consequences of obtain Office of Management and participants’ sense of privacy will be teen dating violence make it a public Budget (OMB) approval to extend the minimized by only using data collected health concern that requires early and data collection for A Controlled from students who have agreed for us to effective prevention. To date, only three Evaluation of Expect Respect Support do so (through student assent and prevention strategies—Safe Dates, the Groups (ERSG): Preventing and signed distribution of passive parental Youth Relationships Project, and 4th Interrupting Teen Dating Violence consent forms) and having the data R—have demonstrated reductions in among At-Risk Middle and High School coded in such a way to protect subjects’ dating violence behaviors in rigorous, Students (OMB No.0920–0861, privacy. controlled evaluations. In order to Expiration 8/31/2013). CDC seeks a Finally, ERSG facilitators will take protect young people and build an three-year approval to continue the part in qualitative interviews planned evidence-base of effective prevention ERSG project. The ongoing evaluation for the middle (December) and end strategies, evaluation of additional employs a quasi-experimental/non- (May) of the second and third years of programs is needed, including those randomized design in which a data collection. The goal of these programs currently in the field. The convenience sample of participants in interviews is to better understand the Expect Respect Support Groups (ERSG; schools receiving universal and/or implementation process for ERSG. provided by SafePlace) program is targeted prevention services are There are no costs to respondents currently being implemented in the compared to students in control schools other than their time.

ESTIMATED ANNUALIZED BURDEN HOURS

Number of Response Total Type of respondent Form name Number of responses per burden burden respondents respondent (hours) hours

Intervention and Control Schools ...... Intake assessment ...... 800 1 15/60 200 Baseline Survey ...... 600 1 1 600 Completion Survey ...... 400 1 1 400 Follow-up Survey 1 (12 month) ...... 400 1 1 400 ERSG Facilitator...... ERSG Facilitator Program Imple- 8 2 15/60 4 mentation Fidelity Measure. ERSG Facilitator Supervisor ...... ERSG Observational Program Im- 1 16 15/60 4 ERSG Facilitator ...... plementation Fidelity Measure.

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ESTIMATED ANNUALIZED BURDEN HOURS—Continued

Number of Response Total Type of respondent Form name Number of responses per burden burden respondents respondent (hours) hours

ERSG Facilitator ...... Mid-Year Qualitative Interview with 8 1 45/60 6 ERSG Facilitators. End of Year Qualitative Interview 8 1 1 8 with ERSG Facilitators.

Total ...... 1,622

Leroy A. Richardson, Policy and Compliance Group, Office of 4. Notify applicants and beneficiaries Chief, Information Collection Review Office, E-Health Standards & Services, Offices that the records are subject to matching; Office of Scientific Integrity, Office of the of Enterprise Management, CMS, Room and, Associate Director for Science, Office of the S2–24–25, 7500 Security Boulevard, 5. Verify match findings before Director, Centers for Disease Control and Baltimore, Maryland 21244–1850. reducing, suspending, terminating, or Prevention. Comments received will be available for denying an individual’s benefits or [FR Doc. 2013–16772 Filed 7–12–13; 8:45 am] review at this location, by appointment, payments. BILLING CODE 4163–18–P during regular business hours, Monday through Friday from 9:00 a.m.–3:00 B. CMS Computer Matches Subject to p.m., Eastern Time zone. the Privacy Act DEPARTMENT OF HEALTH AND HUMAN SERVICES FOR FURTHER INFORMATION CONTACT: CMS has taken action to ensure that Aaron Wesolowski, Director, all CMPs that this Agency participates Centers for Medicare & Medicaid Verifications Policy & Operations in comply with the requirements of the Services Branch, Division of Eligibility and Privacy Act of 1974, as amended. Enrollment Policy and Operations, Dated: July 6, 2013. Privacy Act of 1974; CMS Computer Center for Consumer Information and Michelle Snyder, Match No. 2013–07; HHS Computer Insurance Oversight, CMS, 7501 Match No. 1303; DoD–DMDC Match No. Chief Operating Officer, Centers for Medicare Wisconsin Avenue, Bethesda, MD & Medicaid Services. 18 20814, Office Phone: (301) 492–4416, Facsimile: (443) 380–5531, Email: CMS Computer Match No. 2013–07 AGENCY: Centers for Medicare & [email protected]. HHS Computer Match No. 1303 Medicaid Services (CMS), Department DoD–DMDC Match No. 18 of Health and Human Services (HHS). SUPPLEMENTARY INFORMATION: NAME: ACTION: Notice of Computer Matching I. Description of the Matching Program Program (CMP). ‘‘Computer Matching Agreement A. General between the Department of Health and SUMMARY: In accordance with the The Computer Matching and Privacy Human Services, Centers for Medicare & requirements of the Privacy Act of 1974, Protection Act of 1988 (Public Law Medicaid Services and the Department as amended, this notice announces the (Pub. L.) 101–503), amended the Privacy of Defense, Defense Manpower Data establishment of a CMP that CMS plans Act (5 U.S.C. 552a) by describing the Center for the Determination of to conduct with the Department of manner in which computer matching Eligibility for the Advance Premium Tax Defense (DoD), Defense Manpower Data involving Federal agencies could be Credit and Cost Sharing Reductions Center (DMDC). We have provided performed and adding certain under the Affordable Care Act.’’ background information about the protections for individuals applying for proposed matching program in the SECURITY CLASSIFICATION and receiving Federal benefits. Section : ‘‘Supplementary Information’’ section 7201 of the Omnibus Budget Unclassified. below. Although the Privacy Act Reconciliation Act of 1990 (Pub. L. 101– requires only that CMS provide an 508) further amended the Privacy Act PARTICIPATING AGENCIES: opportunity for interested persons to regarding protections for such Department of Health and Human comment on the proposed matching individuals. The Privacy Act, as Services (HHS), Centers for Medicare & program, CMS invites comments on all amended, regulates the use of computer Medicaid Services (CMS), and portions of this notice. See ‘‘Effective matching by Federal agencies when Department of Defense (DoD), Defense Dates’’ section below for comment records in a system of records are Manpower Data Center (DMDC). period. matched with other Federal, state, or DATES: Effective Dates: Public comments local government records. It requires AUTHORITY FOR CONDUCTING MATCHING are due 30 days after publication. The Federal agencies involved in computer PROGRAM: matching program shall become matching programs to: This Computer Matching Program effective no sooner than 40 days after 1. Negotiate written agreements with (CMP) is executed to comply with the the report of the Matching Program is the other agencies participating in the provisions of the Privacy Act of 1974 (5 sent to OMB and Congress, or 30 days matching programs; U.S.C. 552a), as amended, the Office of after publication in the Federal 2. Obtain the Data Integrity Board Management and Budget (OMB) Register, whichever is later. approval of the match agreements; Circular A–130 entitled, ‘‘Management ADDRESSES: The public should send 3. Furnish detailed reports about of Federal Information Resources,’’ at 61 comments to: CMS Privacy Officer, matching programs to Congress and FR 6428–6435 (February 20, 1996), and Division of Privacy Policy, Privacy OMB; OMB guidelines pertaining to computer

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matching at 54 FR 25818 (June 19, 1989) DESCRIPTION OF RECORDS TO BE USED IN THE Description: The Runaway and and 56 FR 18599 (April 23, 1991); and MATCHING PROGRAM: SYSTEM OF RECORDS Homeless Youth Act, as amended by the computer matching portions of MAINTAINED BY CMS Public Law 106–71 (42 U.S.C. 5701 et Appendix I to OMB Circular No. A–130 The matching program will be seq.), mandates that the Department of as amended at 61 Fed. Reg. 6428 conducted with data maintained by Health and Human Services (HHS) (February 20, 1996). CMS in the ‘‘Health Insurance report regularly to Congress on the Exchanges (HIX) Program,’’ System No. status of HHS-funded programs serving PURPOSE(S) OF THE MATCHING PROGRAM: 09–70–0560, established at 78 FR 8538 runaway and homeless youth. Such on February 6, 2013, and amended at 78 This Computer Matching Agreement reporting is similarly mandated by the FR 32256 on May 29, 2013. Government Performance and Results (CMA) establishes the terms, conditions, The matching program will also be Act. Organizations funded under the safeguards, and procedures under which conducted with data maintained by DoD Runaway and Homeless Youth program DoD will provide records, information, in the Defense Enrollment Eligibility are required by statute (42 U.S.C. 5712, or data to CMS for purposes of Reporting System (DEERS), System No. 42 U.S.C. 5714–2) to meet certain data determining eligibility for advance DMDC 02 DoD, published November 21, collection and reporting requirements. payment of premium tax credits and 2012, 77 FR 69807, located at the EDS cost sharing reductions under the Service Management Center in Auburn These requirements include Patient Protection and Affordable Care Hills, MI. maintenance of client statistical records Act of 2010 (Pub. L. 111–148), as on the number and the characteristics of amended by the Health Care and INCLUSIVE DATES OF THE MATCH: the runaway and homeless youth, and Education Reconciliation Act of 2010 The CMP shall become effective no youth at risk of family separation, who (Pub. L. 111–152) (collectively, the sooner than 40 days after the report of participate in the project, and the ACA). the Matching Program is sent to OMB services provided to such youth by the and Congress, or 30 days after Under this CMA, DoD will assist CMS project. publication in the Federal Register, by providing certain DoD data which is Respondents: The Runaway and whichever is later. The matching needed to make Eligibility Homeless Youth Act, as amended by program will continue for 18 months Determinations. Data will be matched Public Law 106–71 (42 U.S.C. 5701 et from the effective date and may be for the purpose of assisting CMS or a seq.), mandates that the Department of extended for an additional 12 months State-based Exchange to determine Health and Human Services (HHS) thereafter, if certain conditions are met. eligibility for the following benefits: (1) report regularly to Congress on the An advance premium tax credit under [FR Doc. 2013–16845 Filed 7–12–13; 8:45 am] status of HHS-funded programs serving 26 U.S.C. 36B and (2) a cost sharing BILLING CODE 4120–03–P runaway and homeless youth. Such reduction under Section 1402 of the reporting is similarly mandated by the ACA. Specifically, CMS will use DoD Government Performance and Results data to verify an Applicant or Enrollee’s DEPARTMENT OF HEALTH AND Act. Organizations funded under the eligibility for TRICARE health care as HUMAN SERVICES Runaway and Homeless Youth program required under § 1411(c) of the ACA, Administration for Children and are required by statute (42 U.S.C. 5712, which constitutes minimum essential Families 42 U.S.C. 5714–2) to meet certain data coverage as defined in section 5000A(f) collection and reporting requirements. of the Internal Revenue Code of 1986, 26 Proposed Information Collection These requirements include U.S.C. 5000A, as amended by § 1501 of Activity; Comment Request maintenance of client statistical records the ACA. This data will be used by CMS on the number and the characteristics of in its capacity as a Federally-facilitated Proposed Projects the runaway and homeless youth, and Exchange, and by State-based Exchanges Title: New Runaway and Homeless youth at risk of family separation, who that will receive the results of Youth Management Information System participate in the project, and the verifications using DoD data accessed (NEORHYMIS). services provided to such youth by the through the CMS Data Services Hub. OMB No.: 0970–0123. project.

ANNUAL BURDEN ESTIMATES

Number of Average Instrument Number of responses per burden hours Total burden respondents respondent per response hours

Youth Profile (TLP and BCP Only) ...... 516 79 0.25 10,191 Street Outreach Report ...... 149 9 0.05 67 Brief Contacts ...... 184 114 0.05 1049 Turnaways ...... 95 4 0.05 19 Data Transfer ...... 516 2 0.50 516

Estimated Total Annual Burden information collection described above. Attn: ACF Reports Clearance Officer. Hours: 11,842. Copies of the proposed collection of Email address: In compliance with the requirements information can be obtained and [email protected]. All requests of Section 506(c)(2)(A) of the Paperwork comments may be forwarded by writing should be identified by the title of the Reduction Act of 1995, the to the Administration for Children and information collection. Administration for Children and Families, Office of Planning, Research The Department specifically requests Families is soliciting public comment and Evaluation, 370 L’Enfant comments on: (a) Whether the proposed on the specific aspects of the Promenade SW., Washington, DC 20447, collection of information is necessary

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for the proper performance of the Title: Renewal of Office of annual reporting formats, which functions of the agency, including Community Services (OCS) Community resulted in an overall reduction in whether the information shall have Economic Development (CED) Standard burden for the grantees while practical utility; (b) the accuracy of the Reporting Format significantly improving the quality of agency’s estimate of the burden of the OMB No.: 0970–0386 the data collected by OCS. OCS seeks to proposed collection of information; (c) Description: The Office of Community renew this PPR to continue to collect the quality, utility, and clarity of the Services (OCS) will continue collecting quality data from grantees. To ensure information to be collected; and (d) key information about projects funded the burden on grantees is not increased, ways to minimize the burden of the through the Community Economic all questions on the current PPR will collection of information on Development (CED) program. The remain the same—we propose adding respondents, including through the use legislative requirement for this program only one question to the PPR regarding of automated collection techniques or is in Title IV of the Community other forms of information technology. the total number of jobs grantees are Opportunities, Accountability and creating with grant funds. Many Consideration will be given to Training and Educational Services Act comments and suggestions submitted grantees have asked about this element (COATS Human Services within 60 days of this publication. on the current PPR and currently do not Reauthorization Act) of October 27, have a place to report that information. Robert Sargis, 1998, Public Law 105–285, section This is information that most grantees Reports Clearance Officer. 680(b) as amended. The reporting are already collecting. Adding this field [FR Doc. 2013–16842 Filed 7–12–13; 8:45 am] format, Performance Progress Report will allow grantees to provide this (PPR), collects information concerning BILLING CODE 4184–01–P information in a consistent format and the outcomes and management of CED allow OCS to more accurately reflect the projects. OCS will use the data to total number of jobs created through the DEPARTMENT OF HEALTH AND critically review the overall design and CED program. Since grantees are already HUMAN SERVICES effectiveness of the program. familiar with the current format and The PPR will continue to be elements, and all questions on the PPR Administration for Children and administered to all active grantees of the will remain the same (with one added Families CED program. Grantees will be required to use this reporting tool for their semi- question based on grantee feedback), Proposed Information Collection there will be no additional burden on Activity; Comment Request annual reports to be submitted twice a year. The current PPR replaced both the grantees. Proposed Projects: annual questionnaire and other semi- Respondents: Current CED grantees.

ANNUAL BURDEN ESTIMATES

Number of Average Instrument Number of responses per burden hours Total burden respondents respondent per response hours

Questionnaire for current OCS–CED grantees ...... 170 2 1.50 510

Estimated Total Annual Burden practical utility; (b) the accuracy of the DEPARTMENT OF HEALTH AND Hours: 510 agency’s estimate of the burden of the HUMAN SERVICES In compliance with the requirements proposed collection of information; (c) of Section 506(c)(2)(A) of the Paperwork the quality, utility, and clarity of the Food and Drug Administration Reduction Act of 1995, the information to be collected; and (d) Administration for Children and ways to minimize the burden of the [Docket No. FDA–2013–N–0375] Families is soliciting public comment collection of information on on the specific aspects of the respondents, including through the use Agency Information Collection information collection described above. of automated collection techniques or Activities; Submission for Office of Management and Budget Review; Copies of the proposed collection of other forms of information technology. Comment Request; Agreement for information can be obtained and Consideration will be given to Shipment of Devices for Sterilization comments may be forwarded by writing comments and suggestions submitted to the Administration for Children and within 60 days of this publication. AGENCY: Food and Drug Administration, Families, Office of Planning, Research HHS. and Evaluation, 370 L’Enfant Robert Sargis, Promenade SW., Washington, DC 20447, Reports Clearance Officer. ACTION: Notice. Attn: ACF Reports Clearance Officer. [FR Doc. 2013–16874 Filed 7–12–13; 8:45 am] SUMMARY: The Food and Drug Email address: BILLING CODE 4184–01–P [email protected]. All requests Administration (FDA) is announcing should be identified by the title of the that a proposed collection of information collection. information has been submitted to the The Department specifically requests Office of Management and Budget comments on: (a) Whether the proposed (OMB) for review and clearance under collection of information is necessary the Paperwork Reduction Act of 1995. for the proper performance of the DATES: Fax written comments on the functions of the agency, including collection of information by August 14, whether the information shall have 2013.

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ADDRESSES: To ensure that comments on mechanism by which firms may because some firms provide sterilization the information collection are received, manufacture and label medical devices services on a part-time basis for only OMB recommends that written as sterile at one establishment and ship one customer, while others are large comments be faxed to the Office of the devices in interstate commerce for facilities with many customers. The Information and Regulatory Affairs, sterilization at another establishment, a average time required to prepare each OMB, Attn: FDA Desk Officer, FAX: practice that facilitates the processing of written agreement is estimated to be 4 202–395–7285, or emailed to devices and is economically necessary hours. This estimate varies depending [email protected]. All for some firms. Under § 801.150(e)(1), on whether the agreement is the initial comments should be identified with the manufacturers and sterilizers may sign agreement or an annual renewal, on the OMB control number 0910–0131. Also an agreement containing the following: format each firm elects to use, and on include the FDA docket number found (1) Instructions for maintaining the length of time required to reach in brackets in the heading of this accountability of the number of units in agreement. The estimate applies only to document. each shipment, (2) acknowledgment that those portions of the written agreement FOR FURTHER INFORMATION CONTACT: the devices that are nonsterile are being that pertain to the requirements Daniel Gittleson, Office of Information shipped for further processing, and (3) imposed by this regulation. The written Management, Food and Drug specifications for sterilization agreement generally also includes Administration, 1350 Piccard Dr., PI50– processing. This agreement allows the contractual agreements that are a 400B, Rockville, MD 20850, 301–796– manufacturer to ship misbranded customary and usual business practice. 5156, [email protected]. products to be sterilized without On the average, the total annual initiating regulatory action and provides recordkeeping burden is 7,200 hours. SUPPLEMENTARY INFORMATION: In FDA with a means to protect consumers compliance with 44 U.S.C. 3507, FDA The recordkeeping requirements of from use of nonsterile products. During has submitted the following proposed § 801.150(a)(2) consist of making copies routine plant inspections, FDA normally collection of information to OMB for and maintaining the actual reporting reviews agreements that must be kept review and clearance. requests which were required under the for 2 years after final shipment or reporting section of this collection. To Agreement for Shipment of Devices for delivery of devices (§ 801.150(a)(2)). fulfill this requirement, FDA estimates it Sterilization—21 CFR 801.150(e) (OMB The respondents to this collection of will take about 30 minutes to copy each Control Number 0910–0131)—Extension information are device manufacturers package, for a total of 900 recordkeeping Under sections 501(c) and 502(a) of and contract sterilizers. FDA’s estimate hours. the Federal Food, Drug, and Cosmetic of the reporting burden is based on In the Federal Register of April 5, Act (the FD&C Act) (21 U.S.C. 351(c) actual data obtained from industry over 2013 (78 FR 20658), FDA published a and 352(a)), nonsterile devices that are the past several years where there are 60-day notice requesting public labeled as sterile but are in interstate approximately 90 firms subject to this comment on the proposed collection of transit to a facility to be sterilized are requirement. It is estimated that each of information. No comments were adulterated and misbranded. FDA these firms on the average prepares 20 received. regulations in § 801.150(e) (21 CFR written agreements each year. This FDA estimates the burden of this 801.150(e)) establish a control estimate varies greatly, from 1 to 100, collection of information as follows:

TABLE 1—ESTIMATED ANNUAL REPORTING BURDEN 1

Number of Average Activity/21 CFR section Number of responses per Total annual burden per Total hours respondents respondent responses response

Agreement and labeling requirements, § 801.150(e) ...... 90 20 1,800 4 7,200 1 There are no capital costs or operating and maintenance costs associated with this collection of information.

TABLE 2—ESTIMATED ANNUAL RECORDKEEPING BURDEN 1

Number of Average Activity/21 CFR section Number of records per Total annual Burden per Total hours recordkeepers recordkeeper records Recordkeeping

Record retention, § 801.150(a)(2) ...... 90 20 1,800 2 0.5 900 1 There are no capital costs or operating and maintenance costs associated with this collection of information. 2 30 minutes.

Dated: July 10, 2013. Leslie Kux, Assistant Commissioner for Policy. [FR Doc. 2013–16867 Filed 7–12–13; 8:45 am] BILLING CODE 4160–01–P

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DEPARTMENT OF HEALTH AND stakeholders with an overview and MD 20857, 301–827–9363, email: HUMAN SERVICES progress of current relevant data [email protected]. standards initiatives. The plan will be For more information on this funding Food and Drug Administration updated quarterly to indicate progress of opportunity announcement (FOA) and current projects as well as initiation of [Docket No. FDA–2013–N–0812] to obtain detailed requirements, please new projects. refer to the full FOA located at These documents are available from Electronic Study Data Submission; www.fda.gov/food/newsevents/ the CDER Data Standards Program Web Data Standard Support; Availability of default.htm. the Center for Drug Evaluation and site at: http://www.fda.gov/Drugs/ Research Data Standards Program DevelopmentApprovalProcess/ SUPPLEMENTARY INFORMATION: Documents FormsSubmissionRequirements/ ElectronicSubmissions/ucm249979.htm. I. Funding Opportunity Description AGENCY: Food and Drug Administration, Dated: July 10, 2013. RFA–FD–13–036 HHS. Leslie Kux, ACTION: 93.103 Notice. Assistant Commissioner for Policy. A. Background SUMMARY: The Center for Drug [FR Doc. 2013–16861 Filed 7–12–13; 8:45 am] BILLING CODE 4160–01–P Evaluation and Research (CDER) of the The STDF is a unique global Food and Drug Administration (FDA) is partnership established by the Food and announcing the availability of the CDER DEPARTMENT OF HEALTH AND Agriculture Organization, World Data Standards Strategy (version 1.0) HUMAN SERVICES Organization for Animal Health, World and the CDER Data Standards Strategy— Bank, World Health Organization Action Plan (version 1.0). This action is Food and Drug Administration (WHO) and the WTO. The STDF being taken to ensure that all interested supports developing countries in stakeholders are aware that the data [Docket No. FDA–2013–N–0010] building their capacity to implement standards program documents are international sanitary and phytosanitary available and is intended to increase Cooperative Agreement to Support the (SPS) standards, guidelines, and awareness of CDER’s data standards World Trade Organization’s Standards recommendations as a means to plans, ongoing projects, and avenues of and Trade Development Facility improve their human, animal, and plant communication. Comments may be AGENCY: Food and Drug Administration, health status and ability to gain or submitted to the email address listed HHS. maintain access to markets. In achieving below. ACTION: Notice. its aims, the STDF acts as both a FOR FURTHER INFORMATION CONTACT: coordinating and a financing Office of Strategic Programs, Center for SUMMARY: The Food and Drug mechanism. Drug Evaluation and Research, Food Administration (FDA) is announcing its The STDF is a widely established and Drug Administration, 10903 New intention to receive and consider a knowledge platform for information Hampshire Ave., Bldg. 51, Rm. 1100, single source application for the award exchange, sharing experiences and the Silver Spring, MD 20993, 301–796– of a cooperative agreement in fiscal year identification and dissemination of good 3800; email: 2013 (FY 2013) to the World Trade practice on SPS-related technical [email protected]. Organization’s (WTO) Standards and Trade Development Facility (STDF). cooperation. Since 2004, over 60 SUPPLEMENTARY INFORMATION: projects and 52 project preparation DATES: Important dates are as follows: On December 5, 2012, the CDER Data 1. The application due date is August grants have assisted developing Standards Strategy (version 1.0) was 1, 2013. countries to overcome SPS constraints, released. Its purpose is to reinforce 2. The anticipated start date is and gain and maintain market access. FDA’s ongoing commitment to the September 2013. Over 50% have benefited least development, implementation, and 3. The expiration date is August 2, developed and other low-income maintenance of a comprehensive data 2013. countries. standards program to facilitate the The STDF utilizes a key decision- efficient and effective review of ADDRESSES: Submit electronic support tool, Multi-Criteria Decision regulatory submissions so that safe and applications to: http://www.grants.gov. Analysis (MCDA), to help establish SPS effective products can get to market For more information, see section III of priorities and ensure resources are used sooner. It is aligned with the objectives the SUPPLEMENTARY INFORMATION section as efficiently as possible. The use of the of FDA’s Strategic Plan and the of this notice. MCDA tool is unique within the STDF performance goals of the Prescription FOR FURTHER INFORMATION CONTACT: and is a highly-valued attribute; the Drug User Fee Act V Reauthorization as Scientific/Programmatic Contact: Julie MCDA tool facilitates an open and captured in the FDA Safety and Moss, Center for Food Safety and transparent discussion among public Innovation Act. The CDER Data Applied Nutrition (HFS–550), Food and and private stakeholders about capacity- Standards Strategy supersedes version Drug Administration, 5100 Paint Branch building needs and resources. The STDF 1.1 of the CDER Data Standards Plan, Pkwy., College Park, MD 20740, 240– which was issued in December 2010. 402–2031, email: is committed to the Paris Principles on The first release of the companion [email protected]. Aid Effectiveness and to achieving the document to the Data Standards Grants Management Contact: Millennium Development Goals. Strategy, the CDER Data Standards Kimberly Pendleton Chew, Office of With an increasingly diverse and Strategy—Action Plan, was issued on Acquisitions and Grant Services (HFA– complex global food supply, FDA’s March 20, 2013. The Action Plan 500), Food and Drug Administration, interest is to strengthen food safety provides internal and external 5630 Fishers Lane, rm. 2105, Rockville, systems globally to prevent food safety

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problems rather than merely reacting to regional, and global level. Engaging the registration/registrationInstructions.jsp. problems after they occur. FDA STDF through this cooperative After you have followed these steps, recognizes that it cannot do this alone. agreement will provide FDA with ample submit electronic applications to: By leveraging with other WTO member opportunities to leverage additional http://www.grants.gov. countries and partnering with the STDF, resources among WTO member Dated: July 10, 2013. FDA can broaden the reach of food countries. Leslie Kux, safety capacity building efforts. Overall, the objectives of the STDF are Assistant Commissioner for Policy. This cooperative agreement will allow directly in line with the objectives of FDA to deepen its international food this cooperative agreement. This ability [FR Doc. 2013–16860 Filed 7–12–13; 8:45 am] safety capacity building partnerships, to advance the objectives of this BILLING CODE 4160–01–P provide a wider scope of impact than cooperative agreement through member exists currently and leverage resources country engagement and leveraging is a DEPARTMENT OF HEALTH AND with other countries. requisite for success. HUMAN SERVICES B. Research Objectives II. Award Information/Funds Available Food and Drug Administration The purpose of this cooperative A. Award Amount agreement is to: 1. Contribute to the knowledge base The Center for Food Safety and [Docket No. FDA–2013–D–0814] and development of food safety systems Applied Nutrition intends to fund one globally due to the increasingly diverse award up to $750,000 total costs (direct Draft Guidance for Industry on and complex food supply; plus indirect costs) for FY 2013. Future Pediatric Study Plans: Content of and 2. Enhance and broaden FDA’s ability year amounts will depend on annual Process for Submitting Initial Pediatric to address global food safety and public appropriations and successful Study Plans and Amended Pediatric health issues associated with food; performance. Study Plans; Availability 3. Provide opportunities to leverage B. Length of Support AGENCY: Food and Drug Administration, additional resources among WTO HHS. member countries; The award will provide 1 year of 4. Support FDA’s Food Safety support and include future ACTION: Notice. recommended support for 4 additional Modernization Act (FSMA) and its SUMMARY: The Food and Drug years, contingent upon satisfactory International Food Safety Capacity Administration (FDA) is announcing the performance in the achievement of Building Plan, which emphasizes the availability of a draft guidance for project and program reporting objectives concept of preventing food safety- industry entitled ‘‘Pediatric Study during the preceding year and the related problems before they occur and Plans: Content of and Process for availability of Federal fiscal year the importance of establishing strong Submitting Initial Pediatric Study Plans appropriations. relationships and mutual support and Amended Pediatric Study Plans.’’ among all stakeholders, including III. Electronic Application, This draft guidance is intended to multilateral organizations, to improve Registration, and Submission provide information to industry on how worldwide food safety. Only electronic applications will be to submit initial and amended pediatric C. Eligibility Information accepted. To submit an electronic study plans (PSPs) as required under the Federal Food, Drug, and Cosmetic Act Competition is limited to the STDF application in response to this FOA, (FD&C Act) as amended by the Food and hosted by the WTO. The STDF is a applicants should first review the full Drug Administration Safety and global partnership with a well- announcement located at www.fda.gov/ Innovation Act (FDASIA). established, trusted presence and is food/newsevents/default.htm. (FDA has uniquely qualified to further the global verified the Web site addresses DATES: Although you can comment on food safety capacity building objectives throughout this document, but FDA is any guidance at any time (see 21 CFR of this cooperative agreement. STDF’s not responsible for any subsequent 10.115(g)(5)), to ensure that the Agency mandate is to: (1) Increase awareness, changes to the Web sites after this considers your comment on this draft mobilize resources, strengthen document publishes in the Federal guidance before it begins work on the collaboration, identify and disseminate Register.) For all electronically final version of the guidance, submit good practice; and (2) provide support submitted applications, the following either electronic or written comments and funding for the development and steps are required. on the draft guidance by September 13, implementation of projects that promote • Step 1: Obtain a Dun and Bradstreet 2013. compliance with international SPS (DUNS) Number ADDRESSES: Submit written requests for requirements. • Step 2: Register With System for single copies of the draft guidance to the An independent external evaluation Award Management (SAM) Division of Drug Information, Center for of the STDF in 2008 concluded that the • Step 3: Obtain Username & Drug Evaluation and Research, Food STDF ‘‘carries out an important role that Password and Drug Administration, 10903 New no other single body would be able to • Step 4: Authorized Organization Hampshire Ave., Bldg. 51, Rm. 2201, accomplish.’’ (Source: STDF Newsletter, Representative (AOR) Authorization Silver Spring, MD 20993–0002, or Office Vol. 2, Issue 1, February 2009, • Step 5: Track AOR Status of Communication, Outreach, and accessible at: www.standardsfacility.org) • Step 6: Register With Electronic Development (HFM–40), Center for As such, the STDF is uniquely equipped Research Administration (eRA) Biologics Evaluation and Research, to fulfill the objectives of this Commons Steps 1 through 5, in detail, Food and Drug Administration, 1401 cooperative agreement due to its diverse can be found at http:// Rockville Pike, Suite 200N, Rockville, access to WTO members in both www07.grants.gov/applicants/ MD 20852–1448. Send one self- developed and developing countries organization_registration.jsp. Step 6, in addressed adhesive label to assist that and its ability to coordinate capacity detail, can be found at https:// office in processing your requests. See building programs at a national, commons.era.nih.gov/commons/ the SUPPLEMENTARY INFORMATION section

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for electronic access to the draft The draft guidance, when finalized, will guidance that may be considered new or guidance document. represent the Agency’s current thinking that would represent material Submit electronic comments on the on the content of and process for modifications to those previously draft guidance to http:// submitting initial PSPs and amended approved collections of information www.regulations.gov. Submit written PSPs. It does not create or confer any found in FDA regulations or guidances. rights for or on any person and does not comments to the Division of Dockets III. Comments Management (HFA–305), Food and Drug operate to bind FDA or the public. An Administration, 5630 Fishers Lane, Rm. alternative approach may be used if Interested persons may submit either 1061, Rockville, MD 20852. such approach satisfies the electronic comments regarding this document to http://www.regulations.gov FOR FURTHER INFORMATION CONTACT: requirements of the applicable statutes or written comments to the Division of Rosemary Addy, Center for Drug and regulations. Dockets Management (see ADDRESSES). It Evaluation and Research, Food and II. The Paperwork Reduction Act of is only necessary to send one set of Drug Administration, 10903 New 1995 comments. Identify comments with the Hampshire Ave., Bldg. 22, Rm. 6312, This draft guidance includes docket number found in brackets in the Silver Spring, MD 20993–0002, 301– information collection provisions that heading of this document. Received 796–1640; or Stephen Ripley, Center for are subject to review by the Office of comments may be seen in the Division Biologics Evaluation and Research Management and Budget (OMB) under of Dockets Management between 9 a.m. (HFM–17), Food and Drug the Paperwork Reduction Act of 1995 and 4 p.m., Monday through Friday, and Administration, 1401 Rockville Pike, (PRA) (44 U.S.C. 3501–3520). The will be posted to the docket at http:// Suite 200N, Rockville, MD 20852, 301– collections of information referenced in www.regulations.gov. 827–6210. this draft guidance that are related to the SUPPLEMENTARY INFORMATION: burden on the submission of IV. Electronic Access I. Background investigational new drug applications Persons with access to the Internet are covered under 21 CFR Part 312, may obtain the document at http:// FDA is announcing the availability of including plans for pediatric studies www.fda.gov/Drugs/Guidance a draft guidance for industry entitled under 21 CFR 312.47(b)(1)(iv) and ComplianceRegulatoryInformation/ ‘‘Pediatric Study Plans: Content of and waiver requests under 21 CFR 312.10, Guidances/default.htm, http:// Process for Submitting Initial Pediatric and have been approved under OMB www.fda.gov/BiologicsBloodVaccines/ Study Plans and Amended Pediatric control number 0910–0014. The GuidanceComplianceRegulatory Study Plans.’’ The purpose of this draft collections of information referenced in Information/default.htm, or http:// guidance is to assist sponsors in the this draft guidance that are related to the www.regulations.gov. submission of an initial PSP and any burden on the submission of new drug Dated: July 9, 2013. amendments to the PSP. Specifically, applications are covered under 21 CFR Leslie Kux, this guidance addresses FDA’s current Part 314, including pediatric use Assistant Commissioner for Policy. thinking regarding implementation of information under 21 CFR 314.50(d)(7) the requirement for sponsors to submit and waiver requests under 21 CFR [FR Doc. 2013–16825 Filed 7–12–13; 8:45 am] an initial PSP under section 505B of the 314.90, and have been approved under BILLING CODE 4160–01–P FD&C Act as amended by FDASIA (Pub. OMB control number 0910–0001. The L. 112–144, 126 Stat. 993 (enacted July collections of information referenced in DEPARTMENT OF HEALTH AND 9, 2012)). this draft guidance that are related to the HUMAN SERVICES This draft guidance addresses topics burden on the submission of biologic related to the submission of an initial license applications are covered under Food and Drug Administration PSP and any amendments to the PSP, 21 CFR Part 601, including pediatric use including who must submit an initial information and waiver requests under [Docket No. FDA–2012–D–0322] PSP, when a PSP must be submitted, 21 CFR 601.27, and have been approved Draft Guidance for Industry on Arsenic what is expected to be included in an under OMB control number 0910–0338. initial PSP, and what is expected to be Sponsors are already required to in Apple Juice: Action Level; included in a requested amendment to submit plans for pediatric studies and Supporting Document for Action Level an initial PSP. The guidance also often provide the information outlined for Arsenic in Apple Juice; A includes a template that should be used in this guidance pursuant to the Quantitative Assessment of Inorganic for submission of an initial PSP. regulations noted above. The new Arsenic in Apple Juice; Availability This draft guidance does not contain FDASIA provisions primarily serve to AGENCY: Food and Drug Administration, a discussion of general requirements for establish a more precise timeline for the HHS. pediatric drug development under the submission of that information; ACTION: Notice. Pediatric Research Equity Act. That however, some of the information may topic is addressed in the draft guidance be considered a new collection of SUMMARY: The Food and Drug for industry entitled ‘‘How to Comply information. Federal law at 44 U.S.C. Administration (FDA) is announcing the With the Pediatric Research Equity 3506(c)(2)(A) requires Federal Agencies availability of a draft guidance for Act.’’ 1 to publish a 60-day notice in the industry entitled ‘‘Arsenic in Apple This draft guidance is being issued Federal Register for each proposed Juice: Action Level’’ and two supporting consistent with FDA’s good guidance collection of information before documents entitled ‘‘Supporting practices regulation (21 CFR 10.115). submitting the collection to OMB for Document for Action Level for Arsenic approval. To comply with this in Apple Juice’’ (the draft supporting 1 When final, this guidance will represent the requirement, FDA will publish a 60-day document) and ‘‘A Quantitative FDA’s current thinking on this topic. For the most notice of the proposed collection of Assessment of Inorganic Arsenic in recent version of a guidance, check the FDA Drugs guidance Web page at http://www.fda.gov/Drugs/ information in a future issue of the Apple Juice’’ (the risk assessment GuidanceComplianceRegulatoryInformation/ Federal Register for any information document). The supporting documents Guidances/default.htm. collections recommended in this are referenced in the draft guidance. The

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draft guidance identifies for the industry provides estimates of arsenic exposure DEPARTMENT OF HEALTH AND an action level for inorganic arsenic in and risk to humans at different HUMAN SERVICES apple juice that FDA considers hypothetical limits for inorganic arsenic protective of human health and in apple juice. Food and Drug Administration achievable with the use of good FDA considers the 10 mg/kg action [Docket No. FDA–2013–N–0001] manufacturing practices. It also level to be protective of human health describes FDA’s intended sampling and and to be achievable with the use of Risk Communications Advisory enforcement approach. Committee; Notice of Meeting good manufacturing practices, but FDA DATES: Although you can comment on any guidance at any time (see 21 CFR especially welcomes comments and AGENCY: Food and Drug Administration, 10.115(g)(5)), to ensure that the Agency information bearing on the achievability HHS. considers your comment on the draft of 10 mg/kg, as compared with other ACTION: Notice. guidance before it begins work on the potential action levels. Consistent with This notice announces a forthcoming final version of the guidance, submit 21 CFR 109.6, FDA intends to consider meeting of a public advisory committee either electronic or written comments the action level of 10 ug/kg or 10 ppb of the Food and Drug Administration on the draft guidance by September 13, inorganic arsenic, in addition to other (FDA). The meeting will be open to the 2013. factors, when considering whether to bring enforcement action in a particular public. ADDRESSES: Submit electronic Name of Committee: Risk case. comments on the draft guidance to Communications Advisory Committee. http://www.regulations.gov. Submit The draft guidance is being issued General Function of the Committee: written comments on the draft guidance consistent with FDA’s good guidance To provide advice and to the Division of Dockets Management practices regulation (21 CFR 10.115). recommendations to the Agency on (HFA–305), Food and Drug The draft guidance, when finalized, will FDA’s regulatory issues. Administration, 5630 Fishers Lane, Rm. represent the Agency’s current thinking Date and Time: The meeting will be 1061, Rockville, MD 20852. Submit on arsenic in apple juice. It does not held on August 16, 2013, from 9 a.m. to written requests for single copies of the create or confer any rights for or on any 5 p.m. draft guidance to the Office of Food person and does not operate to bind Location: FDA White Oak Campus, Safety, Center for Food Safety and FDA or the public. An alternate 10903 New Hampshire Ave., Building Applied Nutrition (HFS–317), Food and approach may be used if such approach 31 Conference Center, the Great Room Drug Administration, 5100 Paint Branch satisfies the requirements of the (Rm. 1503), Silver Spring, MD 20993– Pkwy., College Park, MD 20740. Send applicable statutes and regulations. 0002. Information regarding special two self-addressed adhesive labels to accommodations due to a disability, assist that office in processing your II. Comments visitor parking, and transportation may request. See the SUPPLEMENTARY be accessed at: http://www.fda.gov/ INFORMATION section for electronic Interested persons may submit either AdvisoryCommittees/default.htm; under access to the draft guidance. electronic or written comments the heading ‘‘Resources for You,’’ click FOR FURTHER INFORMATION CONTACT: regarding this document according to on ‘‘Public Meetings at the FDA White Lauren Posnick Robin, Center for Food the instructions in the ADDRESSES Oak Campus.’’ Please note that visitors Safety and Applied Nutrition (HFS– section of this document. It is only to the White Oak Campus must enter 317), Food and Drug Administration, necessary to send one set of comments. through Building 1. 5100 Paint Branch Pkwy., College Park, Identify comments with the docket Contact Person: Luis G. Bravo, Risk MD 20740, 240–402–1639. number found in brackets in the Communication Staff, Office of SUPPLEMENTARY INFORMATION: heading of this document. Received Planning, Food and Drug comments may be seen in the Division Administration, 10903 New Hampshire I. Background of Dockets Management between 9 a.m. Ave., Bldg. 32, Rm. 3274, Silver Spring, FDA is announcing the availability of and 4 p.m., Monday through Friday. MD 20993–0002, 240–402–5274, FAX: three documents, a draft guidance for 301–847–8609, email: industry entitled ‘‘Arsenic in Apple III. Electronic Access [email protected], or FDA Advisory Juice: Action Level’’ and supporting Committee Information Line, 1–800– Persons with access to the Internet documents referenced in the draft 741–8138 (301–443–0572 in the guidance, including a draft supporting may obtain the draft guidance, the draft Washington, DC area). A notice in the document entitled ‘‘Supporting supporting document, and the risk Federal Register about last minute Document for Action Level for Arsenic assessment document at either http:// modifications that impact a previously in Apple Juice’’ and a risk assessment www.fda.gov/FoodGuidances or http:// announced advisory committee meeting document entitled ‘‘A Quantitative www.regulations.gov. Always access an cannot always be published quickly Assessment of Inorganic Arsenic in FDA document using the FDA Web site enough to provide timely notice. Apple Juice.’’ The draft guidance listed previously to find the most Therefore, you should always check the identifies an action level for inorganic current version of the guidance. Agency’s Web site at http:// arsenic in apple juice of 10 micrograms/ Dated: July 8, 2013. www.fda.gov/AdvisoryCommittees/ kilogram (mg/kg) or 10 parts per billion Leslie Kux, default.htm and scroll down to the (ppb), and identifies FDA’s intended appropriate advisory committee meeting sampling and enforcement approach. Assistant Commissioner for Policy. link, or call the advisory committee The draft supporting document reviews [FR Doc. 2013–16719 Filed 7–12–13; 8:45 am] information line to learn about possible data on arsenic levels, health effects, BILLING CODE 4160–01–P modifications before coming to the and achievability, and explains FDA’s meeting. rationale for identifying an action level Agenda: On August 16, 2013, the for inorganic arsenic in apple juice of 10 Committee will discuss how FDA can mg/kg. The risk assessment document communicate more effectively with

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health care professionals and other AdvisoryCommittees/ DEPARTMENT OF HEALTH AND stakeholders about the public health AboutAdvisoryCommittees/ HUMAN SERVICES risks posed by counterfeit and ucm111462.htm for procedures on unapproved drugs, in addition to safe public conduct during advisory Health Resources and Services purchasing practices, and how FDA can committee meetings. Administration evaluate that communication and its Notice of this meeting is given under impact. Agency Information Collection FDA intends to make background the Federal Advisory Committee Act (5 Activities: Proposed Collection: Public material available to the public no later U.S.C. app. 2). Comment Request than 2 business days before the meeting. Dated: July 9, 2013. AGENCY: Health Resources and Services If FDA is unable to post the background Leslie Kux, Administration, HHS. material on its Web site prior to the Assistant Commissioner for Policy. ACTION: Notice. meeting, the background material will [FR Doc. 2013–16831 Filed 7–12–13; 8:45 am] be made publicly available at the SUMMARY: In compliance with the location of the advisory committee BILLING CODE 4160–01–P requirement for opportunity for public meeting, and the background material comment on proposed data collection will be posted on FDA’s Web site after projects (Section 3506(c)(2)(A) of the the meeting. Background material is DEPARTMENT OF HEALTH AND Paperwork Reduction Act of 1995), the available at http://www.fda.gov/ HUMAN SERVICES Health Resources and Services AdvisoryCommittees/Calendar/ Administration (HRSA) announces Food and Drug Administration default.htm. Scroll down to the plans to submit an Information appropriate advisory committee meeting Collection Request (ICR), described link. [Docket No. FDA–2013–N–0001] below, to the Office of Management and Procedure: Interested persons may Budget (OMB). Prior to submitting the present data, information, or views, Anesthetic and Analgesic Drug ICR to OMB, HRSA seeks comments orally or in writing, on issues pending Products Advisory Committee; from the public regarding the burden before the committee. Written Cancellation estimate, below, or any other aspect of submissions may be made to the contact the ICR. person on or before August 8, 2013. Oral AGENCY: Food and Drug Administration, DATES: Comments on this Information presentations from the public will be HHS. Collection Request must be received scheduled between approximately 1 ACTION: Notice. within 60 days of this notice. p.m. and 2 p.m. Those individuals ADDRESSES: interested in making formal oral Submit your comments to presentations should notify the contact SUMMARY: The meeting of the Anesthetic [email protected] or mail the HRSA person and submit a brief statement of and Analgesic Drug Products Advisory Information Collection Clearance the general nature of the evidence or Committee scheduled for July 17, 2013, Officer, Room 10–29, Parklawn arguments they wish to present, the is cancelled. This meeting was Building, 5600 Fishers Lane, Rockville, names and addresses of proposed announced in the Federal Register of MD 20857. participants, and an indication of the May 17, 2013 (78 FR 29142 to 29143). FOR FURTHER INFORMATION CONTACT: To approximate time requested to make This meeting has been canceled due to request more information on the their presentation on or before July 31, new information submitted to the proposed project or to obtain a copy of 2013. Time allotted for each application. The Agency intends to the data collection plans and draft presentation may be limited. If the continue evaluating the application and, instruments, email [email protected] number of registrants requesting to as needed, will announce future or call the HRSA Information Collection speak is greater than can be reasonably meeting dates in the Federal Register. Clearance Officer at (301) 443–1984. accommodated during the scheduled SUPPLEMENTARY INFORMATION: When open public hearing session, FDA may FOR FURTHER INFORMATION CONTACT: submitting comments or requesting conduct a lottery to determine the Caleb Briggs, Center for Drug Evaluation information, please include the speakers for the scheduled open public and Research, Food and Drug information request collection title for hearing session. The contact person will Administration, 10903 New Hampshire reference. notify interested persons regarding their Ave., Bldg. 31, Rm. 2417, Silver Spring, Information Collection Request Title: request to speak by August 1, 2013. MD 20993–0002, 301–796–9001, FAX: National Hospital Organ Donation Persons attending FDA’s advisory 301–847–8533, email: Campaign’s Activity Scorecard. OMB committee meetings are advised that the [email protected], or FDA No. 0915-xxxx—New. Agency is not responsible for providing Advisory Committee Information Line, Need and Proposed Use of the access to electrical outlets. 1–800–741–8138 (301–443–0572 in the Information: HRSA’s Healthcare FDA welcomes the attendance of the Washington, DC area), and follow the Systems Bureau, Division of public at its advisory committee prompts to the desired center or product Transplantation administers the Workplace Partnership for Life program meetings and will make every effort to area. Please call the Information Line for under the authority of Section 377A(a) accommodate persons with physical up-to-date information on this meeting. disabilities or special needs. If you of the Public Health Service (PHS) Act, require special accommodations due to Dated: July 9, 2013. (42 U.S.C. 274f-1). The Workplace a disability, please contact Luis G. Bravo Leslie Kux, Partnership for Life program seeks to at least 7 days in advance of the Assistant Commissioner for Policy. increase the number of registered organ, meeting. [FR Doc. 2013–16823 Filed 7–12–13; 8:45 am] eye, and tissue donors and to increase FDA is committed to the orderly awareness about organ donation. HRSA conduct of its advisory committee BILLING CODE 4160–01–P launched a challenge to hospitals meetings. Please visit our Web site at nationwide to assist in this effort by http://www.fda.gov/ conducting donor education and donor

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registry enrollment events in their the programmable PDF is assigned a hospitals to list additional activities will hospitals and communities. The particular number of points based on help to identify best practices that can nation’s 58 organ procurement the activity’s potential for generating be shared with all hospital partners on organizations (OPOs), who already work registrations. monthly webinars. with hospitals on clinical aspects of Hospitals can complete the Activity Likely Respondents: A hospital transplantation, are invited to Scorecard and submit it by email or fax representative, most often the organ participate in HRSA’s National Hospital it to HRSA or to their OPO or DLA. This donation champion identified by the Organ Donation Campaign to increase is a voluntary activity. Hospitals can OPO, can download the form from the number of enrollments in state participate in the campaign without organdonor.gov or receive it from their donor registries. The Campaign supports using the Activity Scorecard. HRSA OPO or Donate Life America (DLA) OPOs by providing fresh anticipates that most hospitals enrolled affiliate. communications materials, facilitating in the campaign (currently 802) will submit a completed Activity Scorecard Burden Statement: Burden in this the sharing of best practices, leveraging context means the time expended by the influence of national associations once a year. Most importantly, the Activity persons to generate, maintain, retain, and organizations related to hospitals disclose or provide the information and organ donation, and offering the Scorecard provides incentive for hospitals to conduct activities that will requested. This includes the time additional incentive of national-level increase the number of registered needed to review instructions; to recognition to hospitals. donors throughout the nation. A list of develop, acquire, install and utilize The National Hospital Organ hospitals that reach these levels will be technology and systems for the purpose Donation Campaign’s Activity Scorecard shared with all campaign participants of collecting, validating and verifying is one piece of this campaign. A during monthly webinars, in monthly information, processing and campaign leadership committee campaign e-newsletters from HRSA, and maintaining information, and disclosing comprised of representatives from in communications pieces sent out by and providing information; to train OPOs, Donate Life America (DLA) the campaign’s ten national partners, personnel and to be able to respond to affiliates, and hospitals helped which include the American Hospital a collection of information; to search conceptualize the Activity Scorecard Association, the Association of Organ data sources; to complete and review which is based on the committee’s Procurement Organizations, and the the collection of information; and to experience of hospital receptivity to American Society of Transplant transmit or otherwise disclose the friendly competition and the Surgeons. In addition, OPOs, DLA information. The total annual burden opportunity to be recognized among affiliates, participating state hospital hours estimated for this Information their peers. The Activity Scorecard associations, HRSA, and the national Collection Request are summarized in provides hospitals that wish to partners can use the results to recognize the table below. participate in the campaign with ideas hospital participation and successes. Total Estimated Annualized burden for outreach activities. Each activity on The ‘‘write-in’’ option that allows hours:

Average bur- Number of re- Number of re- Total re- den per re- Total burden Form Name spondents sponses per sponses sponse (in hours respondent hours)

Name of instrument ...... 802 1 802 1 802

Total ...... 802 1 802 1 802

HRSA specifically requests comments DEPARTMENT OF HEALTH AND this notice: (1) Transfers the Freedom of on (1) the necessity and utility of the HUMAN SERVICES Information Act function from the proposed information collection for the Office of Communications (RA6) to the proper performance of the agency’s Health Resources and Services Office of Management (RB4), Division of functions, (2) the accuracy of the Administration Policy and Information Coordination estimated burden, (3) ways to enhance (RB41); and (2) updates the functional Statement of Organization, Functions statements for the Office of the quality, utility, and clarity of the and Delegations of Authority information to be collected, and (4) the Communications, the Office of use of automated collection techniques This notice amends Part R of the Management, and the Division of Policy or other forms of information Statement of Organization, Functions and Information Coordination. technology to minimize the information and Delegations of Authority of the Chapter RA6—Office of collection burden. Department of Health and Human Communications Dated: July 8, 2013. Services (HHS), Health Resources and Services Administration (HRSA) (60 FR Section RA6–20, Functions Bahar Niakan, 56605, as amended November 6, 1995; Delete the functional statement for the Director, Division of Policy and Information as last amended at 78 FR 38720–38723 Office of Communications (RA6) and Coordination. dated June 27, 2013). replace in its entirety with the [FR Doc. 2013–16894 Filed 7–12–13; 8:45 am] This notice reflects organizational following: BILLING CODE 4165–15–P changes in the Health Resources and The Office of Communications (RA6) Services Administration (HRSA). This provides leadership and general policy notice updates the functional statements and program direction, and conducts for the Office of Communications and and coordinates communications and the Office of Management. Specifically, public affairs activities of the agency.

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Specifically, the Office of coordinates HRSA’s activities in the Dated: July 9, 2013. Communications: (1) Serves as focal areas of human resources management, Mary K. Wakefield, point for coordination of agency including labor relations, personnel Administrator. communications activities with those of security, and performance; (5) [FR Doc. 2013–16899 Filed 7–12–13; 8:45 am] other health agencies within the coordinates the development of policy BILLING CODE 4165–15–P Department of Health and Human and regulations; (6) oversees the Services and with field, state, local, development of annual operating voluntary, and professional objectives and coordinates HRSA work DEPARTMENT OF HEALTH AND organizations; (2) develops and planning and appraisals; (7) directs and HUMAN SERVICES implements national communications coordinates the agency’s organizations, initiatives to inform and educate the functions and delegations of authority National Institutes of Health public, health care professionals, policy programs; (8) administers the agency’s makers, and the media; (3) coordinates, Submission for OMB Review; 30-day Executive Secretariat and committee Comment Request; NIH Office of researches, writes, and prepares management functions; (9) provides speeches and audiovisual presentations Intramural Training & Education staff support to the agency Chief Travel Application for the HRSA Administrator and staff; Official; (10) provides staff support to (4) provides communication and public the Deputy Ethics Counselor; (11) SUMMARY: Under the provisions of affairs expertise and staff advice and directs, coordinates, and conducts Section 3507(a)(1)(D) of the Paperwork support to the Administrator in program workforce development activities for the Reduction Act of 1995, the National and policy formulation and execution agency; and (12) coordinates the Institutes of Health (NIH) has submitted consistent with policy direction implementation of the Freedom of to the Office of Management and Budget established by the Assistant Secretary Information Act for the agency. (OMB) a request for review and for Public Affairs; (5) develops and approval of the information collection implements policies and procedures Division of Policy and Information listed below. This proposed information related to external media relations and Coordination (RB41) collection was previously published in internal employee communications the Federal Register on March 24, 2013, including those for the development, (1) Advises the Administrator and page 17935–17936 and allowed 60-days review, processing, quality control, and other key agency officials on cross- for public comment. One public dissemination of agency cutting policy issues and assists in the comment was received. The purpose of communications materials, including identification and resolution of cross- this notice is to allow an additional 30 exhibits and those disseminated cutting policy issues and problems; (2) days for public comment. The Office of electronically; (6) serves as establishes and maintains tracking the Director (OD), National Institutes of Communications and Public Affairs systems that provide HRSA-wide Health, may not conduct or sponsor, Officer for the agency including coordination and clearance of policies, and the respondent is not required to establishment and maintenance of regulations and guidelines; (3) plans, respond to, an information collection productive relationships with the news organizes and directs the Executive that has been extended, revised, or media; (7) serves as focal point for Secretariat with primary responsibility implemented on or after October 1, intergovernmental affairs for the agency; for preparation and management of 1995, unless it displays a currently valid and (8) manages audio, visual, and written correspondence; (4) arranges OMB control number. multimedia activities in support of briefings for Department officials on Direct Comments to OMB: Written communications efforts through critical policy issues and oversees the comments and/or suggestions regarding multiple media formats. development of necessary briefing the item(s) contained in this notice, Chapter RB4—Office of Management documents; (5) coordinates the especially regarding the estimated preparation of proposed rules and public burden and associated response Section RB4–20, Functions regulations relating to HRSA programs time, should be directed to the: Office Delete the functional statement for the and coordinates review and comment of Management and Budget, Office of immediate Office of Management (RB4) on other Department regulations and Regulatory Affairs, and the Division of Policy and policy directives that may affect HRSA [email protected] or by Information Coordination (RB41) and programs; (6) oversees and coordinates fax to 202–395–6974, Attention: NIH replace in its entirety with the the committee management activities; Desk Officer. following: and (7) coordinates the review and Comment Due Date: Comments publication of Federal Register Notices; regarding this information collection are Office of Management (RB4) and (8) coordinates the implementation best assured of having their full effect if Provides HRSA-wide leadership, of the Freedom of Information Act for received within 30-days of the date of program direction, and coordination of the agency. this publication. all phases of administrative FOR FURTHER INFORMATION CONTACT: To management. Specifically, the Office of Section RB4–30, Delegations of obtain a copy of the data collection Management: (1) Provides management Authority plans and instruments or request more expertise, staff advice, and support to information on the proposed project All delegations of authority and re- the Administrator in program and contact: Dr. Patricia Wagner; Director of delegations of authority made to HRSA policy formulation and execution; (2) Admissions & Registrar; Office of provides administrative management officials that were in effect immediately Intramural Training & Education; services including human resources, prior to this reorganization, and that are National Institutes of Health; 2 Center property management, space planning, consistent with this reorganization, Drive: Building 2/Room 2E06; Bethesda, safety, physical security, and general shall continue in effect pending further Maryland 20892–0234; or call 240–476– administrative services; (3) conducts re-delegation. 3619 or Email your request, including HRSA-wide workforce analysis studies This reorganization is effective upon your address to: [email protected]. and surveys; (4) plans, directs, and date of signature. Formal requests for additional plans and

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instruments must be requested in proposed information collection is sensitive data, future networking writing. necessary in order to determine the contact, travel information, as well as Proposed Collection: NIH Office of eligibility and quality of potential feedback questions about interviews and Intramural Training & Education awardees for traineeships in these application submission experiences. Application, 0925–0299 Revision, Office programs. The applications for Sensitive data collected on the of the Director (OD), National Institutes admission consideration include key applicants, race, gender, ethnicity, of Health (NIH). areas such as: Personal information, disability, and recruitment method, are Need and Use of Information eligibility criteria, contact information, made available only to OITE staff Collection: The Office of Intramural student identification number, training members or in aggregate form to select Training & Education (OITE) program selection, scientific discipline NIH offices and are not used by the administers a variety of programs and interests, educational history, admission committee for admission initiatives to recruit pre-college through standardized examination scores, consideration; optional to submit. post-doctoral educational level reference information, resume OMB approval is requested for 3 individuals into the National Institutes components, employment history, years. There are no costs to respondents of Health Intramural Research Program employment interests, dissertation other than their time. The total (NIH–IRP) to facilitate develop into research details, letters of estimated annualized burden hours are future biomedical scientists. The recommendation, financial aid history, 18,354.00.

ESTIMATED ANNUALIZED BURDEN HOURS

Estimated Estimated number of Estimated total Estimated total Type of respondent number of responses annual burden annual burden respondents annually per hours hours respondent

Summer Internship Program in Biomedical Research (SIP) ...... 6,820.0 1.0 1.0 6,820.00 Biomedical Engineering Summer Internship Program (BESIP) ...... 80.0 1.0 1.0 80.00 Post-baccalaureate Training Program (PBT) ...... 1,885.0 1.0 1.0 1,885.00 Community College Summer Enrichment Program (CCSEP) ...... 100.0 1.0 1.0 100.00 Technical Training Program (PBT) ...... 115.0 1.0 1.0 115.00 Graduate Partnerships Program (GPP)—Application (Select Institutional Partnerships) ...... 250.0 1.0 1.0 250.00 Graduate Partnerships Program (GPP)—Registration (Select Institutional Partnerships + Individual Partnership) ...... 140.0 1.0 1.0 140.00 National Graduate Student Research Conference (NGSRC) ...... 800.0 1.0 1.0 800.00 Undergraduate Scholarship Program (UGSP) ...... 200.0 1.0 1.0 200.00 Alumni Database ...... 1,900.0 1.0 1.0 1,900.00 UGSP—Certificate of Eligibility (Completed by Applicant) ...... 200.0 1.0 3/60 10.00 UGSP—Certificate of Eligibility (Completed by University Staff) ...... 200.0 1.0 15/60 50.00 UGSP—Deferment Form (Completed by Applicant) ...... 40.0 1.0 3/60 2.00 UGSP—Deferment Form (Completed by University Staff) ...... 40.0 1.0 15/60 10.00 Reference Recommendation Letters for All Programs ...... 23,235.0 1.0 15/60 5,808.75 Survey—Race-Ethnicity-Gender-Birth Year (25% Response Rate) ...... 3,073.0 1.0 3/60 153.65 Survey—Time to Complete Application Form (4% Response Rate) ...... 492.0 1.0 3/60 24.60 Survey—GPP Interview Experience (60% Response Rate) ...... 30.0 1.0 10/60 5.0

Totals ...... 39,600.0 N/A N/A 18,354.00

Dated: July 1, 2013. 20850 which was published in the DEPARTMENT OF HEALTH AND Richard Wyatt, Federal Register on June 17, 2013, HUMAN SERVICES Executive Director, Office of Intramural 78FR36201. Research, OD, National Institutes of Health. This notice is being amended to Substance Abuse and Mental Health [FR Doc. 2013–16887 Filed 7–12–13; 8:45 am] change the meeting format from a face Services Administration BILLING CODE 4140–01–P to face meeting to a teleconference. Also Agency Information Collection the meeting date and time are now 10:30 Activities: Submission for Office of DEPARTMENT OF HEALTH AND a.m. to 12:00 p.m. on August 12, 2013. Management and Budget (OMB) HUMAN SERVICES The meeting is closed to the public. Review; Comment Request Dated: July 9, 2013. National Institutes of Health David Clary, Periodically, the Substance Abuse and Mental Health Services Administration National Cancer Institute; Amended Program Analyst, Office of Federal Advisory (SAMHSA) will publish a summary of Notice of Meeting Committee Policy. [FR Doc. 2013–16791 Filed 7–12–13; 8:45 am] information collection requests under OMB review, in compliance with the Notice is hereby given of a change in BILLING CODE 4140–01–P the meeting of the National Cancer Government Paperwork Elimination Act Institute Special Emphasis Panel, July (GPEA) 44 U.S.C. 3504. To request a 30, 2013, 9:00 a.m.–4:00 p.m., National copy of these documents, call the Cancer Institute, 9609 Medical Center SAMHSA Reports Clearance Officer at Drive, Room 2W908 Rockville, MD, (240) 276–1243.

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Project: Mandatory Guidelines for report results, and for the Medical used as a paper form or as an electronic Federal Workplace Drug Testing Review Officer (MRO) to make a form. Programs (OMB No. 0930–0158)— determination. The current OMB- • The first change to the Federal CCF Revision approved Federal CCF has an August is to allow the Public Burden Statement SAMHSA will request OMB approval 31, 2013 expiration date. In accordance to be a separate page of an electronic for the Federal Drug Testing Custody with the GPEA, OMB set terms of Federal CCF. The Public Burden and Control Form (Federal CCF) for clearance for the extension of the Statement must appear on all federal federal agency and federally regulated current Federal CCF as follows: Prior to government forms that place a reporting drug testing programs which must the next approval of this package, the burden on gathering information. Agency (SAMHSA) shall provide a comply with the HHS Mandatory • The second change is to allow the progress update on adoption of Guidelines for Federal Workplace Drug Federal CCF instructions and the electronic forms in an effort to reduce Testing Programs (73 FR 71858) dated Privacy Act Statement to be on a burden. SAMHSA is encouraged to November 25, 2008, and OMB approval separate page or pages of an electronic explore ways to convert the Federal for the information provided by test Federal CCF. facilities (i.e., laboratories and Drug Testing Custody and Control Form • The third change is to allow the Instrumented Initial Test Facilities, (Federal CCF) into an electronic form. bottle labels/seals to be printed IITFs) for the National Laboratory In an effort to comply with the stated separately, and not as a part of Copy 1 Certification Program (NLCP). terms of the clearance requirement set of the Federal CCF. The Federal CCF is used by all federal forth by OMB, SAMHSA will authorize • agencies and employers regulated by the the use of an electronic Federal CCF. The fourth change is to revise the Department of Transportation (DOT) to SAMHSA has resubmitted the Federal Federal CCF Instructions to allow the document the collection and chain of CCF with no content revisions to the use of an electronic form. custody of drug testing specimens at the form for OMB approval. The only Below is a copy of the Federal CCF: collection site, for the test facility to revisions are to enable the form to be BILLING CODE 4162–20–P

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FEDERAL DRUG TESTING CUSTODY AND CONTROL FORM

1111111111111111111111111111111

SPECIMEN 10 NO. 0000001 STEP 1: COMPLETED ElY COLLECTOR OR EMPLOYER REPRESENTATIVE ACCESSION NO. A.. Emplo)l!>f Name, Address, J.D. No. EI. MRO Name, Address, Phone Nth and Fax No.

C.oooorSSNor EmplO)l!>e 1.0.• _. ______D. Sprelly Testing AUl!lorny. NRC o DOT - Specify DOT Agency: 0 FMCSA 0 FAA 0 FAA 0 ITA 0 PHMSA 0 USCG E. R_onlor Tesl: 0 l're-llfllll!oylMRI 0 Random 0 RU$llnllblG Suspll::iooJCausG 0 Post Accident 0 R~lurn 10 !luly 0 FoIOOl4.Jp 0 OthGf (specilyl ______F; Drug Tesls to be peflormad: 0 THC, COC, pcp, 01"1, AMP 0 THC & COC Only 0 Otoor (specify) ______G. Collection Site Addmss: Collector Phona No. ______

RECEIVED AT IITF: X

DMDMA o DILUTE o REJECTED FOR TESTING o ADULTERATED o SUBSTITUTED o INVALID RESULT

REMARK~ ______

STEP 5B: COMPLETED BY SPLlTTESTlNG LABORATORY o SPLIT SPECIMEN TESTED; SEE LABORATORY REPORT

0000001 A SPECIMEN BOTTLE SEAL 0000001 B SPECIMEN BOTTLE (SPuT) SP!;CI~AEN ID NO. SEAL

Paper CCF: Back of Copy 1–4 person is not required to respond to, a information is estimated to average: 5 Electronic CCF: Separate Page collection of information unless it minutes/donor; 4 minutes/collector; 3 displays a currently valid OMB control minutes/test facility; and 3 minutes/ Public Burden Statement number. The OMB control number for Medical Review Officer. Send Public Burden Statement: An agency this project is 0930–0158. Public comments regarding this burden may not conduct or sponsor, and a reporting burden for this collection of estimate or any other aspect of this

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collection of information, including 1 Choke Cherry Road, Room 2–1057, suggestions for reducing this burden, to Rockville, Maryland, 20857. SAMHSA Reports Clearance Officer,

FEDERAL DRUG TESTING CUSTODY AND CONTROL FORM

SPl'iCIMEN ID NO. 0000001

C. Dooor SSN '" Empklye" til D. Specify Tem".,,, 1wII>",ity: 0 HHS 0 NAC o OCT -SpeclfyOOT At:t<>n"l': 0 !'MCSA 0 FAA 0 FAA 0 FTA 0 PHMSA 0 USCG E. A"""",n fi:Jr Teol: 0 ~aym

In """"m,,,,,,,, ..,til app/i""b!<> F"'*-i ..quir"""",1l!, my ~Iio

X 1lI_l>f ___'wOflicor tI'!IIIIITl_"'" _0IIIt:0<._1Rr0l, ilL L•• ll ~v...Iiif~ STEP 1: COMPLETED BY MEDICAL REVIEW OFFICER -SPLIT SPECIMEN In """orda""" ..,til app/ioab!<> F~I "'~!1Il!, my ~Iioo for Ill" opiil spoofmen (ff 1ss1«l) ill: o RECONFIRMED tor: D TEST CANCELLED o FAILED 10 RECONFIRM tor: ""' .. ""''''''',

X ~~OlMOOi_~w~ lI'illRTj __~'._'!l'i.tlil' [soil ~ilil~'!

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FEDERAL DRUG TESTING CUSTODY AND CONTROL FORM

SPECIMEN ID NO~ 0000001 STEP 1: COMPLETED BY COLLECTOR OR EMPLOYER REPRESENTATIVE ACCESSION NO.

c, 0000' SSN .oifyl ______IF Drug rei'll" to be Pe"orrrn;d: 0 THe, cae, pcp, OPI, AMP 0 THe &. CDC Only 0 Other G. conect;"" Site Add""""

CoIIed",PhOl1e 1'«.'),, ______

In """".,-d.,n"" willl ~

Ix i I SI_m_ooI' II'flIIlT _""_... 0fIl00r·._ flr"'M~La.f o...~_, STEP 1: COMPLETED BY MEDICAL REVIEW OFFICER . SPLIT SPECIMEN In"oo~ willl ~"""'" Frodeml "'~"'" my 1ffrii

REMARKS:

It i!§gnatme a DiaiCil ~W:mfi£lf tpRfilj ~ Rw:ieWi.':i~reRiliiH ~Fis1. lilt E.Mij ~1liI~'i

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FEDERAL DRUG TESTING CUSTODY AND CONTROL FORM

SPECIMEN ID 1\10, 0000001 STEP 1: COMPLETED BV COLLEClOR OR EMPLOYER REPRESENTATIVE ACCESSION NO,

C,O""", SSNm Eml>~" UJ,N"' ______11 Sp""ify T"stin[l AMlhOl'iIy: 0 HHS 0 NRC o DOT - Sp"cify OOT Aoenqr: 0 FMCSA 0 FAA 0 FAA 0 ITA 0 PHMSA USCG E, Re"""" br Telll: 0 ~'"fll1"nt 0 R""dorn 0 R""""",oble SUIlpi::;",,''C'"'''' 0 Po!iIl\.ecidenl 0 RelUlft io!My 0 FolwLll' 0 Oth., (opocify) ______" Drug T""181o be Perl","",d: 0 THe, COO, PCp, OPI, AMI' 0 THe 3: COC Only 0 OIhe, {"pooifyl ______Q, ColIeclioo Sit" Add",,,,,: CoUe"'",pt,,,,,,, No, ______

In "OO~ will!~ 1""""",1 ~""""''''' my ""rifklalion is: o NEGATIVE POSITIVE br: 0 o REFUSALlOTEST because - "heck fm..,nls} below: o TEST CANCELLED o ADULTERATED (aduflel'1IDl/realloo): o SOOSTITUTED o OTHER: HEMARKS:

X ---1---1 Sii_.<>If_OOI_O_ l'mIffl __ow 001<:01"._ Rr.~ II~ \.stoll llmTllollla!llY' STEP l' COMPLETED BY MEDICAL REVIEW OFFICER . SPLIT SPECIMEN In aooadiiinoo will!~1<> [="""",1 ,..~"""" my ~~Iion f

o RECONFIRMED !OI'; DTEST CANCELLED

o FAILED 10 RECONFIRM m

REMARKS:

X I I "'_. (!'!IIm !.Iiiilki!I !l'iiilO\ii Qfl"",,,,'. Hiiiiiii (Ri.... fil~ LiI.1j wml"''''''''IIIn]

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FEDERAL DRUG TESTING CUSTODY AND CONTROL FORM

SPECIMEN ID NO. 0000001 STEP 1: COMPLETED BY COLLECTOR OR EMPLOYER REPRESENTATIVE ACCESSION NO,

C.lJooor SSN or E"nployeeUl 1'10. ______11 Specify TeWng Authority: 0 HHS 0 NRC 0 DOT - Speoify DOT Agency: 0 !'MCSA 0 FAA. 0 FAA D!=TiI. 0 PHMSA 0 USCG E. ReMon fer T"IlI: 0 Pre-etTpl"l'menI 0 IlMoorn 0 RaruI,onoble SuspiilioNC!iII$e 0 Post Accident 0 Return tQ tlul:v 0 Folbw-up 0 DIner (specify) ______F. Drug reD!o b" P"lfofrfle.:i: 0 THe, COC, PCp, OPI, AMP 0 THe & coe Only 0 Other (spooifyJ ______G. CoNeolien Site Address: C"lleGiorPhooe 1\10, ______

l:n"oo~with"Pl'iiCliibfeF~I"'~ my ~Ii<",i",

o NEGATIVE POSmVEror: 0 o REFUSAL TO TEST b"""""" - "heck ...... ,nls} bei"",,: o TEST CANCELLED o ADULTERATED (rulullel>lJ1li,eM""): o SUBSTITUTED

Ix ! I Ilil_ 0IIi_ PIllm -""'-"'01&0<'$14..". _tli!~L ••tl 1MIo1lil_.lVrl STEP 7: COMPLETED BY MEDICAL REVIEW OFFICER . SPLIT SPECIMEN In 1Il""~ with ~Ie F~I re<;llJifem",,'" my ~fim, far the "PIN $"""""""" (if teoled) is: o RECONFIRMED for: o TEST CANCELlED

o FAILED TO RECONFIRM lor;

X iIil~"ID8iiIiiiiI_~ !'mIIlj_"_~lill .... ll'b\IiI~"Oij ------6.1l1~i

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BILLING CODE 4162–20–C distributes remaining copies as U.S.C. 7301 note. Under provisions of Paper CCF: Back of Copy 5 required. Executive Order 12564 and 5 U.S.C. • Collector checks the Split or Single 7301, test results may only be disclosed Electronic CCF: Separate Page specimen collection box. If the to agency officials on a need-to-know Instructions for Completing the Federal collection is observed, Collector checks basis. This may include the agency Drug Testing Custody and Control Form the Observed box and enters a remark in Medical Review Officer (MRO), the for Urine Specimen Collection STEP 2. administrator of the Employee Assistance Program, and a supervisor When Making Entries on a Paper CCF, STEP 3: with authority to take adverse personnel use Black or Blue ink pen and Press • Donor watches Collector pour the action. This information may also be Firmly specimen from the collection container disclosed to a court where necessary to Collector ensures that the name and into the specimen bottle(s), place the defend against a challenge to an adverse address of the HHS-certified cap(s) on the specimen bottle(s), and personnel action. Instrumented Initial Test Facility (IITF) affix the label(s)/seal(s) on the specimen Submission of your SSN is not or HHS-certified laboratory are on the bottle(s). required by law and is voluntary. Your • top of the Federal CCF and the Collector dates the specimen bottle refusal to furnish your number will not Specimen Identification (I.D.) number label(s) after placement on the specimen result in the denial of any right, benefit, on the top of the Federal CCF matches bottle(s). • or privilege provided by law. Your SSN the Specimen I.D. number on the labels/ Donor initials the specimen bottle is solicited, pursuant to Executive Order seals. label(s) after placement on the specimen 9397, for purposes of associating bottle(s). information in agency files relating to STEP 1: • Collector instructs the Donor to • you and for purposes of identifying the Collector ensures that the required read and complete the certification specimen provided for testing for the information is in STEP 1. Collector statement in STEP 5 on Copy 2 presence of illegal drugs. If you refuse enters a remark in STEP 2 if Donor (signature, printed name, date, phone to indicate your SSN, a substitute refuses to provide his/her SSN or numbers, and date of birth). If Donor number or other identifier will be Employee I.D. number. refuses to sign the certification assigned, as required, to process the • Collector gives collection container statement, Collector enters a remark in specimen. to Donor and instructs Donor to provide STEP 2 on Copy 1. a specimen. Collector notes any unusual Public Burden Statement behavior or appearance of Donor in the STEP 4: Public Burden Statement: An agency remarks line in STEP 2. If the Donor’s • Collector completes STEP 4 on may not conduct or sponsor, and a conduct at any time during the Copy 1 (signature, printed name, date, person is not required to respond to, a collection process clearly indicates an time of collection, and name of delivery collection of information unless it attempt to tamper with the specimen, service) and places the sealed specimen displays a currently valid OMB control Collector notes the conduct in the bottle(s) in a leak-proof plastic bag. number. The OMB control number for remarks line in STEP 2 and takes action • Paper CCF: Collector places Copy 1 this project is 0930–0158. Public as required. in the leak-proof plastic bag. Electronic reporting burden for this collection of CCF: Collector places printed copy of information is estimated to average: 5 STEP 2: Copy 1 in the leak-proof plastic bag and/ minutes/donor; 4 minutes/collector; 3 • Collector checks specimen or places package label (with Specimen minutes/test facility; and 3 minutes/ temperature within 4 minutes after I.D., test facility name and contact Medical Review Officer. Send receiving the specimen from Donor, and information, and collection site name comments regarding this burden marks the appropriate temperature box and contact information) on the outside estimate or any other aspect of this in STEP 2. If the temperature is outside of the bag. the acceptable range, Collector enters a • Collector seals the bag, prepares the collection of information, including remark in STEP 2 and takes action as specimen package for shipment, and suggestions for reducing this burden, to required. distributes the remaining CCF copies as SAMHSA Reports Clearance Officer, 1 • Collector inspects the specimen and required. Choke Cherry Road, Room 2–1057, notes any unusual findings in the Rockville, Maryland, 20857. remarks line in STEP 2 and takes action Privacy Act Statement: (For Federal The number of respondents has been as required. Any specimen with unusual Employees Only) reduced from 7.1 to a total of 6.1 physical characteristics (e.g., unusual Submission of the information on the million; which reduces the total burden ¥ color, presence of foreign objects or Federal Drug Testing Custody and hours of 240,480. material, unusual odor) cannot be sent Control Form is voluntary. However, Prior to an inspection, each test to an IITF and must be sent to an HHS- incomplete submission of the facility is required to submit specific certified laboratory for testing, as information, refusal to provide a information regarding its procedures. required. specimen, or substitution or Collecting this information prior to an • Collector determines the volume of adulteration of a specimen may result in inspection allows the inspectors to specimen in the collection container. If delay or denial of your application for thoroughly review and understand the the volume is acceptable, Collector employment/appointment or may result testing procedures before arriving at the proceeds with the collection. If the in removal from the federal service or test facility. volume is less than required by the other disciplinary action. The NLCP application form has not federal agency, Collector takes action as The authority for obtaining the been revised compared to the previous required, and enters remarks in STEP 2. specimen and identifying information form. If no specimen is collected by the end contained herein is Executive Order The annual total burden estimates for of the collection process, Collector 12564 (‘‘Drug-Free Federal Workplace’’), the Federal Drug Testing Custody and checks the None Provided box, enters a 5 U.S.C. 3301 (2), 5 U.S.C. 7301, and Control Form, the NLCP application, the remark in STEP 2, discards Copy 1, and Section 503 of Public Law 100–71, 5 NLCP inspection checklist, and NLCP

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recordkeeping requirements are shown in the following table.

Burden/re- Number of form/respondents sponses Responses/ Total burden (hours) respondent hours

Custody and Control Form Donor ...... 08 6,150,000 512,500 Collector ...... 07 6,150,000 410,000 Laboratory ...... 05 6,150,000 307,500 Medical Review Officer ...... 05 6,150,000 307,500 Laboratory Application ...... 3.0 3 9 Laboratory Inspection Checklist ...... 2.0 35 70 Laboratory Recordkeeping ...... 250.0 35 8750

Total ...... 1,546,329

Written comments and opportunity for individuals and disproportionate impact of this problem recommendations concerning the organizations to help solve a critical among individuals with behavioral proposed information collection should problem in today’s health environment. health disorders. Therefore, SAMHSA is be sent by August 14, 2013 to the Specifically, there are high levels of announcing two challenge projects to SAMHSA Desk Officer at the Office of involuntary breaks in health insurance help develop innovative solutions to the Information and Regulatory Affairs, coverage among the non-elderly barriers to developing a Office of Management and Budget population in the United States. These communications strategy targeting (OMB). To ensure timely receipt of breaks are referred to as ‘‘churning’’— individuals who experience churn. comments, and to avoid potential delays when people transition from one source The statutory authority for this in OMB’s receipt and processing of mail of insurance coverage to another when challenge competition is section 105 of sent through the U.S. Postal Service, eligibility for assistance changes. the America Creating Opportunities to commenters are encouraged to submit Churning makes programs more Meaningfully Promote Excellence in their comments to OMB via email to: complicated and costly to administer Technology, Education, and Science [email protected]. and can interrupt continuity of care, Reauthorization Act of 2010 Although commenters are encouraged to create gaps in coverage, reduce health (COMPETES Act). send their comments via email, plans’ incentive to invest in their DATES: Challenge submissions accepted commenters may also fax their members’ long-term wellness, and until August 31, 2013. comments to: 202–395–7285. interfere with the accurate and FOR FURTHER INFORMATION CONTACT: Commenters may also mail them to: comprehensive measurement of health Kevin J. Malone, 1 Choke Cherry Road, Office of Management and Budget, care quality. Room 8–1014, Rockville, MD 20857, Office of Information and Regulatory According to a study by the Urban Office: 240.276.2239, Email: Affairs, New Executive Office Building, Institute, a total of 29.4 million people [email protected]. Room 10102, Washington, DC 20503. will have their eligibility status change each year beginning in 2014 1. This SUPPLEMENTARY INFORMATION: Summer King, challenge aligns with SAMHSA’s Subject of Challenge Competitions Statistician. mission to reduce the impact of mental [FR Doc. 2013–16794 Filed 7–12–13; 8:45 am] and substance use disorders on SAMHSA is interested in identifying BILLING CODE 4162–20–P America’s communities. SAMHSA individuals from a marketing recognizes that enrollment in health perspective who experience churn, and insurance plays a significant role in in developing innovative strategies for DEPARTMENT OF HEALTH AND fulfilling this mission, from preventive targeting them. SAMHSA has access to HUMAN SERVICES health care to behavioral health relatively good data on the individuals treatment and recovery. The National who are covered by Medicaid, based on Substance Abuse and Mental Health Survey on Drug Use and Health disability, and the providers and Services Administration estimates that of the individuals community-based organizations that Announcement of Requirements and currently uninsured and expected to be serve them. However, SAMHSA has Registration for the ‘‘Stay Covered covered under the Affordable Care Act, very little capacity to identify the Challenge’’ and the ‘‘Churn Marketing 11 million will have a behavioral health individuals among the uninsured who Research Methodology Development need. The literature on the causes of were disenrolled but remain eligible. Challenge’’ breaks in coverage (i.e., income, housing SAMHSA’s strategy is to use the volatility), and the high prevalence of following two challenges to strengthen Authority: 15 U.S.C. 3719. behavioral health conditions among the communication with individuals in AGENCY: Substance Abuse and Mental uninsured, points to an both phases of the process (prior to Health Services Administration, HHS. interrelationship between behavioral losing coverage, and once an individual ACTION: Notice. health symptoms and difficulties has been disenrolled), thereby reducing complying with administrative incidences of churn and minimizing the SUMMARY: The Substance Abuse and requirements in applying for and period between coverage if it does Mental Health Services Administration maintaining continuous coverage. happen. (SAMHSA), an operating division of the Additionally, churning has a 1. The ‘‘Stay Covered Challenge’’ calls U.S. Department of Health and Human significant amount of administrative as for the development of a marketing/ Services, is announcing a new well as health costs, and there is a outreach campaign designed for use by

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providers and community-based a prize under this challenge, an Amount of Prize for the ‘‘Stay Covered organizations in targeting individuals in individual or entity Challenge’’ Medicaid due to disability. For example, 1. Shall have registered to participate • Total: $50,000 in prizes competitors should consider developing in the competition under the rules • First Place: $30,000 marketing materials communicating the promulgated by the Substance Abuse • Second Place: $15,000 importance of maintaining eligibility by and Mental Health Services • Third Place: $5,000 responding to communications from the Administration (SAMHSA); Awards may be subject to federal Medicaid agency, and by 2. Shall have complied with all the income taxes and HHS will comply with communicating to the agency about requirements under this section; IRS withholding and reporting housing changes or other changes of 3. In the case of a private entity, shall requirements, where applicable. circumstance that might impact program be incorporated in and maintain a Basis Upon Which Winners Will Be eligibility. The materials submitted as a primary place of business in the United Selected: The judging panel will make part of the challenge competition will be States, and in the case of an individual, selections based upon the following evaluated as to how useful they would whether participating singly or in a criteria (100 points total): be in (1) targeting individuals group, must be a citizen or permanent 1. Consideration of Medicaid and experiencing or at risk of churn; and (2) resident of the United States; and Health Exchange Enrollment processes fostering the use of the materials by the 4. May not be a federal entity or in each state, including current full range of providers and community- federal employee acting within the mechanisms states and health plans use based organizations serving Medicaid scope of their employment; to communicate with enrollees populations with behavioral health 5. May not be an HHS employee regarding recertification (25 points). needs. working on their application or 2. Development of (1) Messages 2. As there is very limited data submission during assigned duty hours; encouraging providers and community available on the recently disenrolled but 6. May not be an employee of the based organizations to reach out to eligible population, the ‘‘Churn Substance Abuse and Mental Health persons experiencing or at risk of churn, Marketing Research Methodology Services Administration; and (2) messages for use by providers Development Challenge’’ asks 7. Federal grantees may not use and CBOs in reaching out to persons competitors to develop a research federal funds to develop COMPETES experiencing or at risk of churn, on methodology on how to identify Act challenge applications unless those eligible for Medicaid due to actionable marketing data on this group. consistent with the purpose of their disability (25 points). The challenge will not involve the grant award; and 3. Demonstration of creative and development of communications 8. Federal contractors may not use innovative uses of multiple platforms of materials targeting these individuals. federal funds from a contract to develop media, including but not limited to This challenge tasks researchers with COMPETES Act challenge applications social media, mobile/smart phones, developing a methodology for or to fund efforts in support of a television, radio, and other traditional identifying the marketing COMPETES Act challenge submission. forms of outreach (25 points). communications profile of uninsured An individual or entity will not be 4. Demonstration of the potential to individuals who have been disenrolled deemed ineligible because the improve the health status of individuals from coverage affordability programs individual or entity used federal with behavioral health needs which will but remain eligible for enrollment. facilities or consulted with federal be measured by the likelihood of SAMHSA asks that applicants employees during a competition if the increased coverage among this consider the following components in facilities and employees are made population as the result of these efforts. their methodology for identifying this available to all individuals and entities (25 points). target population: participating in the competition on an • Thorough description of data set Additional Information: Ownership of equitable basis. intellectual property is determined by and data collection protocols, rationale Registered participants will be for database selection, and limitations of the following: required to agree to assume any and all D Each entrant retains title and full the data set risks and waive claims against the • Sample selection criteria accurately ownership of their submission. Entrants Federal Government and its related meets criteria reserve all intellectual property rights • Analytic design plan includes: entities, except in the case of willful not expressly granted under the selecting sample based on criteria and misconduct, for any injury, death, challenge agreement. running descriptive statistical tests on damage, or loss of property, revenue, or D By participating in the challenge, the data profits, whether direct, indirect, or each entrant agrees to sponsor and • Description of the variables (level of consequential, arising from their administrate a limited, non-exclusive, measurement of each) and description participation in a competition, whether royalty free, worldwide, license and of variable measurement (is the method the injury, death, damage, or loss arises right to reproduce, publically perform, reliable and valid) through negligence or otherwise. publically display, and use the • Differences in Medicaid and Health All participants are required to submission without limitation, for Exchange Enrollment policies across provide written consent to the rules advertising and promotional purposes states, including eligibility criteria and upon or before submitting an entry. relating to the challenge. administrative requirements Registration Process for Participants: • To register for this challenge ‘‘Churn Marketing Research Differences between individuals Methodology Development Challenge’’ experiencing churn for different reasons participants should: (e.g. criminal justice involvement vs. • Access the www.challenge.gov Web Eligibility Rules for Participating in relocation). site and search for the ‘‘Stay Covered the Competition: To be eligible to win Challenge.’’ a prize under this challenge, an ‘‘Stay Covered Challenge’’ Æ A registration link for the challenge individual or entity Eligibility Rules for Participating in can be found on the landing page under (1) Shall have registered to participate the Competition: To be eligible to win the challenge description. in the competition under the rules

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promulgated by the Substance Abuse • First Place: $30,000 DEPARTMENT OF HOMELAND and Mental Health Services • Second Place: $15,000 SECURITY Administration (SAMHSA); • (2) Shall have complied with all the Third Place: $5,000 Coast Guard requirements under this section; Awards may be subject to federal [Docket No. USCG–2013–0516] (3) In the case of a private entity, shall income taxes and HHS will comply with be incorporated in and maintain a IRS withholding and reporting Boston Area Maritime Security primary place of business in the United requirements, where applicable. Advisory Committee; Vacancies States, and in the case of an individual, Basis Upon Which Winner Will Be whether participating singly or in a AGENCY: Coast Guard, DHS. Selected: Applications should be no group, must be a citizen or permanent ACTION: Solicitation for Membership. longer than 10 pages and include the resident of the United States; and (4) May not be a federal entity or following (100 points total): SUMMARY: This notice requests federal employee acting within the 1. Understanding the problem, individuals interested in serving on the scope of their employment including references from the available Boston Area Maritime Security (5) May not be an HHS employee literature (20 points). Committee to submit their applications working on their application or for membership, to the Captain of the 2. Description of the data, methods of Port, Boston, MA. submission during assigned duty hours; analysis, characteristics of the (6) May not be an employee of the DATES: population (60 points). Requests for membership should Substance Abuse and Mental Health reach the U.S. Coast Guard Captain of Services Administration; a. Data sets to be used and the the Port Boston on or before August 14, (7) Federal grantees may not use applicant’s access to the data—(10 2013. federal funds to develop COMPETES points). ADDRESSES: Applications for Act challenge applications unless b. Methods of defining the population membership should be submitted to the consistent with the purpose of their of interest—‘‘churners’’—(20 points) Captain of the Port Boston at the grant award; and c. Methods of defining the following address: Commander (sx), (8) Federal contractors may not use USCG Sector Boston, 427 Commercial federal funds from a contract to develop demographic, psychographic, and economic characteristics— (15 points) Street, Boston, MA 02109 or by email to COMPETES Act challenge applications [email protected]. or to fund efforts in support of a d. Table shells (may be presented in FOR FURTHER INFORMATION CONTACT: For COMPETES Act challenge submission. an Appendix)—(15 points) questions about submitting an An individual or entity will not be 3. Personnel qualifications, including application or about the Boston Area deemed ineligible because the data analysis and technical resources Maritime Security Advisory Committe individual or entity used federal available (resume may be presented in in general, contact Mr. Phillip C. Smith facilities or consulted with federal an Appendix)—(20 points) at 617–223–3008 or by email to employees during a competition if the [email protected]. facilities and employees are made Additional Information: Ownership of available to all individuals and entities intellectual property is determined by SUPPLEMENTARY INFORMATION: the following: participating in the competition on an Authority equitable basis. D Each entrant retains title and full Registered participants will be ownership of their submission. Entrants Section 102 of the Maritime required to agree to assume any and all reserve all intellectual property rights Transportation Security Act (MTSA) of risks and waive claims against the not expressly granted under the 2002 (Pub. L. 107–295) added section Federal Government and its related challenge agreement. 70112 to Title 46 of the U.S. Code, and entities, except in the case of willful authorized the Secretary of the D By participating in the challenge, misconduct, for any injury, death, Department in which the Coast Guard is damage, or loss of property, revenue, or each entrant agrees to sponsor and operating to establish Area Maritime profits, whether direct, indirect, or administrate a limited, non-exclusive, Security Advisory Committees (AMSCs) consequential, arising from their royalty free, worldwide, license and for any port area of the United States. participation in a competition, whether right to reproduce, publically perform, (See 33 U.S.C. 1226; 46 U.S.C.; 33 CFR the injury, death, damage, or loss arises publically display, and use the 1.05–1, 6.01; Department of Homeland through negligence or otherwise. submission without limitation, for Security Delegation No. 0170.1). MTSA All participants are required to advertising and promotional purposes includes a provision exempting these provide written consent to the rules relating to the challenge. AMSCs from the Federal Advisory upon or before submitting an entry. Source: Committee Act, Public Law 92–436, 86 Registration Process for Participants: Stat. 470 (5 U.S.C. App. 2). 1 Buettgens, M., Nichols, A., & Dorn, S. To register for this challenge (2012). Churning Under the ACA and State Boston AMSC Purpose participants should: Access the Policy Options for Mitigation. Prepared for www.challenge.gov Web site and search The AMSCs shall assist the Captain of Robert Wood Johnson Foundation, Timely for the ‘‘Churn Marketing Research the Port in the development, review, Analysis of Immediate Health Policy Issues, update, and exercising of the Area Methodology Development Challenge.’’ http://www.urban.org/UploadedPDF/412587- Æ A registration link for the challenge Maritime Security Plan for their area of Churning-Under-the-ACA-and-State-Policy- responsibility. Such matters may can be found on the landing page under Options-for-Mitigation.pdf. the challenge description. include, but are not limited to: Identifying critical port infrastructure Amount of Prize for the ‘‘Churn Cathy J. Friedman, and operations; Identifying risks Marketing Research Methodology Public Health Analyst, SAMHSA. (threats, vulnerabilities, and Development Challenge’’ [FR Doc. 2013–16871 Filed 7–12–13; 8:45 am] consequences); Determining mitigation • Total: $50,000 in prizes BILLING CODE 4162–20–P strategies and implementation methods;

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Developing strategies to facilitate the Dated: June 21, 2013. watchkeeping requirement within the recovery of the MTS after a J.C. O’Connor III, Global Maritime Distress and Safety Transportation Security Incident; Captain, U.S. Coast Guard, Federal Maritime System (GMDSS), an internationally Developing and describing the process Security Coordinator Boston. agreed-upon set of satellite and to continually evaluate overall port [FR Doc. 2013–16802 Filed 7–12–13; 8:45 am] terrestrial communications systems security by considering consequences BILLING CODE 9110–04–P used to increase safety and facilitate the and vulnerabilities, how they may location and rescue of distressed ships, change over time, and what additional boats and aircraft. Under GMDSS, ship mitigation strategies can be applied; and DEPARTMENT OF HOMELAND and shore exclusive watchkeeping on Providing advice to, and assisting the SECURITY MF 2182 kHz was no longer a Captain of the Port in developing and requirement, but instead became only Coast Guard maintaining the AMS Plan. one of several frequencies available for [Docket No. USCG–2013–0521] distress communications. AMSC Composition No domestic regulations exist Termination of Radiotelephone requiring the Coast Guard to provide MF The composition of an AMSC, to Medium Frequency 2182 kHz distress safety watchkeeping services, include the Boston AMSC and its Watchkeeping, 2187.5 kHz Digital although Federal Communications subcommittees, is controlled by 33 CFR Selective Calling Channel Guard, and Commission regulations in 47 CFR Part 103.305. Accordingly, members may be 2670 kHz Broadcasts 80 mandate certain carriage selected from the Federal, Territorial, or requirements in order to communicate Tribal government; the State ACTION: Notice. in an emergency. SOLAS requires the government and political subdivisions SUMMARY: The United States Coast Coast Guard to provide, as it deems of the State; local public safety, crisis practical and necessary, appropriate management, and emergency response Guard is announcing that it will no longer maintain a watch on 2182 kHz, shore-based facilities for GMDSS agencies; law enforcement and security services including those in the 1.6–4 organizations; maritime industry, will no longer guard the Digital Selective Calling (DSC) channel 2187.5 MHz range (SOLAS). The Coast Guard, including labor; other port stakeholders in cooperation with other agencies and having a special competence in kHz, and will no longer transmit Marine Information Broadcasts on 2670 kHz. organizations, provides each of the other maritime security; and port stakeholders five services listed in SOLAS affected by security practices and The minimal use of these channels by mariners for distress and safety coupled regulations, including satellite policies. Also, members of the Boston communications, support for 406 MHz AMSC must have at least 5 years of with antenna site deterioration, costly upkeep, and extensive maintenance satellite emergency position-indicating experience related to maritime or port radio beacons (EPIRBs), VHF security operations. required to support the medium frequency (MF) system have led to a communications through Rescue 21, AMSC Membership Coast Guard decision to terminate the high frequency radiocommunications, 1 MF services and direct the public and NAVTEX broadcasts of maritime The Boston AMSC has 29 members mariner to use more modern safety and safety information. who represent Federal, State, local, and distress services which can be more While many countries terminated industry stakeholders from reliably received by the Coast Guard. 2182 kHz watchkeeping from shore when GMDSS was implemented in Massachusetts. We are seeking to fill 7 DATES: The termination announced in 1999, the Coast Guard continued its positions with this solicitation. this notice is effective on August 1, watch on this frequency to support Applicants may be required to pass an 2013. smaller vessels not subject to SOLAS appropriate security background check FOR FURTHER INFORMATION CONTACT: For that operate between approximately 20 prior to appointment to the committee. questions on this Notice, contact Larry and 100 miles from shore. Members’ terms of office will be for 5 S. Solomon, Spectrum Management and Advancements in satellite, digital, very years; however, a member is eligible to Telecommunications Policy Counsel high frequency (VHF), and high serve additional terms of office. (Commandant CG–652) telephone: 202– frequency (HF) radio communication Members will not receive any salary or 475–3556; email: equipment, including satellite service other compensation for their service on [email protected]. provider competition, have improved an AMSC. SUPPLEMENTARY INFORMATION: The service and reduced costs of this Request for Applications frequency 2182 kHz (which is in the equipment causing MF radiotelephone frequency band generally referred to as to become obsolete. Those seeking membership are not medium frequency (MF)), was In addition, a detailed review of required to submit formal applications designated more than 65 years ago at the several Coast Guard MF sites revealed to the local Captain of the Port, International Telecommunications significant antenna ground deterioration however, because we do have an Union Radio Conference (Atlantic City, and infrastructure support degradation, obligation to ensure that a specific 1947) as an international radiotelephone leaving the Coast Guard at risk for not number of members have the distress frequency. Shore stations that being able to receive or respond to prerequisite maritime security operated in this MF band, and ships maritime distress calls on 2182 kHz or experience, we encourage the subject to the International Convention 2187.5 kHz, and not being able to submission of resumes highlighting for the Safety of Life at Sea Ch. IV, Reg. transmit effectively on 2670 kHz. Early experience in the maritime and security 5 (SOLAS) were required to maintain a last year, as a result of physical site industries. watch on this frequency. surveys, the Coast Guard confirmed the In support of the USCG policy on Beginning in 1987, the International 1 gender and ethnic nondiscrimination, NAVTEX is a broadcast warning system that Telecommunications Union Radio delivers navigational warnings, meteorological we encourage qualified women and men Regulations and SOLAS were amended warnings and forecasts, and other marine safety of all racial and ethnic groups to apply. to incorporate this MF radiotelephone information.

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significant site deterioration and, from shore, any vessel that operates DATES: Written comments should be therefore, the unreliability of receiving more than 20 nautical miles from the received on or before August 14, 2013 MF distress transmissions at many coast should carry to be assured of consideration. locations. The Coast Guard provided radiocommunications equipment ADDRESSES: Interested persons are notifications of the situation to mariners capable of tuning to distress frequencies invited to submit written comments on using Local Notice to Mariners and other than VHF to ensure the vessel is this information collection to the Office radio broadcasts. The Coast Guard did able to make a distress call when of Information and Regulatory Affairs, not receive any adverse reaction to those needed. Office of Management and Budget. notifications. All vessel owners and operators are Comments should be addressed to the The site deterioration, costly upkeep, strongly advised to check their OMB Desk Officer for U.S. Customs and and extensive maintenance required to communication equipment regularly to Border Protection, Department of support this legacy MF system, as well ensure it is properly installed, operating Homeland Security, and sent via as the relatively minimal use by and tuned to the most reliable distress electronic mail to mariners, has led the Coast Guard to channels. For more information visit the [email protected] or faxed decide to discontinue support of the MF Coast Guard’s Navigation Center Web to (202) 395–5806. system. The Coast Guard will site at www.navcen.uscg.gov. FOR FURTHER INFORMATION CONTACT: discontinue all watchkeeping and Authority Maria Lloyd, U.S. Customs and Border transmissions on MF channels, namely Protection, Regulations and Rulings, This notice is issued under authority the 2182 kHz voice channel, the 2187.5 Office of International Trade, 90 K of 14 U.S.C. 93(a)(16) and 5 U.S.C. kHz Digital Selective Calling (DSC) Street NE., 10th Floor, Washington, DC 552(a). channel and Marine Information 20229–1177, at 202–325–0369. Broadcasts (MIBs) on 2670 kHz. Dated: July 9, 2013. SUPPLEMENTARY INFORMATION: CBP Mariners have several increasingly Alfredo Mistichelli, low cost and commonly available invites the general public and affected U.S. Coast Guard, Acting Chief, Office of Federal agencies to submit written alternatives to using MF distress and Information Assurance and Spectrum Policy, non-distress channels. Instead of relying comments and suggestions on proposed Commandant (CG–65). and/or continuing information on 2182 kHz voice and 2187.5 kHz DSC, [FR Doc. 2013–16801 Filed 7–12–13; 8:45 am] mariners can tune their existing HF collection requests pursuant to the BILLING CODE 9110–04–P radios to other GMDSS radiotelephone Paperwork Reduction Act of 1995 (Pub. distress voice frequencies the Coast L. 104–13). Your comments should Guard monitors (i.e., 4125, 6215, 8291, address one of the following four points: DEPARTMENT OF HOMELAND (1) Evaluate whether the proposed or 12290 kHz voice), use satellite-based SECURITY collection of information is necessary communication for EPIRB and voice for the proper performance of the communications, or use HF radios U.S. Customs and Border Protection functions of the agency/component, equipped with DSC. The information in including whether the information will the 2670 kHz broadcasts (weather Agency Information Collection have practical utility; forecasts and warnings, Notice to Activities: African Growth and (2) Evaluate the accuracy of the Mariners, and urgent marine Opportunity Act Certificate of Origin agencies/components estimate of the information broadcasts) will continue to AGENCY: U.S. Customs and Border burden of the proposed collection of be available from other broadcast Protection, Department of Homeland information, including the validity of sources (e.g., SafetyNet 2, NAVTEX, Security. the methodology and assumptions used; VHF) and online. The Coast Guard urges (3) Enhance the quality, utility, and mariners to use these other alternatives ACTION: 30-Day notice and request for clarity of the information to be to the MF channels for distress calls, comments; Extension of an existing information collection: 1651–0082. collected; and DSC calls, and information broadcasts. (4) Minimize the burden of the Mariners should not need to purchase SUMMARY: U.S. Customs and Border collections of information on those who any new equipment to make this change Protection (CBP) will be submitting the are to respond, including the use of from 2182 kHz to other GMDSS distress following information collection request appropriate automated, electronic, frequencies. Most radiocommunications to the Office of Management and Budget mechanical, or other technological equipment carried by vessels is able to (OMB) for review and approval in techniques or other forms of operate in the 2–27.5 MHz range in accordance with the Paperwork information. addition to the VHF radiotelephone also Reduction Act: African Growth and Title: African Growth and carried by ships. While some older Opportunity Act Certificate of Origin Opportunity Act Certificate of Origin. radios may not tune to other (AGOA). This is a proposed extension of OMB Number: 1651–0082. frequencies, these radios are no longer an information collection that was Form Number: None. sold, parts are not available for repairing previously approved. CBP is proposing Abstract: The African Growth and them and they are not typically found that this information collection be Opportunity Act (AGOA) was adopted on vessels. Therefore, the overwhelming extended with a change to the burden by the United States with the enactment majority of vessels simply need to tune hours. This document is published to of the Trade and Development Act of their radios from 2182 kHz to another obtain comments from the public and 2000 (Pub. L. 106–200). The objectives GMDSS distress frequency (such as affected agencies. This information of AGOA are (1) to provide for extension 4125, 6215, 8291, or 12290 kHz). collection was previously published in of duty-free treatment under the Because VHF frequencies may not be the Federal Register (78 FR 26650) on Generalized System of Preferences reliable more than 20 nautical miles May 7, 2013, allowing for a 60-day (GSP) to import sensitive articles comment period. This notice allows for normally excluded from GSP duty 2 SafetyNET is a satellite-based broadcast warning system that delivers high seas navigational an additional 30 days for public treatment, and (2) to provide for the warnings, meteorological warnings and forecasts, comments. This process is conducted in entry of specific textile and apparel ice reports, and other marine safety information. accordance with 5 CFR 1320.10. articles free of duty and free of any

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quantitative limits from the countries of DEPARTMENT OF THE INTERIOR 1. Implementing the Recreational sub-Saharan Africa. Hunting and Wildlife Resource Fish and Wildlife Service For preferential treatment under Conservation Plan—A Ten-Year Plan for AGOA, the exporter is required to [FWS–HQ–EA–2013–N136; FF09D00000– Implementation; prepare a certificate of origin and FXGO1664091HCC05D–134] 2. Increasing public awareness of and support for the Wildlife Restoration provide it to the importer. The Wildlife and Hunting Heritage Program; certificate of origin includes information Conservation Council 3. Fostering wildlife and habitat such as contact information for the conservation and ethics in hunting and AGENCY: Fish and Wildlife Service, importer; exporter and producer; the shooting sports recreation; Interior. basis for which preferential treatment is 4. Stimulating sportsmen and claimed; and a description of the ACTION: Notice of teleconference. women’s participation in conservation imported merchandise. The importers SUMMARY: and management of wildlife and habitat are required to have the certificate in We, the U.S. Fish and Wildlife Service, announce a public resources through outreach and their possession at the time of the claim, teleconference of the Wildlife and education; and to provide it to U.S. Customs and Hunting Heritage Conservation Council 5. Fostering communication and Border Protection (CBP) upon request. (Council). coordination among State, tribal, and The collection of this information is Federal governments; industry; hunting DATES: Teleconference: Tuesday, July provided for in 19 CFR 10.214, 10.215, 30, 2013, 2–3:30 p.m. (Eastern daylight and shooting sportsmen and women; and 10.216. time). For deadlines and directions on wildlife and habitat conservation and Instructions for complying with this registering to listen to the management organizations; and the regulation are posted on CBP.gov Web teleconference, submitting written public; site at: http://www.cbp.gov/linkhandler/ material, and giving an oral 6. Providing appropriate access to cgov/trade/priority_trade/textiles/tbts/ presentation, please see ‘‘Public Input’’ Federal lands for recreational shooting and hunting; TBT2001/TBT-01-008.ctt/TBT-01- under SUPPLEMENTARY INFORMATION. 7. Providing recommendations to 008.doc. FOR FURTHER INFORMATION CONTACT: improve implementation of Federal Current Actions: This submission is Joshua Winchell, Council Coordinator, conservation programs that benefit being made to extend the expiration 4401 North Fairfax Drive, Mailstop wildlife, hunting, and outdoor date and to revise the burden hours as 3103–AEA, Arlington, VA 22203; recreation on private lands; and a result of updated estimates of the telephone (703) 358–2639; fax (703) 8. When requested by the Designated number of AGOA certificates of origin 358–2548; or email Federal Officer in consultation with the [email protected]. that are prepared and/or submitted to Council Chairperson, performing a CBP. There are no changes to the SUPPLEMENTARY INFORMATION: In variety of assessments or reviews of information collected or to the AGOA accordance with the requirements of the policies, programs, and efforts through certificate of origin. Federal Advisory Committee Act, 5 the Council’s designated subcommittees U.S.C. App., we announce that Wildlife or workgroups. Type of Review: Extension with a and Hunting Heritage Conservation Background information on the change to the burden hours. Council will hold a teleconference. Council is available at http:// Affected Public: Businesses. Background www.fws.gov/whhcc. Estimated Number of Respondents: Formed in February 2010, the Council Meeting Agenda 210. provides advice about wildlife and The Wildlife and Hunting Heritage Estimated Number of Responses per habitat conservation endeavors that: Conservation Council will consider a Respondent: 107. 1. Benefit wildlife resources; letter to the Secretaries of Agriculture Estimated Total Annual Responses: 2. Encourage partnership among the and the Interior regarding: 22,494. public, sporting conservation (a) The process the Bureau of Land organizations, States, Native American Management and the U.S. Forest Service Estimated Time per Response: 20 tribes, and the Federal Government; and minutes. employ in the development and 3. Benefit recreational hunting. implementation of land and travel The Council advises the Secretary of Estimated Total Annual Burden management plans for the allowance the Interior and the Secretary of Hours: 7,648. and furtherance of recreational shooting Agriculture, reporting through the and the use of motorized big game Dated: July 10, 2013. Director, U.S. Fish and Wildlife Service retrieval, where appropriate; and Tracey Denning, (Service), in consultation with the (b) The participation of the Bureau of Agency Clearance Officer, U.S. Customs and Director, Bureau of Land Management Land Management and the U.S. Forest Border Protection. (BLM); Director, National Park Service Service in the 2006 Federal Lands [FR Doc. 2013–16897 Filed 7–12–13; 8:45 am] (NPS); Chief, Forest Service (USFS); Hunting, Fishing and Shooting Sports Chief, Natural Resources Service BILLING CODE 9111–14–P Roundtable Memorandum of (NRCS); and Administrator, Farm Understanding (MOU). Services Agency (FSA). The Council’s The final agenda will be posted on the duties are strictly advisory and consist Internet at http://www.fws.gov/whhcc. of, but are not limited to, providing recommendations for: Public Input

You must contact the Council Coordinator (see FOR FURTHER If you wish to INFORMATION CONTACT) no later than

Listen to the teleconference ...... Monday, July 22, 2013.

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You must contact the Council Coordinator (see FOR FURTHER If you wish to INFORMATION CONTACT) no later than

Submit written information or questions before the teleconference for Monday, July 22, 2013. the council to consider during the teleconference. Give an oral presentation during the teleconference ...... Monday, July 22, 2013.

Submitting Written Information or DEPARTMENT OF THE INTERIOR • Report from, Supervisory Education Questions Specialist, Special Education, DPA/BIE; Bureau of Indian Affairs • BIE Data Summit Review; Interested members of the public may • [124A2100RM.AADD003200.A087C222. Discussion and selection of submit relevant information or 999900.AR.DED.97C22214.001] Advisory Board Priorities; questions for the Council to consider • Public Comment (via conference during the teleconference. Written Advisory Board for Exceptional call, July 19, 2013, meeting only*); and statements must be received by the date Children • BIE Advisory Board-Advice and listed in ‘‘Public Input’’ under Recommendations. AGENCY: Bureau of Indian Affairs, SUPPLEMENTARY INFORMATION, so that the *During the July 19, 2013 meeting, Interior. information may be made available to time has been set aside for public the Council for their consideration prior ACTION: Notice of Meeting. comment via conference call from 1:00– to this teleconference. Written SUMMARY: The Bureau of Indian 1:30 p.m. Mountain Time. The call-in statements must be supplied to the Education (BIE) is announcing that the information is: Conference Number 1– Council Coordinator in one of the Advisory Board for Exceptional 888–417–0376, Passcode 1509140. following formats: One hard copy with Children (Advisory Board) will hold its Dated: July 10, 2013. original signature, and one electronic next meeting in Albuquerque, New Kevin K. Washburn, copy via email (acceptable file formats Mexico. The purpose of the meeting is Assistant Secretary—Indian Affairs. are Adobe Acrobat PDF, MS Word, MS to meet the mandates of the Individuals [FR Doc. 2013–16886 Filed 7–12–13; 8:45 am] PowerPoint, or rich text file). with Disabilities Education Act of 2004 BILLING CODE 4310–6W–P (IDEA) for Indian children with Giving an Oral Presentation disabilities. Individuals or groups requesting to DATES: The Advisory Board will meet on INTERNATIONAL TRADE make an oral presentation during the Thursday, July 18, 2013, from 8:30 a.m. COMMISSION teleconference will be limited to 3 to 4:00 p.m. and Friday, July 19, 2013 minutes per speaker, with no more than from 8:30 a.m. to 4:00 p.m. Mountain [Investigation Nos. 701–TA–415 and 731– TA–933–934 (Second Review)] a total of 30 minutes for all speakers. Time. Orientation for new members will Interested parties should contact the be held Wednesday, July 17, 2013, from Polyethylene Terephthalate Film, Council Coordinator, in writing 9:00 a.m. to 4:00 p.m. Mountain Time. Sheet, and Strip From India and (preferably via email; see FOR FURTHER ADDRESSES: The meeting will be held at Taiwan; Notice of Commission INFORMATION CONTACT), to be placed on the Manuel Lujan, Jr. Building, 1011 Determinations To Conduct Full Five- the public speaker list for this Indian School Road NW., Room 231– Year Reviews teleconference. To ensure an 232, Albuquerque, New Mexico 87104. opportunity to speak during the public Telephone 505–563–5383. AGENCY: United States International comment period of the teleconference, FOR FURTHER INFORMATION CONTACT: Sue Trade Commission. members of the public must register Bement, Designated Federal Officer, ACTION: Notice. with the Council Coordinator. Bureau of Indian Education, Division of Registered speakers who wish to expand Performance and Accountability (DPA), SUMMARY: The Commission hereby gives upon their oral statements, or those who 1011 Indian School Road NW., Suite notice that it will proceed with full had wished to speak but could not be 332, Albuquerque, New Mexico 87104; reviews pursuant to section 751(c)(5) of the Tariff Act of 1930 (19 U.S.C. accommodated on the agenda, may telephone number (505) 563–5274 or 1675(c)(5)) to determine whether submit written statements to the email [email protected]. revocation of the countervailing duty Council Coordinator up to 30 days SUPPLEMENTARY INFORMATION: In order on polyethylene terephthalate subsequent to the teleconference. accordance with the Federal Advisory Committee Act, the BIE is announcing film, sheet, and strip (‘‘PET’’ film) from Meeting Minutes that the Advisory Board will hold its India and the antidumping duty orders next meeting in Albuquerque, New on PET film from India and Taiwan Summary minutes of the Mexico. The Advisory Board was would be likely to lead to continuation teleconference will be maintained by established under the Individuals with or recurrence of material injury within the Council Coordinator (see FOR Disabilities Act of 2004 (20 U.S.C. 1400 a reasonably foreseeable time. A FURTHER INFORMATION CONTACT) and will et seq.) to advise the Secretary of the schedule for the review will be be available for public inspection within Interior, through the Assistant established and announced at a later 90 days of the meeting and will be Secretary—Indian Affairs, on the needs date. For further information concerning posted on the Council’s Web site at of Indian children with disabilities. The the conduct of these reviews and rules http://www.fws.gov/whhcc. meetings are open to the public. of general application, consult the Commission’s Rules of Practice and Rowan W. Gould, The following items will be on the agenda: Procedure, part 201, subparts A through Acting Deputy Director. • Remarks from Acting BIE Director; E (19 CFR part 201), and part 207, [FR Doc. 2013–16881 Filed 7–12–13; 8:45 am] • Report from Acting Associate subparts A, D, E, and F (19 CFR part BILLING CODE 4310–55–P Deputy Director, DPA/BIE; 207).

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DATES: Effective Date: July 5, 2013. INTERNATIONAL TRADE with mobility impairments who will COMMISSION need special assistance in gaining access FOR FURTHER INFORMATION CONTACT: to the Commission should contact the Michael Szustakowski (202–205–3169), [Investigation No. 337–TA–886] Office of the Secretary at (202) 205– Office of Investigations, U.S. 2000. General information concerning Certain TV Programs, Literary Works International Trade Commission, 500 E the Commission may also be obtained for TV Production and Episode Guides Street SW., Washington, DC 20436. by accessing its internet server at http:// Pertaining to Same; Institution of Hearing-impaired persons can obtain www.usitc.gov. The public record for Investigation Pursuant to 19 U.S.C. information on this matter by contacting this investigation may be viewed on the 1337 the Commission’s TDD terminal on 202– Commission’s electronic docket (EDIS) 205–1810. Persons with mobility AGENCY: U.S. International Trade at http://edis.usitc.gov. impairments who will need special Commission. FOR FURTHER INFORMATION CONTACT: The assistance in gaining access to the ACTION: Notice. Office of Unfair Import Investigations, Commission should contact the Office U.S. International Trade Commission, of the Secretary at 202–205–2000. SUMMARY: Notice is hereby given that a telephone (202) 205–2560. General information concerning the complaint was filed with the U.S. Authority: The authority for institution of Commission may also be obtained by International Trade Commission on June this investigation is contained in section 337 accessing its internet server (http:// 7, 2013, under section 337 of the Tariff of the Tariff Act of 1930, as amended, and www.usitc.gov). The public record for Act of 1930, as amended, 19 U.S.C. in section 210.10 of the Commission’s Rules these reviews may be viewed on the 1337, on behalf of E.T. Radcliffe, LLC of of Practice and Procedure, 19 CFR 210.10 (2013). Commission’s electronic docket (EDIS) Dallas, Texas and Emir Tiar of Coto De at http://edis.usitc.gov. Caza, California. Supplements to the Scope of Investigation: Having Complaint were filed June 25, 2013 and SUPPLEMENTARY INFORMATION: On July 5, considered the complaint, the U.S. June 27, 2013. The complaint alleges International Trade Commission, on 2013, the Commission determined that violations of section 337 based upon the it should proceed to full reviews in the July 9, 2013, ordered that— importation into the United States, the (1) Pursuant to subsection (b) of subject five-year reviews pursuant to sale for importation, and the sale within section 337 of the Tariff Act of 1930, as section 751(c)(5) of the Act. The the United States after importation of amended, an investigation be instituted Commission found the domestic certain TV programs, literary works for to determine: interested party group response to its TV production and episode guides (a) Whether there is a violation of notice of institution (78 F.R. 19524, pertaining to same by reason of subsection (a)(1)(B) of section 337 in the April 2, 2013) to be adequate and that infringement of U.S. Copyright importation into the United States, the the respondent interested party group PAU003415849 (‘‘the ’849 copyright’’); sale for importation, or the sale within response with respect to Taiwan was U.S. Copyright TXU001832727 (‘‘the the United States after importation of adequate and decided to conduct a full ’727 copyright’’); and U.S. Copyright certain TV programs, literary works for review with respect to the antidumping PAU003639268 (‘‘the ’268 copyright’’), TV production and episode guides duty order concerning PET film from and that an industry in the United pertaining to same by reason of Taiwan. The Commission found that the States exists as required by subsection infringement of the ’849 copyright; the respondent interested party group (a)(2) of section 337. The complaint ’727 copyright; and the ’268 copyright, response with respect to the reviews on further alleges violations of section 337 and whether an industry in the United based upon the importation, the sale for the orders on PET film from India was States exists as required by subsection importation, and the sale within the inadequate. However, the Commission (a)(2) of section 337; United States after importation of determined to conduct full reviews (b) whether there is a violation of certain TV programs, literary works for concerning the antidumping and subsection (a)(1)(A) of section 337 in the TV production and episode guides importation into the United States, the countervailing duty orders on PET film pertaining to same, by reason of unfair from India to promote administrative sale for importation, or the sale within methods of competition and unfair acts, the United States after importation of efficiency in light of its decision to the threat or effect of which is to destroy certain TV programs, literary works for conduct a full review with respect to the or substantially injure an industry in the TV production and episode guides order on PET film from Taiwan. A United States. pertaining to same, by reason of unfair record of the Commissioners’ votes, the The complainants request that the methods of competition and unfair acts, Commission’s statement on adequacy, Commission institute an investigation the threat or effect of which is to destroy and any individual Commissioner’s and, after the investigation, issue a or substantially injure an industry in the statements will be available from the limited exclusion order and cease and United States; Office of the Secretary and at the desist orders. (2) For the purpose of the Commission’s Web site. ADDRESSES: The complaint, except for investigation so instituted, the following Authority: These reviews are being any confidential information contained are hereby named as parties upon which conducted under authority of title VII of the therein, is available for inspection this notice of investigation shall be Tariff Act of 1930; this notice is published during official business hours (8:45 a.m. served: pursuant to section 207.62 of the to 5:15 p.m.) in the Office of the (a) The complainants are: Commission’s rules. Secretary, U.S. International Trade E.T. Radcliffe, LLC, 1445 Ross Avenue, By order of the Commission. Commission, 500 E Street SW., Room Suite 2700, Dallas, TX 75202. Emir Tiar, 31785 Via Coyote, Coto De Issued: July 10, 2013. 112, Washington, DC 20436, telephone (202) 205–2000. Hearing impaired Caza, CA 92679. Lisa R. Barton, individuals are advised that information (b) The respondents are the following Acting Secretary to the Commission. on this matter can be obtained by entities alleged to be in violation of [FR Doc. 2013–16869 Filed 7–12–13; 8:45 am] contacting the Commission’s TDD section 337, and are the parties upon BILLING CODE 7020–02–P terminal on (202) 205–1810. Persons which the complaint is to be served:

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The Walt Disney Company, 500 South INTERNATIONAL TRADE SUPPLEMENTARY INFORMATION: Section Buena Vista Street, Burbank, CA COMMISSION 337 of the Tariff Act of 1930 provides that if the Commission finds a violation 91521. [Investigation No. 337–TA–800] Thunderbird Films, Inc., 10675 Santa it shall exclude the articles concerned Monica Boulevard, Suite B, Los Certain Wireless Devices With 3G from the United States: Angeles, CA 90025. Capabilities and Components Thereof; unless, after considering the effect of such Notice of Request for Statements on exclusion upon the public health and Mindset Television, Inc., 708–1155 the Public Interest welfare, competitive conditions in the United Pender Street, Vancouver, British States economy, the production of like or Columbia, V6E 2P4, Canada. AGENCY: U.S. International Trade directly competitive articles in the United Commission. States, and United States consumers, it finds (c) The Office of Unfair Import that such articles should not be excluded ACTION: Notice. Investigations, U.S. International Trade from entry. Commission, 500 E Street SW., Suite SUMMARY: Notice is hereby given that 19 U.S.C. 1337(d)(1). A similar 401, Washington, DC 20436; and the presiding administrative law judge provision applies to cease and desist (3) For the investigation so instituted, has issued a Recommended orders. 19 U.S.C. 1337(f)(1). the Chief Administrative Law Judge, Determination on Remedy and Bonding The Commission is interested in U.S. International Trade Commission, in the above-captioned investigation. further development of the record on shall designate the presiding The Commission is soliciting comments the public interest in these Administrative Law Judge. on public interest issues raised by the investigations. Accordingly, members of recommended relief, specifically a the public are invited to file Responses to the complaint and the limited exclusion order against certain submissions of no more than five (5) notice of investigation must be wireless devices with 3G capabilities pages, inclusive of attachments, submitted by the named respondents in and components thereof imported by concerning the public interest in light of accordance with section 210.13 of the respondents Huawei Technologies Co., the administrative law judge’s Commission’s Rules of Practice and Ltd. of Shenzhen, China; FutureWei Recommended Determination on Procedure, 19 CFR 210.13. Pursuant to Technologies, Inc. d/b/a Huawei, Remedy and Bonding issued in this 19 CFR 201.16(e) and 210.13(a), such Technologies (USA) of Plano, Texas; investigation on March 1, 2013. responses will be considered by the Huawei Device USA, Inc. of Plano, Comments should address whether Commission if received not later than 20 Texas (‘‘Huawei Device’’); Nokia issuance of a limited exclusion order in days after the date of service by the Corporation of Espoo, Finland; Nokia this investigation would affect the Commission of the complaint and the Inc. of White Plains, New York (‘‘Nokia public health and welfare in the United notice of investigation. Extensions of Inc.’’); ZTE Corporation of Shenzhen, States, competitive conditions in the time for submitting responses to the China; and ZTE (USA) Inc. of United States economy, the production complaint and the notice of Richardson, Texas, and cease and desist of like or directly competitive articles in investigation will not be granted unless orders against Huawei Device and Nokia the United States, or United States good cause therefor is shown. Inc. This notice is soliciting public consumers. In particular, the Commission is Failure of a respondent to file a timely interest comments from the public only. Parties are to file public interest interested in comments that: response to each allegation in the submissions pursuant to 19 CFR (i) Explain how the articles complaint and in this notice may be 210.50(a)(4). potentially subject to the recommended deemed to constitute a waiver of the orders are used in the United States; right to appear and contest the FOR FURTHER INFORMATION CONTACT: (ii) identify any public health, safety, allegations of the complaint and this Panyin A. Hughes, Office of the General or welfare concerns in the United States notice, and to authorize the Counsel, U.S. International Trade relating to the recommended orders; administrative law judge and the Commission, 500 E Street SW., (iii) identify like or directly Commission, without further notice to Washington, DC 20436, telephone (202) competitive articles that complainant, the respondent, to find the facts to be as 205–3042. The public version of the its licensees, or third parties make in the alleged in the complaint and this notice complaint can be accessed on the United States which could replace the Commission’s electronic docket (EDIS) and to enter an initial determination subject articles if they were to be at http://edis.usitc.gov, and will be and a final determination containing excluded; available for inspection during official such findings, and may result in the (iv) indicate whether complainant, business hours (8:45 a.m. to 5:15 p.m.) complainant’s licensees, and/or third issuance of an exclusion order or a cease in the Office of the Secretary, U.S. and desist order or both directed against party suppliers have the capacity to International Trade Commission, 500 E replace the volume of articles the respondent. Street SW., Washington, DC 20436, potentially subject to the recommended By order of the Commission. telephone (202) 205–2000. exclusion order and/or a cease and Issued: July 10, 2013. General information concerning the desist order within a commercially Lisa R. Barton, Commission may also be obtained by reasonable time; and accessing its Internet server (http:// (v) explain how the limited exclusion Acting Secretary to the Commission. www.usitc.gov). The public record for order would impact consumers in the [FR Doc. 2013–16885 Filed 7–12–13; 8:45 am] this investigation may be viewed on the United States. BILLING CODE 7020–02–P Commission’s electronic docket (EDIS) Written submissions must be filed no at http://edis.usitc.gov. Hearing- later than by close of business on impaired persons are advised that August 7, 2013. information on this matter can be Persons filing written submissions obtained by contacting the must file the original document Commission’s TDD terminal on (202) electronically on or before the deadlines 205–1810. stated above and submit 8 true paper

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copies to the Office of the Secretary by Consent Decree includes an estimated Library, U.S. DOJ—ENRD, P.O. Box noon the next day pursuant to section $1.6 billion in capital improvements to 7611, Washington, DC 20044–7611. 210.4(f) of the Commission’s Rules of Miami-Dade’s wastewater collection and Please enclose a check or money order Practice and Procedure (19 CFR transmission system over the next 15 for $81 (25 cents per page reproduction 210.4(f)). Submissions should refer to years, including sewer assessment, cost) payable to the United States the investigation number (‘‘Inv. No. rehabilitation, repair, and replacement Treasury. For a paper copy of the 337–TA–800’’) in a prominent place on work on force mains, sewer lines, Consent Decree without the appendices, the cover page and/or the first page. (See manholes, and pumps, and the cost is $25.25. Handbook for Electronic Filing rehabilitation of all three wastewater Maureen Katz, treatment plants. Miami-Dade has also Procedures, http://www.usitc.gov/ Assistant Section Chief, Environmental secretary/fed_reg_notices/rules/ agreed to implement a number of EPA _ _ _ Enforcement Section, Environment and handbook on electronic filing.pdf). sewer maintenance and repair programs Natural Resources Division. which EPA believes will dramatically Persons with questions regarding filing [FR Doc. 2013–16797 Filed 7–12–13; 8:45 am] reduce the incidence and severity of should contact the Secretary, (202) 205– BILLING CODE 4410–CW–P 2000. sanitary sewer overflows. Miami-Dade Any person desiring to submit a also has agreed to pay a penalty of document to the Commission in $978,100, of which $511,800 will be DEPARTMENT OF JUSTICE confidence must request confidential paid to the United States, and $466,300 treatment. All such requests should be will be paid to Florida. Miami-Dade has Drug Enforcement Administration also agreed to complete a Supplemental directed to the Secretary to the [OMB Number 1117–0042] Commission and must include a full Environmental Project valued at statement of the reasons why the $2,047,200. Agency Information Collection Commission should grant such The prior notice indicated that the Activities: Proposed Collection; treatment. See 19 CFR 201.6. Documents Department of Justice would receive Comments Requested: National for which confidential treatment by the comments concerning the settlement for Clandestine Laboratory Seizure Report Commission is properly sought will be a period of thirty (30) days from the date treated accordingly. A redacted non- of publication of the notice on June 12, ACTION: 60-Day Notice. confidential version of the document 2012. Having received a request for an must also be filed simultaneously with extension of the initial comment period The Department of Justice (DOJ), Drug the any confidential filing. All non- and given the public interest in this Enforcement Administration (DEA), will confidential written submissions will be settlement, the United States is be submitting the following information available for public inspection at the extending the comment period for an collection request to the Office of Office of the Secretary and on EDIS. additional thirty (30) days. Management and Budget (OMB) for This action is taken under the The Department of Justice will review and approval in accordance with authority of section 337 of the Tariff Act receive, for a period of sixty (60) days the Paperwork Reduction Act of 1995. of 1930, as amended (19 U.S.C. 1337), from June 12, 2013, any comments The proposed information collection is and of sections 201.10 and 210.50 of the relating to the proposed Consent Decree. published to obtain comments from the Commission’s Rules of Practice and Comments should be addressed to the public and affected agencies. Comments Assistant Attorney General, Procedure (19 CFR 201.10, 210.50). are encouraged and will be accepted Environment and Natural Resources until September 13, 2013. This process By order of the Commission. Division, and should refer to United is conducted in accordance with 5 CFR Issued: July 10, 2013. States, State of Florida and State of 1320.10. Lisa R. Barton, Florida Department of Environmental If you have comments, especially on Acting Secretary to the Commission. Protection v. Miami-Dade County, Civil the estimated public burden or [FR Doc. 2013–16870 Filed 7–12–13; 8:45 am] Action No. 1:12–cv–24400–FAM, D.J. associated response time, suggestions, BILLING CODE 7020–02–P Ref. No. 90–5–1–1–4022/1. All or need a copy of the proposed comments must be submitted no later information collection instrument with than August 11, 2013. Comments may instructions or additional information, DEPARTMENT OF JUSTICE be submitted by email or by mail: please contact Clark R. Fleming, Field Division Counsel, El Paso Intelligence Notice of Extension to Public To submit com- Center, 11339 SSG Sims Blvd., El Paso, ments: Send them to: Comment Period for Consent Decree TX 79908. Under the Clean Water Act By E-mail ...... pubcomment- Written comments and suggestions [email protected]. from the public and affected agencies On June 6, 2013, the Department of By mail ...... Assistant Attorney Gen- concerning the proposed collection of Justice lodged a proposed Consent eral, U.S. DOJ—ENRD, information are encouraged. Your Decree with the United States District P.O. Box 7611, Wash- comments should address one or more Court for the Southern District of ington, DC 20044–7611. of the following four points: Florida in the lawsuit entitled United • Evaluate whether the proposed States, State of Florida and State of During the public comment period, collection of information is necessary Florida Department of Environmental the Consent Decree may be examined for the proper performance of the Protection v. Miami-Dade County, Civil and downloaded at this Justice functions of the agency, including Action No. 1:12–cv–24400–FAM. The Department Web site: http:// whether the information will have Consent Decree resolves all of the www.usdoj.gov/enrd/ practical utility; United States’, State of Florida’s, and Consent_Decrees.html. We will provide • Evaluate the accuracy of the State of Florida Department of a paper copy of the Consent Decree agencies estimate of the burden of the Environmental Protection’s claims upon written request and payment of proposed collection of information, against Miami-Dade County (‘‘Miami- reproduction costs. Please mail your including the validity of the Dade’’) in this case. The proposed request and payment to: Consent Decree methodology and assumptions used;

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• Enhance the quality, utility, and Dated: July 10, 2013. —Enhance the quality, utility, and clarity of the information to be Jerri Murray, clarity of the information to be collected; and Department Clearance Officer for PRA, U.S. collected; and • Minimize the burden of the Department of Justice. —Minimize the burden of the collection collection of information on those who [FR Doc. 2013–16866 Filed 7–12–13; 8:45 am] of information on those who are to are to respond, including through the BILLING CODE 4410–09–P respond, including through the use of use of appropriate automated, appropriate automated, electronic, electronic, mechanical, or other mechanical, or other technological technological collection techniques or DEPARTMENT OF JUSTICE collection techniques or other forms other forms of information technology, of information technology, e.g., e.g., permitting electronic submission of Office of Justice Programs permitting electronic submission of responses. responses. Overview of Information Collection [OMB Number 1121—NEW] Overview of This Information Collection Back to Top 1117–0042 Agency Information Collection (1) Type of Information Collection: Activities; Proposed Collection; (1) Type of information collection: Extension of a currently approved Comments Requested: Juvenile Original Web-based Survey. collection. Justice Reform and Reinvestment (2) The title of the form/collection: (2) Title of the Form/Collection: Initiative Stakeholder Survey Under Juvenile Justice Reform and National Clandestine Laboratory Seizure OMB’s Partnership Fund Reinvestment Initiative. Report. (3) The agency form number, if any, (3) Agency form number, if any and ACTION: 60 Day Notice. and the applicable component of the the applicable component of the Department sponsoring the collection: Department sponsoring the collection: The Department of Justice (DOJ), The Office of Juvenile Justice and Form number: EPIC Form 143. Office of Justice Programs, Office of Delinquency Prevention, United States Component: El Paso Intelligence Juvenile Justice and Delinquency Department of Justice. Center, Drug Enforcement Prevention, will be submitting the (4) Affected public who will be asked Administration, U.S. Department of following information collection request or required to respond, as well as a brief Justice. to the Office of Management and Budget abstract: Milwaukee County, Wisconsin; (4) Affected public who will be asked (OMB) for review and approval in Iowa; and Delaware Juvenile Justice or required to respond, as well as a brief accordance with the Paperwork Service Providers. Local government abstract: Reduction Act of 1995. The proposed and Not-for-profit institutions, Business Primary: State, Local or Tribal information collection is published to or other for-profit in each of these three Government. obtain comments from the public and jurisdictions will be affected. Other: None. affected agencies. Comments are Abstract: This survey is being Abstract: Records in this system are encouraged and will be accepted for conducted as a part of an evaluation of used to provide clandestine laboratory ‘‘sixty days’’ until September 13, 2013. OJJDPs JJRRI Demonstration Program. In seizure information to the El Paso This process is conducted in accordance 2012, OJJDP commissioned a 36-month Intelligence Center, Drug Enforcement with 5 CFR 1320.10. evaluation of the Juvenile Justice Administration, and other Law If you have comments especially on Reform and Reinvestment Initiative enforcement agencies, in the discharge the estimated public burden or (JJRRI) Demonstration Program. The of their law enforcement duties and associated response time, suggestions, JJRRI Demonstration Program provides responsibilities. or need a copy of the proposed funds to three states and/or local (5) An estimate of the total number of information collection instrument with administering agencies for juvenile respondents and the amount of time instructions or additional information, justice to develop and implement an estimated for an average respondent to please contact Kristen Kracke, (202) integrated set of evidence-based and respond: There are one thousand two 616–3649, Office of Juvenile Justice and cost-measurement tools that will enable hundred sixty-seven (1267) total Delinquency Prevention, Office of them to make informed decisions about respondents for this information Justice Programs, U.S. Department of resources and services for juvenile- collection. Eight thousand eight Justice, 810 Seventh Street NW., justice involved youth. hundred seventy-eight (8878) responded Washington, DC 20531. The Urban Institute (UI) is conducting using paper at 1 hour a response and a comprehensive evaluation of JJRRI to Written comments and suggestions four thousand five hundred twenty-four determine whether the initiative has from the public and affected agencies (4524) responded electronically at 1 had the intended effect of improving concerning the proposed collection of hour a response, for thirteen thousand program- and cost-effectiveness. As part information are encouraged. Your four hundred two (13,402) annual of this evaluation, UI will conduct two comments should address one or more responses. web-based surveys with key of the following four points: (6) An estimate of the total public stakeholders at each site to measure burden (in hours) associated with the —Evaluate whether the proposed changes in attitudes towards evidence- collection: It is estimated that there are collection of information is necessary based practices as a result of the JJRRI 13,402 annual burden hours associated for the proper performance of the Demonstration Program. with this collection. functions of the agency, including The main objective of this web-based If additional information is required whether the information will have survey is to measure juvenile justice contact: Jerri Murray, Department practical utility; stakeholder—agency leadership and Clearance Officer, Policy and Planning —Evaluate the accuracy of the agencies staff—support for use and knowledge of Staff, Justice Management Division, estimate of the burden of the Evidence-Based Practice’s in the three Department of Justice, Two Constitution proposed collection of information, sites selected to be JJRRI Demonstration Square, 145 N Street NE., Suite 3W– including the validity of the Programs. Two surveys will be 1407B, Washington, DC 20530. methodology and assumptions used; conducted by UI to measure stakeholder

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support and knowledge of evidence- participating via teleconference and/or NATIONAL AERONAUTICS AND based practices. The first survey will WebEx. Presentations from previous SPACE ADMINISTRATION assess baseline attitudes of EBPs. The committee meetings can be found at [Notice: (13–078)] second survey will measure the extent http://www.nasa.gov/offices/nac/ to which context and attitudes change EPO_Meetings.html. NASA Advisory Council; Human through the initiative. Exploration and Operations SUPPLEMENTARY INFORMATION: (5) An estimate of the total number of The Committee; Meeting respondents and the amount of time agenda for the meeting includes the estimated for an average respondent to following topics: AGENCY: National Aeronautics and respond/reply: It is estimated that 480 Space Administration. • NASA Education Current Activities respondents will complete a 20 minute and Plans ACTION: Notice of meeting. questionnaire. (6) An estimate of the total public • NASA Communications Current SUMMARY: In accordance with the burden (in hours) associated with the Activities and Plans Federal Advisory Committee Act, Public collection: Approximately 160 hours. • The Educational Global Climate Law 92–462, as amended, the National If additional information is required, Modeling Project Aeronautics and Space Administration (NASA) announces a meeting of the contact: Jerri Murray, Department • Clearance Officer, United States International Space Station (ISS) 101 Human Exploration and Operations Department of Justice, Justice • Asteroid Grand Challenge Committee of the NASA Advisory Management Division, Policy and • Current/Planned Planetary Science Council (NAC). This Committee reports Planning Staff, Two Constitution Milestones to the NAC. Square, 145 N Street NE., Suite 2E–508, DATES: Monday, July 29, 2013, 10:00 The meeting will be open to the Washington, DC 20530. a.m.–2:00 p.m.; and Tuesday, July 30, public up to the seating capacity of the 2013, 9:00 a.m.–3:30 p.m., Local Time. Dated: July 9, 2013. room. It is imperative that the meeting ADDRESSES: NASA Headquarters, Jerri Murray, be held on this date to accommodate the Program Review Center, Room 9H40, Department Clearance Officer for PRA, scheduling priorities of the key 300 E Street SW., Washington, DC Department of Justice. participants. Attendees will be 20546. [FR Doc. 2013–16781 Filed 7–12–13; 8:45 am] requested to sign a register and to BILLING CODE 4410–18–P comply with NASA security FOR FURTHER INFORMATION CONTACT: Dr. requirements, including the Bette Siegel, Human Exploration and presentation of a valid picture ID, green Operations Mission Directorate, NASA NATIONAL AERONAUTICS AND card, or passport to Security before Headquarters, Washington, DC 20546, SPACE ADMINISTRATION access to NASA Headquarters. Foreign (202) 358–2245, fax (202) 358–2946, or [email protected]. [Notice: (13–079)] nationals attending this meeting will be required to provide a copy of their SUPPLEMENTARY INFORMATION: The NASA Advisory Council; Education passport and visa in addition to meeting will be open to the public up and Public Outreach Committee; providing the following information no to the capacity of the room. This Meeting less than 10 working days prior to the meeting is also available telephonically and by WebEx. Any interested person meeting: Full name; gender, date/place AGENCY: National Aeronautics and may call the USA toll free conference of birth; citizenship; visa information Space Administration. call number (877) 546–1574 or toll (number, type, expiration date); ACTION: Notice of meeting. number (212) 547–0312, pass code passport information (number, country, 7677920, to participate in this meeting SUMMARY: In accordance with the expiration date); employer/affiliation by telephone. The WebEx link is Federal Advisory Committee Act, Public information (name of institution, https://nasa.webex.com/, the meeting Law 92–463, as amended, the National address, country, telephone); title/ number is 994 521 512, and the Aeronautics and Space Administration position of attendee; and home address password is July 29–30! announces a meeting of the Education to Ms. Erika Vick via fax at (202) 358– The agenda for the meeting includes and Public Outreach (EPO) Committee 4332 or by email at Erika.vick- the following topics: of the NASA Advisory Council (NAC). [email protected]. U.S. citizens and —Status of Human Exploration and This Committee reports to the NAC. Permanent Residents (green card Operations DATES: Tuesday, July 30, 2013, 8:30 a.m. holders) are requested to submit their —Status of Exploration Systems to 5:00 p.m., Local Time. name and affiliation 3 working days Development ADDRESSES: NASA Headquarters, Room prior to the meeting to Ms. Erika G. —Status of International Space Station 2E39, 300 E Street SW., Washington, DC Vick. —Status of Commercial Crew and Cargo 20546. Patricia D. Rausch, —Status of Center for the Advancement FOR FURTHER INFORMATION CONTACT: of Science in Space (CASIS) and NAC This Advisory Committee Management Officer, meeting will also take place Research Subcommittee National Aeronautics and Space —Technology Briefing—Joint Session telephonically and via WebEx. Any Administration. with NAC Technology and Innovation interested person should contact Ms. [FR Doc. 2013–16914 Filed 7–12–13; 8:45 am] Erika G. Vick, Executive Secretary for Committee the Education and Public Outreach BILLING CODE 7510–13–P It is imperative that the meeting be Committee, National Aeronautics and held on this date to accommodate the Space Administration, Washington, DC, scheduling priorities of the key at [email protected], no later than participants. Attendees will be 12:00 p.m. Local Time, July 26, 2013, to requested to sign a register and to get further information about comply with NASA security

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requirements, including the SUPPLEMENTARY INFORMATION: The NATIONAL SCIENCE FOUNDATION presentation of a valid picture ID to meeting will be open to the public up Security before access to NASA to the capacity of the room. This Advisory Committee for Mathematical Headquarters. Foreign nationals meeting is also available telephonically and Physical Sciences #66; Notice of attending this meeting will be required and by WebEx. Any interested person Meeting; Correction to provide a copy of their passport and may call the USA toll free conference SUMMARY: The National Science visa in addition to providing the call number (888) 323–3509 or toll Foundation published a Notice of following information no less than 10 number (415) 228–4885, pass code Meeting for the July 18 Advisory working days prior to the meeting: Full 3340929, to participate in this meeting Committee for Mathematical and name; gender; date/place of birth; by telephone. The WebEx link is Physical Sciences in the Federal citizenship; visa information (number, https://nasa.webex.com/, the meeting Register on June 21, 2013. This notice type, expiration date); passport number is 990 899 527, and the corrects the operated assistance information (number, country, password is Partners2013*. The agenda teleconference telephone number and expiration date); employer/affiliation for the meeting includes the following the password. information (name of institution, FOR FURTHER INFORMATION CONTACT: Dr. address, country, telephone); title/ topics: Kelsey Cook, Staff Associate and position of attendee; and home address —Commercial Crew Update and MPSAC Designated Federal Officer, to Dr. Bette Siegel via email at Collaborations for Commercial Space Directorate for Mathematical and [email protected] or by fax at (202) Capabilities Physical Sciences, National Science 358–2946. U.S. citizens and Permanent —Aeronautics Research Mission Foundation, 4201 Wilson Blvd., Residents (green card holders) are Directorate Lessons Learned Arlington, VA 22230 Telephone #: 703– requested to submit their name and 292–7490, 703–292–8800— affiliation 3 working days prior to the —Use of Prizes [email protected] or Caleb Autrey, Science meeting to Dr. Bette Siegel. —International Space Station Assistant, Directorate for Mathematical Patricia D. Rausch, Utilization Status and Plans and Physical Sciences, National Science Advisory Committee Management Officer, —Description of NASA’s Agency Level Foundation, 4201 Wilson Blvd., National Aeronautics and Space Commercialization Study Update Arlington, VA 22230 Telephone #: 703– Administration. 292–5137—[email protected]. It is imperative that the meeting be held [FR Doc. 2013–16910 Filed 7–12–13; 8:45 am] on this date to accommodate the Correction BILLING CODE 7510–13–P scheduling priorities of the key In the Federal Register of June 21, participants. Attendees will be 2013, on page 37590, in the third NATIONAL AERONAUTICS AND requested to sign a register and to column, the last paragraph under SPACE ADMINISTRATION comply with NASA security ‘‘Place’’ should read: requirements, including the Operated Assisted teleconference [Notice: (13–080)] presentation of a valid picture photo ID, service is available for this meeting. Call green card, or passport to Security 1–866–844–9416. The Operator will ask NASA Advisory Council; Commercial before access to NASA Headquarters. for the password which is ‘‘mps Space Committee; Meeting Foreign nationals attending this meeting advisory.’’ You will be connected to the audio portion of the meeting. AGENCY: National Aeronautics and will be required to provide a copy of Space Administration. their passport and visa in addition to Dated: July 9, 2013. ACTION: Notice of meeting. providing the following information no Susanne Bolton, less than 10 working days prior to the Committee Management Officer. SUMMARY: In accordance with the meeting: Full name; gender; date/place [FR Doc. 2013–16799 Filed 7–12–13; 8:45 am] Federal Advisory Committee Act, Public of birth; citizenship; visa information BILLING CODE 7555–01–P Law 92–462, as amended, the National (number, type, expiration date); Aeronautics and Space Administration passport information (number, country, (NASA) announces a meeting of the expiration date); employer/affiliation NATIONAL SCIENCE FOUNDATION Commercial Space Committee of the information (name of institution, National Science Board; Sunshine Act NASA Advisory Council (NAC). This address, country, telephone); title/ Meetings; Notice Committee reports to the NAC. The position of attendee; and home address meeting will be held for the purpose of to Mr. David M. Lengyel via email at The National Science Board’s soliciting, from the scientific [email protected] or by fax at (202) Committee on Education and Human community and other persons, scientific 358–2885. U.S. citizens and Permanent Resources, pursuant to NSF regulations and technical information relevant to Residents (green card holders) are (45 CFR part 614), the National Science program planning. requested to submit their name and Foundation Act, as amended (42 U.S.C. DATES: Tuesday, July 30, 2013, 9:15 affiliation 3 working days prior to the 1862n–5), and the Government in the a.m.–5:25 p.m., Local Time. meeting to Mr. David M. Lengyel. Sunshine Act (5 U.S.C. 552b), hereby ADDRESSES: NASA Headquarters, gives notice in regard to the scheduling Conference Room 1Q39, 300 E Street Patricia D. Rausch, of a teleconference for the transaction of SW., Washington, DC 20546. Advisory Committee Management Officer, National Science Board business and FOR FURTHER INFORMATION CONTACT: Mr. National Aeronautics and Space other matters specified, as follows: David M. Lengyel, Human Exploration Administration. DATE AND TIME: Wednesday, July 17, and Operations Mission Directorate, [FR Doc. 2013–16908 Filed 7–12–13; 8:45 am] 2013, from 2:00–3:00 p.m. e.d.t. NASA Headquarters, Washington, DC BILLING CODE 7510–13–P SUBJECT MATTER: (1) Chairman’s 20546, (202) 358–0391, fax (202) 358– opening remarks; (2) topics and possible 2946, or [email protected]. speakers for the August Board meeting;

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and (3) activities committees undertake 1. The title of the information Submit, by September 13, 2013, in order to produce NSB reports. collection: Policy Statement for the comments that address the following STATUS: Open. ‘‘Criteria for Guidance of States and questions: NRC in Discontinuance of NRC LOCATION: This meeting will be held by 1. Is the proposed collection of Regulatory Authority and Assumption teleconference at the National Science information necessary for the NRC to Thereof By States Through Agreement,’’ Board Office, National Science properly perform its functions? Does the Maintenance of Existing Agreement Foundation, 4201 Wilson Blvd., information have practical utility? State Programs, Request for Information Arlington, VA 22230. A public listening Through the Integrated Materials 2. Is the burden estimate accurate? room will be available for this Performance Evaluation Program teleconference meeting. All visitors 3. Is there a way to enhance the (IMPEP) Questionnaire, and Agreement must contact the Board Office (call 703– quality, utility, and clarity of the State Participation in IMPEP. 292–7000 or send an email message to information to be collected? [email protected]) at least 24 2. Current OMB approval number: 4. How can the burden of the hours prior to the teleconference for the 3150–0183. information collection be minimized, public room number and to arrange for 3. How often the collection is including the use of automated a visitor’s badge. All visitors must report required: Every four years for collection techniques or other forms of to the NSF visitor desk located in the completion of the IMPEP questionnaire information technology? lobby at the 9th and N. Stuart Streets in preparation for an IMPEP review. The public may examine and have entrance on the day of the One time for new Agreement State copied for a fee publicly-available teleconference to receive a visitor’s applications. Annually for participation documents, including the draft badge. by Agreement States in the IMPEP supporting statement, at the NRC’s UPDATES AND POINT OF CONTACT: Please reviews and fulfilling requirements for Public Document Room, Room O–1F21, refer to the National Science Board Web Agreement States to maintain their One White Flint North, 11555 Rockville site www.nsf.gov/nsb for additional programs. Pike, Rockville, Maryland 20852. The information. Meeting information and 4. Who is required or asked to report: OMB clearance requests are available at updates (time, place, subject matter or All Agreement States (37 Agreement the NRC’s Web site: http://www.nrc.gov/ status of meeting) may be found at States who have signed Agreements public-involve/doc-comment/omb/. http://www.nsf.gov/nsb/notices/. Point with NRC under Section 274b. of the The document will be available on the of contact for this meeting is: Jack Atomic Energy Act (Act)) and any non- NRC home page site for 60 days after the Meszaros, 4201Wilson Blvd., Arlington, Agreement State seeking to sign an signature date of this notice. Comments VA 22230. Telephone: (703) 292–7000. Agreement with the Commission. submitted in writing or in electronic Ann Bushmiller, 5. The number of annual respondents: form will be made available for public Senior Counsel to the National Science Board. 38 (37 existing Agreement States plus 1 inspection. Because your comments will [FR Doc. 2013–17021 Filed 7–11–13; 4:15 pm] applicant). not be edited to remove any identifying or contact information, the NRC BILLING CODE 7555–01–P 6. The number of hours needed annually to complete the requirement or cautions you against including any request: 285,143 hours (an average of information in your submission that you do not want to be publicly disclosed. NUCLEAR REGULATORY 7,504 hours per respondent). This Comments submitted should reference COMMISSION includes 477 hours to complete the IMPEP questionnaires; 2,750 hours to Docket No. NRC–2013–0116. You may [Docket No. NRC–2013–0116] prepare new Agreement State submit your comments by any of the applications, 396 hours for participation following methods: Electronic Agency Information Collection in IMPEP reviews; and 281,520 hours comments: Go to http:// Activities: Proposed Collection; for maintaining Existing Agreement www.regulations.gov and search for Comment Request State programs. Docket No. NRC–2013–0116. Mail comments to NRC’s Clearance Officer, AGENCY: Nuclear Regulatory 7. Abstract: The States wishing to Tremaine Donnell (T–5 F53), U.S. Commission. become Agreement States are requested Nuclear Regulatory Commission, ACTION: Notice of pending NRC action to to provide certain information to the Washington, DC 20555–0001. Questions submit an information collection NRC as specified by the Commission’s about the information collection request to the Office of Management and Policy Statement, ‘‘Criteria for Guidance requirements may be directed to the Budget (OMB) and solicitation of public of States and NRC in Discontinuance of NRC’s Clearance Officer, Tremaine comment. NRC Regulatory Authority and Donnell (T–5 F53), U.S. Nuclear Assumption Thereof By States Through Regulatory Commission, Washington, SUMMARY: The U.S. Nuclear Regulatory Agreement.’’ The Agreement States need DC 20555–0001; telephone: 301–415– Commission (NRC) invites public to ensure that the radiation control 6258, or by email: comment about our intention to request program under the Agreement remains [email protected]. the OMB’s approval for renewal of an adequate and compatible with the existing information collection that is requirements of Section 274 of the Act Dated at Rockville, Maryland, this 9th day summarized below. We are required to and must maintain certain information. of July, 2013. publish this notice in the Federal The NRC conducts periodic evaluations For the Nuclear Regulatory Commission. Register under the provisions of the through IMPEP to ensure that these Tremaine Donnell, Paperwork Reduction Act of 1995 (44 programs are compatible with the NRC’s NRC Clearance Officer, Office of Information U.S.C. Chapter 35). program, meet the applicable parts of Services. Information pertaining to the the Act, and adequate to protect public [FR Doc. 2013–16780 Filed 7–12–13; 8:45 am] requirement to be submitted: health and safety. BILLING CODE 7590–01–P

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NUCLEAR REGULATORY 2011 (ADAMS Accession No. SECURITIES AND EXCHANGE COMMISSION ML11215A090), as supplemented by COMMISSION letters dated September 14, 2012, [Docket Nos. 50–361 and 50–362; NRC– Submission for OMB Review; 2013–0155] September 27, 2012, September 28, 2012, November 5, 2012, February 15, Comment Request Application and Amendment to Facility 2013, March 19, 2013, and April 11, Upon Written Request, Copies Available Operating License Involving Proposed 2013 (ADAMS Accession Nos.: From: Securities and Exchange No Significant Hazards Consideration ML12263A300, ML12275A418, Commission, Office of Investor Determination; San Onofre Nuclear ML12272A092, ML12310A408, Education and Advocacy, Generating Station, Units 2 and 3 ML13051A451, ML13081A019, and Washington, DC 20549–0213. ML13105A199, respectively), for AGENCY: Nuclear Regulatory proposed amendments to Facility Extension: Commission. Rule 6h–1, SEC File No. 270–497; OMB Operating License Nos. NPF–10 and Control No. 3235–0555. ACTION: Notice of withdrawal. NPF–15 for the San Onofre Nuclear Generating Station (SONGS), Units 2 Notice is hereby given that pursuant ADDRESSES: Please refer to Docket ID and 3, respectively, located in San Diego to the Paperwork Reduction Act of 1995 NRC–2013–0155 when contacting the County, California. (44 U.S.C. 3501 et seq.) (‘‘PRA’’), the NRC about the availability of The proposed amendments would Securities and Exchange Commission information regarding this document. have revised a number of Technical (‘‘Commission’’) has submitted to the You may access information related to Specification (TS) requirements, to Office of Management and Budget this document, which the NRC allow the licensee to use AREVA 16x16 (‘‘OMB’’) a request for approval of possesses and are publicly available, reactor fuel on a permanent basis in extension of the previously approved using any of the following methods: SONGS, Units 2 and 3. These changes collection of information provided for in • Federal rulemaking Web site: Go to included revising TS 5.7.1.5, Core Rule 6h–1 (17 CFR 240.6h–1) under the http://www.regulations.gov and search Operating Limits Report (COLR), to Securities Exchange Act of 1934, as for Docket ID NRC–2013–0155. Address update the methodology reference list to amended (‘‘Act’’) (15 U.S.C. 78a et seq.). questions about NRC dockets to Carol support the core design with the new Section 6(h) of the Act (15 U.S.C. Gallagher; telephone: 301–492–3668; AREVA fuel; revising TS 4.2.1, Fuel 78f(h)) requires national securities email: [email protected]. For Assemblies, to include the description exchanges and national securities technical questions, contact the of the new fuel cladding material (M5); associations that trade security futures individual(s) listed in the FOR FURTHER revising TS 2.1.1.2, Reactor Safety products to establish listing standards that, among other things, require that: (i) INFORMATION CONTACT section of this Limits, to identify a fuel centerline melt Trading in such products not be readily document. safety limit for the AREVA fuel with susceptible to price manipulation; and • NRC’s Agencywide Documents corresponding adjustments made to (ii) the market on which the security Access and Management System account for the burnable absorber fuel futures product trades has in place (ADAMS): You may access publicly rods; and incorporating fuel burnup procedures to coordinate trading halts available documents online in the NRC limits consistent with AREVA M5 clad with the listing market for the security Library at http://www.nrc.gov/reading- fuel assemblies into the SONGS or securities underlying the security rm/adams.html. To begin the search, licensing basis. futures product. Rule 6h–1 implements select ‘‘ADAMS Public Documents’’ and The Commission had previously these statutory requirements and then select ‘‘Begin Web-based ADAMS issued a Notice of Consideration of requires that (1) the final settlement Search.’’ For problems with ADAMS, Issuance of Amendment published in price for each cash-settled security please contact the NRC’s Public the Federal Register on February 14, futures product fairly reflect the Document Room (PDR) reference staff at 2012 (76 FR 8292). However, by letter opening price of the underlying security 1–800–397–4209, 301–415–4737, or by dated July 1, 2013 (ADAMS Accession or securities, and (2) the exchanges and email to [email protected]. The No. ML13183A412), the licensee associations trading security futures ADAMS accession number for each withdrew the proposed change.For products halt trading in any security document referenced in this notice (if further details with respect to this futures product for as long as trading in that document is available in ADAMS) action, see the application for the underlying security, or trading in is provided the first time that a amendment dated July 29, 2011, as 50% of the underlying securities, is document is referenced. supplemented by letters dated • NRC’s PDR: You may examine and halted on the listing market. September 14, 2012, September 27, It is estimated that approximately 1 purchase copies of public documents at 2012, September 28, 2012, November 5, the NRC’s PDR, Room O1–F21, One respondent per year, consisting of a 2012, February 15, 2013, March 19, designated contract market not already White Flint North, 11555 Rockville 2013, and April 11, 2013, and the Pike, Rockville, Maryland 20852. registered as a national securities licensee’s letter dated July 1, 2013, exchange under Section 6(g) of the FOR FURTHER INFORMATION CONTACT: which withdrew the application for Exchange Act that seeks to list or trade Brian Benney, Senior Project Manager, license amendment. security futures products, will incur an Office of Nuclear Reactor Regulation, Dated at Rockville, Maryland, this 8th day average burden of 10 hours per year to U.S. Nuclear Regulatory Commission, of July, 2013. comply with this rule, for a total burden Washington, DC 20555–0001; telephone: For the Nuclear Regulatory Commission. of 10 hours. At an average cost per hour 301–415–2767; email: Brian Benney, of approximately $379, the resultant [email protected]. Senior Project Manager, SONGS Special total internal cost of compliance for all SUPPLEMENTARY INFORMATION: The U.S. Projects Branch, Division of Operating respondents is $3,790 per year (1 Nuclear Regulatory Commission (NRC) Reactor Licensing, Office of Nuclear Reactor respondent × 10 hours/respondent × has granted the request of Southern Regulation. $379/hour). California Edison (the licensee) to [FR Doc. 2013–16854 Filed 7–12–13; 8:45 am] Compliance with Rule 6h–1 is withdraw its application dated July 29, BILLING CODE 7590–01–P mandatory. Any listing standards

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established pursuant to Rule 6h–1 section 12(d)(1)(J) of the Act for an statutory trust. The Adviser is an Illinois would be filed with the Commission as exemption from sections 12(d)(1)(A) and state banking corporation that is proposed rule changes pursuant to (B) of the Act (‘‘Prior Orders’’). registered under the Investment Section 19(b) of the Act, and would be Advisers Act of 1940 and serves as published in the Federal Register. SUMMARY OF APPLICATION: Applicants investment adviser to the 13 series of An agency may not conduct or seek to amend the Prior Orders to the Trust (‘‘Existing Funds’’), all of sponsor, and a person is not required to permit the Funds (as defined in the which rely on one of the Prior Orders. respond to, a collection of information applications for the Prior Orders) to The distributor for the Existing Funds is under the PRA unless it displays a issue Shares in less than Creation Unit Foreside, a Delaware limited liability currently valid OMB control number. size to investors participating in the company. Applicants request relief for The public may view background Distribution Reinvestment Program (as the Existing Funds and for any documentation for this information defined below). additional Funds, as defined in the Prior collection at the following Web site: APPLICANTS: FlexShares Trust (the Applications. www.reginfo.gov. Comments should be ‘‘Trust’’), Northern Trust Investments, 2. The Prior Applications stated that directed to: (i) Desk Officer for the Inc. (the ‘‘Adviser’’), and Foreside Fund the Funds would not make the DTC Securities and Exchange Commission, Services, LLC (‘‘Foreside’’). book-entry dividend reinvestment Office of Information and Regulatory DATES: Filing Dates: The application was service available for use by Beneficial Affairs, Office of Management and filed on April 12, 2013, and amended on Owners for reinvestment of their cash Budget, Room 10102, New Executive July 3, 2013. proceeds. The Prior Applications also Office Building, Washington, DC 20503, HEARING OR NOTIFICATION OF HEARING: An stated that ‘‘[b]rokers may, however, or by sending an email to: order granting the requested relief will offer a dividend reinvestment service [email protected]; and (ii) be issued unless the Commission orders which uses dividends to purchase Thomas Bayer, Director/Chief a hearing. Interested persons may Shares on the secondary market at Information Officer, Securities and request a hearing by writing to the market value.’’ In addition, the Prior Exchange Commission, c/o Remi Pavlik- Commission’s Secretary and serving Applications included several Simon, 6432 General Green Way, applicants with a copy of the request, representations and a condition noting Alexandria, VA 22312 or send an email personally or by mail. Hearing requests that Shares could be acquired from the to: [email protected]. Comments should be received by the Commission Funds and the Funds would issue must be submitted to OMB within 30 by 5:30 p.m. on August 5, 2013 and Shares in Creation Units only. The days of this notice. should be accompanied by proof of applicants seek an order amending the Dated: July 10, 2013. service on applicants, in the form of an Prior Orders (‘‘Amended Order’’) so that Kevin M. O’Neill, affidavit or, for lawyers, a certificate of the representations and condition A.2 specifically permit the Funds to operate Deputy Secretary. service. Hearing requests should state the nature of the writer’s interest, the the ‘‘Distribution Reinvestment [FR Doc. 2013–16859 Filed 7–12–13; 8:45 am] reason for the request, and the issues Program,’’ as described below.2 BILLING CODE 8011–01–P contested. Persons who wish to be 3. The Trust will make the DTC book- notified of a hearing may request entry Dividend Reinvestment Service SECURITIES AND EXCHANGE notification by writing to the (‘‘DTC Dividend Reinvestment Service’’) COMMISSION Commission’s Secretary. available for use by the beneficial ADDRESSES: Elizabeth M. Murphy, owners of Shares (‘‘Beneficial Owners’’) [Investment Company Act Release No. Secretary, U.S. Securities and Exchange through DTC Participants for 30593; 812–14150] Commission, 100 F Street NE., reinvestment of their cash dividends.3 Washington, DC 20549–1090. DTC Participants whose customers FlexShares Trust, et al.; Notice of participate in the program will have the Application Applicants, Trust and Adviser, c/o Peter K. Ewing, 50 S. LaSalle Street, Chicago, distributions of their customers July 9, 2013. IL 60603, Foreside, Three Canal Plaza, automatically reinvested in additional AGENCY: Securities and Exchange Suite 100, Portland, ME 04101. whole Shares issued by the applicable Commission (‘‘Commission’’). FOR FURTHER INFORMATION CONTACT: Fund at NAV per Share. Shares will be issued at NAV under the DTC Dividend ACTION: Notice of an application to Marilyn Mann, Special Counsel, at (202) Reinvestment Service regardless of amend prior orders 1 under section 6(c) 551–6813 or Mary Kay Frech, Branch whether the Shares are trading in the of the Investment Company Act of 1940 Chief, at (202) 551–6821 (Division of secondary market at a premium or (‘‘Act’’) granting an exemption from Investment Management, Exemptive discount to NAV as of the time NAV is sections 2(a)(32), 5(a)(1), 22(d) and 22(e) Applications Office). calculated. Thus, Shares may be of the Act and rule 22c–1 under the Act, SUPPLEMENTARY INFORMATION: The purchased through the DTC Dividend and under sections 6(c) and 17(b) of the following is a summary of the Reinvestment Service at prices that are Act for an exemption from sections application. The complete application higher (or lower) than the 17(a)(1) and (2) of the Act, and under may be obtained via the Commission’s Web site by searching for the file contemporaneous secondary market trading price. Applicants state that the 1 Northern Trust Investments, Inc., Investment number, or an applicant using the Company Act Release Nos. 29752 (Aug. 10, 2011) Company name box, at http:// (notice) and 29782 (Sept. 6, 2011) (order); Northern 2 All entities that currently intend to rely on the Trust Investments, Inc., Investment Company Act www.sec.gov/search/search.htm or by Amended Order are named as applicants. Any other Release Nos. 30045 (Apr. 24, 2012) (notice) and calling (202) 551–8090. entity that relies on the Amended Order in the 30068 (May 22, 2012) (order); Northern Trust future will comply with the terms and conditions Investments, Inc., Investment Company Act Release Applicants’ Representations of the application. Nos. 30211 (Sept. 24, 2012) (notice) and (30240 1. The Trust is registered under the 3 Some DTC Participants may not elect to utilize (Oct. 23, 2012) (order). All capitalized terms not the DTC Dividend Reinvestment Service. Beneficial otherwise defined in the application have the Act as an open-end management Owners will be encouraged to contact their broker meanings ascribed to them in the applications for investment company with multiple to ascertain the availability of the DTC Dividend the Prior Orders (the ‘‘Prior Applications’’). series and organized as a Maryland Reinvestment Service through such broker.

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DTC Dividend Reinvestment Service dividend reinvestment program under Beneficial Owners’ expectations about differs from dividend reinvestment which Shares are purchased in the the Funds or the fact that individual services offered by broker-dealers in two secondary market at current market Shares trade at secondary market prices. ways. First, in dividend reinvestment prices or no dividend reinvestment Applicants believe that Beneficial programs typically offered by broker- program at all. Owners (other than Authorized dealers, the additional shares are Participants) generally expect to buy Applicants’ Legal Analysis purchased in the secondary market at and sell individual Shares only through current market prices at a date and time 1. Section 6(c) of the Act provides that secondary market transactions at market determined by the broker-dealer at its the Commission may exempt any prices and that such owners will not be discretion. Shares purchased through person, security or transaction, or any confused by the Distribution the DTC Dividend Reinvestment Service class of persons, securities or Reinvestment Program. Therefore, are purchased directly from the fund on transactions, from any provision of the applicants believe that the Distribution the date of the distribution at the NAV Act, if and to the extent that such Reinvestment Program meets the per share on such date. Second, in exemption is necessary or appropriate standards for relief under section 6(c) of dividend reinvestment programs in the public interest and consistent the Act. typically offered by broker-dealers, with the protection of investors and the shareholders are typically charged a purposes fairly intended by the policy Applicants’ Conditions brokerage or other fee in connection and provisions of the Act. Applicants agree that the Amended with the secondary market purchase of 2. Applicants seek to amend the Prior Order will be subject to the same shares. Applicants state that brokers Orders to specifically permit the Funds conditions as those imposed by the typically do not charge customers any to operate the Distribution Reinvestment Prior Orders, except that condition A.2 fees for reinvesting distributions Program. The only difference between is revised in its entirety as follows: through the DTC Dividend the terms and conditions in the Prior Neither the Trust nor any Fund will Reinvestment Service. Orders and the Amended Order relates be advertised or marketed as an open- 4. Applicants state that the DTC to a Fund issuing Shares in less than end investment company or a mutual Dividend Reinvestment Service will be Creation Unit size under the fund. Any advertising material that operated by DTC in exactly the same Distribution Reinvestment Program. describes the purchase or sale of way it runs such service for other open- Applicants represent that the relief Creation Units or refers to redeemability end management investment granted in the Prior Orders under will prominently disclose that Shares companies. The initial decision to section 6(c) remains appropriate in the are not individually redeemable and participate in the DTC Dividend public interest and consistent with the that owners of Shares may acquire those Reinvestment Service is made by the protection of investors and the purposes Shares from a Fund (other than DTC Participant. Once a DTC fairly intended by the policy and pursuant to the Distribution Participant elects to participate in the provisions of the Act. Reinvestment Program) and tender those DTC Dividend Reinvestment Service, it 3. Applicants state that the Shares for redemption to a Fund in offers its customers the option to Distribution Reinvestment Program is Creation Units only. participate. Beneficial Owners will have reasonable and fair because it is voluntary and each Beneficial Owner For the Commission, by the Division of to make an affirmative election to Investment Management, under delegated participate by completing an election will have in advance accurate and authority. explicit information that makes clear the notice. Before electing to participate, Kevin M. O’Neill, terms of the Distribution Reinvestment Beneficial Owners will receive Deputy Secretary. disclosure describing the terms of the Program and the consequences of [FR Doc. 2013–16858 Filed 7–12–13; 8:45 am] DTC Dividend Reinvestment Service participation. The Distribution and the consequences of participation. Reinvestment Program does not involve BILLING CODE 8011–01–P This disclosure will include a clear and any overreaching on the part of any concise explanation that under the person concerned because it operates the same for each Beneficial Owner who SECURITIES AND EXCHANGE Distribution Reinvestment Program, COMMISSION Shares will be issued at NAV, which elects to participate, and is structured in could result in such Shares being the public interest because it is designed [Investment Company Act Release No. acquired at a price higher or lower than to give those Beneficial Owners who 30594; 812–13941] that at which they could be sold in the elect to participate a convenient and NGAM Advisors, LP, et al.; Notice of secondary market on the day they are efficient method to reinvest Application issued (this will also be clearly distributions without paying a brokerage disclosed in the Prospectus). Brokers commission. In addition, although July 9, 2013. providing the DTC Dividend brokers providing the Distribution AGENCY: Securities and Exchange Reinvestment Service to their customers Reinvestment Program could charge a Commission (‘‘Commission’’). fee, applicants represent that typically will determine whether to charge ACTION: Notice of an application for an Beneficial Owners a fee for this service. brokers do not charge for this service. order under section 6(c) of the 4. Applicants do not believe that the Applicants represent that brokers Investment Company Act of 1940 issuance of Shares under the typically do not charge a fee for the DTC (‘‘Act’’) for an exemption from sections Distribution Reinvestment Program will Dividend Reinvestment Service. 2(a)(32), 5(a)(1), 22(d) and 22(e) of the have a material effect on the overall 5. The Prospectus will make clear to Act and rule 22c-1 under the Act, under operation of the Funds, including on the Beneficial Owners that the Distribution sections 6(c) and 17(b) of the Act for an Reinvestment Program is optional and efficiency of the arbitrage mechanism exemption from sections 17(a)(1) and that its availability is determined by inherent in ETFs. In addition, (a)(2) of the Act, and under section their broker, at its own discretion. applicants do not believe that providing 12(d)(1)(J) of the Act for an exemption Broker-dealers are not required to utilize Beneficial Owners with an added from sections 12(d)(1)(A) and (B) of the the DTC Dividend Reinvestment optional benefit (the ability to reinvest Act. Service, and may instead offer a in Shares at NAV) will change the

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APPLICANTS: NGAM Advisors, LP SUPPLEMENTARY INFORMATION: The of other investment companies, (ii) are (‘‘NGAMA’’ or the ‘‘Adviser’’), Natixis following is a summary of the advised by an Adviser, and (iii) comply ETF Trust (the ‘‘Trust’’) and NGAM application. The complete application with the terms and conditions of the Distribution, LP (‘‘NGAMD’’ or the may be obtained via the Commission’s ETF Relief (such ETFs, individually, a ‘‘Distributor’’). Web site by searching for the file ‘‘Fund’’ and collectively, the ‘‘Funds’’).3 number, or an applicant using the SUMMARY OF APPLICATION: Applicants Each Fund will have distinct investment request an order that permits: (a) Series Company name box, at http:// strategies that are different from those of of certain actively managed open-end www.sec.gov/search/search.htm or by other Funds. 5. Applicants also request that the management investment companies to calling (202) 551–8090. 12(d)(1) Relief, exempting certain issue exchange-traded shares (‘‘Shares’’) Applicants’ Representations transactions from Sections 12(d)(l)(A) redeemable in large aggregations only 1. The Trust is a Massachusetts and 12(d)(l)(B) of the Act, and under (‘‘Creation Units’’); (b) secondary market business trust and will be registered as Sections 6(c) and 17(b) of the Act transactions in Shares to occur at an open-end management investment exempting certain transactions from negotiated market prices; (c) certain company under the Act. The Trust is Section 17(a) of the Act, apply to (i) the series to pay redemption proceeds, authorized to offer an unlimited number Funds and to (ii) series of the Trust or under certain circumstances, more than of series, and will create Funds (defined of other open-end management seven days after the tender of Shares for below) that will operate pursuant to the investment companies that operate as redemption; (d) certain affiliated terms and conditions of the application. ETFs whose portfolio securities will be persons of the series to deposit It is anticipated that the initial Fund selected to correspond generally to the securities into, and receive securities will be a foreign equity fund whose price and yield performance of a from, the series in connection with the investment objective is to seek long- specified index and are advised by an purchase and redemption of Creation term capital growth. Adviser (‘‘Index Series’’),4 (iii) Units (collectively, the ‘‘ETF Relief’’); 2. NGAMA, a Delaware partnership, is Acquiring Funds,5 and (iv) any and (e) certain registered management registered with the Commission as an principal underwriter of a Fund or any investment companies and unit investment adviser under the broker-dealer registered under the investment trusts outside of the same Investment Advisers Act of 1940 Securities Exchange Act of 1934, as group of investment companies as the (‘‘Advisers Act’’). NGAMA or an entity amended (‘‘Exchange Act’’) selling series to acquire Shares (the ‘‘12(d)(1) controlling, controlled by or under Shares to Acquiring Funds (‘‘Brokers’’).6 Relief’’). common control with NGAMA (each, Acquiring Funds do not include Funds. DATES: Filing Dates: The application was together with any successor thereto, 6. Each Fund will attempt to achieve filed on August 15, 2011, and amended included as an ‘‘Adviser’’) will serve as its investment objective by utilizing an on February 8, 2012, July 16, 2012, investment adviser to each Fund.1 An ‘‘active’’ management strategy based on December 4, 2012, and May 23, 2013. Adviser may retain one or more sub- investments in equity and debt advisers (each, a ‘‘Sub-Adviser’’) for a securities, as appropriate, including HEARING OR NOTIFICATION OF HEARING: An Fund. Any Adviser and any Sub- shares of other open-end and/or closed- order granting the requested relief will Adviser is or will be registered under end investment companies and/or be issued unless the Commission orders the Advisers Act or, in the case of a Sub- ETFs.7 If a Fund invests in derivatives, a hearing. Interested persons may Adviser, not subject to such registration. then (a) the Fund’s Board will request a hearing by writing to the 3. NGAMD, a Delaware partnership periodically review and approve the Commission’s Secretary and serving and an affiliate of NGAMA, is a broker- Fund’s use of derivatives and how the applicants with a copy of the request, dealer registered under the Securities Fund’s investment adviser assesses and personally or by mail. Hearing requests Exchange Act of 1934 (‘‘Exchange Act’’) manages risk with respect to the Fund’s should be received by the Commission that will act as the distributor and use of derivatives and (b) the Fund’s by 5:30 p.m. on August 5, 2013, and 2 principal underwriter of the Funds. disclosure of its use of derivatives in its should be accompanied by proof of The Distributor will be identified as offering documents and periodic reports service on applicants, in the form of an such in the current prospectus of each affidavit or, for lawyers, a certificate of Fund (‘‘Prospectus’’) and will comply 3 All entities that currently intend to rely on the service. Hearing requests should state with the terms of the application. order are named as applicants. Any other entity that the nature of the writer’s interest, the 4. Applicants request that the ETF relies on the order in the future will comply with reason for the request, and the issues Relief apply to future series of the Trust the terms and conditions of the application. contested. Persons who wish to be 4 For purposes of the requested 12(d)(1) Relief, or of other open-end management Index Series are included as Funds. notified of a hearing may request investment companies that may be 5 An ‘‘Acquiring Fund’’ is a registered notification by writing to the created in the future that are actively- management investment company or unit Commission’s Secretary. managed exchange-traded funds investment trust that is not advised or sponsored by (‘‘ETFs’’) that (i) primarily invest in debt the Adviser or an entity controlling, controlled by ADDRESSES: Elizabeth M. Murphy, or under common control with the Adviser, and not Secretary, U.S. Securities and Exchange and equity securities, including shares part of the same ‘‘group of investment companies’’ Commission, 100 F Street NE., as defined in Section 12(d)(l)(G)(ii) of the Act as the Washington, DC 20549–1090. 1 For the purposes of the application, a Funds. Each Acquiring Fund relying on the 12(d)(1) ‘‘successor’’ is limited to an entity that would result Relief to invest in a Fund will enter into an Applicants: c/o Coleen Downs Dineen, from reorganization into another jurisdiction or a ‘‘Acquiring Fund Agreement’’ (defined below) with NGAM Advisors, L.P., 399 Boylston change in the type of business organization. the Fund. An Acquiring Fund may rely on the order Street, Boston, MA 02116–9848. 2 In the future, another broker-dealer registered only to invest in Funds and not in any other under the Exchange Act may act as distributor and registered investment company. FOR FURTHER INFORMATION CONTACT: Jaea principal underwriter (included in the term 6 Any future principal underwriter of a Fund will F. Hahn, Senior Counsel, at (202) 551– ‘‘Distributor’’). No Distributor, Fund, Trust, be a broker-dealer registered under the Exchange 6870 or Jennifer L. Sawin, Branch Chief, Adviser, or Sub-Adviser will be affiliated with any Act and will comply with the terms and conditions Listing Market. A ‘‘Listing Market’’ is a national of the application. at (202) 551–6821 (Division of securities exchange, as defined in section 2(a)(26) 7 In no case, however, will such a Fund rely on Investment Management, Exemptive of the Act, on which Shares of a Fund trade at the exemption from section 12(d)(1) being requested Applications Office). negotiated prices in the secondary market. in the application.

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will be consistent with relevant Day 11 the names and quantities of the redemptions or all purchases and Commission and staff guidance. Funds instruments that constitute the Deposit redemptions on that day will be made may invest in ‘‘Depositary Receipts’’. A Instruments and the names and entirely in cash; (c) if, upon receiving a Fund will not invest in any Depositary quantities of the instruments that purchase or redemption order from an Receipts that the Adviser or any Sub- constitute the Redemption Instruments Authorized Participant, the Fund Adviser deems to be illiquid or for will be identical, and these instruments determines to require the purchase or which pricing information is not readily may be referred to, in the case of either redemption, as applicable, to be made available.8 The Funds may invest in a purchase or redemption, as the entirely in cash; 17 (d) if, on a given equity securities or fixed income ‘‘Creation Basket.’’ In addition, the Business Day, the Fund requires all securities traded in the U.S. or non-U.S. Creation Basket will correspond pro rata Authorized Participants purchasing or markets. Funds that invest in equity and to the positions in a Fund’s portfolio redeeming Shares on that day to deposit fixed income securities traded in the (including cash positions),12 except: (a) or receive (as applicable) cash in lieu of U.S. market are ‘‘Domestic Funds.’’ In the case of bonds, for minor some or all of the Deposit Instruments Funds that invest in equity securities or differences when it is impossible to or Redemption Instruments, fixed income securities traded in the break up bonds beyond certain respectively, solely because: (i) Such U.S. or non-U.S. markets are ‘‘Global minimum sizes needed for transfer and instruments are not eligible for transfer Funds’’. Funds that invest solely in settlement, (b) for minor differences through either the NSCC Process or the foreign equity and foreign fixed income when rounding is necessary to eliminate DTC Process; or (ii) in the case of Global securities are ‘‘Foreign Funds’’. fractional shares or lots that are not Funds or Foreign Funds, such 7. Shares of each Fund will be issued tradeable round lots; 13 or (c) TBA instruments are not eligible for trading in Creation Units of 25,000 or more Transactions,14 short positions in due to local trading restrictions, local Shares and Applicants anticipate that securities (‘‘Short Positions’’) and other restrictions on securities transfers or the price of a Share will range from $20 positions that cannot be transferred in other similar circumstances; or (e) if the to $200. All orders to purchase Creation kind 15 will be excluded from the Fund permits an Authorized Participant Units must be placed with the Creation Basket.16 If there is a difference to deposit or receive (as applicable) cash Distributor by or through a participant between the net asset value (‘‘NAV’’) in lieu of some or all of the Deposit in the Depository Trust Company (‘‘DTC attributable to a Creation Unit and the Instruments or Redemption Instruments, Participant’’) that has entered into a aggregate market value of the Creation respectively, solely because: (i) Such ‘‘Participant Agreement’’ with the Basket exchanged for the Creation Unit, instruments are, in the case of the Distributor (an ‘‘Authorized the party conveying instruments with purchase of a Creation Unit, not Participant’’).9 Purchase orders for the lower value will also pay to the available in sufficient quantity; (ii) such Shares will be processed either through other an amount in cash equal to that instruments are not eligible for trading a manual clearing process (the ‘‘DTC difference (the ‘‘Balancing Amount’’). by an Authorized Participant or the Process’’) or through an enhanced 9. Purchases and redemptions of investor on whose behalf the clearing process (‘‘the NSCC Process’’) Creation Units may be made in whole or Authorized Participant is acting; or (iii) available only to those DTC Participants in part on a cash basis, rather than in a holder of Shares of a Global Fund or that also are participants in the kind, solely under the following Foreign Fund would be subject to Continuous Net Settlement (‘‘CNS’’) circumstances: (a) To the extent there is unfavorable income tax treatment if the System of the National Securities a Balancing Amount, as described holder receives redemption proceeds in Clearing Corporation (‘‘NSCC’’), a above; (b) if, on a given Business Day, kind.18 clearing agency registered with the a Fund announces before the open of 10. Each Business Day, before the Commission and affiliated with DTC. trading that all purchases, all open of trading on that Fund’s Listing 8. Shares will be purchased and Market, each Fund will cause to be redeemed in Creation Units and transactions that would be exempt from registration published through the NSCC the names generally on an in-kind basis. Except under the Securities Act of 1933 (‘‘Securities Act’’). and quantities of the instruments In accepting Deposit Instruments and satisfying comprising the Creation Basket, as well where the purchase or redemption will redemptions with Redemption Instruments that are include cash under the limited restricted securities eligible for resale pursuant to as the estimated Balancing Amount (if circumstances specified below, Rule 144A under the Securities Act, the Funds will any), for that day. The published purchasers will be required to purchase comply with the conditions of Rule 144A. Creation Basket will apply until a new 11 Creation Units by making an in-kind Each Fund will sell and redeem Creation Units Creation Basket is announced on the on any day the Trust is open for business, including following Business Day, and there will deposit of specified instruments as required by section 22(e) of the Act (each, a (‘‘Deposit Instruments’’), and ‘‘Business Day’’). shareholders redeeming their Shares 12 The portfolio used for this purpose will be the 17 In determining whether a particular Fund will sell or redeem Creation Units entirely on a cash or will receive an in-kind transfer of same portfolio used to calculate the Fund’s NAV for that Business Day. in-kind basis (whether for a given day or a given order), the key consideration will be the benefit that specified instruments (‘‘Redemption 13 A tradeable round lot for a security will be the 10 would accrue to the Fund and its investors. For Instruments’’). On any given Business standard unit of trading in that particular type of instance, in bond transactions, the Adviser may be security in its primary market. able to obtain better execution than Share 8 14 Depositary Receipts are typically issued by a A TBA Transaction is a method of trading purchasers because of the Adviser’s size, experience financial institution, a ‘‘Depository’’, and evidence mortgage-backed securities. In a TBA Transaction, and potentially stronger relationships in the fixed ownership in a security or pool of securities that the buyer and seller agree on general trade income markets. Purchases of Creation Units either have been deposited with the Depositary. No parameters such as agency, settlement date, par on an all cash basis or in-kind are expected to be affiliated persons of Applicants, or of any Adviser, amount and price. The actual pools delivered are neutral to the Funds from a tax perspective. In Fund, or Sub-Adviser, will serve as Depository for determined two days prior to the settlement date. contrast, cash redemptions typically require selling any Depositary Receipts held by a Fund. 15 This includes instruments that can be portfolio holdings, which may result in adverse tax 9 DTC Participants may include broker-dealers, transferred in kind only with the consent of the consequences for the remaining Fund shareholders banks, trust companies and clearing companies. original counterparty to the extent the Fund does that would not occur with an in-kind redemption. 10 The Funds must comply with the federal not intend to seek such consents. As a result, tax considerations may warrant in-kind securities laws in accepting Deposit Instruments 16 Because these instruments will be excluded redemptions. and satisfying redemptions with Redemption from the Creation Basket, their value will be 18 A ‘‘custom order’’ is any purchase or Instruments, including that the Deposit Instruments reflected in the determination of the Balancing redemption of Shares made in whole or in part on and Redemption Instruments are sold in Amount (defined below). a cash basis in reliance on clause (e)(i) or (e)(ii).

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be no intra-day changes to the Creation trade in the secondary market at a 17(a)(1) and 17(a)(2) of the Act, and Basket except to correct errors in the material discount or premium in under section 12(d)(1)(J) of the Act for published Creation Basket. The Listing relation to their NAV. Applicants expect an exemption from sections 12(d)(1)(A) Market will disseminate every 15 that secondary market purchasers of and (B) of the Act. seconds throughout its regular trading Shares will include both institutional 2. Section 6(c) of the Act provides that hours the Fund’s estimated NAV, which and retail investors. the Commission may exempt any is an amount per Share representing the 14. Shares will not be individually person, security or transaction, or any current value of the Fund’s Portfolio redeemable and owners of Shares may Positions. acquire those Shares from a Fund, or class of persons, securities or 11. An investor purchasing or tender such shares for redemption to the transactions, from any provisions of the redeeming a Creation Unit from a Fund Fund, in Creation Units only. To Act, if and to the extent that such may be charged a fee (‘‘Transaction redeem, an investor must accumulate exemption is necessary or appropriate Fee’’) to protect existing shareholders of enough Shares to constitute a Creation in the public interest and consistent the Funds from the dilutive costs Unit. As discussed above, redemptions with the protection of investors and the associated with the purchase and of Creation Units may be made in whole purposes fairly intended by the policy redemption of Creation Units.19 All or in part on a cash basis, rather than and provisions of the Act. Section 17(b) orders to purchase Creation Units must in kind, solely pursuant to the of the Act provides that the Commission be placed with the Distributor by or procedures discussed in section III.B.1 may approve the sale of securities to an through an Authorized Participant and of the application. investment company and the purchase the Distributor will transmit all 15. The Trust will not, nor will any of securities from an investment purchase orders to the relevant Fund. Fund, be marketed or otherwise held company, in both cases by an affiliated The Distributor will maintain a record out as a ‘‘mutual fund.’’ Instead, each person of such company, if the of Creation Units purchases and will Fund will be marketed as an ‘‘actively- Commission finds that the terms of the send confirmations of such purchases. managed exchange-traded fund.’’ All transaction, including the consideration The Distributor will coordinate the marketing materials that describe the to be paid or received, are reasonable production and distribution of features or method of obtaining, buying and fair and do not involve Prospectuses to broker-dealers. or selling Creation Units, or Shares overreaching on the part of any person Applicants will arrange for dealers traded on the Listing Market, or refer to concerned, and the proposed selling Shares in the secondary market redeemability, will prominently transaction is consistent with the to provide purchasers with a disclose that Shares are not individually policies of each registered investment Prospectus. redeemable. company concerned and the general 12. Shares will be listed on the Listing 16. The Funds’ Web site, which will purposes of the Act. Section 12(d)(1)(J) Market and traded at prices based on a be publicly available at no charge, will current bid-offer market.20 No include the Prospectus and additional of the Act provides that the Commission secondary sales will be made to brokers quantitative information updated on a may exempt any person, security, or or dealers at a concession by the daily basis, including, on a per Share transaction, or any class or classes of Distributor or by a Fund. Transactions basis for each Fund, the prior Business persons, securities or transactions, from involving the sale of Shares on the Day’s NAV and the market closing price any provision of section 12(d)(1) if the Listing Market, which will not involve or mid-point of the bid/ask spread at the exemption is consistent with the public a Fund, will be subject to customary time of the calculation of such NAV interest and the protection of investors. brokerage commissions and charges. (‘‘Bid/Ask Price’’), and a calculation of Sections 5(a)(1) and 2(a)(32) of the Act 13. Applicants expect that purchasers the premium or discount of the market of Creation Units will include closing price or Bid/Ask Price against 3. Section 5(a)(1) of the Act defines an institutional investors and arbitrageurs. such NAV. On each Business Day, ‘‘open-end company’’ as a management Applicants expect that arbitrage before commencement of trading in investment company that is offering for opportunities created by the ability to Shares on a Fund’s Listing Market, the sale or has outstanding any redeemable continually purchase or redeem Fund will disclose on its Web site the security of which it is the issuer. Creation Units at their NAV per Share identities and quantities of the Section 2(a)(32) of the Act defines a should ensure that the Shares will not securities and other assets and positions redeemable security as any security, (including Short Positions) (together, other than short-term paper, under the 19 Higher transaction fees may be assessed for the ‘‘Portfolio Positions’’) held by the terms of which the holder, upon its investors purchasing or redeeming in cash, or for Fund that will form the basis for the investors purchasing or redeeming through the DTC presentation to the issuer, is entitled to Process than through the NSCC Process due to the Fund’s calculation of NAV at the end of receive approximately a proportionate higher fees charged to the Fund by DTC. that Business Day.21 share of the issuer’s current net assets, 20 If Shares are listed on Nasdaq or a similar or the cash equivalent. Because Shares electronic Listing Market (including NYSE Arca), Applicants’ Legal Analysis will not be individually redeemable, one or more member firms of that Listing Market 1. Applicants request an order under will act as market maker (‘‘Market Maker’’) and applicants request an order that would section 6(c) of the Act for an exemption maintain a market for Shares trading on the Listing permit each Fund to redeem Shares in from sections 2(a)(32), 5(a)(1), 22(d) and Market. On Nasdaq, no particular Market Maker Creation Units only. Applicants state would be contractually obligated to make a market 22(e) of the Act and rule 22c–1 under in Shares. However, the listing requirements on the Act, under sections 6(c) and 17(b) of that investors may purchase Shares in Nasdaq, for example, stipulate that at least two the Act for an exemption from sections Creation Units from each Fund and Market Makers must be registered in Shares to redeem Creation Units from each Fund. maintain a listing. In addition, on Nasdaq and NYSE Arca, registered Market Makers are required 21 Under accounting procedures followed by the Applicants further state that because the to make a continuous two-sided market or subject Funds, trades made on the prior Business Day (‘‘T’’) market price of Creation Units will be themselves to regulatory sanctions. No Market will be booked and reflected in NAV on the current disciplined by arbitrage opportunities, Maker will be an affiliated person, or an affiliated Business Day (‘‘T+1’’). Accordingly, the Funds will investors should be able to sell Shares person of an affiliated person, of the Funds, except be able to disclose at the beginning of the Business within Section 2(a)(3)(A) or (C) of the Act due to Day the portfolio that will form the basis for the in the secondary market at prices that ownership of Shares, as described below. NAV calculation at the end of the Business Day. do not vary materially from their NAV.

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Section 22(d) of the Act and Rule difference between the market price of represent more than 3% of the total 22c–1 under the Act Shares and their NAV remains narrow. outstanding voting stock of the acquired company, more than 5% of the total Section 22(e) of the Act 4. Section 22(d) of the Act, among assets of the acquiring company, or, other things, prohibits a dealer from 7. Section 22(e) of the Act generally together with the securities of any other selling a redeemable security that is prohibits a registered investment investment companies, more than 10% currently being offered to the public by company from suspending the right of of the total assets of the acquiring or through a principal underwriter, redemption or postponing the date of company. Section 12(d)(1)(B) of the Act except at a current public offering price payment of redemption proceeds for prohibits a registered open-end described in the prospectus. Rule 22c– more than seven days after the tender of investment company, its principal 1 under the Act generally requires that a security for redemption. Applicants underwriter, or any other broker or a dealer selling, redeeming, or observe that settlement of redemptions dealer from selling the investment repurchasing a redeemable security do of Creation Units of Foreign Funds and company’s shares to another investment so only at a price based on its NAV. Global Funds is contingent not only on company if the sale will cause the Applicants state that secondary market the settlement cycle of the U.S. acquiring company to own more than trading in Shares will take place at securities markets but also on the 3% of the acquired company’s voting negotiated prices, not at a current delivery cycles present in foreign stock, or if the sale will cause more than offering price described in the markets in which those Funds invest. 10% of the acquired company’s voting Prospectus, and not at a price based on Applicants have been advised that, stock to be owned by investment NAV. Thus, purchases and sales of under certain circumstances, the companies generally. Shares in the secondary market will not delivery cycles for transferring Portfolio 10. Applicants request relief to permit comply with section 22(d) of the Act Positions to redeeming investors, Acquiring Funds to acquire Shares in and rule 22c–1 under the Act. coupled with local market holiday excess of the limits in section Applicants request an exemption under schedules, will require a delivery 12(d)(1)(A) of the Act and to permit the section 6(c) from these provisions. process of up to 14 calendar days. Funds, their principal underwriters and 5. Applicants assert that the concerns Applicants therefore request relief from any Broker to sell Shares to Acquiring sought to be addressed by section 22(d) section 22(e) in order to provide Funds in excess of the limits in section of the Act and rule 22c–1 under the Act payment or satisfaction of redemptions 12(d)(l)(B) of the Act. Applicants submit with respect to pricing are equally within the maximum number of that the proposed conditions to the satisfied by the proposed method of calendar days required for such requested relief address the concerns pricing Shares. Applicants maintain that payment or satisfaction in the principal underlying the limits in section 12(d)(1), while there is little legislative history local markets where transactions in the which include concerns about undue regarding section 22(d), its provisions, Portfolio Positions of each Foreign Fund influence, excessive layering of fees and as well as those of rule 22c–1, appear to or Global Fund customarily clear and overly complex structures. settle, but in all cases no later than 14 have been designed to (a) Prevent 11. Applicants submit that their calendar days following the tender of a dilution caused by certain riskless- proposed conditions address any Creation Unit. trading schemes by principal concerns regarding the potential for 8. Applicants state that section 22(e) undue influence. To limit the control underwriters and contract dealers, (b) was designed to prevent unreasonable, that an Acquiring Fund may have over prevent unjust discrimination or undisclosed and unforeseen delays in a Fund, applicants propose a condition preferential treatment among buyers the actual payment of redemption prohibiting an investment adviser as resulting from sales at different prices, proceeds. Applicants assert that the defined in section 2(a)(20)(A) of the Act and (c) assure an orderly distribution requested relief will not lead to the of an Acquiring Management Company system of investment company shares problems that section 22(e) was (‘‘Acquiring Fund Advisor’’), sponsor of by eliminating price competition from designed to prevent. Applicants state an Investing Trust (‘‘Sponsor’’), any brokers offering shares at less than the that allowing redemption payments for person controlling, controlled by, or published sales price and repurchasing Creation Units of a Fund to be made under common control with the shares at more than the published within a maximum of 14 calendar days Acquiring Fund Advisor or Sponsor, redemption price. would not be inconsistent with the and any investment company or issuer 6. Applicants believe that none of spirit and intent of section 22(e). that would be an investment company these purposes will be thwarted by Applicants state the SAI will disclose but for sections 3(c)(1) or 3(c)(7) of the permitting Shares to trade in the those local holidays (over the period of Act that is advised or sponsored by the secondary market at negotiated prices. at least one year following the date of Acquiring Fund Advisor, the Sponsor, Applicants state that (a) secondary the SAI), if any, that are expected to or any person controlling, controlled by, market trading in Shares does not prevent the delivery of redemption or under common control with the involve Fund assets and cannot result in proceeds in seven calendar days and the Acquiring Fund Advisor or Sponsor dilution of an investment in Shares, and maximum number of days needed to (‘‘Acquiring Fund’s Advisory Group’’) (b) to the extent different prices exist deliver the proceeds for each affected from controlling (individually or in the during a given trading day, or from day Foreign Fund or Global Fund. aggregate) a Fund within the meaning of to day, such variances occur as a result Applicants are not seeking relief from section 2(a)(9) of the Act. The same of third-party market forces, such as section 22(e) with respect to Foreign prohibition would apply to any sub- supply and demand. Therefore, Funds and Global Funds that do not adviser (an investment adviser within applicants assert that secondary market effect redemptions in-kind. the meaning of section 2(a)(20)(B) of the transactions in Shares will not lead to Act) to an Acquiring Management discrimination or preferential treatment Section 12(d)(1) of the Act Company (‘‘Acquiring Fund Sub- among purchasers. Finally, applicants 9. Section 12(d)(1)(A) of the Act Advisor’’), any person controlling, contend that the proposed distribution prohibits a registered investment controlled by or under common control system will be orderly because arbitrage company from acquiring shares of an with the Acquiring Fund Sub-Advisor, activity should ensure that the investment company if the securities and any investment company or issuer

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that would be an investment company limits applicable to a fund of funds as second tier affiliates of the Funds solely but for sections 3(c)(1) or 3(c)(7) of the set forth in NASD Conduct Rule 2830.23 by virtue of one or more of the Act (or portion of such investment 14. Applicants submit that the following: (a) Holding 5% or more, or in company or issuer) advised or proposed arrangement will not create an excess of 25% of the outstanding Shares sponsored by the Acquiring Fund Sub- overly complex fund structure. of one or more Funds; (b) having an Advisor or any person controlling, Applicants note that a Fund will be affiliation with a person with an controlled by or under common control prohibited from acquiring securities of ownership interest described in (a); or with the Acquiring Fund Sub-Advisor any investment company or company (c) holding 5% or more, or more than (‘‘Acquiring Fund’s Sub-Advisory relying on section 3(c)(1) or 3(c)(7) of 25% of the Shares of an Affiliated Group’’). the Act in excess of the limits contained Fund.24 Applicants also request, as part of the requested 12(d)(1) Relief, an 12. Applicants propose a condition to in section 12(d)(1)(A) of the Act, except exemption in order to permit a Fund to ensure that no Acquiring Fund or to the extent permitted by exemptive 22 relief from the Commission permitting sell its Shares to and redeem its Shares Acquiring Fund Affiliate (except to from, and engage in the in-kind the extent it is acting in its capacity as the Fund to purchase shares of other investment companies for short-term transactions that would accompany an investment adviser to a Fund) will cash management purposes. such sales and redemptions with, cause a Fund to purchase a security in 15. To ensure that an Acquiring Fund certain Acquiring Funds of which the an offering of securities during the is aware of the terms and conditions of Funds are affiliated persons or a second- existence of an underwriting or selling the requested order, the Acquiring tier affiliates.25 syndicate of which a principal Funds must enter into an agreement 18. Applicants assert that no useful underwriter is an Underwriting Affiliate with the respective Funds (the purpose would be served by prohibiting (‘‘Affiliated Underwriting’’). An ‘‘Acquiring Fund Agreement’’) that will such affiliated persons from making in- ‘‘Underwriting Affiliate’’ is a principal include an acknowledgement from the kind purchases or in-kind redemptions underwriter in any underwriting or Acquiring Fund that it may rely on the of Shares of a Fund in Creation Units. selling syndicate that is an officer, order only to invest in a Fund and not Except with respect to cash as director, member of an advisory board, in any other investment company. determined in accordance with the Acquiring Fund Advisor, Acquiring procedures described in section III.B.1 Fund Sub-Advisor, employee or Sections 17(a)(1) and (2) of the Act of the application, the Deposit Sponsor of the Acquiring Fund, or a 16. Section 17(a) of the Act generally Instruments and Redemption person of which any such officer, prohibits an affiliated person of a Instruments for a Fund will be the same director, member of an advisory board, registered investment company, or an and will correspond pro rata to the Acquiring Fund Advisor, Acquiring affiliated person of such a person positions in the Fund’s portfolio, and Fund Sub-Advisor, employee or (‘‘second tier affiliate’’), from selling any in-kind purchases and redemptions will Sponsor is an affiliated person, except security to or purchasing any security be on the same terms, for all persons any person whose relationship to the from the company. Section 2(a)(3) of the regardless of the identity of the Fund is covered by section 10(f) of the Act defines ‘‘affiliated person’’ to purchaser or redeemer. Both the deposit Act is not an Underwriting Affiliate). include any person directly or indirectly procedures for in-kind purchases of 13. Applicants propose several owning, controlling, or holding with Creation Units and the redemption conditions to address the potential for power to vote, 5% or more of the procedures for in-kind redemptions will layering of fees. Applicants note that the outstanding voting securities of the be effected in exactly the same manner board of directors or trustees (‘‘Board’’) other person and any person directly or for all purchases and redemptions. of any Acquiring Management indirectly controlling, controlled by, or Deposit Instruments and Redemption Company, including a majority of the under common control with, the other Instruments will be valued in the same directors or trustees who are not person. Section 2(a)(9) of the Act manner as those Portfolio Positions ‘‘interested persons’’ within the defines ‘‘control’’ as the power to currently held by the relevant Funds. meaning of section 2(a)(19) of the Act exercise a controlling influence over the Applicants do not believe that in-kind (‘‘Independent Trustees’’), will be management or policies of a company purchases and redemptions will result required to find that any fees charged and provides that a control relationship in abusive self-dealing or overreaching under the Acquiring Management will be presumed where one person of the Fund. 19. Applicants also submit that the Company’s advisory contract(s) are owns more than 25% of another sale of Shares to and redemption of based on services provided that will be person’s voting securities. The Funds in addition to, rather than duplicative may be deemed to be controlled by the 24 Applicants are not seeking relief from section of, services provided under the advisory Advisers and hence affiliated persons of 17(a) for, and the requested relief will not apply to, contract(s) of any Fund in which the each other. In addition, the Funds may transactions where a Fund could be deemed an Acquiring Management Company may be deemed to be under common control affiliated person, or an affiliated person of an affiliated person, of an Acquiring Fund because an invest. Applicants also state that any with any other registered investment investment adviser to the Funds is also an sales charges and/or service fees company (or series thereof) advised by investment adviser to an Acquiring Fund. charged with respect to shares of an an Adviser (an ‘‘Affiliated Fund’’). 25 Applicants expect most Acquiring Funds will Acquiring Fund will not exceed the 17. Applicants request an exemption purchase Shares in the secondary market and will not purchase Creation Units directly from a Fund. under sections 6(c) and 17(b) of the Act To the extent that purchases and sales of Shares 22 An ‘‘Acquiring Fund Affiliate’’ is defined as the from sections 17(a)(1) and 17(a)(2) of the occur in the secondary market and not through Acquiring Fund Advisor, Acquiring Fund Sub- Act to permit in-kind purchases and principal transactions directly between an Advisor(s), any Sponsor, promoter or principal redemptions of Creation Units by Acquiring Fund and a Fund, relief from Section underwriter of an Acquiring Fund and any person 17(a) would not be necessary. However, the controlling, controlled by or under common control persons that are affiliated persons or requested relief would apply to direct sales of with any of these entities. ‘‘Fund Affiliate’’ is an Shares in Creation Units by a Fund to an Acquiring investment adviser, promoter, or principal 23 Any reference to NASD Conduct Rule 2830 Fund and redemptions of those Shares. The underwriter of a Fund or any person controlling, includes any successor or replacement rule that requested relief is also intended to cover any in- controlled by or under common control with any may be adopted by the Financial Industry kind transactions that would accompany such sales of these entities. Regulatory Authority. and redemptions.

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Shares from an Acquiring Fund meets to acquire any Deposit Instrument for a Acquiring Fund Affiliate in connection the standards for relief under sections Fund through a transaction in which the with any services or transactions: (i) Is 17(b) and 6(c) of the Act. Applicants Fund could not engage directly. fair and reasonable in relation to the note that any consideration paid for the 6. The requested relief to permit ETF nature and quality of the services and purchase or redemption of Shares operations will expire on the effective benefits received by the Fund; (ii) is directly from a Fund will be based on date of any Commission rule under the within the range of consideration that the NAV of the Fund in accordance with Act that provides relief permitting the the Fund would be required to pay to policies and procedures set forth in the operation of actively-managed another unaffiliated entity in connection Fund’s registration statement.26 exchange-traded funds. with the same services or transactions; Applicants also state that the proposed B. Section 12(d)(1) Relief and (iii) does not involve overreaching transactions are consistent with the on the part of any person concerned. general purposes of the Act and 7. The members of an Acquiring This condition does not apply with appropriate in the public interest. Fund’s Advisory Group will not control respect to any services or transactions (individually or in the aggregate) a Fund between a Fund and its investment Applicants’ Conditions within the meaning of Section 2(a)(9) of adviser(s), or any person controlling, Applicants agree that any order of the the Act. The members of an Acquiring controlled by or under common control Commission granting the requested Fund’s Sub-Advisory Group will not with such investment adviser(s). relief will be subject to the following control (individually or in the aggregate) 11. No Acquiring Fund or Acquiring conditions: a Fund within the meaning of Section Fund Affiliate (except to the extent it is 2(a)(9) of the Act. If, as a result of a acting in its capacity as an investment A. Actively-Managed Exchange-Traded decrease in the outstanding voting Fund Relief adviser to a Fund) will cause the Fund securities of a Fund, the Acquiring to purchase a security in any Affiliated 1. Neither the Trust nor any Fund will Fund’s Advisory Group or the Acquiring Underwriting. be advertised or marketed as an open- Fund’s Sub-Advisory Group, each in the 12. The Board, including a majority of end investment company or mutual aggregate, becomes a holder of more the Independent Trustees, will adopt fund. Any advertising material that than 25 percent of the outstanding procedures reasonably designed to describes the purchase or sale of voting securities of a Fund, it will vote monitor any purchases of securities by Creation Units or refers to redeemability its Shares of the Fund in the same the Fund in an Affiliated Underwriting, will prominently disclose that the proportion as the vote of all other once an investment by an Acquiring Shares are not individually redeemable holders of that Fund’s Shares. This Fund in the securities of the Fund and that owners of the Shares may condition does not apply to the exceeds the limit of section acquire those Shares from the Fund and Acquiring Fund’s Sub-Advisory Group 12(d)(1)(A)(i) of the Act, including any tender those Shares for redemption to with respect to a Fund for which the purchases made directly from an the Fund in Creation Units only. Acquiring Fund Sub-Adviser or a Underwriting Affiliate. The Board will 2. The Web site for the Funds, which person controlling, controlled by, or review these purchases periodically, but is and will be publicly accessible at no under common control with the no less frequently than annually, to charge, will contain, on a per Share Acquiring Fund Sub-Adviser acts as the determine whether the purchases were basis for each Fund, the prior Business investment adviser within the meaning influenced by the investment by the Day’s NAV and the market closing price of Section 2(a)(20)(A) of the Act. Acquiring Fund in the Fund. The Board or Bid/Ask Price, and a calculation of 8. No Acquiring Fund or Acquiring will consider, among other things: (i) the premium or discount of the market Fund Affiliate will cause any existing or Whether the purchases were consistent closing price or Bid/Ask Price against potential investment by the Acquiring with the investment objectives and such NAV. Fund in a Fund to influence the terms policies of the Fund; (ii) how the 3. As long as a Fund operates in of any services or transactions between performance of securities purchased in reliance on the Order, its Shares will be the Acquiring Fund or an Acquiring an Affiliated Underwriting compares to listed on a Listing Market. Fund Affiliate and the Fund or a Fund the performance of comparable 4. On each Business Day, before Affiliate. securities purchased during a commencement of trading in Shares on 9. The board of trustees or directors of comparable period of time in a Fund’s Listing Market, the Fund will an Acquiring Management Company, underwritings other than Affiliated disclose on its Web site the identities including a majority of the Independent Underwritings or to a benchmark such and quantities of the Portfolio Positions Trustees, will adopt procedures as a comparable market index; and (iii) held by the Fund that will form the reasonably designed to ensure that the whether the amount of securities basis for the Fund’s calculation of NAV Acquiring Fund Advisor and any purchased by the Fund in Affiliated per Share at the end of the Business Acquiring Fund Sub-Advisor are Underwritings and the amount Day. conducting the investment program of purchased directly from an 5. The Adviser or any Sub-Advisers, the Acquiring Management Company Underwriting Affiliate have changed directly or indirectly, will not cause any without taking into account any significantly from prior years. The Authorized Participant (or any investor consideration received by the Acquiring Board will take any appropriate actions on whose behalf an Authorized Management Company or an Acquiring based on its review, including, if Participant may transact with the Fund) Fund Affiliate from a Fund or a Fund appropriate, the institution of Affiliate in connection with any services procedures designed to ensure that 26 Applicants acknowledge that the receipt of or transactions. purchases of securities in Affiliated compensation by (a) an affiliated person of an Acquiring Fund, or an affiliated person of such 10. Once an investment by an Underwritings are in the best interest of person, for the purchase by the Acquiring Fund of Acquiring Fund in Shares exceeds the shareholders of the Fund. Shares of the Fund or (b) an affiliated person of a limits of Section 12(d)(1)(A)(i) of the 13. Each Fund will maintain and Fund, or an affiliated person of such person, for the Act, the Board, including a majority of preserve permanently in an easily sale by the Fund of its Shares to an Acquiring Fund, may be prohibited by section 17(e)(1) of the Act. the Independent Trustees, will accessible place a written copy of the The Acquiring Fund Agreement also will include determine that any consideration paid procedures described in the preceding this acknowledgment. by the Fund to an Acquiring Fund or an condition, and any modifications to

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such procedures, and will maintain and Advisor, directly or indirectly, by the SECURITIES AND EXCHANGE preserve for a period of not less than six Acquiring Management Company in an COMMISSION years from the end of the fiscal year in amount at least equal to any [Investment Company Act Release No. which any purchase in an Affiliated compensation received from a Fund by 30592; 812–14118] Underwriting occurred, the first two the Acquiring Fund Sub-Advisor, or an years in an easily accessible place, a affiliated person of the Acquiring Fund Bridge Builder Trust and Olive Street written record of each purchase of Sub-Advisor, other than any advisory Investment Advisers, LLC; Notice of securities in Affiliated Underwritings, fees paid to the Acquiring Fund Sub- Application once an investment by an Acquiring Advisor or its affiliated person by the Fund in the securities of the Fund July 9, 2013. Fund, in connection with any exceeds the limit of section AGENCY: Securities and Exchange investment by the Acquiring 12(d)(1)(A)(i) of the Act, setting forth Commission (‘‘Commission’’). Management Company in the Fund from whom the securities were ACTION: Notice of an application under acquired, the identity of the made at the direction of the Acquiring section 6(c) of the Investment Company underwriting syndicate’s members, the Fund Sub-Advisor. In the event that the Act of 1940 (‘‘Act’’) for an exemption terms of the purchase, and the Acquiring Fund Sub-Advisor waives from section 15(a) of the Act and rule information or materials upon which fees, the benefit of the waiver will be 18f–2 under the Act, as well as from the determinations of the Board were passed through to the Acquiring certain disclosure requirements. made. Management Company. 14. Before investing in Shares of a 16. Any sales charges and/or service SUMMARY OF APPLICATION: Applicants Fund in excess of the limits in section fees charged with respect to shares of an request an order that would permit them 12(d)(1)(A), each Acquiring Fund and Acquiring Fund will not exceed the to enter into and materially amend sub- advisory agreements without the Fund will execute an Acquiring limits applicable to a fund of funds as Fund Agreement stating, without shareholder approval and that would set forth in NASD Conduct Rule 2830. limitation, that their boards of directors grant relief from certain disclosure or boards of trustees and their 17. No Fund relying on the 12(d)(1) requirements. investment adviser(s), or their Sponsors Relief will acquire securities of any APPLICANTS: Bridge Builder Trust (the or trustees (‘‘Trustee’’), as applicable, other investment company or company ‘‘Trust’’) and Olive Street Investment understand the terms and conditions of relying on section 3(c)(1) or 3(c)(7) of Advisers (the ‘‘Adviser’’) (collectively, the Order, and agree to fulfill their the Act in excess of the limits contained ‘‘Applicants’’). responsibilities under the Order. At the in section 12(d)(1)(A) of the Act, except DATES: Filing Dates: The application was time of its investment in Shares of a to the extent permitted by exemptive filed February 1, 2013, and amended on Fund in excess of the limit in section relief from the Commission permitting June 18, 2013. 12(d)(1)(A)(i), an Acquiring Fund will the Fund to purchase shares of other HEARING OR NOTIFICATION OF HEARING: An notify the Fund of the investment. At investment companies for short-term order granting the application will be such time, the Acquiring Fund will also cash management purposes. issued unless the Commission orders a transmit to the Fund a list of the names hearing. Interested persons may request of each Acquiring Fund Affiliate and 18. Before approving any advisory a hearing by writing to the Underwriting Affiliate. The Acquiring contract under section 15 of the Act, the Commission’s Secretary and serving Fund will notify the Fund of any board of trustees or directors of each applicants with a copy of the request, changes to the list of the names as soon Acquiring Management Company, personally or by mail. Hearing requests as reasonably practicable after a change including a majority of the Independent should be received by the Commission occurs. The Fund and the Acquiring Trustees, will find that the advisory fees by 5:30 p.m. on August 5, 2013, and Fund will maintain and preserve a copy charged under such advisory contract should be accompanied by proof of of the Order, the Acquiring Fund are based on services provided that will service on the applicants, in the form of Agreement, and the list with any be in addition to, rather than an affidavit or, for lawyers, a certificate updated information for the duration of duplicative of, the services provided of service. Hearing requests should state the investment and for a period of not under the advisory contract(s) of any the nature of the writer’s interest, the less than six years thereafter, the first Fund in which the Acquiring reason for the request, and the issues two years in an easily accessible place. Management Company may invest. 15. The Acquiring Fund Advisor, contested. Persons who wish to be These findings and their basis will be notified of a hearing may request Trustee or Sponsor, as applicable, will recorded fully in the minute books of waive fees otherwise payable to it by the notification by writing to the the appropriate Acquiring Management Acquiring Fund in an amount at least Commission’s Secretary. Company. equal to any compensation (including ADDRESSES: Elizabeth M. Murphy, fees received pursuant to any plan For the Commission, by the Division of Secretary, U.S. Securities and Exchange adopted under Rule 12b–1 under the Investment Management, under delegated Commission, 100 F Street NE., Act) received from the Fund by the authority. Washington, DC 20549–1090. Acquiring Fund Advisor, Trustee or Kevin M. O’Neill, Applicants: The Trust: Joseph C. Neuberger, 2020 East Financial Way, Sponsor, or an affiliated person of the Deputy Secretary. Suite 100, Glendora, CA 91741; The Acquiring Fund Advisor, Trustee or [FR Doc. 2013–16856 Filed 7–12–13; 8:45 am] Sponsor, other than any advisory fees Adviser: James A. Tricarico, Olive Street paid to the Acquiring Fund Advisor, BILLING CODE 8011–01–P Investment Advisers, LLC, 12555 Trustee, or Sponsor, or its affiliated Manchester Road, St. Louis, MO 63131. person by the Fund, in connection with FOR FURTHER INFORMATION CONTACT: the investment by the Acquiring Fund Jennifer L. Sawin, Branch Chief, at (202) in the Fund. Any Acquiring Fund Sub- 551–6724 (Division of Investment Advisor will waive fees otherwise Management, Office of Investment payable to the Acquiring Fund Sub- Company Regulation).

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SUPPLEMENTARY INFORMATION: The supervision of, and policies established Applicants’ Legal Analysis following is a summary of the by the Board. For the investment 1. Section 15(a) of the Act provides, application. The complete application management services it will provide to in relevant part, that is unlawful for any may be obtained via the Commission’s each Fund the Adviser will receive the person to act as an investment adviser Web site by searching for the file fee specified in the Advisory Agreement to a registered investment company number, or an applicant using the from such Fund, based on the average except pursuant to a written contract Company name box, at http:// daily net assets of the Fund. The that has been approved by a vote of a www.sec.gov/search/search.htm or by Advisory Agreement permits the majority of the company’s outstanding calling (202) 551–8090. Adviser, subject to the approval of the voting securities. Rule 18f–2 under the Applicants’ Representations Board, to delegate certain Act provides that each series or class of 1. The Trust, a Delaware statutory responsibilities to one or more sub- stock in a series investment company trust, is registered under the Act as an advisers (‘‘Sub-Advisers’’) to provide affected by a matter must approve that open-end management investment investment advisory services to the matter if the Act requires shareholder company. The Trust is organized as a Funds. As of the date of the amended approval. series trust and currently consists of one application, the Adviser had not entered 2. Form N–1A is the registration series, which will be advised by the into sub-advisory agreements with any statement used by open-end investment Adviser.1 The Adviser is a limited Sub-Advisers (‘‘Sub-Advisory companies. Item 19(a)(3) of Form N–1A liability company organized under Agreements’’). Each Sub-Adviser will be requires disclosure of the method and Missouri law. The Adviser is, and any an investment adviser as defined in amount of the investment adviser’s future Adviser will be, registered as an section 2(a)(20) of the Act and, if compensation. investment adviser under the required, registered with the 3. Rule 20a–1 under the Act requires Investment Advisers Act of 1940 Commission as an ‘‘investment adviser’’ proxies solicited with respect to a (‘‘Advisers Act’’). The Adviser will under the Advisers Act. The Adviser registered investment company to serve as the investment adviser to the evaluates, allocates assets to and comply with Schedule 14A under the Funds pursuant to an investment oversees the Sub-Advisers, and makes Securities Exchange Act of 1934 (‘‘1934 Act’’). Items 22(c)(1)(ii), 22(c)(1)(iii), advisory agreement with the Trust or recommendations about their hiring, 2 22(c)(8) and 22(c)(9) of Schedule 14A, Fund (the ‘‘Advisory Agreement’’). termination and replacement to the taken together, require a proxy Each Advisory Agreement was approved Board, at all times subject to the or will be approved by the Fund’s board statement for a shareholder meeting at authority of the Board. The Adviser will which the advisory contract will be of trustees (the ‘‘Board’’), including a compensate the Sub-Advisers out of the majority of the trustees who are not voted upon to include the ‘‘rate of advisory fee paid by a Fund to the compensation of the investment ‘‘interested persons,’’ as defined in Adviser under the Advisory Agreement. section 2(a)(19) of the Act, of the Trust, adviser,’’ the ‘‘aggregate amount of the the Fund, or the Adviser (‘‘Independent 3. Applicants request an order to investment adviser’s fees,’’ a description Trustees’’), and by the Fund’s permit the Adviser, subject to Board of the ‘‘terms of the contract to be acted shareholder(s) in the manner required approval, to select certain Sub-Advisers upon,’’ and, if a change in the advisory by sections 15(a) and 15(c) of the Act to manage all or a portion of the assets fee is proposed, the existing and and rule 18f–2 under the Act. The terms of a Fund or Funds pursuant to a Sub- proposed fees and the difference of each Advisory Agreement will Advisory Agreement and materially between the two fees. comply with section 15(a) of the Act. amend existing Sub-Advisory 4. Regulation S–X sets forth the 2. Under the terms of each Advisory Agreements without obtaining requirements for financial statements Agreement, the Adviser will provide the shareholder approval. The requested required to be included as part of a Funds with overall management relief will not extend to any Sub- registered investment company’s services and will continuously review, Adviser that is an affiliated person, as registration statement and shareholder supervise and administer each Fund’s defined in section 2(a)(3) of the Act, of reports filed with the Commission. investment program, subject to the the Trust, a Fund, or the Adviser, other Sections 6–07(2)(a), (b), and (c) of than by reason of serving as a sub- Regulation S–X require a registered 1 Applicants request relief with respect to any adviser to one or more of the Funds investment company to include in its existing and any future series of the Trust or any (‘‘Affiliated Sub-Adviser’’). financial statement information about other registered open-end management company investment advisory fees. that: (a) Is advised by the Adviser or a person 4. Applicants also request an order controlling, controlled by, or under common 5. Section 6(c) of the Act provides that control with the Adviser or its successor (each, also exempting the Funds from certain the Commission may exempt any an ‘‘Adviser’’); (b) uses the manager of managers disclosure provisions described below person, security, or transaction or any structure described in the application; and (c) that may require the Applicants to class or classes of persons, securities, or complies with the terms and conditions of the disclose fees paid by the Adviser or a requested order (any such series, a ‘‘Fund’’ and transactions from any provisions of the collectively, the ‘‘Funds’’). The only existing Fund to each Sub-Adviser. Applicants Act, or from any rule thereunder, if such registered open-end management investment seek an order to permit a Fund to exemption is necessary or appropriate company that currently intends to rely on the disclose (as both a dollar amount and a requested order is named as an Applicant, and the in the public interest and consistent only series that currently intends to rely on the percentage of the Fund’s net assets): (a) with the protection of investors and the requested order as a Fund is the Bridge Builder The aggregate fees paid to the Adviser purposes fairly intended by the policy Bond Fund. For purposes of the requested order, and any Affiliated Sub-Adviser; and (b) and provisions of the Act. Applicants ‘‘successor’’ is limited to an entity that results from the aggregate fees paid to Sub-Advisers a reorganization into another jurisdiction or a state that the requested relief meets this change in the type of business organization. If the other than Affiliated Sub-Advisers standard for the reasons discussed name of any Fund contains the name of a Sub- (collectively, ‘‘Aggregate Fee below. Adviser (as defined below), that name will be Disclosure’’). Any Fund that employs an 6. Applicants assert that the preceded by the name of the Adviser. Affiliated Sub-Adviser will provide shareholders expect the Adviser, subject 2 ‘‘Advisory Agreement’’ includes advisory agreements with an Adviser for the Bridge Builder separate disclosure of any fees paid to to the review and approval of the Board, Bond Fund and any future Funds. the Affiliated Sub-Adviser. to select the Sub-Advisers who are best

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suited to achieve the Fund’s investment manager Information Statement. majority of the Independent Trustees, objectives. Applicants assert that, from Moreover, as indicated above, the will make a separate finding, reflected the perspective of the shareholder, the applicable Board would comply with in the applicable Board minutes, that role of the Sub-Advisers is substantially the requirements of sections 15(a) and such change is in the best interests of equivalent to that of the individual 15(c) of the Act before entering into or the Fund and its shareholders and does portfolio managers employed by amending Sub-Advisory Agreements. not involve a conflict of interest from traditional investment company 8. Applicants assert that the requested which the Adviser or the Affiliated Sub- advisory firms. Applicants state that disclosure relief will benefit Adviser derives an inappropriate requiring shareholder approval of each shareholders of the Funds because it advantage. Sub-Advisory Agreement would impose will improve the Adviser’s ability to 7. Independent legal counsel, as unnecessary delays and expenses on the negotiate the fees paid to Sub-Advisers. defined in rule 0–1(a)(6) under the Act, Funds and may preclude the Funds Applicants state that the Adviser may be will be engaged to represent the from acting promptly when the Adviser able to negotiate rates that are below a Independent Trustees. The selection of and Board consider it appropriate to Sub-Adviser’s ‘‘posted’’ amounts if the such counsel will be within the hire Sub-Advisers or amend Sub- Adviser is not required to disclose the discretion of the then existing Advisory Agreements. Applicants note Sub-Advisers’ fees to the public. Independent Trustees. that the Advisory Agreements and any Applicants’ Conditions 8. Each Adviser will provide the Sub-Advisory Agreements with Board, no less frequently than quarterly, Affiliated Sub-Advisers will remain Applicants agree that any order with information about the profitability subject to the shareholder approval granting the requested relief will be of the Adviser on a per-Fund basis. The requirements of section 15(a) of the Act subject to the following conditions: information will reflect the impact on 1. Before a Fund may rely on the and rule 18f–2 under the Act. profitability of the hiring or termination order requested in the application, the 7. If a new Sub-Adviser is retained in of any Sub-Adviser during the operation of the Fund in the manner reliance on the requested order, the applicable quarter. described in the application will be applicable Fund will inform its 9. Whenever a Sub-Adviser is hired or approved by a majority of the Fund’s shareholders of the hiring of a new Sub- terminated, the Adviser will provide the outstanding voting securities, as defined Adviser pursuant to the following Board with information showing the in the Act, or, in the case of a Fund procedures (‘‘Modified Notice and expected impact on the profitability of whose public shareholders purchase Access Procedures’’): (a) Within 90 days the Adviser. shares on the basis of a prospectus after a new Sub-Adviser is hired for the 10. The Adviser will provide general containing the disclosure contemplated Fund, the Fund will send its management services to a Fund, by condition 2 below, by the sole initial shareholders either a Multi-manager including overall supervisory shareholder before offering the Fund’s Notice or a Multi-manager Notice and responsibility for the general Multi-manager Information Statement; 3 shares to the public. 2. The prospectus for each Fund will management and investment of the and (b) the Fund will make the Multi- Fund’s assets and, subject to review and manager Information Statement disclose the existence, substance, and effect of any order granted pursuant to approval of the Board, will (i) set a available on the Web site identified in Fund’s overall investment strategies; (ii) the Multi-manager Notice no later than the application. Each Fund will hold itself out to the public as employing the evaluate, select and recommend Sub- when the Multi-manager Notice (or Advisers to manage all or part of a Multi-manager Notice and Multi- manager of managers structure described in the application. The Fund’s assets; (iii) when appropriate, manager Information Statement) is first allocate and reallocate a Fund’s assets sent to shareholders, and will maintain prospectus will prominently disclose that the Adviser has ultimate among multiple Sub-Advisers; (iv) it on that Web site for at least 90 days. monitor and evaluate the performance Applicants assert that a proxy responsibility (subject to oversight by the Board) to oversee the Sub-Advisers of Sub-Advisers; and (v) implement solicitation to approve the appointment procedures reasonably designed to of new Sub-Advisers would provide no and recommend their hiring, termination, and replacement. ensure that the Sub-Advisers comply more meaningful information to with a Fund’s investment objective, shareholders than the proposed Multi- 3. Funds will inform shareholders of the hiring of a new Sub-Adviser (other policies and restrictions. 11. No trustee or officer of the Trust, 3 A ‘‘Multi-manager Notice’’ will be modeled on than an Affiliated Sub-Adviser) within a Notice of Internet Availability as defined in rule 90 days after the hiring of that new Sub- or of a Fund, or director or officer of the 14a–16 under the Exchange Act, and specifically Adviser pursuant to the Modified Notice Adviser, will own directly or indirectly will, among other things: (a) Summarize the and Access Procedures. (other than through a pooled investment relevant information regarding the new Sub- vehicle that is not controlled by such Adviser; (b) inform shareholders that the Multi- 4. The Adviser will not enter into a manager Information Statement is available on a Sub-Advisory Agreement with any person) any interest in a Sub-Adviser, Web site; (c) provide the Web site address; (d) state Affiliated Sub-Adviser without that except for (i) ownership of interests in the time period during which the Multi-manager agreement, including the compensation the Adviser or any entity that controls, Information Statement will remain available on that is controlled by, or is under common Web site; (e) provide instructions for accessing and to be paid thereunder, being approved printing the Multi-manager Information Statement; by the shareholders of the applicable control with the Adviser; or (ii) and (f) instruct the shareholder that a paper or Fund. ownership of less than 1% of the email copy of the Multi-manager Information 5. At all times, at least a majority of outstanding securities of any class of Statement may be obtained, without charge, by the Board will be Independent Trustees, equity or debt of a publicly traded contacting the Fund. company that is either a Sub-Adviser or A ‘‘Multi-manager Information Statement’’ will and the nomination and selection of meet the requirements of Regulation 14C, Schedule new or additional Independent Trustees an entity that controls, is controlled by, 14C and Item 22 of Schedule 14A under the will be placed within the discretion of or is under common control with a Sub- Exchange Act for an information statement, except the then-existing Independent Trustees. Adviser. as modified by the requested order to permit 12. Each Fund will disclose in its Aggregate Fee Disclosure. Multi-manager 6. When a Sub-Adviser change is Information Statements will be filed electronically proposed for a Fund with an Affiliated registration statement the Aggregate Fee with the Commission via the EDGAR system. Sub-Adviser, the Board, including a Disclosure.

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13. In the event the Commission SECURITIES AND EXCHANGE needs and general corporate purposes. adopts a rule under the Act providing COMMISSION The aggregate principal amount of the substantially similar relief to that in the senior unsecured debt securities placed [Release No. 34–69955; File No. SR–OCC– in the Offering is expected to be up to order requested in the application, the 2013–804] requested order will expire on the $100 million. The proceeds of the effective date of that rule. Self-Regulatory Organizations; The Offering would be among the financial resources used to satisfy the For the Commission, by the Division of Options Clearing Corporation; Notice of Filing of an Advance Notice in requirements applicable to OCC under Investment Management, under delegated CFTC regulations. authority. Connection With a Proposed Change to its Operations in the Form of a Among other things, OCC states that Kevin M. O’Neill, 5 Private Offering by OCC of Senior CFTC regulation Section 39.11(a)(2) Deputy Secretary. Unsecured Debt Securities requires a derivatives clearing [FR Doc. 2013–16855 Filed 7–12–13; 8:45 am] organization (‘‘DCO’’) to hold an amount BILLING CODE 8011–01–P July 10, 2013. of financial resources that, at a Pursuant to Section 806(e)(1) of the minimum, exceeds the total amount that Payment, Clearing, and Settlement would enable the DCO to cover its SECURITIES AND EXCHANGE Supervision Act of 2010 (‘‘Clearing operating costs for a period of at least COMMISSION Supervision Act’’) 1 and Rule 19b– one year, calculated on a rolling basis. 4(n)(1)(i) 2 of the Securities Exchange In turn, CFTC regulation Section Sunshine Act Meeting. Act of 1934 (‘‘Exchange Act’’) notice is 39.11(e)(2) 6 provides that these hereby given that on June 10, 2013, The financial resources must include FEDERAL REGISTER CITATION OF Options Clearing Corporation (‘‘OCC’’) unencumbered, liquid financial assets PREVIOUS ANNOUNCEMENT: [78 FR filed with the Securities and Exchange (i.e., cash and/or highly liquid 40780, July 8, 2013]. Commission (‘‘Commission’’) the securities), equal to at least six months’ advance notice as described in Items I operating costs. OCC states that the STATUS: Closed Meeting. and II below, which Items have been Offering is intended to contribute to 3 OCC’s compliance with the financial PLACE: 100 F Street NE., Washington, substantially prepared by OCC. The resources requirement under CFTC DC Commission is publishing this notice to solicit comments on the advance notice regulation Section 39.11(a)(2) 7 and the DATE AND TIME OF PREVIOUSLY ANNOUNCED from interested persons. liquidity requirements prescribed by MEETING: July 10, 2013 at 4:00 p.m. CFTC regulation Section 39.11(e)(2).8 I. Clearing Agency’s Statement of the OCC states that the proceeds of the CHANGE IN THE MEETING: Additional Terms of Substance of the Advance offering would be invested in Item. Notice instruments such as reverse repurchase The following matter will also be OCC is proposing to change its agreements in which working capital considered during the 4:00 p.m. Closed operations in the form of a private may be invested under OCC’s By-Laws. Meeting scheduled for Wednesday July offering of senior unsecured debt Under the proposal, OCC would issue 10, 2013: securities (‘‘Offering’’). senior unsecured debt securities through the Offering, which would be a personnel matter. II. Clearing Agency’s Statement of the structured as a private placement for The General Counsel of the Purpose of, and Statutory Basis for, the which a broker-dealer registered with Commission, or her designee, has Advance Notice the Securities and Exchange certified that, in her opinion, one or In its filing with the Commission, Commission under the Exchange Act more of the exemptions as set forth in OCC included statements concerning would act as the exclusive placement 5 U.S.C. 552b(c)(2) and (6) and 17 CFR the purpose of and basis for the advance agent. Under the terms of the Offering, 200.402(a)(2) and (6), permit notice and discussed any comments it OCC would be required to use any consideration of the scheduled matter at received on the advance notice. The text capital raised to finance its working the Closed Meeting. of these statements may be examined at capital needs or for general corporate Commissioner Aguilar, as duty the places specified in Item IV below. purposes. According to OCC, one of the officer, voted to consider the item listed The clearing agency has prepared conditions of OCC’s proposed Offering for the Closed Meeting in closed summaries, set forth in section A below, of the most significant aspects of such is the execution of definitive session, and determined that no earlier statements.4 agreements. These agreements are notice thereof was possible. expected to include a number of At times, changes in Commission (A) Advance Notices Filed Pursuant to conditions related to OCC’s performance priorities require alterations in the Section 806(e) of the Clearing under such agreements including, scheduling of meeting items. For further Supervision Act without limitation, certain covenants information and to ascertain what, if Description of Change and default provisions. any, matters have been added, deleted OCC states that the Offering would OCC states that the proposed Offering involve a variety of customary fees and or postponed, please contact the Office would provide OCC with access to of the Secretary at (202) 551–5400. expenses payable by OCC to the additional liquidity for working capital placement agent and the noteholders, Dated: July 10, 2013. including but not limited to: (1) A 1 Elizabeth M. Murphy, 12 U.S.C. 5465(e)(1). placement agent fee calculated as a 2 17 CFR 240.19b–4(n)(1)(i). Secretary. 3 OCC is a designated financial market utility and [FR Doc. 2013–16937 Filed 7–11–13; 11:15 am] is required to file advance notices with the 5 17 CFR 39.11(a)(2). 6 17 CFR 39.11(e)(2). BILLING CODE 8011–01–P Commission. See 12 U.S.C. 5465(e). 4 The Commission has modified the text of the 7 17 CFR 39.11(a)(2). summaries prepared by the clearing agency. 8 17 CFR 39.11(e)(2).

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percentage of the aggregate principal liquidating OCC assets in the event of from the date of receipt of the advance amount of debt securities sold in the OCC’s default. notice, or the date the Commission Offering; and (2) other costs and The agreement with noteholders also receives any further information it expenses incurred by the placement requires OCC to make the noteholders requested, if the Commission notifies agent in relation to its activities in ‘‘whole’’ in the event OCC elects to the clearing agency in writing that it connection with the Offering including, prepay any outstanding principal. does not object to the proposed change but not limited to, travel expenses and According to OCC, this ‘‘make-whole’’ and authorizes the clearing agency to reasonable fees of counsel. These fees covenant poses risk to the extent OCC implement the proposed change on an and expenses may be paid out of the is unable to immediately pay the earlier date, subject to any conditions proceeds of the Offering. outstanding interest payments. OCC imposed by the Commission. would mitigate the risk of having to The clearing agency shall post notice Anticipated Effect on and Management make a large make-whole payment by on its Web site of proposed changes that of Risk either electing not to call the notes prior are implemented. OCC states that any impact of the to termination or by waiting to call the The proposal shall not take effect Offering on the risks presented by OCC notes until the make-whole premium until all regulatory actions required would be to reduce such risks by has been reduced by the passage of time with respect to the proposal are providing an additional source of to a smaller amount. OCC expects to completed.11 liquidity for the protection of OCC, its need the additional liquidity for the IV. Solicitation of Comments clearing members, and the options term of the notes and to issue the notes Interested persons are invited to market in general. OCC states that the at a time of favorable market conditions, submit written data, views and Offering would provide OCC with and accordingly OCC does not expect to arguments concerning the foregoing. additional liquidity for working capital call the notes prior to termination. Comments may be submitted by any of needs and general corporate purposes According to OCC, one risk of the following methods: and thereby assist OCC in satisfying the obtaining capital through the Offering as CFTC’s requirements with respect to opposed to an unsecured line of credit Electronic Comments is that OCC will incur more expense in liquidity under CFTC regulation Section • Use the Commission’s Internet 39.11.9 connection with the Offering given that it must pay interest expense on the comment form (http://www.sec.gov/ OCC states that, like any debt offering, entire outstanding note balance as rules/sro.shtml); or the Offering would involve risks. • opposed to a comparatively smaller Send an email to rule- According to OCC, one risk associated commitment fee on a line of credit. [email protected]. Please include File with the Offering relates to the need for However, OCC states that this risk is Number SR–OCC–2013–804 on the OCC to maintain sufficient cash flow to justified by the difficulty in obtaining an subject line. support ongoing interest payments to unsecured line of credit of a size the noteholders. OCC states this risk is Paper Comments comparable to that of the Offering. mitigated by its conservative fiscal • Send paper comments in triplicate Moreover, OCC states the risk is practices under which clearing and to Elizabeth M. Murphy, Secretary, mitigated by OCC’s investment of the other fees are assessed at a level Securities and Exchange Commission, proceeds, which generates income to designed to ensure that OCC has more 100 F Street NE., Washington, DC offset the interest expense. In addition, than sufficient funds to operate and 20549–1090. by obtaining capital through the satisfy liabilities, and refunds are paid All submissions should refer to File Offering OCC avoids the funding risk to clearing members only when it is Number SR–OCC–2013–804. This file associated with a line of credit. clear that excess funds are available. number should be included on the Clearing member refunds would be III. Date of Effectiveness of the Advance subject line if email is used. To help the effectively subordinated to interest Notice and Timing for Commission Commission process and review your payments on the notes sold in the Action comments more efficiently, please use only one method. The Commission will Offering. OCC may implement the proposed post all comments on the Commission’s OCC states that the Offering involves change pursuant to Section 806(e)(1)(G) Internet Web site (http://www.sec.gov/ a risk of OCC’s defaulting by failing to of the Clearing Supervision Act 10 if it rules/sro.shtml). Copies of the make timely payment of principal or has not received an objection to the submission, all subsequent interest or to comply with financial proposed change within 60 days of the amendments, all written statements covenants, which would allow the later of (i) the date that the Commission with respect to the advance notice that noteholders to take legal action against received the advance notice or (ii) the are filed with the Commission, and all OCC to recover any losses resulting from date the Commission receives any written communications relating to the a default. However, OCC states that the further information it requested for advance notice between the risk of default from a payment failure is consideration of the notice. The clearing Commission and any person, other than mitigated because, as discussed above, agency shall not implement the those that may be withheld from the OCC does not expect to have difficulty proposed change if the Commission has public in accordance with the making interest payments. Similarly, any objection to the proposed change. OCC states that the tests included in the The Commission may extend the provisions of 5 U.S.C. 552, will be financial covenants will be established period for review by an additional 60 available for Web site viewing and at reasonable levels, making it unlikely days if the proposed change raises novel printing in the Commission’s Public that OCC would default by violating or complex issues, subject to the Reference Room, 100 F Street NE., these covenants. In addition, because Commission providing the clearing Washington, DC 20549 on official the Offering would involve the issuance agency with prompt written notice of business days between the hours of of unsecured notes, OCC states that it the extension. A proposed change may would not be at risk of the noteholders’ 11 OCC also filed the proposals contained in this be implemented in less than 60 days advance notice as a proposed rule change under Section 19(b)(1) of the Exchange Act and Rule 19b– 9 17 CFR 39.11. 10 12 U.S.C. 5465(e)(1)(G). 4 thereunder. See supra note 3.

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10:00 a.m. and 3:00 p.m. Copies of the 19, 2013, NSCC filed with the I. Clearing Agency’s Statement of the filing also will be available for Commission Amendment No. 1 to the Terms of Substance of the Advance inspection and copying at the principal Advance Notice.4 The Advance Notice, Notice office of OCC and on OCC’s Web site as modified by Amendment No. 1, was The Advance Notice, as modified by (http://theocc.com/about/publications/ published for comment in the Federal Amendment No. 2, is a proposal by bylaws.jsp). All comments received will Register on May 1, 2013.5 On May 20, NSCC to amend its Rules and be posted without change; the 2013, the Commission extended the Procedures (‘‘Rules’’) to provide for a Commission does not edit personal period of review of the Advance Notice, supplemental liquidity funding identifying information from as modified by Amendment No. 1.6 As obligation (‘‘SLD Proposal’’), as submissions. You should submit only of July 9, 2013, the Commission had described below. NSCC filed information that you wish to make received fourteen comment letters on Amendment No. 2 to the Advance available publicly. All submissions the proposal contained in the Advance Notice, as previously modified by should refer to File Number SR–OCC– Notice and its related Proposed Rule Amendment No. 1, in order to mitigate 2013–804 and should be submitted on Change,7 including NSCC’s response to potential cash outlay burdens, respond or before August 5, 2013. the comment letters received as of June to transparency concerns raised by By the Commission. 10, 2013.8 NSCC members (‘‘Members’’), clarify the Kevin M. O’Neill, implementation timeframe, and describe Pursuant to Section 806(e)(1) of the Deputy Secretary. the reports that would be provided to Clearing Supervision Act 9 and Rule Members so that they can anticipate [FR Doc. 2013–16864 Filed 7–12–13; 8:45 am] 19b–4(n)(1)(i) 10 thereunder, notice is their supplemental liquidity obligations BILLING CODE 8011–01–P hereby given that on June 11, 2013, to NSCC under the SLD Proposal NSCC filed with the Commission (‘‘Supplemental Liquidity Obligations’’). Amendment No. 2 to the Advance SECURITIES AND EXCHANGE II. Clearing Agency’s Statement of the Notice, as previously modified by COMMISSION Purpose of, and Statutory Basis for, the Amendment No. 1.11 The Commission Advance Notice [Release No. 34–69954; File No. SR–NSCC– is publishing this notice to solicit 2013–802] comments on the Advance Notice, as In its filing with the Commission, NSCC included statements concerning Self-Regulatory Organizations; modified by Amendment No. 2, from interested persons. the purpose of and basis for the National Securities Clearing Advance Notice, as modified by Corporation; Notice of Filing Amendment No. 2, and discussed any Amendment No. 2 to an Advance the Proposed Rule Change, as amended, shall not take effect until all regulatory actions required with comments it received on the Advance Notice, as Previously Modified by Notice, as amended. The text of these Amendment No. 1, To Institute respect to the proposal are completed. 4 See Release No. 34–69451 (Apr. 25, 2013), 78 FR statements may be examined at the Supplemental Liquidity Deposits to Its 25496 (May 1, 2013). places specified in Item IV below. NSCC Clearing Fund Designed To Increase 5 Id. has prepared summaries, set forth in Liquidity Resources To Meet Its 6 Release No. 34–69605 (May 20, 2013), 78 FR sections (A), (B), and (C) immediately Liquidity Needs 31616 (May 24, 2013). Absent a request by the below, of the most significant aspects of Commission to NSCC to provide additional these statements.12 July 9, 2013. information on the Advance Notice pursuant to On March 21, 2013, National Section 806(e)(1)(D) of the Clearing Supervision (A) Advance Notices Filed Pursuant to Securities Clearing Corporation Act, see 12 U.S.C. 5465(e)(1)(D), the Commission Section 806(e) of the Payment, Clearing (‘‘NSCC’’) filed with the Securities and shall have until July 19, 2013 to issue an objection and Settlement Supervision Act Exchange Commission (‘‘Commission’’) or non-objection to the Advance Notice, as amended. See Release No. 34–69605 (May 20, 1. Description of Change advance notice SR–NSCC–2013–802 2013), 78 FR 31616 (May 24, 2013), and see 12 (‘‘Advance Notice’’) pursuant to Section U.S.C. 5465(e)(1)(E) and (G). Original SLD Proposal 806(e)(1) of the Payment, Clearing, and 7 See Comments Received on File Nos. SR– The original proposal contained in the Settlement Supervision Act of 2010 NSCC–2013–02 (http://sec.gov/comments/sr-nscc- Advance Notice, as modified by 1 (‘‘Clearing Supervision Act’’) and Rule 2013-02/nscc201302.shtml) and SR–NSCC–2013– Amendment No. 1 (‘‘Original SLD 19b–4(n)(1)(i) 2 thereunder.3 On April 802 (http://sec.gov/comments/sr-nscc-2013-802/ nscc2013802.shtml). Since the proposal contained Proposal’’), would change the Rules to in the Advance Notice was also filed as a Proposed add a new Rule 4A, in order to establish 1 12 U.S.C. 5465(e)(1). Rule Change, see Release No. 34–69313, supra note a supplemental liquidity funding 2 17 CFR 240.19b–4(n)(1)(i). 3, the Commission is considering all public 3 NSCC also filed the proposal contained in the obligation designed to cover the comments received on the proposal regardless of Advance Notice as proposed rule change SR– liquidity exposure attributable to those whether the comments are submitted to the NSCC–2013–02 (‘‘Proposed Rule Change’’) under Advance Notice, as amended, or the Proposed Rule Members and families of affiliated Section 19(b)(1) of the Securities and Exchange Act Members (‘‘Affiliated Families’’) that of 1934 (‘‘Exchange Act’’) and Rule 19b–4 Change, as amended. thereunder. Release No. 34–69313 (Apr. 4, 2013), 78 8 NSCC also received a comment letter directly regularly incur the largest gross FR 21487 (Apr. 10, 2013). On April 19, 2013, NSCC prior to filing the Advance Notice and related settlement debits over a settlement cycle filed Amendment No. 1 to the Proposed Rule Proposed Rule Change with the Commission, which during both times of normal trading Change, which, on May 22, 2013, the Commission NSCC provided to the Commission in Amendment activity (‘‘Regular Activity Periods’’) provided notice of and designated a longer period No. 1 to the filings. See Exhibit 2 to File No. SR– and times of increased trading and of review for Commission action on the Proposed NSCC–2013–802 (http://sec.gov/rules/sro/nscc/ Rule Change, as modified by Amendment No. 1. 2013/34-69451-ex2.pdf). settlement activity that arise around Release No. 34–69620 (May 22, 2013), 78 FR 32292 9 12 U.S.C. 5465(e)(1). quarterly triple options expiration dates (May 29, 2013). On June 11, 2013, NSCC filed 10 17 CFR 240.19b–4(n)(1)(i). (‘‘Quarterly Options Expiration Activity Amendment No. 2 to the Proposed Rule Change, which the Commission published notice of with an 11 Defined terms that are not defined in this Periods’’). order instituting proceedings to determine whether notice are defined in Amended Exhibit 5 to the to approve or disapprove the Proposed Rule Advance Notice, available at http://sec.gov/rules/ 12 The Commission has modified the text of the Change. Release No. 34–69951 (July 9, 2013). The sro/nscc.shtml, under File No. SR–NSCC–2013– summaries prepared by NSCC to primarily focus on proposal in the Advance Notice, as amended, and 802, Additional Materials. the Advance Notice.

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The Supplemental Liquidity under the Credit Facility. To the extent that this commitment would reduce the Obligation of a Member or Affiliated that NSCC is successful in raising Member’s Regular Activity Liquidity Family with respect to a Regular significant amounts of its needed Obligation cash requirement by the Activity Period (‘‘Regular Activity liquidity though the Credit Facility— amount of any such commitment. Liquidity Obligation’’) or a Quarterly whether from Members, their affiliates Therefore, under the Revised SLD Options Expiration Activity Period making commitments on their behalf, or Proposal, NSCC states that all Members, (‘‘Special Activity Liquidity non-affiliated lenders—NSCC states that whether or not they have affiliated Obligation’’) would be imposed on the a diversified lender facility serves to banks, are equally incentivized to seek 30 Members or Affiliated Families who mitigate the liquidity risk of NSCC and lenders to maximize the size of the generate the largest aggregate liquidity its membership as a whole, while Credit Facility. NSCC states that this needs over a settlement cycle that reducing the cash outlay obligations of change effectively eliminates any would apply in the event of a closeout the top 30 Members and Affiliated perceived discrimination in the Original (i.e., over a period from date of default Families. SLD Proposal between those Members through the following three settlement NSCC states that the cash deposit in that have bank affiliates and those that days), based upon a historical look-back respect of a Special Activity Liquidity do not. This change is reflected in the period. Obligation (‘‘Special Activity proposed Rule 4A by the inclusion of a NSCC states that the calculations for Supplemental Deposit’’) was structured new definition for ‘‘Designated Lender,’’ both the Regular Activity Liquidity in the Original SLD Proposal to address and corresponding adjustments to the Obligation and the Special Activity any additional liquidity shortfalls (i.e., calculation formula. Liquidity Obligation are designed so over and above NCSS’s other available Second, any ‘‘excess’’ Credit Facility that NSCC has adequate liquidity liquidity resources) that arose during commitments made by Members resources to enable it to settle the heightened trading activity around directly or through their Designated transactions, notwithstanding the the Quarterly Options Expiration Lenders (i.e., the amount of any default of the Member or Affiliated Period. As such, these additional commitment by a Member or its Family presenting the largest liquidity Special Activity Supplemental Deposits Designated Lender that exceeds the need during Regular Activity Periods, as would be required to be maintained on Member’s calculated Regular Activity well as during Quarterly Options deposit with NSCC only through the Liquidity Obligation) would be Expiration Activity Periods. The completion of the related settlement allocated ratably among all Regular Supplemental Liquidity Obligations cycle and for a few days thereafter. Activity Liquidity Providers, which imposed on Members of Affiliated Both prior to the submission of the NSCC states would reduce their cash Families would be apportioned among Advance Notice, and since, NSCC states Regular Activity Supplemental Deposit the Members in that Affiliated Family in that it has engaged in significant requirements, in the same way that proportion to the liquidity risk (or peak outreach to its Members to discuss the commitments of non-affiliated lenders exposure) they present to NSCC. SLD Proposal, which outreach, NSCC are applied under the Original SLD NSCC states that the SLD Proposal is believes, has been key to the Proposal. This change is reflected in designed to supplement NSCC’s development and evolution of the SLD adjustments to the calculation formula liquidity resources and work in tandem Proposal over the past 18 months. NSCC in Sections 5 and 9 of the proposed Rule with NSCC’s committed credit facility is cognizant of the concerns raised by 4A. (‘‘Credit Facility’’), which it maintains Members who have submitted Third, under the Revised SLD as a liquidity resource (in addition to comments regarding the Advance Notice Proposal, the seasonal/peak facility that the NSCC Clearing Fund) should a and related Proposed Rule Change, and, NSCC believes currently addresses Member or Affiliated Family default. according to NSCC, this Amendment NSCC’s liquidity needs over Quarterly The Regular Activity Liquidity No. 2 seeks to address those concerns. Options Expiration Activity Periods Obligations would be calculated and would be extended to cover monthly imposed semi-annually, the first of Proposed Enhancements to the Original options expiration periods and would which would be made to coincide with SLD Proposal be calculated and collected 12 times a the annual renewal of the Credit Facility NSCC is proposing to amend the year instead of four (‘‘Monthly Options and the second of which would be made Original SLD Proposal with Expiration Activity Period’’). NSCC six months thereafter. NSCC states that enhancements that NSCC believes are states, based on its review of available the SLD Proposal seeks to strike a collectively designed to mitigate historical quantitative information, that balance between reliance on the Credit potential cash outlay burdens, as well as the effect of this change would be to Facility to reduce the burden on respond to transparency concerns raised reduce the size of the Regular Activity Members or Affiliated Families for cash by Members, by clarifying the Liquidity Obligations under the Revised outlay, while at the same time obligating implementation timeframe of the SLD Proposal. Additionally, NSCC those Members or Affiliated Families proposed change and the reporting that states that by treating all liquidity who expose NSCC to the largest would be provided to Members under obligations derived from Monthly liquidity risks to fund their fair share of this revised SLD Proposal (‘‘Revised Options Expiration Activity Periods the liquidity ‘‘differential.’’ SLD Proposal’’). (where there is greater activity NSCC states that the SLD Proposal First, NSCC would allow its Members fluctuation than during other periods) as contains both obligations and to designate a commercial lender— Special Activity Liquidity Obligations, incentives. For example, a cash deposit whether or not affiliated with that the Revised SLD Proposal would in respect of a Regular Activity Member—to commit as a lender to the provide greater stability and Liquidity Obligation (e.g., in the Credit Facility as a designee of the predictability to the size of the Regular Original SLD Proposal, the obligation of Member, subject to satisfaction of Activity Liquidity Obligations. NSCC’s a Member or Affiliated Family to make reasonable lender criteria.13 NSCC states analyses based upon historical data a ‘‘Regular Activity Supplemental estimates that expanding this seasonal/ Deposit’’) would be reduced by any 13 NSSC states that such criteria would be liquidity such Members or their designed to cover issues such as credit risk, ensure the continued robust viability of the line of affiliates provided as commitments concentration risk, and lender diversity, so as to credit.

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peak facility to cover all Monthly SLD Proposal would address any designed to align notice, payment, and Options Expiration Activity Periods concern that NSCC would not have cash return timeframes, and to clarify could reduce the size of the aggregate sufficient liquid resources to effect the operation of the calculation Regular Activity Liquidity Obligations settlement if prefunding is unavailable formulas to ensure they operate as by up to 20 percent. NSCC also states when actually needed. intended. that recalibrating the Special Activity Additional Revisions to the Original Implementation Timeframe and Liquidity Obligations on a monthly SLD Proposal Funding Notice. While the SLD Proposal basis results in allocating the liquidity Reporting. NSCC states that it would be effective upon the completion burdens among those Members and of all required regulatory approvals, Affiliated Families more equitably, understands and agrees that Members Members would not be obligated to fund since only those Members whose have to be able to evaluate risks of their their Regular Activity Liquidity monthly options-related activity membership and be able to plan for Obligations or Special Activity generate liquidity needs in excess of their liquidity obligations. NSCC also Liquidity Obligations until the Monthly NSCC’s then available liquidity states that it is critical that Members Options Expiration Activity Period in resources would be obligated to fund understand the risks that their own such additional amounts.14 NSCC states activity presents to NSCC and be September 2013. Moreover, Members that this change is reflected in a revised prepared to monitor their own activity would be provided with notice of their definition of ‘‘Options Expiration and alter their behavior if they want to initial Regular Activity Liquidity Activity Period,’’ and clarifications to minimize the liquidity risk they present Obligations no later than 30 days prior the calculation formula of the Special to NSCC. While NSCC states that robust to the date on which that amount must Activity Liquidity Obligations, as well reporting has always been a key element be deposited with NSCC. At that time, as to related definitions to ensure the of the Original SLD Proposal, the NSCC’s risk management staff would formula—and the allocation among Revised SLD Proposal clarifies in a new also provide to affected Members their affected Members—operates as Section 31 of proposed Rule 4A the Special Activity Peak Liquidity intended. information that NSCC would provide Exposure within the look-back period. Fourth, the Revised SLD Proposal to Members. Such information would be Specific implementation dates would be includes a new definition for ‘‘Other provided to all Members, not just the provided by NSCC by Important Notice. top 30 Members and Affiliated Families, Qualifying Liquid Resources.’’ NSCC NSCC states that its risk management at least monthly. NSCC states that these states that this new defined term would staff would continue to work with reports would show Members the permit NSCC to take any such Members to help them understand the additional or alternative liquidity liquidity exposure they present to NSCC to enable them to monitor their activity Revised SLD Proposal and to develop resources that it may obtain in the tools that NSCC believes would enable future into account when calculating and the ‘‘Regular Activity Peak Liquidity Exposure’’ that results from Members to forecast the liquidity Regular Activity Liquidity Obligations exposure they present to NSCC. NSCC and to use them to reduce the amount their activity. Information provided in these reports would include: states that its risk management staff of cash, if any, that Members would • would also use the reports that would otherwise be obligated to deposit as The Regular Activity Peak Liquidity Exposure of the Member on each be provided under new Section 31 or Regular Activity Supplemental proposed Rule 4A to guide ongoing Deposits. This change is reflected both Business Day of the preceding month; • NSCC’s largest Regular Activity discussions with Members regarding the with the inclusion of the new definition Peak Liquidity Need for the preceding types of actions that could mitigate of ‘‘Other Qualifying Liquid Resources,’’ month; those Members’ peak liquidity exposure. and with corresponding modifications • in the case of an Unaffiliated In addition, under the Revised SLD to the calculation formula. Member, for each Business Day of the Fifth, as regards Members’ voluntarily Proposal (as in the Original SLD preceding month, the percentage that prefunding Regular Activity Liquidity Proposal), NSCC states that Members the Regular Activity Peak Liquidity Obligations and Special Activity would be able to manage their Exposure of the Member bears to the Liquidity Obligations, NSCC would exposures by making prefund deposits aggregate Regular Activity Peak monitor Members’ prefunding activity where they project their own activity Liquidity Exposures of all Regular to understand the impact such would increase their liquidity exposure. Activity Liquidity Providers (the prefunded amounts have on the amount For example, if a Member that would be percentage for a Member that is not a of its committed liquidity resources. a Special Activity Liquidity Provider Regular Activity Liquidity Provider for NSCC states that the Revised SLD anticipates that its Special Activity Peak that month would be zero); and Liquidity Exposure at any time during a Proposal provides NSCC with some • in the case of an Affiliated Family, particular Options Expiration Activity discretion when including prefunded for each Business Day of the preceding deposits within its calculated liquidity Period would be greater than the month, the percentage that the aggregate amount calculated by NSCC, then it resources, so as to provide some Regular Activity Peak Liquidity flexibility in the event it becomes too could make an additional cash deposit Exposures of all Members of that to the Clearing Fund (in excess of its reliant on voluntary prefunding to meet Affiliated Family bears to the aggregate its minimum liquidity needs. NSCC Required Deposit) that it designates as a Regular Activity Peak Liquidity ‘‘Special Activity Prefund Deposit.’’ states that this change to the Original Exposures of all Regular Activity Liquidity Providers (Affiliated Families In order to give Members sufficient 14 NSCC states that since the allocation formula time to plan for annual Credit Facilities ratably applies the excess amount needed due to that are not Regular Activity Liquidity activity during Special Activity Periods based upon Providers for that month would be zero renewals and to line up designated the affected Member’s Special Activity Peak percentage). liquidity providers for the Credit Liquidity Exposure, then to the extent that a Technical Clarifications and Changes. Facility, NSCC states that its risk staff Member’s Special Activity Peak Liquidity Exposure would provide Members with an impact (as defined) is less than or equal to NSCC’s other The Revised SLD Proposal includes available resources, that Member’s share of the certain technical changes and analysis of their projected Supplemental Special Activity Peak Liquidity Need will be zero. clarifications that NSCC states it Liquidity Obligations beginning on

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November 31 of each year.15 NSCC supplemental deposit requirements, Liquidity Obligations are only imposed states that the information provided including the rationale behind these on the 30 largest Members and would show the potential impact on initiatives, how these initiatives fit Affiliated Families rather than on the affected Members based on different within NSCC’s liquidity risk tolerance, entire membership. NSCC states that, Credit Facility funding levels. and the likely impact of the initiatives. based on an analysis of Members, NSCC In response to the more general NSCC states that the Revised SLD made a business determination that the concern regarding refinancing risk and Proposal contributes to NSCC’s goal of top 30 Members or Affiliated Families NSCC’s reliance on the Credit Facility, ensuring that NSCC has adequate would most appropriately capture the NSCC states that it would continue to liquidity resources to meet its liquidity exposure over and above explore additional financing sources. settlement obligations, notwithstanding available NSCC Clearing Fund liquidity. NSCC states that it would review and the default of its Members or Affiliated NSCC states that its liquidity analyses evaluate the financing options available Families that pose the largest aggregate show that the liquidity requirements to it and the related costs of those liquidity exposure over the relevant attributable to the top 30 Members and options, and would expect to present settlement cycle, as required by Affiliated Families account for the vast the findings of that review to the NSCC Commission Rule 17Ad–22(b)(3).16 majority of NSCC’s liquidity needs. Board prior to the next renewal of the 2. Anticipated Effect on Management of According to NSCC, as of the end of Credit Facility in May 2014. When Risk February 2013, the top 30 Members and sizing and approving the fee and costs Affiliated Families represented structure of the renewal Credit Facility, As described above, NSCC is approximately 85% of the total NSCC states that the NSCC Board would proposing to amend the Advance membership by peak liquidity needs be able to take into account those Notice, as modified by Amendment No. over the prior six-month period. NSCC potential additional financing sources 1, in order to mitigate potential cash states that the analyses also show that outlay burdens, and respond to and consider the consequent impact on the remaining membership’s peak transparency concerns raised by Members’ cash Regular Activity liquidity demands are covered by the Members by clarifying the Supplemental Deposit and Special required deposits to the NSCC Clearing implementation timeframe of the SLD Activity Supplemental Deposit Fund. Therefore, NSCC states the SLD Proposal and the reporting that would obligations. The items that would be Proposal appropriately places the be provided to Members under the SLD included in this review are: burden of providing liquidity on those Proposal. NSCC believes that the SLD • Analysis of the availability, size, Members and Affiliated Families who Proposal, as amended hereby, has been cost, and credit risk necessary to obtain present the largest liquidity risk. While designed to ameliorate any unintended the additional commitments under the NSCC does not believe it would be Credit Facility likely to reduce the impact on competition that may be perceived, and it does not believe that appropriate to require the entire Regular Activity Supplemental Deposit the proposed amendments change the membership to bear the burden of the requirements to zero; liquidity needs that are generated by • analysis of the availability, size, anticipated effect on and management of risk, as described in the original NSCC’s largest trading firms, it does cost, and credit risk to obtain a new note that all Members currently do bear multi-year committed facility to replace Advance Notice filed by NSCC on March 21, 2013.17 the cost of the Credit Facility as an the existing Credit Facility; operating expense that NSCC factors • an understanding of the aggregate (B) Comments on Competition into its overall fee structure, as well as costs, if any, for Members to designate their share of the NSCC Clearing Fund. commercial lenders to commit to the 1. Competition Concerns Raised by Commenters NSCC states that as a whole, NSCC Credit Facility as their designees; believes this collective liquidity funding • analysis of the availability, size, Bank Affiliates. NSCC states that some approach represents a fair cost, and potential depth of a capital commenters raised concerns on apportionment of NSCC’s aggregate markets funding among Members and/or competition grounds that the Original liquidity needs amongst its third parties as an additional liquidity SLD Proposal permitted Members and membership. resource, including the viability of Affiliated Families with bank affiliates to reduce or potentially eliminate their Impact on a Sector of the Market. offering the funding to Members or NSCC states that some commenters mandating their participation in such required cash Required Activity Supplemental Deposits by the amounts raised concerns on competition grounds funding; and that the SLD Proposal may cause • a summary of the steps that of the commitments of such bank increased concentration of clearing Members have taken to reduce their affiliates under the Credit Facility while activity by requiring smaller firms to NSCC liquidity profile, and whether this Members and Affiliated Families clear through larger financial should be factored into the historical without bank affiliates could not do so. institutions. NSCC states that implicit in analysis used to determine NSCC’s As indicated above, NSCC states that these comments is a concern that Regular Activity Period liquidity needs this limitation to bank affiliates has smaller, less well-capitalized firms have and Members’ share of that need. been eliminated from the SLD Proposal. less access to funding than do larger, NSCC states that it would update its NSCC states that any Member or well capitalized firms. NSCC states, Members on the results of this review Affiliated Family could designate a however, that no Member, because of its and the determination of the NSCC Designated Lender and receive an offset low capital business model or limited Board. NSCC states that it would also for the commitment of such Designated access to funding, should have the right update its Members with information Lender. to impose on NSCC (and the rest of the regarding future liquidity initiatives The Top 30 Cut-Off. NSCC states that membership) the burden of bearing the designed to increase NSCC’s liquidity some commenters raised concerns on risks of that Member’s clearing resources and potentially reduce competition grounds that Supplemental activities. Moreover, NSCC states that 15 NSCC states that given the timing of the 16 See 17 CFR 240.17Ad–22(b)(3). the SLD Proposal provides incentives calculation look-back periods, information provided 17 See Release No. 34–69451 (Apr. 25, 2013), 78 for Members to manage the liquidity in November will necessarily be estimates. FR 25496 (May 1, 2013). risks of their business; by doing so they

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could reduce the share of their post-trade processing and information individual Members that may be obligation under the SLD Proposal. services. NSCC states that it and the affected by the proposed change— NSCC also states that some other registered clearing agencies in the designed to assure that NSCC has the commenters claim that the risk posed by DTCC group provide the critical liquidity it needs to safely operate a brokers with business in mostly agency- infrastructure for the clearance and clearing and settlement business and based transactions was overstated by settlement of securities transactions in meet its obligations as a registered NSCC in crafting the SLD Proposal the United States. These registered clearing agency and central because those firms settle transactions clearing agencies operate as utilities for counterparty under the Exchange Act— on a delivery-versus-payment (‘‘DVP’’) their users, allowing such users to must also recognize that some basis. NSCC states, however, that agency compete against each other (for the accommodation may be required on brokers that execute market transactions benefit of their retail and institutional their part. that clear at NSCC are obligated, as customers) on the basis of performance Nevertheless, in response to principals, to settle those transactions at and price and not on the basis of any comments submitted on the proposed NSCC irrespective of whether their relative advantage with respect to change in the form in which it was institutional customers complete the clearing and settlement services. originally filed in the Advance Notice, institutional delivery DVP side of the As a clearinghouse for securities and dialogue with a number of other transaction (which occurs outside of transactions and a central counterparty, Members who did not submit comments NSCC). According to NSCC, it, as the NSCC states that it has no reason, but otherwise provided their input to central counterparty, remains obligated interest, or intent to discriminate among NSCC, NSCC states that it has revised to complete the other side of the market its Members—certainly not to give any the proposed change in a number of transaction if the agency broker fails. of its Members a competitive advantage respects that bear upon the issue of NSCC states that institutional customers or impose on any of its Members a competition and whether the proposed of the agency brokers are not NSCC competitive disadvantage in their change would have an impact or impose Members and have no contractual operations. NSCC states that although it any burden on competition. obligation with NSCC to complete those strives for complete neutrality in its First, the Original SLD Proposal trades if the agency broker fails. interface with Members, it may be that provided that a Regular Activity Therefore, NSCC states that if an agency clearing agency rules of general Liquidity Provider would receive an broker fails, NSCC (and its other application to all Members could have offset against its Regular Activity Members) face the risk that the a disparate effect on Members with Liquidity Obligation for the amount of institutional customer will take its own diverse business models and strategies. its commitment and the commitment of market action, and NSCC will incur the NSCC states that any such disparate any affiliate of the Regular Activity liquidity obligation of completing the effects arising out of choices made by Liquidity Provider under the Credit market settlement. NSCC states that it individual Members in terms of their Facility. The Revised SLD Proposal must consider this risk in crafting its business models and strategies provides that a Regular Activity risk management strategies, and agency (including their relative levels of Liquidity Provider would receive an brokers are not immune from the risk of capitalization) should not be seen as offset against its Regular Activity failure, as recent events have shown that due to action by the clearing agency Liquidity Obligation for the amount of they, like other firms, remain subject to having an impact or imposing a burden its commitment, the commitment of any market events, as well as technology on competition. affiliate, and the commitment of any and other risks. Although NSCC states that it is always Designated Lender of the Regular NSCC states that these comments mindful of the effect that its Rules may Activity Liquidity Provider under the raise a concern that Members are being have on individual Members, NSCC Credit Facility. As a result, NSCC states asked share the burden of funding the states that it must also be concerned that any distinction between Members liquidity needs that are dependent on with (i) the interests of its membership with bank affiliates and Members the actions, including trading levels, of as a whole, (ii) its general obligations without bank affiliates, and any other Members, and thus the amounts under Section 17A(b)(3) of the Exchange perceived advantage for Members with are not within the contributing Act ‘‘to facilitate the prompt and bank affiliates over Members without Member’s control. NSCC states that from accurate clearance and settlement of bank affiliates, has been eliminated. a fairness perspective, however, that securities transactions and derivatives Second, the SLD Proposal has been proportionate share of the affected agreements, contracts, and transactions’’ refined to provide that a Regular Member’s liquidity burden (whether it and ‘‘to safeguard securities and funds Activity Liquidity Provider would be an agency broker or otherwise) would in its custody or control,’’ and (iii) the receive an offset against its Regular always be less than the Member’s own particular requirements of Rule 17Ad- Activity Liquidity Obligation for both (i) peak liquidity needs, and each Member 22(b)(3) relating to the financial its pro rata share of the commitments of is in the best position to monitor and resources that a clearing agency which lenders under the Credit Facility that manage the liquidity risks presented by is a central counterparty (like NSCC) are not Members or their Designated its own activity. must maintain to cover the default of Lenders and (ii) its pro rata share of the the participant family presenting the commitments of Members and their 2. Modifications to the Proposed Change largest exposure to the clearing agency Designated Lenders above the amounts Address Competition Concerns in extreme but plausible market of their Regular Activity Liquidity NSCC is an operating subsidiary of conditions. Obligations. As a result of this change, The Depository Trust & Clearing NSCC states that these concerns and NSCC states that the obligation of Corporation (‘‘DTCC’’), which NSCC the interests of its Members, including Regular Activity Liquidity Providers to states is a user-owned, user-governed their interests relating to issues of provide Regular Activity Supplemental holding company for NSCC, two other competition and the effect of the Deposits will be ratably reduced by the registered clearing agencies, a proposed change on competition among amount of such ‘‘excess.’’ derivatives clearing organization joint Members and between Members and Third, the Options Expiration Activity venture, and a number of other other financial market participants, can Period has been redefined to mean the companies that provide a variety of be reconciled. But, NSCC states that days around all monthly options

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expiration dates (12 per year) rather III. Date of Effectiveness of the Advance 100 F Street NE., Washington, DC than just triple options expiration dates Notice and Timing for Commission 20549–1090. (four per year). As a result of this Action All submissions should refer to File No. change, NSCC states that more periods The clearing agency may implement SR–NSCC–2013–802. This file number of increased activity would be excluded the proposed change pursuant to should be included on the subject line by NSCC from the calculation of its Section 806(e)(1)(G) of the Clearing if email is used. To help the Regular Activity Peak Liquidity Need, Supervision Act 18 if it has not received Commission process and review your thereby reducing the Regular Activity an objection to the proposed change comments more efficiently, please use Liquidity Obligations of Regular within 60 days of the later of (i) the date only one method. The Commission will Activity Liquidity Providers. that the Commission received the post all comments on the Commission’s NSCC states that participation in the Internet Web site (http://www.sec.gov/ Credit Facility is available to financial advance notice or (ii) the date the Commission receives any further rules/sro.shtml.) Copies of the institutions that have the resources and submission, all subsequent operational capabilities to be lenders information it requested for consideration of the notice. The clearing amendments, all written statements under the Credit Facility, subject to with respect to the Advance Notice, as satisfaction of reasonable lender criteria. agency shall not implement the proposed change if the Commission has amended, that are filed with the Although the Credit Facility was Commission, and all written renewed on May 14, 2013 for an any objection to the proposed change. The Commission may extend the communications relating to the Advance additional term of 364 days, NSCC Notice, as amended, between the states that there are mechanisms in the period for review by an additional 60 days if the proposed change raises novel Commission and any person, other than Credit Facility to increase the those that may be withheld from the commitments of existing lenders and or complex issues, subject to the Commission providing the clearing public in accordance with the admit new lenders at any time during provisions of 5 U.S.C. 552, will be the term. Accordingly, NSCC states that agency with prompt written notice of the extension. A proposed change may available for Web site viewing and at the time when the SLD Proposal printing in the Commission’s Public becomes effective and before the time be implemented in less than 60 days from the date of receipt of the advance Reference Room, 100 F Street NE., that any Member may have to satisfy a Washington, DC 20549, on official Regular Activity Liquidity Obligation, notice, or the date the Commission receives any further information it business days between the hours of such Member would have an 10:00 a.m. and 3:00 p.m. Copies of such opportunity to either join the Credit requested, if the Commission notifies the clearing agency in writing that it filings also will be available for Facility itself as a lender (if it has the inspection and copying at the principal authority to be a lender) or enter into does not object to the proposed change and authorizes the clearing agency to office of NSCC and on NSCC’s Web site arrangements with a bank to be its at http://dtcc.com/legal/rule_filings/ Designated Lender—in either case implement the proposed change on an earlier date, subject to any conditions nscc/2013.php. All comments received thereby reducing or eliminating the will be posted without change; the need for it to make a cash Regular imposed by the Commission. The clearing agency shall post notice on its Commission does not edit personal Activity Supplemental Deposit to the identifying information from Clearing Fund. Web site of proposed changes that are implemented. submissions. You should submit only 3. Impact on Competition The proposal shall not take effect information that you wish to make NSCC states that for the reasons stated until all regulatory actions required available publicly. All submissions above, it believes the changes that have with respect to the proposal are should refer to File No. SR–NSCC– been made to the Original SLD Proposal completed. 2013–802 and should be submitted on or before August 5, 2013. eliminate or substantially ameliorate the IV. Solicitation of Comments impact that the SLD Proposal might By the Commission. have on competition. Interested persons are invited to Kevin M. O’Neill, submit written data, views, and Deputy Secretary. (C) Clearing Agency’s Statement on arguments concerning the foregoing, [FR Doc. 2013–16821 Filed 7–12–13; 8:45 am] Comments on the Advance Notice including whether the Advance Notice, Received from Members, Participants, or as amended, is consistent with the BILLING CODE 8011–01–P Others Clearing Supervision Act. Comments While written comments on the may be submitted by any of the SECURITIES AND EXCHANGE Advance Notice, as modified by following methods: COMMISSION Amendment No. 2, were not solicited, Electronic Comments as noted above, NSCC engaged [Release No. 34–69948; File No. SR–CBOE– significant outreach and discussion with • Use the Commission’s Internet 2013–041] affected Members in developing the SLD comment form (http://www.sec.gov/ Self-Regulatory Organizations; Proposal. rules/sro.shtml); or Chicago Board Options Exchange, Written comments on the Advance • Send an email to rule- Incorporated; Order Approving a Notice, as amended, have been filed [email protected]. Please include File Proposed Rule Change, as Modified by with the Commission and are available No. SR–NSCC–2013–802 on the subject Amendment Nos. 1 and 2, To Amend on the Commission’s Web site. NSCC line. Rule 6.53(u), Relating to Qualified states that this Amendment No. 2 Paper Comments Contingent Cross Orders addresses some of the issues raised by • those comments. NSCC’s formal Send paper comments in triplicate July 9, 2013. response to the written comments has to Elizabeth M. Murphy, Secretary, been submitted separately to the Securities and Exchange Commission, I. Introduction Commission in accordance with the On March 28, 2013, the Chicago process for submitting comments. 18 12 U.S.C. 5465(e)(1)(G). Board Options Exchange, Incorporated

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(‘‘Exchange’’ or ‘‘CBOE’’) filed with the This order approves the proposed rule orders.9 CBOE states that the pricing of Securities and Exchange Commission change, as modified by Amendment a complex order, whether or not it is a (‘‘Commission’’), pursuant to Section Nos. 1 and 2. QCC Order, is based on the relative 19(b)(1) of the Securities Exchange Act price of one option leg to another (as II. Description of the Proposal of 1934 (‘‘Act’’) 1 and Rule 19b–4 opposed to the outright price of a single thereunder,2 a proposed rule change to Currently, CBOE Rule 6.53(u) states option), and therefore that the standard amend CBOE Rule 6.53(u) to allow that QCC Orders may only be entered in increment of trading of the individual Qualified Contingent Cross (‘‘QCC’’) the standard increments applicable to legs of a complex order is less relevant Orders with more than one option leg to simple orders in the options class under to the pricing of the complex order.10 In be entered in $0.01 increments. The CBOE Rule 6.42.7 CBOE Rule 6.42 addition, CBOE notes that, under CBOE proposed rule change was published for provides trading increments of $0.01, Rule 6.53(u)(ii), each option leg of a comment in the Federal Register on $0.05, or $0.10 for individual option complex QCC Order must: (1) Provide April 16, 2013.3 CBOE filed series, and orders to buy or sell a single price improvement over a public Amendment No. 1 to the proposal on option series must be entered in the customer order resting in the electronic April 18, 2013.4 CBOE filed trading increment applicable to the book; and (2) be at or between the Amendment No. 2 to the proposal on series. CBOE Rule 6.42(4) allows bids NBBO.11 CBOE also states that it has May 29, 2013.5 On June 5, 2013, the and offers on complex orders to be never had to reject a complex QCC Commission published notice of and expressed in any increment, regardless Order because it would have violated solicited comment on the proposed rule of the minimum increment otherwise either of these principles.12 Finally, change, as modified by Amendment applicable to the individual legs of the CBOE believes that allowing QCC Nos. 1 and 2, and extended the time complex order. CBOE proposes to Orders with multiple options legs to be period for Commission action on the amend CBOE Rule 6.53(u) to permit entered in $0.01 increments will proposal to July 15, 2013.6 The QCC orders with more than one option provide an opportunity for price Commission received no comments leg to be entered in the increments improvement at a smaller increment regarding the proposal, as amended. specified for complex orders under level.13 CBOE Rule 6.42, i.e., $0.01 increments.8 1 15 U.S.C. 78s(b)(1). CBOE believes that, because a QCC III. Discussion and Commission 2 17 CFR 240.19b–4. Order with multiple option legs is a Findings 3 See Securities Exchange Act Release No. 69360 form of complex order, these QCC After careful review, the Commission (April 10, 2013), 78 FR 22591. Orders also should be permitted to be finds that the proposed rule change, as 4 In Amendment No. 1, CBOE added an entered in $0.01 increments, a change additional paragraph at the end of the purpose modified by Amendment Nos. 1 and 2, section stating that: (1) A QCC Order with multiple the Exchange states would place QCC is consistent with the requirements of legs is a form of a complex order and should be able Orders with multiple options legs on the the Act and the rules and regulations to be entered in $0.01 increments, as non-QCC same footing as other types of complex complex orders can currently be entered in $0.01 thereunder applicable to a national increments; and (2) such orders still cannot trade securities exchange and, in particular, 7 unless they are at or between the NBBO and the A QCC Order is an order to buy (or sell) at least with Section 6(b) of the Act.14 In opportunity to trade QCC Orders with multiple legs 1,000 standard option contracts or 10,000 mini- particular, the Commission finds that in $0.01 increments provides an opportunity for option contracts that is identified as being part of price improvement at this smaller increment level. a qualified contingent trade coupled with a contra- the proposed rule change is consistent The paragraph added in Amendment No. 1 was side order to sell (or buy) an equal number of with Sections 6(b)(5) 15 and 6(b)(8),16 deleted and replaced by language added in contracts. A ‘‘qualified contingent trade,’’ or which require, among other things, that ‘‘QCT,’’ is a transaction consisting of two or more Amendment No. 2. See note 5 infra. the rules of a national securities 5 In Amendment No. 2, CBOE replaced the component orders, executed as agent or principal, paragraph added by Amendment No. 1 with two where: (1) At least one component is an NMS stock, exchange be designed to promote just paragraphs at the end of the purpose section stating as defined in Rule 600 of Regulation NMS under the and equitable principles of trade, to that: (1) Were it not for language in CBOE Rule Act; (2) all components are effected with a product prevent fraudulent and manipulative or price contingency that either has been agreed to 6.53(u) that limits the entry of QCC Orders to the acts, to remove impediments to and standard increments applicable to simple orders in by all the respective counterparties or arranged for the options class of each leg, QCC Orders with by a broker-dealer as principal or agent; (3) the perfect the mechanism for a free and multiple legs would be allowed to be traded in execution of one component is contingent upon the open market and a national market $0.01 increments under CBOE Rule 6.42; (2) the execution of all other components at or near the system, and, in general, to protect same time; (4) the specific relationship between the nature of the pricing of a complex order, whether investors and the public interest, and a QCC Order or otherwise, is such that the pricing component orders (e.g., the spread between the is based on the relative price of one option versus prices of the component orders) is determined by that the rules of an exchange do not another and thus the standard increment of trading the time the contingent order is placed; (5) the impose any burden on competition not of a complex order’s individual options legs is less component orders bear a derivative relationship to necessary or appropriate in furtherance one another, represent different classes of shares of relevant to the pricing of the complex order; (3) the of the purposes of the Act. In addition, proposed amendment to permit QCC Orders with the same issuer, or involve the securities of more than one option leg to be entered in the participants in mergers or with intentions to merge the Commission finds that the proposed increments specified for complex orders under that have been announced or cancelled; and (6) the rule change is consistent with Section CBOE Rule 6.42 (i.e., $0.01 increments) would put transaction is fully hedged (without regard to any 11A(a)(1)(C) of the Act,17 in which the trading of QCC Orders with multiple legs on the prior existing position) as a result of other same footing as the trading of other types of components of the contingent trade. See CBOE Rule Congress found that it is in the public complex orders; (4) pursuant to CBOE Rule 6.53(u)(i). The six requirements are substantively 6.53(u)(ii), each options leg of a complex QCC identical to the six elements of a QCT under the 9 See Amendment No. 2. Order cannot trade unless each leg provides price Commission’s QCT exemption. See Securities 10 See id. improvement over a public customer order resting Exchange Act Release Nos. 54389 (August 31, 11 See id. 2006), 71 FR 52829 (September 7, 2006) (‘‘Original in the electronic book and is at or between the 12 See id. NBBO, and to date, CBOE has never had to reject QCT Exemption’’) and 57620 (April 4, 2008), 73 FR 13 See id. a submitted complex QCC Order because it would 19271 (April 9, 2008) (‘‘CBOE QCT Exemption’’). 14 have violated either of these principles; and (5) The current QCT exemption (i.e., as modified by the 15 U.S.C. 78f(b). In approving this proposed permitting the trading of QCC Orders with multiple CBOE QCT Exemption) is referred to herein as the rule change, the Commission has considered the legs in $0.01 increments would provide an ‘‘NMS QCT Exemption.’’ proposed rule’s impact on efficiency, competition, opportunity for price improvement at this smaller 8 QCC Orders with one option leg would continue and capital formation. See 15 U.S.C. 78c(f). increment level. to trade in the standard increment applicable to 15 15 U.S.C. 78f(b)(5). 6 See Securities Exchange Act Release No. 69675 simple orders in the option class. See CBOE Rule 16 15 U.S.C. 78f(b)(8). (May 30, 2013), 78 FR 33868. 6.53(u). 17 15 U.S.C. 78k–1(a)(1)(C).

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interest and appropriate for the the efficient functioning of the securities principle of exposure and retained the protection of investors and the markets and the price discovery general principle of customer priority in maintenance of fair and orderly markets process.24 The Commission noted that the options markets.30 The Commission to assure, among other things, the QCC Orders would provide assurance to noted, further, that the requirement that economically efficient execution of parties to stock-option qualified a QCC Order be part of a qualified securities transactions. contingent trades that their hedge would contingent trade that satisfies each of In 2011, the Commission approved be maintained by allowing the options the six underlying requirements of the CBOE’s proposal to establish rules component of the qualified contingent NMS QCT Exemption, and the providing for the trading of QCC Orders trade to be executed as a clean cross.25 requirement that a QCC Order be for a on CBOE,18 which followed the The CBOE QCC Approval Order minimum size of 1,000 contracts, Commission’s approval of a proposal by stated further that, although the further limited the use of QCC Orders by the International Stock Exchange, LLC Commission believed that order ensuring that only transactions of (‘‘ISE’’) to trade QCC Orders.19 In the exposure is generally beneficial to the significant size would be able to avail ISE Order, the Commission noted that options markets in that it provides an themselves of the order type.31 the parties to a contingent trade are incentive to options market makers to The Commission believes that the focused on the spread or ratio between provide liquidity and therefore plays an analysis in the CBOE QCC Approval the transaction prices for each of the important role in ensuring competition Order applies equally to the current component instruments (i.e., the net and price discovery in the options proposal. By allowing QCC Orders with price of the entire contingent trade), markets, the Commission also has more than one option leg to trade in rather than the absolute price of any recognized that contingent trades can be $0.01 increments, rather than in the single component.20 Under the ‘‘useful trading tools for investors and standard increment applicable to single requirements of the NMS QCT other market participants, particularly leg orders in the options class, the Exemption, the spread or ratio between those who trade the securities of issuers proposal could facilitate the execution the relevant instruments must be involved in mergers, different classes of of QCC Orders with multiple option legs determined at the time the order is shares of the same issuers, convertible by providing additional price points at placed, and this spread or ratio stands securities, and equity derivatives such which these orders would be able to be 26 regardless of the market prices of the as options [italics added]’’, and that executed, which, in turn, could individual orders at their time of ‘‘[t]hose who engage in contingent facilitate the execution of qualified execution.21 As the Commission noted trades can benefit the market as a whole contingent trades. As discussed above, in the Original QCT Exemption, ‘‘the by studying the relationships between the Commission previously has found difficulty of maintaining a hedge, and prices of such securities and executing that transactions that meet the specified the risk of falling out of hedge, could contingent trades when they believe requirements of the NMS QCT dissuade participants from engaging in such relationships are out of line with 27 Exemption could benefit the market as contingent trades, or at least raise the what they believe to be fair value.’’ a whole by contributing to the efficient cost of such trades.’’ 22 Thus, the Thus, the Commission believed that functioning of the securities markets Commission found that, if each stock leg transactions that meet the specified and the price discovery process. of a qualified contingent trade were requirements of the NMS QCT Further, as discussed above, QCC required to meet the trade-though Exemption could be of benefit to the Orders provide assurance to the parties provisions of Rule 611 of Regulation market as a whole, contributing to the to a stock-option qualified contingent efficient functioning of the securities NMS, such trades could become too risk trade that their hedge will be and costly to be employed successfully markets and the price discovery 28 maintained by allowing the options and noted that the elimination or process. In the CBOE QCC Approval Order, the component of the order to be executed reduction of this trading strategy as a clean cross. By allowing QCC potentially could remove liquidity from Commission stated that the benefits provided by the exposure requirement Orders with multiple option legs to be the market.23 executed in $0.01 increments, the CBOE’s QCC Orders allow a Trading and by qualified contingent trades, such as QCC Orders, required the proposal could further facilitate the Permit Holder to cross the options leg(s) execution of the option component of a of a qualified contingent trade in a Commission to weigh the relative merits of both for the options markets.29 The stock-option qualified contingent trade. Regulation NMS stock on CBOE The Commission notes that CBOE immediately, without exposure, Commission found that CBOE’s rule, by requiring a QCC Order to be: (1) Part of Rule 6.53(u) will continue to require provided that the requirements of CBOE that QCC Orders, including those with Rule 6.53(u) are satisfied. In approving a qualified contingent trade under Regulation NMS; (2) for at least 1,000 CBOE’s proposal, the Commission 30 contracts; (3) executed at a price at or See id. stated that QCC Orders could facilitate 31 See CBOE QCC Approval Order at 35492–93. the execution of qualified contingent between the NBBO; and (4) cancelled if The CBOE QCC Approval Order also noted CBOE’s trades, which the Commission there is a public customer order on the representation that, to effect proprietary orders (including QCC Orders) electronically from on the previously had found to be beneficial to electronic book, struck an appropriate balance for the options markets in that floor of the Exchange, members must qualify for an the market as a whole by contributing to exemption from Section 11(a)(1) of the Act, 15 it was narrowly drawn and established U.S.C. 78k(a)(1), which concerns proprietary 18 See Securities Exchange Act Release No. 64653 a limited exception to the general trading on an exchange by an exchange member. (June 13, 2011), 76 FR 35491 (June 17, 2011) (order Among other things and as discussed in greater approving CBOE–2011–041) (‘‘CBOE QCC Approval 24 See CBOE QCC Approval Order at 35492, citing detail in the CBOE QCC Approval Order, CBOE Order’’). Original QCT Exemption, supra note 7. recognized that Trading Permit Holders effecting QCC Orders and relying on the ‘‘G’’ exemption for 19 See Securities Exchange Act Release No. 63955 25 See CBOE QCC Approval Order at 35492. yielding priority to non-members under Section (February 24, 2011), 76 FR 11533 (March 2, 2011) 26 See CBOE QCC Approval Order at 35492, citing 11(a)(1)(G) of the Act and Rule 11a1–1(T) (order approving ISE–2010–73) (‘‘ISE Order’’). Original QCT Exemption at 52830–31. thereunder would be required to yield priority to 20 See ISE Order at 11540. 27 See id. any interest, not just public customer orders, in the 21 See id. See also supra note 7. 28 See CBOE QCC Approval Order at 35492, citing electronic book at the same price to ensure that 22 See Original QCT Exemption at 52831. CBOE QCT Exemption at 19273. non-member interest is protected. See CBOE QCC 23 See id. 29 See CBOE QCC Approval Order at 35492. Approval Order at 35493.

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multiple option legs, be: (1) Part of a notice is hereby given that, on June 26, includes any security listed on Nasdaq qualified contingent trade under 2013, NYSE MKT LLC (the ‘‘Exchange’’ that (i) is designated as an ‘‘eligible Regulation NMS; (2) for at least 1,000 or ‘‘NYSE MKT’’) filed with the security’’ under the Joint Self- standard option contracts; 32 (3) Securities and Exchange Commission Regulatory Organization Plan Governing executed at a price at or between the (‘‘Commission’’) the proposed rule the Collection, Consolidation and NBBO; and (4) cancelled if there is a change as described in Items I and II Dissemination of Quotation and public customer order at the same price below, which Items have been prepared Transaction Information for Nasdaq- resting on the electronic book. Thus, the by the Exchange. The Commission is Listed Securities Traded on Exchanges Commission believes that the proposal publishing this notice to solicit on an Unlisted Trading Privilege Basis, continues to strike an appropriate comments on the proposed rule change as amended (‘‘UTP Plan’’),4 and (ii) has balance for the options market in that it from interested persons. been admitted to dealings on the is narrowly drawn and in that it I. Self-Regulatory Organization’s Exchange pursuant to a grant of unlisted establishes a limited exception to the Statement of the Terms of Substance of trading privileges in accordance with general principle of exposure and 5 the Proposed Rule Change Section 12(f) of the Act (collectively, retains the general principle of customer ‘‘Nasdaq Securities’’).6 priority in the options markets.33 The Exchange proposes to amend Designated Market Maker units For the foregoing reasons, the NYSE MKT Rules 504 and 509— (‘‘DMM units’’) 7 registered in one or Commission finds that the proposed Equities with respect to DMM quoting more Nasdaq Securities must comply rule change is consistent with Section requirements applicable to Nasdaq with all ‘‘DMM rules,’’ as defined in 6(b)(5) 34 and 6(b)(8) 35 of the Act. Stock Market (‘‘Nasdaq’’) securities NYSE MKT Rule 98—Equities,8 and the Further, the Commission finds that the traded on the Exchange pursuant to a grant of unlisted trading privileges. The proposed rule change is consistent with Equities to Extend the Operation of the Pilot 36 Section 11A(a)(1)(C) of the Act. text of the proposed rule change is Program that Allows Nasdaq Stock Market available on the Exchange’s Web site at (‘‘Nasdaq’’) Securities to be Traded on the Exchange IV. Conclusion www.nyse.com, at the principal office of Pursuant to a Grant of Unlisted Trading Privileges). It is therefore ordered, pursuant to the Exchange, and at the Commission’s See also Securities Exchange Act Release No. 62479 37 (July 9, 2010), 75 FR 41264 (July 15, 2010) (SR– Section 19(b)(2) of the Act, that the Public Reference Room. NYSEAmex–2010–31). See also Securities Exchange proposed rule change (SR–CBOE–2013– II. Self-Regulatory Organization’s Act Release Nos. 62857 (September 7, 2010), 75 FR 041), as modified by Amendment Nos. 55837 (September 14, 2010) (SR–NYSEAmex–2010– 1 and 2, is approved. Statement of the Purpose of, and 89); 63601 (December 22, 2010), 75 FR 82117 Statutory Basis for, the Proposed Rule (December 29, 2010) (SR–NYSEAmex–2010–124); For the Commission, by the Division of Change 64746 (June 24, 2011), 76 FR 38446 (June 30, 2011) Trading and Markets, pursuant to delegated (SR–NYSEAmex–2011–45); 66040 (December 23, authority.38 In its filing with the Commission, the 2011), 76 FR 82324 (December 30, 2011) (SR– Kevin M. O’Neill, self-regulatory organization included NYSEAmex–2011–104); 67497 (July 25, 2012), 77 FR 45404 (July 31, 2012) (SR–NYSEMKT–2012–25); Deputy Secretary. statements concerning the purpose of, and basis for, the proposed rule change and 68561 (January 2, 2013), 78 FR 1290 (January [FR Doc. 2013–16818 Filed 7–12–13; 8:45 am] 8, 2013) (SR–NYSEMKT–2012–86). and discussed any comments it received 4 BILLING CODE 8011–01–P See Securities Exchange Act Release No. 58863 on the proposed rule change. The text (October 27, 2008), 73 FR 65417 (November 3, 2008) of those statements may be examined at (File No. S7–24–89). The Exchange’s predecessor, the places specified in Item IV below. the American Stock Exchange LLC, joined the UTP SECURITIES AND EXCHANGE Plan in 2001. See Securities Exchange Act Release COMMISSION The Exchange has prepared summaries, No. 55647 (April 19, 2007), 72 FR 20891 (April 26, set forth in sections A, B, and C below, 2007) (S7–24–89). In March 2009, the Exchange [Release No. 34–69952; File No. SR– of the most significant parts of such changed its name to NYSE Amex LLC, and in May NYSEMKT–2013–61] statements. 2012, the Exchange subsequently changed its name to NYSE MKT LLC. See Securities Exchange Act Self-Regulatory Organizations; NYSE A. Self-Regulatory Organization’s Release Nos. 59575 (March 13, 2009), 74 FR 11803 MKT LLC; Notice of Filing and Statement of the Purpose of, and (March 19, 2009) (SR–NYSEALTR–2009–24) and 67037 (May 21, 2012), 77 FR 31415 (May 25, 2012 Immediate Effectiveness of Proposed Statutory Basis for, the Proposed Rule (SR–NYSE Amex-2012–32), Rule Change Amending NYSE MKT Change 5 15 U.S.C. 781. Rules 504 and 509—Equities With 6 1. Purpose ‘‘Nasdaq Securities’’ is included within the Respect to DMM Quoting definition of ‘‘security’’ as that term is used in the Requirements Applicable to Nasdaq The Exchange proposes to amend NYSE MKT Rules—Equities. See NYSE MKT Rule NYSE MKT Rules 504 and 509— 3—Equities. In accordance with this definition, Stock Market Securities Traded on the Nasdaq Securities are admitted to dealings on the Exchange Pursuant to A Grant of Equities with respect to DMM quoting Exchange on an ‘‘issued,’’ ‘‘when issued,’’ or ‘‘when Unlisted Trading Privileges requirements applicable to Nasdaq distributed’’ basis. See NYSE MKT Rule 501— securities traded on the Exchange Equities. July 9, 2013. pursuant to a grant of unlisted trading 7 See NYSE MKT Rule 103—Equities— Pursuant to Section 19(b)(1) of the privileges. NYSE MKT Rules 500–525— Registration and Capital Requirements of DMMs Securities Exchange Act of 1934 and DMM Units. ‘‘DMM unit’’ means any member Equities, as a pilot program, govern the organization, aggregation unit within a member 1 2 (‘‘Act’’) and Rule 19b–4 thereunder, trading of any Nasdaq-listed security on organization, or division or department within an the Exchange pursuant to unlisted integrated proprietary aggregation unit of a member 32 For mini-option contracts, the minimum size is organization that (i) has been approved by NYSE trading privileges (‘‘UTP Pilot Regulation pursuant to section (c) of this Rule 103, 10,000 contracts. See CBOE Rule 6.53(u). 3 33 See CBOE QCC Approval Order at 35492. Program’’). The UTP Pilot Program (ii) is eligible for allocations under NYSE MKT Rule 34 15 U.S.C. 78f(b)(5). 103B—Equities as a DMM unit in a security listed 3 or traded on the Exchange, and (iii) has met all 35 15 U.S.C. 78f(b)(8). The UTP Pilot Program is currently scheduled to expire on the earlier of Commission approval to registration and qualification requirements for 36 15 U.S.C. 78k–1(a)(1)(C). make such pilot permanent or January 31, 2014. See DMM units assigned to such unit. See NYSE MKT 37 15 U.S.C. 78s(b)(2). Securities Exchange Act Release No. 69814 (June Rule 98(b)(2)—Equities. 38 17 CFR 200.30–3(a)(12). 20, 2013) (SR–NYSEMKT–2013–53) (Notice of 8 ‘‘DMM rules’’ means any rules that govern DMM 1 15 U.S.C. 78s(b)(1). Filing and Immediate Effectiveness of Proposed conduct or trading. See NYSE MKT Rule 98(b)(5)— 2 17 CFR 240.19b–4. Rule Change Amending NYSE MKT Rule 500— Equities.

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obligations and benefits of DMMs in Active Security’’ security, as defined in of the difficulty DMM units have in Nasdaq Securities closely track those Rule 103B(II)(B) and (C)—Equities. As meeting the current stock-by-stock applicable to DMMs in Exchange-listed proposed, a DMM unit would be quoting obligation, DMM units have equities, subject to certain modifications required to maintain a bid or offer at the declined to participate in the UTP Pilot enumerated in NYSE MKT Rule 509— NBBO for at least 15% of the trading Program, and trading in Nasdaq Equities. As is the case with DMMs in day for Nasdaq Securities in which the Securities on NYSE MKT is minimal, Exchange-listed equities, a DMM unit in DMM unit is registered with a CADV of with only 135 of the approximately Nasdaq Securities has an affirmative less than one million shares (i.e., Less 2,600 Nasdaq Securities trading at the obligation to engage in a course of Active Securities), and at least 10% of Exchange as of May 21, 2013. dealings for its own account to assist in the trading day for Nasdaq Securities in Specifically, meeting the security-by- the maintenance of a fair and orderly which the DMM unit is registered with security quoting requirement on a daily market insofar as reasonably practicable, a CADV equal to or greater than one basis has been sufficiently difficult to including maintaining price continuity million shares (i.e., More Active discourage DMM units from with reasonable depth and quoting and Securities). participating in the UTP program. The trading with reference to Exchange- The requirements of proposed NYSE Exchange believes that the portfolio provided Depth Guidelines.9 In MKT Rule 509(a)(1)(A) are modeled on approach will give DMM units more addition, a DMM in Nasdaq Securities is the DMM unit quoting requirements in flexibility in meeting the quoting required to facilitate trading when a New York Stock Exchange LLC requirements, thus encouraging DMM ‘‘gap’’ quote procedure is being used (‘‘NYSE’’) Rule 104(a)(1)(A), which participation in the UTP Pilot Program. and when a manual block trade is being requires that DMM units maintain a bid The Exchange notes that while there 10 executed. or offer at the NBBO for a certain may be more or less quoting in percentage of the trading day on a The obligations of DMM units individual securities in the portfolio in registered to trade Nasdaq Securities portfolio basis. Specifically, NYSE Rule any particular trading session, as with are, however, slightly different from 104(a)(1)(A) requires that DMM units the portfolio quoting requirement for those that apply to DMMs in Exchange- maintain a bid or offer at the NBBO for NYSE and the Exchange, the Exchange listed securities. First, the rules that at least 15% of the trading day for believes that over time, quoting across apply to trading in Nasdaq Securities on NYSE-listed securities in which the all of the assigned Nasdaq Securities the Exchange do not provide for DMM unit is registered with a CADV of will even out as the requirement to meet opening and closing auctions in Nasdaq less than one million shares, and at least the portfolio requirement would Securities, so DMMs in Nasdaq 10% for securities for NYSE-listed discourage an imbalance in quoting any Securities are not responsible for securities in which the DMM unit is one security. The Exchange therefore facilitating openings and closings, as registered with a CADV equal to or seeks to adopt an obligation that is both DMMs in listed equities are. Second, greater than one million shares. meaningful and attainable to encourage NYSE MKT Rule 509(a)(1)—Equities The Exchange notes that the NYSE increased participation by DMM units states that in lieu of NYSE MKT Rule requirement for NYSE-listed securities in the UTP Pilot Program, which would 104(a)(1)(A)—Equities, with respect to is greater than the DMM unit quoting result in more liquidity providing and maintaining a continuous two-sided requirement for Exchange-listed quoting in a higher number of Nasdaq quote with reasonable size, a DMM unit securities. NYSE MKT Rule Securities trading on the Exchange. registered in Nasdaq Securities must 104(a)(1)(A)—Equities requires that maintain a quote at the National Best DMM units maintain a bid or offer at the The Exchange also notes that the Bid or Offer (‘‘inside’’) in each assigned NBBO for a certain percentage of the proposed quoting requirement is higher Nasdaq Security an average of at least trading day for all Exchange-listed than the quoting requirement applicable 10% of the time during the regular securities in which the DMM unit is to Exchange-listed securities, and business hours of the Exchange for each registered, specifically, at least 10% of therefore the obligation associated with calendar month for Nasdaq Securities the trading day for the Exchange-listed the quoting requirement for DMMs in with a consolidated average daily securities in which the DMM unit is Nasdaq Securities would still be greater volume (‘‘CADV’’) of less than one registered with a CADV of less than one than the similar obligation for million shares per calendar month and million shares, and at least 5% for Exchange-listed securities. The an average of at least 5% of the time securities in which the DMM unit is Exchange believes that this is during the regular business hours of the registered with a CADV equal to or appropriate given the Commission’s Exchange for each calendar month for greater than one million shares. prior finding that the obligations and Nasdaq Securities with a CADV equal to Accordingly, under the proposed benefits for DMMs that trade Nasdaq or greater than one million shares per change, DMM units would be required Securities differ from the obligations calendar month. As such, a DMM in a to meet a quoting requirement for and benefits for DMMs that trade Nasdaq Security is required to meet Nasdaq Securities that is greater than Exchange-listed securities.11 The these quoting requirements on a stock- the quoting requirement for Exchange- Exchange believes that the proposed by-stock basis. listed securities. change strikes the appropriate balance The Exchange proposes to amend The Exchange believes the proposed between setting a meaningful obligation NYSE MKT Rule 509(a)(1)—Equities to change is appropriate in light of the low to the market that is tailored to the require that DMM units maintain a bid volume of trading of Nasdaq Securities volume levels of Nasdaq Securities that or offer at the NBBO for a certain occurring on the Exchange. The trade in the UTP Pilot Program while at percentage of the trading day on a Exchange believes that basing the the same time recognizing that the portfolio basis. The percentage required quoting requirements on quoting in the obligations for DMM units must be would depend on whether the stock is portfolio of securities in which the meaningful as compared to the benefits a ‘‘More Active Security’’ or ‘‘Less DMM unit is registered rather than on they receive. a security-by security basis will 9 See NYSE MKT Rule 104(a), (f)(ii) and (f)(iii)— encourage quoting activity in a broader 11 See Securities Exchange Act Release Nos. Equities. number of Nasdaq Securities, including 62479 (July 9, 2010), 75 FR 41264 (July 15, 2010) 10 See NYSE MKT Rule 104(a)(5)—Equities. less active securities. Because, in part, (SR–NYSEAmex–2010–31).

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Finally, the Exchange notes that using meet and replace it with a quoting At any time within 60 days of the a similar structure for the obligations for obligation better tailored to the scope of filing of such proposed rule change, the listed securities and for Nasdaq the UTP Pilot Program and how Nasdaq Commission summarily may Securities would, for the same DMM Securities trade at the Exchange. The temporarily suspend such rule change if unit eliminate in large part the Exchange believes that the proposed it appears to the Commission that such additional responsibility and burden for change would promote fair competition action is necessary or appropriate in the DMM units to design, implement and among broker dealers by encouraging public interest, for the protection of maintain different technology more DMM units to quote Nasdaq investors, or otherwise in furtherance of approaches and programming for their Securities, thereby increasing the the purposes of the Act. If the trading and internal compliance available liquidity in such securities, Commission takes such action, the applications relating to Nasdaq which would benefit investors and the Commission shall institute proceedings Securities only. public. under Section 19(b)(2)(B) 18 of the Act to The Exchange also proposes to delete determine whether the proposed rule B. Self-Regulatory Organization’s from NYSE MKT Rule 504(b)(1)(A)— change should be approved or Statement on Burden on Competition Equities, Nasdaq Security Assignment, disapproved. the text setting out the DMM quoting The Exchange does not believe that requirements of NYSE MKT Rule 509— the proposed rule changes will impose IV. Solicitation of Comments Equities and to replace the repetition of any burden on competition that are not Interested persons are invited to the text with a cross-reference to NYSE necessary or appropriate in furtherance submit written data, views, and MKT Rule 509—Equities. of the purposes of the Act. The arguments concerning the foregoing, The Exchange proposes to implement Exchange believes that the proposed including whether the proposed rule the rule changes effective [sic] August 1, change is pro-competitive because it change is consistent with the Act. 2013. would remove an overly burdensome Comments may be submitted by any of obligation that places Exchange DMM the following methods: 2. Statutory Basis units at a disadvantage vis-a`-vis market Electronic Comments The Exchange believes that the makers on other markets because the proposed rule change is consistent with Exchange DMM units are unable to meet • Use the Commission’s Internet the requirements of the Act and the the quoting obligations, and therefore do comment form (http://www.sec.gov/ rules and regulations thereunder not trade Nasdaq Securities at the rules/sro.shtml); or • applicable to a national securities Exchange. The Exchange further Send an email to rule- exchange. In particular, the Exchange believes that the proposed change will [email protected]. Please include File believes that its proposal is consistent foster competition because it will Number SR–NYSEMKT–2013–61 on the with: (i) Section 6(b) of the Act,12 in increase the number of DMM units that subject line. general, and furthers the objectives of would be willing to be registered in Paper Comments Section 6(b)(5) of the Act,13 in Nasdaq Securities, thereby increasing • particular, in that it is designed to the potential pool of liquidity in Nasdaq Send paper comments in triplicate prevent fraudulent and manipulative Securities in the market. to Elizabeth M. Murphy, Secretary, acts and practices, to promote just and Securities and Exchange Commission, equitable principles of trade, to remove C. Self-Regulatory Organization’s 100 F Street NE., Washington, DC impediments to and perfect the Statement on Comments on the 20549–1090. mechanism of a free and open market Proposed Rule Change Received From All submissions should refer to File and a national market system, and, in Members, Participants, or Others Number SR–NYSEMKT–2013–61. This general, to protect investors and the No written comments were solicited file number should be included on the public interest; (ii) Section 11A(a)(1) of or received with respect to the proposed subject line if email is used. To help the the Act,14 in that it seeks to ensure the rule change. Commission process and review your economically efficient execution of comments more efficiently, please use securities transactions and fair III. Date of Effectiveness of the only one method. The Commission will competition among brokers and dealers Proposed Rule Change and Timing for post all comments on the Commission’s and among exchange markets; and (iii) Commission Action Internet Web site (http://www.sec.gov/ Section 12(f) of the Act,15 which Because the foregoing proposed rule rules/sro.shtml). Copies of the governs the trading of securities change does not significantly affect the submission, all subsequent pursuant to UTP consistent with the protection of investors or the public amendments, all written statements maintenance of fair and orderly markets, interest, does not impose any significant with respect to the proposed rule the protection of investors and the burden on competition, and, by its change that are filed with the public interest, and the impact of terms, does not become operative for 30 Commission, and all written extending the existing markets for such days from the date on which it was communications relating to the securities. filed, or such shorter time as the proposed rule change between the Specifically, the Exchange believes Commission may designate, it has Commission and any person, other than that the proposed change would remove become effective pursuant to Section those that may be withheld from the impediments to and perfect the 19(b)(3)(A) of the Act 16 and Rule 19b– public in accordance with the mechanism of a free and open market 4(f)(6) thereunder.17 provisions of 5 U.S.C. 552, will be and national market system because it available for Web site viewing and would remove an obligation that is 16 15 U.S.C. 78s(b)(3)(A). printing in the Commission’s Public virtually impossible for DMM units to 17 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– Reference Room, 100 F Street NE., 4(f)(6)(iii) requires the Exchange to give the Washington, DC 20549, on official Commission written notice of the Exchange’s intent 12 15 U.S.C. 78f(b). to file the proposed rule change, along with a brief 13 15 U.S.C. 78f(b)(5). description and text of the proposed rule change, as designated by the Commission. The Exchange 14 15 U.S.C. 78k–1(a)(1). at least five business days prior to the date of filing has satisfied this requirement. 15 15 U.S.C. 78l(f). of the proposed rule change, or such shorter time 18 15 U.S.C. 78s(b)(2)(B).

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business days between the hours of II. Self-Regulatory Organization’s Percentage thresholds of na- 10:00 a.m. and 3:00 p.m. Copies of the Statement of the Purpose of, and tional customer volume in Per contract filing also will be available for Statutory Basis for, the Proposed Rule multiply-listed options class- credit es listed on MIAX (Monthly) inspection and copying at the principal Change office of the Exchange. All comments 0.00%–0.25% ...... $0.00 received will be posted without change; In its filing with the Commission, the Above 0.25%–0.50% ...... 0.10 the Commission does not edit personal Exchange included statements Above 0.50%–1.00% ...... 0.11 identifying information from concerning the purpose of and basis for Above 1.00%–2.00% ...... 0.12 submissions. You should submit only the proposed rule change and discussed Above 2.00% ...... 0.14 information that you wish to make any comments it received on the available publicly. All submissions proposed rule change. The text of these The Exchange will aggregate the should refer to File Number SR– statements may be examined at the contracts resulting from Priority NYSEMKT–2013–61 and should be places specified in Item IV below. The Customer orders transmitted and submitted on or before August 5, 2013. Exchange has prepared summaries, set executed electronically on the Exchange forth in sections A, B, and C below, of from affiliated Members for purposes of For the Commission, by the Division of the most significant aspects of such the thresholds above, provided there is Trading and Markets, pursuant to delegated at least 75% common ownership authority.19 statements. between the firms as reflected on each Kevin M. O’Neill, A. Self-Regulatory Organization’s firm’s Form BD, Schedule A. In the Deputy Secretary. Statement of the Purpose of, and the event of a MIAX System outage or other [FR Doc. 2013–16820 Filed 7–12–13; 8:45 am] Statutory Basis for, the Proposed Rule interruption of electronic trading on BILLING CODE 8011–01–P Change MIAX, the Exchange will adjust the national customer volume in multiply- 1. Purpose listed options for the duration of the SECURITIES AND EXCHANGE The purpose of the proposed rule outage. A Member may request to COMMISSION change is to implement a Priority receive its credit under the Priority Customer Rebate Program (the Customer Rebate Program as a separate [Release No. 34–69947; File No. SR–MIAX– direct payment. 2013–31] ‘‘Program’’) for the period beginning July 1, 2013 and ending September 30, In addition, the rebate payments will Self-Regulatory Organizations; Miami 2013.3 The new Priority Customer be calculated from the first executed International Securities Exchange LLC; Rebate Program is based on the contract at the applicable threshold per Notice of Filing and Immediate substantially similar fees of another contract credit with the rebate payments Effectiveness of Proposed Rule competing options exchange.4 Under made at the highest achieved volume tier for each contract traded in that Change To Adopt a Priority Customer the Program, the Exchange shall credit month. For example, if Member Firm Rebate Program each Member the per contract amount XYZ, Inc. (‘‘XYZ’’) has enough Priority set forth in the table below resulting Customer contracts to achieve 2.5% of July 9, 2013. from each Priority Customer 5 order the national customer volume in Pursuant to Section 19(b)(1) of the transmitted by that Member which is multiply-listed option contracts during Securities Exchange Act of 1934 executed on the Exchange in all (‘‘Act’’) 1, and Rule 19b–4 thereunder,2 the month of July, XYZ will receive a multiply-listed option classes credit of $0.14 for each Priority notice is hereby given that on June 27, (excluding mini-options and executions 2013, Miami International Securities Customer contract executed in the related to contracts that are routed to month of July. Exchange LLC (‘‘MIAX’’ or ‘‘Exchange’’) one or more exchanges in connection filed with the Securities and Exchange The purpose of the Program is to with the Options Order Protection and encourage Members to direct greater Commission (‘‘Commission’’) the Locked/Crossed Market Plan referenced proposed rule change as described in Priority Customer trade volume to the in Rule 1400), provided the Member Exchange. Increased Priority Customer Items I, II, and III below, which Items meets certain volume thresholds in a have been prepared by the Exchange. volume will provide for greater month as described below. The volume liquidity, which benefits all market The Commission is publishing this thresholds are calculated based on the notice to solicit comments on the participants. The practice of customer average daily volume over the incentivizing increased retail customer proposed rule change from interested course of the month. Volume will be persons. order flow in order to attract recorded for and credits will be professional liquidity providers I. Self-Regulatory Organization’s delivered to the Member Firm that (Market-Makers) is, and has been, Statement of the Terms of Substance of submits the order to the Exchange. commonly practiced in the options the Proposed Rule Change markets. As such, marketing fee 3 6 The Exchange is filing a proposal to The Exchange notes that at the end of the programs, and customer posting period, the Program will expire unless the Exchange 7 adopt a Priority Customer Rebate incentive programs, are based on files another 19b–4 Rule Filing to amend its fees. attracting public customer order flow. Program. 4 See Chicago Board Options Exchange, The text of the proposed rule change Incorporated (‘‘CBOE’’) Fees Schedule, p. 4. See The Program similarly intends to attract is available on the Exchange’s Web site also Securities Exchange Act Release Nos. 66054 Priority Customer order flow, which (December 23, 2011), 76 FR 82332 (December 30, at http://www.miaxoptions.com/filter/ will increase liquidity, thereby 2011) (SR–CBOE–2011–120); 68887 (February 8, providing greater trading opportunities wotitle/rule_filing, at MIAX’s principal 2013), 78 FR 10647 (February 14, 2013) (SR–CBOE– office, and at the Commission’s Public 2013–017). and tighter spreads for other market Reference Room. 5 The term ‘‘Priority Customer’’ means a person or entity that (i) is not a broker or dealer in 6 See MIAX Fee Schedule, Section 1(b). securities, and (ii) does not place more than 390 7 See NYSE Arca, Inc. Fees Schedule, page 3 19 17 CFR 200.30–3(a)(12). orders in listed options per day on average during (section titled ‘‘Customer Monthly Posting Credit 1 15 U.S.C. 78s(b)(1). a calendar month for its own beneficial accounts(s). Tiers and Qualifications for Executions in Penny 2 17 CFR 240.19b–4. See MIAX Rule 100. Pilot Issues’’).

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participants and causing a participants, makes it impractical to volume (increased credit rates at corresponding increase in order flow offer Members a credit for Priority increased volume tiers) is equitable and from such other market participants. Customer mini-option volume that they not unfairly discriminatory because The specific volume thresholds of the transact. Providing rebates to Priority such increased rates and tiers encourage Program’s tiers were set based upon Customer executions that occur on other Members to direct increased amounts of business determinations and an analysis trading venues would be inconsistent Priority Customer contracts to the of current volume levels. The volume with the proposal. Therefore, routed Exchange. The resulting increased thresholds are intended to incentivize away volume is excluded from the volume and liquidity will benefit those firms that route some Priority Customer Program in order to promote the Members who receive the lower tier orders to the Exchange to increase the underlying goal of the proposal, which levels, or do not qualify for the Program number of orders that are sent to the is to increase liquidity and execution at all, by providing more trading Exchange to achieve the next threshold volume on the Exchange. opportunities and tighter spreads. and to incent new participants to send The credits paid out as part of the Limiting the Program to multiply- Priority Customer orders as well. program will be drawn from the general listed options classes listed on MIAX is Increasing the number of orders sent to revenues of the Exchange.10 The reasonable because those parties trading the Exchange will in turn provide Exchange calculates volume thresholds heavily in multiply-listed classes will tighter and more liquid markets, and on a monthly basis. The proposed rule now begin to receive a credit for such therefore attract more business overall. change is to take effect July 1, 2013. trading, and is equitable and not unfairly discriminatory because the Similarly, the different credit rates at 2. Statutory Basis the different tier levels were based on an Exchange does not trade any singly- analysis of revenue and volume levels The Exchange believes that its listed products at this time. If at such and are intended to provide increasing proposal to amend its fee schedule is time the Exchange develops proprietary 11 ‘‘rewards’’ for increasing the volume of consistent with Section 6(b) of the Act products, the Exchange anticipates trades sent to the Exchange. The specific in general, and furthers the objectives of having to devote a lot of resources to 12 amounts of the tiers and rates were set Section 6(b)(4) of the Act in develop them, and therefore would need in order to encourage suppliers of particular, in that it is an equitable to retain funds collected in order to Priority Customer order flow to reach allocation of reasonable fees and other recoup those expenditures. for higher tiers. charges among Exchange members. The Exchange believes that the B. Self-Regulatory Organization’s The Exchange proposes limiting the Statement on Burden on Competition Program to multiply-listed options proposed Priority Customer Rebate classes on MIAX because MIAX does Program is fair, equitable and not The Exchange does not believe that not compete with other exchanges for unreasonably discriminatory. The the proposed rule change will impose order flow in the proprietary, singly- Program is reasonably designed because any burden on competition not listed products.8 In addition, the it will incent providers of Priority necessary or appropriate in furtherance Exchange does not trade any singly- Customer order flow to send that of the purposes of the Act. The listed products at this time, but may Priority Customer order flow to the Exchange believes that the proposed develop such products in the future. If Exchange in order to receive a credit for change would increase both intermarket at such time the Exchange develops a limited period in a manner that and intramarket competition by incenting Members to direct their proprietary products, the Exchange enables the Exchange to improve its Priority Customer orders to the anticipates having to devote a lot of overall competitiveness and strengthen Exchange, which will enhance the resources to develop them, and its market quality for all market quality of quoting and increase the therefore would need to retain funds participants. The proposed rebate volume of contracts traded here. To the collected in order to recoup those program is fair and equitable and not extent that there is additional expenditures. unreasonably discriminatory because it The Exchange proposes excluding will apply equally to all Priority competitive burden on non-Priority mini-options and executions related to Customer orders. All similarly situated Customers, the Exchange believes that this is appropriate because the rebate contracts that are routed to one or more Priority Customer orders are subject to program should incent Members to exchanges in connection with the the same rebate schedule, and access to direct additional order flow to the Options Order Protection and Locked/ the Exchange is offered on terms that are Exchange and thus provide additional Crossed Market Plan referenced in not unfairly discriminatory. In addition, liquidity that enhances the quality of its Exchange Rule 1400 from the Program. the Program is equitable and not markets and increases the volume of The Exchange notes these exclusions are unfairly discriminatory because, while contracts traded here. To the extent that nearly identical to the ones made by only Priority Customer order flow this purpose is achieved, all the CBOE.9 Mini-options contracts are qualifies for the Program, an increase in Exchange’s market participants should excluded from the Program because the Priority Customer order flow will bring benefit from the improved market cost to the Exchange to process quotes, greater volume and liquidity, which benefit all market participants by liquidity. Enhanced market quality and orders and trades in mini-options is the increased transaction volume that same as for standard options. This, providing more trading opportunities and tighter spreads. Similarly, offering results from the anticipated increase in coupled with the lower per-contract order flow directed to the Exchange will transaction fees charged to other market increasing credits for executing higher percentages of total national customer benefit all market participants and improve competition on the Exchange. 8 If a multiply-listed options class is not listed on MIAX, then the trading volume in that options class 10 Despite providing credits under the Program, The Exchange notes that it operates in will be omitted from the calculation of national the Exchange represents that it will continue to a highly competitive market in which customer volume in multiply-listed options classes. have adequate resources to fund its regulatory market participants can readily favor 9 See CBOE Fee Schedule, page 4. CBOE also program and fulfill its responsibilities as a self- competing venues if they deem fee excludes QCC trades from their rebate program. regulatory organization during the limited period CBOE excluded QCC trades because a bulk of those that the Program will be in effect. levels at a particular venue to be trades on CBOE are facilitation orders which are 11 15 U.S.C. 78f(b). excessive. In such an environment, the charged at the $0.00 fee rate on their exchange. 12 15 U.S.C. 78f(b)(4). Exchange must continually adjust its

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fees to remain competitive with other Commission that such action is available publicly. All submissions exchanges and to attract order flow to necessary or appropriate in the public should refer to File No. SR–MIAX– the Exchange. The Exchange believes interest, for the protection of investors, 2013–31 and should be submitted on or that the proposed rule change reflects or otherwise in furtherance of the before August 5, 2013. this competitive environment because it purposes of the Act. If the Commission For the Commission, by the Division of reduces the Exchange’s fees in a manner takes such action, the Commission shall Trading and Markets, pursuant to delegated that encourages market participants to institute proceedings to determine authority.14 direct their customer order flow, to whether the proposed rule should be Kevin M. O’Neill, provide liquidity, and to attract approved or disapproved. Deputy Secretary. additional transaction volume to the IV. Solicitation of Comments [FR Doc. 2013–16817 Filed 7–12–13; 8:45 am] Exchange. Given the robust competition BILLING CODE 8011–01–P for volume among options markets, Interested persons are invited to many of which offer the same products, submit written data, views, and implementing a volume based customer arguments concerning the foregoing, SECURITIES AND EXCHANGE rebate program to attract order flow like including whether the proposed rule COMMISSION the one being proposed in this filing is change is consistent with the Act. consistent with the above-mentioned Comments may be submitted by any of [Release No. 34–69951; File No. SR–NSCC– goals of the Act. This is especially true the following methods: 2013–02] for the smaller options markets, such as Electronic Comments Self-Regulatory Organizations; MIAX, which is competing for volume • Use the Commission’s Internet National Securities Clearing with much larger exchanges that Corporation; Notice of Filing dominate the options trading industry. comment form (http://www.sec.gov/ rules/sro.shtml); or Amendment No. 2 and Order Instituting As a new exchange, MIAX has a • Proceedings To Determine Whether To nominal percentage of the average daily Send an email to rule- [email protected]. Please include File Approve or Disapprove a Proposed trading volume in options, so it is Rule Change, as Previously Modified unlikely that the customer rebate No. SR–MIAX–2013–31 on the subject by Amendment No. 1, To Institute program could cause any competitive line. Supplemental Liquidity Deposits to Its harm to the options market or to market Paper Comments Clearing Fund Designed To Increase participants. Rather, the customer rebate • Send paper comments in triplicate Liquidity Resources To Meet Its program is a modest attempt by a small to Elizabeth M. Murphy, Secretary, Liquidity Needs options market to attract order volume Securities and Exchange Commission, away from larger competitors by 100 F Street NE., Washington, DC July 9, 2013. adopting an innovative pricing strategy. 20549–1090. On March 21, 2013, National The Exchange notes that if the rebate All submissions should refer to File No. Securities Clearing Corporation program resulted in a modest percentage SR–MIAX–2013–31. This file number (‘‘NSCC’’) filed with the Securities and increase in the average daily trading should be included on the subject line Exchange Commission (‘‘Commission’’) volume in options executing on MIAX, if email is used. To help the proposed rule change SR–NSCC–2013– while such percentage would represent Commission process and review your 02 (‘‘Proposed Rule Change’’) pursuant a large volume increase for MIAX, it comments more efficiently, please use to Section 19(b)(1) of the Securities would represent a minimal reduction in only one method. The Commission will Exchange Act of 1934 (‘‘Exchange volume of its larger competitors in the 1 2 post all comments on the Commission’s Act’’) and Rule 19b–4 thereunder. The industry. The Exchange believes that the Internet Web site (http://www.sec.gov/ Proposed Rule Change was published proposal will help further competition, rules/sro.shtml). Copies of the for comment in the Federal Register on because market participants will have submission, all subsequent yet another additional option in 14 amendments, all written statements 17 CFR 200.30–3(a)(12). determining where to execute orders 1 15 U.S.C. 78s(b)(1). with respect to the proposed rule and post liquidity if they factor the 2 17 CFR 240.19b–4. NSCC also filed the proposal change that are filed with the benefits of a customer rebate program contained in the Proposed Rule Change as advance Commission, and all written notice SR–NSCC–2013–802 (‘‘Advance Notice’’), as into the determination. communications relating to the modified by Amendment No. 1, pursuant to Section C. Self-Regulatory Organization’s 806(e)(1) of the Payment, Clearing, and Settlement proposed rule change between the Supervision Act of 2010 (‘‘Clearing Supervision Statement on Comments on the Commission and any person, other than Act’’) and Rule 19b–4(n)(1)(i) thereunder. See Proposed Rule Change Received From those that may be withheld from the Release No. 34–69451 (Apr. 25, 2013), 78 FR 25496 Members, Participants, or Others public in accordance with the (May 1, 2013). On May 20, 2013, the Commission extended the period of review of the Advance Written comments were neither provisions of 5 U.S.C. 552, will be Notice, as modified by Amendment No. 1. Release solicited nor received. available for Web site viewing and No. 34–69605 (May 20, 2013), 78 FR 31616 (May printing in the Commission’s Public 24, 2013). On June 11, 2013, NSCC filed III. Date of Effectiveness of the Reference Room, 100 F Street NE., Amendment No. 2 to the Advance Notice, as Proposed Rule Change and Timing for Washington, DC 20549, on official previously modified by Amendment No.1. Absent Commission Action a request by the Commission to NSCC to provide business days between the hours of additional information on the Advance Notice, as The foregoing rule change has become 10:00 a.m. and 3:00 p.m. Copies of such amended, pursuant to Section 806(e)(1)(D) of the effective pursuant to Section filing also will be available for Clearing Supervision Act, see 12 U.S.C. 13 5465(e)(1)(D), the Commission shall have until July 19(b)(3)(A)(ii) of the Act. At any time inspection and copying at the principal 19, 2013 to issue an objection or non-objection to within 60 days of the filing of the office of the Exchange. All comments the Advance Notice, as amended. See Release No. proposed rule change, the Commission received will be posted without change; 34–69605 (May 20, 2013), 78 FR 31616 (May 24, summarily may temporarily suspend the Commission does not edit personal 2013), and see 12 U.S.C. 5465(e)(1)(E) and (G). The proposal in the Proposed Rule Change, as amended, such rule change if it appears to the identifying information from and the Advance Notice, as amended, shall not take submissions. You should submit only effect until all regulatory actions required with 13 15 U.S.C. 78s(b)(3)(A)(ii). information that you wish to make respect to the proposal are completed.

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April 10, 2013.3 On April 19, 2013, provide additional comment on the and times of increased trading and NSCC filed with the Commission Proposed Rule Change to inform the settlement activity that arise around Amendment No. 1 to the Proposed Rule Commission’s analysis of whether to quarterly triple options expiration dates Change, which, on May 29, 2013, the approve or disapprove the Proposed (‘‘Quarterly Options Expiration Activity Commission published for comment in Rule Change. Periods’’). the Federal Register and designated a The Supplemental Liquidity I. Clearing Agency’s Statement of the longer period for Commission action on Obligation of a Member or Affiliated Terms of Substance of the Proposed the Proposed Rule Change, as Family with respect to a Regular Rule Change amended.4 As of July 9, 2013, the Activity Period (‘‘Regular Activity Commission had received fourteen The Proposed Rule Change, as Liquidity Obligation’’) or a Quarterly comment letters on the proposal modified by Amendment No. 2, is a Options Expiration Activity Period contained in the Proposed Rule Change proposal by NSCC to amend its Rules (‘‘Special Activity Liquidity and its related Advance Notice,5 and Procedures (‘‘Rules’’) to provide for Obligation’’) would be imposed on the including NSCC’s response to the a supplemental liquidity funding 30 Members or Affiliated Families who comment letters received as of June 10, obligation (‘‘SLD Proposal’’), as generate the largest aggregate liquidity 2013.6 described below. NSCC filed needs over a settlement cycle that Pursuant to Section 19(b)(1) of the Amendment No. 2 to the Proposed Rule would apply in the event of a closeout Exchange Act 7 and Rule 19b–4 Change, as previously modified by (i.e., over a period from date of default thereunder,8 notice is hereby given that Amendment No. 1, in order to mitigate through the following three settlement on June 11, 2013, NSCC filed with the potential cash outlay burdens, respond days), based upon a historical look-back Commission Amendment No. 2 to the to transparency concerns raised by period. Proposed Rule Change, as previously NSCC members (‘‘Members’’), clarify the NSCC states that the calculations for modified by Amendment No. 1. The implementation timeframe, and describe both the Regular Activity Liquidity Commission is publishing this notice to the reports that would be provided to Obligation and the Special Activity solicit comments on the Proposed Rule Members so that they can anticipate Liquidity Obligation are designed so Change, as modified by Amendment No. their supplemental liquidity obligations that NSCC has adequate liquidity 2, from interested persons.9 to NSCC under the SLD Proposal resources to enable it to settle Additionally, this order institutes (‘‘Supplemental Liquidity Obligations’’). transactions, notwithstanding the proceedings under Section 19(b)(2)(B) of default of the Member or Affiliated II. Clearing Agency’s Statement of the the Exchange Act 10 to determine Family presenting the largest liquidity Purpose of, and Statutory Basis for, the whether to approve or disapprove the need during Regular Activity Periods, as Proposed Rule Change Proposed Rule Change, as discussed in well as during Quarterly Options Section IV, below. The institution of In its filing with the Commission, Expiration Activity Periods. The proceedings does not indicate that the NSCC included statements concerning Supplemental Liquidity Obligations Commission has reached any the purpose of and basis for the imposed on Members of Affiliated conclusions with respect to any of the Proposed Rule Change, as modified by Families would be apportioned among issues involved, nor does it mean that Amendment No. 2, and discussed any the Members in that Affiliated Family in the Commission will ultimately comments it received on the Proposed proportion to the liquidity risk (or peak disapprove the Proposed Rule Change. Rule Change, as amended. The text of exposure) they present to NSCC. Rather, as described in Section III, these statements may be examined at NSCC states that the SLD Proposal is below, the Commission seeks and the places specified in Item V below. designed to supplement NSCC’s encourages interested persons to NSCC has prepared summaries, set forth liquidity resources and work in tandem in sections (A), (B), and (C) immediately with NSCC’s committed credit facility 3 Release No. 34–69313 (Apr. 4, 2013), 78 FR below, of the most significant aspects of (‘‘Credit Facility’’), which it maintains 21487 (Apr. 10, 2013). these statements.11 as a liquidity resource (in addition to 4 See Release No. 34–69620 (May 22, 2013), 78 FR (A) Clearing Agency’s Statement of the the NSCC Clearing Fund) should a 32292 (May 29, 2013). Member or Affiliated Family default. 5 See Comments Received on File Nos. SR– Purpose of, and Statutory Basis for, the NSCC–2013–02 (http://sec.gov/comments/sr-nscc- Proposed Rule Change The Regular Activity Liquidity 2013-02/nscc201302.shtml) and SR–NSCC–2013– Obligations would be calculated and 802 (http://sec.gov/comments/sr-nscc-2013-802/ 1. Description of Change imposed semi-annually, the first of nscc2013802.shtml). Since the proposal contained Original SLD Proposal which would be made to coincide with in the Proposed Rule Change was also filed as an the annual renewal of the Credit Facility Advance Notice, see Release No. 34–69451, supra The original proposal contained in the and the second of which would be made note 2, the Commission is considering all public Proposed Rule Change, as modified by comments received on the proposal regardless of six months thereafter. NSCC states that whether the comments are submitted to the Amendment No. 1 (‘‘Original SLD the SLD Proposal seeks to strike a Proposed Rule Change, as amended, or the Advance Proposal’’), would change the Rules to balance between reliance on the Credit Notice, as amended. add a new Rule 4A, in order to establish Facility to reduce the burden on 6 NSCC also received a comment letter directly a supplemental liquidity funding Members or Affiliated Families for cash prior to filing the Proposed Rule Change and related obligation designed to cover the Advance Notice with the Commission, which NSCC outlay, while at the same time obligating liquidity exposure attributable to those provided to the Commission in Amendment No. 1 those Members or Affiliated Families to the filings. See Exhibit 2 to File No. SR–NSCC– Members and families of affiliated who expose NSCC to the largest 2013–02 (http://sec.gov/rules/sro/nscc/2013/34- Members (‘‘Affiliated Families’’) that liquidity risks to fund their fair share of 69620-ex2.pdf). regularly incur the largest gross 7 15 U.S.C. 78s(b)(1). the liquidity ‘‘differential.’’ settlement debits over a settlement cycle 8 17 CFR 240.19b–4. NSCC states that the SLD Proposal during both times of normal trading 9 Defined terms that are not defined in this notice contains both obligations and activity (‘‘Regular Activity Periods’’) are defined in Amended Exhibit 5 to the Proposed incentives. For example, a cash deposit Rule Change, available at http://sec.gov/rules/sro/ in respect of a Regular Activity nscc.shtml, under File No. SR–NSCC–2013–02, 11 The Commission has modified the text of the Additional Materials. summaries prepared by NSCC to primarily focus on Liquidity Obligation (e.g., in the 10 15 U.S.C. 78s(b)(2)(B). the Proposed Rule Change. Original SLD Proposal, the obligation of

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a Member or Affiliated Family to make Member, subject to satisfaction of predictability to the size of the Regular a ‘‘Regular Activity Supplemental reasonable lender criteria.12 NSCC states Activity Liquidity Obligations. NSCC’s Deposit’’) would be reduced by any that this commitment would reduce the analyses based upon historical data liquidity such Members or their Member’s Regular Activity Liquidity estimates that expanding this seasonal/ affiliates provided as commitments Obligation cash requirement by the peak facility to cover all Monthly under the Credit Facility. To the extent amount of any such commitment. Options Expiration Activity Periods that NSCC is successful in raising Therefore, under the Revised SLD could reduce the size of the aggregate significant amounts of its needed Proposal, NSCC states that all Members, Regular Activity Liquidity Obligations liquidity though the Credit Facility— whether or not they have affiliated by up to 20 percent. NSCC also states whether from Members, their affiliates banks, are equally incentivized to seek that recalibrating the Special Activity making commitments on their behalf, or lenders to maximize the size of the Liquidity Obligations on a monthly non-affiliated lenders—NSCC states that Credit Facility. NSCC states that this basis results in allocating the liquidity a diversified lender facility serves to change effectively eliminates any burdens among those Members and mitigate the liquidity risk of NSCC and perceived discrimination in the Original Affiliated Families more equitably, its membership as a whole, while SLD Proposal between those Members since only those Members whose reducing the cash outlay obligations of that have bank affiliates and those that monthly options-related activity the top 30 Members and Affiliated do not. This change is reflected in the generate liquidity needs in excess of Families. proposed Rule 4A by the inclusion of a NSCC’s then available liquidity NSCC states that the cash deposit in new definition for ‘‘Designated Lender,’’ resources would be obligated to fund respect of a Special Activity Liquidity and corresponding adjustments to the such additional amounts.13 NSCC states Obligation (‘‘Special Activity calculation formula. that this change is reflected in a revised Supplemental Deposit’’) was structured Second, any ‘‘excess’’ Credit Facility definition of ‘‘Options Expiration in the Original SLD Proposal to address commitments made by Members Activity Period,’’ and clarifications to any additional liquidity shortfalls (i.e., directly or through their Designated the calculation formula of the Special over and above NCSS’s other available Lenders (i.e., the amount of any Activity Liquidity Obligations, as well liquidity resources) that arose during commitment by a Member or its as to related definitions to ensure the the heightened trading activity around Designated Lender that exceeds the formula—and the allocation among the Quarterly Options Expiration Member’s calculated Regular Activity affected Members—operates as Period. As such, these additional Liquidity Obligation) would be intended. Special Activity Supplemental Deposits allocated ratably among all Regular Fourth, the Revised SLD Proposal would be required to be maintained on Activity Liquidity Providers, which includes a new definition for ‘‘Other deposit with NSCC only through the NSCC states would reduce their cash Qualifying Liquid Resources.’’ NSCC completion of the related settlement Regular Activity Supplemental Deposit states that this new defined term would cycle and for a few days thereafter. requirements, in the same way that permit NSCC to take any such Both prior to the submission of the commitments of non-affiliated lenders additional or alternative liquidity Proposed Rule Change, and since, NSCC are applied under the Original SLD resources that it may obtain in the states that it has engaged in significant Proposal. This change is reflected in future into account when calculating outreach to its Members to discuss the adjustments to the calculation formula Regular Activity Liquidity Obligations SLD Proposal, which outreach, NSCC in Sections 5 and 9 of the proposed Rule and to use them to reduce the amount believes, has been key to the 4A. of cash, if any, that Members would Third, under the Revised SLD development and evolution of the SLD otherwise be obligated to deposit as Proposal, the seasonal/peak facility that Proposal over the past 18 months. NSCC Regular Activity Supplemental NSCC believes currently addresses is cognizant of the concerns raised by Deposits. This change is reflected both NSCC’s liquidity needs over Quarterly Members who have submitted with the inclusion of the new definition Options Expiration Activity Periods comments regarding the Proposed Rule of ‘‘Other Qualifying Liquid Resources,’’ would be extended to cover monthly Change and related Advance Notice, and with corresponding modifications options expiration periods and would and, according to NSCC, this to the calculation formula. be calculated and collected 12 times a Amendment No. 2 seeks to address Fifth, as regards Members’ voluntarily year instead of four (‘‘Monthly Options those concerns. prefunding Regular Activity Liquidity Expiration Activity Period’’). NSCC Obligations and Special Activity Proposed Enhancements to the Original states, based on its review of available Liquidity Obligations, NSCC would SLD Proposal historical quantitative information, that monitor Members’ prefunding activity NSCC is proposing to amend the the effect of this change would be to to understand the impact such Original SLD Proposal with reduce the size of the Regular Activity prefunded amounts have on the amount enhancements that NSCC believes are Liquidity Obligations under the Revised of its committed liquidity resources. collectively designed to mitigate SLD Proposal. Additionally, NSCC NSCC states that the Revised SLD potential cash outlay burdens, as well as states that by treating all liquidity respond to transparency concerns raised obligations derived from Monthly Proposal provides NSCC with some by Members, by clarifying the Options Expiration Activity Periods discretion when including prefunded implementation timeframe of the (where there is greater activity deposits within its calculated liquidity proposed change and the reporting that fluctuation than during other periods) as resources, so as to provide some would be provided to Members under Special Activity Liquidity Obligations, 13 NSCC states that since the allocation formula this revised SLD Proposal (‘‘Revised the Revised SLD Proposal would ratably applies the excess amount needed due to SLD Proposal’’). provide greater stability and activity during Special Activity Periods based upon First, NSCC would allow its Members the affected Member’s Special Activity Peak to designate a commercial lender— 12 NSSC states that such criteria would be Liquidity Exposure, then to the extent that a whether or not affiliated with that designed to cover issues such as credit risk, Member’s Special Activity Peak Liquidity Exposure concentration risk, and lender diversity, so as to (as defined) is less than or equal to NSCC’s other Member—to commit as a lender to the ensure the continued robust viability of the line of available resources, that Member’s share of the Credit Facility as a designee of the credit. Special Activity Peak Liquidity Need will be zero.

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flexibility in the event it becomes too Technical Clarifications and Changes. Liquidity Obligations beginning on reliant on voluntary prefunding to meet The Revised SLD Proposal includes November 31 of each year.14 NSCC its minimum liquidity needs. NSCC certain technical changes and states that the information provided states that this change to the Original clarifications that NSCC states it would show the potential impact on SLD Proposal would address any designed to align notice, payment, and affected Members based on different concern that NSCC would not have cash return timeframes, and to clarify Credit Facility funding levels. sufficient liquid resources to effect the operation of the calculation In response to the more general settlement if prefunding is unavailable formulas to ensure they operate as concern regarding refinancing risk and when actually needed. intended. NSCC’s reliance on the Credit Facility, Implementation Timeframe and NSCC states that it would continue to Additional Revisions to the Original Funding Notice. While the SLD Proposal SLD Proposal explore additional financing sources. would be effective upon the completion NSCC states that it would review and Reporting. NSCC states that it of all required regulatory approvals, evaluate the financing options available understands and agrees that Members Members would not be obligated to fund to it and the related costs of those have to be able to evaluate risks of their their Regular Activity Liquidity options, and would expect to present membership and be able to plan for Obligations or Special Activity the findings of that review to the NSCC their liquidity obligations. NSCC also Liquidity Obligations until the Monthly Board prior to the next renewal of the states that it is critical that Members Options Expiration Activity Period in Credit Facility in May 2014. When understand the risks that their own September 2013. Moreover, Members sizing and approving the fee and costs activity presents to NSCC and be would be provided with notice of their structure of the renewal Credit Facility, prepared to monitor their own activity initial Regular Activity Liquidity NSCC states that the NSCC Board would and alter their behavior if they want to Obligations no later than 30 days prior be able to take into account those minimize the liquidity risk they present to the date on which that amount must potential additional financing sources to NSCC. While NSCC states that robust be deposited with NSCC. At that time, and consider the consequent impact on reporting has always been a key element NSCC’s risk management staff would Members’ cash Regular Activity of the Original SLD Proposal, the also provide to affected Members their Supplemental Deposit and Special Revised SLD Proposal clarifies in a new Special Activity Peak Liquidity Activity Supplemental Deposit Section 31 of proposed Rule 4A the Exposure within the look-back period. obligations. The items that would be information that NSCC would provide Specific implementation dates would be included in this review are: to Members. Such information would be provided by NSCC by Important Notice. • analysis of the availability, size, provided to all Members, not just the NSCC states that its risk management cost, and credit risk necessary to obtain top 30 Members and Affiliated Families, staff would continue to work with the additional commitments under the at least monthly. NSCC states that these Members to help them understand the Credit Facility likely to reduce the reports would show Members the Revised SLD Proposal and to develop Regular Activity Supplemental Deposit liquidity exposure they present to NSCC tools that NSCC believes would enable requirements to zero; to enable them to monitor their activity Members to forecast the liquidity • analysis of the availability, size, and the ‘‘Regular Activity Peak exposure they present to NSCC. NSCC cost, and credit risk to obtain a new Liquidity Exposure’’ that results from states that its risk management staff multi-year committed facility to replace their activity. Information provided in would also use the reports that would the existing Credit Facility; these reports would include: be provided under new Section 31 or • • an understanding of the aggregate The Regular Activity Peak Liquidity proposed Rule 4A to guide ongoing costs, if any, for Members to designate Exposure of the Member on each discussions with Members regarding the commercial lenders to commit to the Business Day of the preceding month; types of actions that could mitigate • Credit Facility as their designees; NSCC’s largest Regular Activity those Members’ peak liquidity exposure. • analysis of the availability, size, Peak Liquidity Need for the preceding In addition, under the Revised SLD cost, and potential depth of a capital month; Proposal (as in the Original SLD markets funding among Members and/or • in the case of an Unaffiliated Proposal), NSCC states that Members third parties as an additional liquidity Member, for each Business Day of the would be able to manage their resource, including the viability of preceding month, the percentage that exposures by making prefund deposits offering the funding to Members or the Regular Activity Peak Liquidity where they project their own activity mandating their participation in such Exposure of the Member bears to the would increase their liquidity exposure. funding; and aggregate Regular Activity Peak For example, if a Member that would be • a summary of the steps that Liquidity Exposures of all Regular a Special Activity Liquidity Provider Members have taken to reduce their Activity Liquidity Providers (the anticipates that its Special Activity Peak NSCC liquidity profile, and whether this percentage for a Member that is not a Liquidity Exposure at any time during a should be factored into the historical Regular Activity Liquidity Provider for particular Options Expiration Activity analysis used to determine NSCC’s that month would be zero); and Period would be greater than the Regular Activity Period liquidity needs • in the case of an Affiliated Family, amount calculated by NSCC, then it and Members’ share of that need. for each Business Day of the preceding could make an additional cash deposit NSCC states that it would update its month, the percentage that the aggregate to the Clearing Fund (in excess of its Members on the results of this review Regular Activity Peak Liquidity Required Deposit) that it designates as a and the determination of the NSCC Exposures of all Members of that ‘‘Special Activity Prefund Deposit.’’ Board. NSCC states that it would also Affiliated Family bears to the aggregate In order to give Members sufficient update its Members with information Regular Activity Peak Liquidity time to plan for annual Credit Facilities regarding future liquidity initiatives Exposures of all Regular Activity renewals and to line up designated designed to increase NSCC’s liquidity Liquidity Providers (Affiliated Families liquidity providers for the Credit that are not Regular Activity Liquidity Facility, NSCC states that its risk staff 14 NSCC states that given the timing of the Providers for that month would be zero would provide Members with an impact calculation look-back periods, information provided percentage). analysis of their projected Supplemental in November will necessarily be estimates.

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resources and potentially reduce the information to be included in the (including their relative levels of supplemental deposit requirements, completed form. With respect to capitalization) should not be seen as including the rationale behind these competition, the self-regulatory due to action by the clearing agency initiatives, how these initiatives fit organization is required to ‘‘[s]tate having an impact or imposing a burden within NSCC’s liquidity risk tolerance, whether the proposed rule change will on competition. and the likely impact of the initiatives. have an impact on competition and, if Although NSCC states that it is always so, (i) state whether the proposed rule mindful of the effect that its Rules may 2. Statutory Basis change will impose any burden on have on individual Members, NSCC NSCC states that the Revised SLD competition or whether it will relieve states that it must also be concerned Proposal contributes to NSCC’s goal of any burden on, or otherwise promote, with (i) the interests of its membership ensuring that NSCC has adequate competition and (ii) specify the as a whole, (ii) its general obligations liquidity resources to meet its particular categories of persons and under Section 17A(b)(3) of the Exchange settlement obligations, notwithstanding kinds of businesses on which any Act ‘‘to facilitate the prompt and the default of its Members or Affiliated burden will be imposed and the ways in accurate clearance and settlement of Families that pose the largest aggregate which the proposed rule change will securities transactions and derivatives liquidity exposure over the relevant affect them.’’ The self-regulatory agreements, contracts, and transactions’’ settlement cycle, as required by organization is further required to and ‘‘to safeguard securities and funds Commission Rule 17Ad–22(b)(3).15 As explain (i) why any impact on in its custody or control,’’ and (iii) the such, NSCC states the Revised SLD competition is not believed to be a particular requirements of Rule 17Ad- Proposal is consistent with the significant burden on competition or (ii) 22(b)(3) relating to the financial requirements of the Exchange Act, as why any burden on competition is resources that a clearing agency which amended, and the rules and regulations necessary or appropriate in furtherance is a central counterparty (like NSCC) thereunder applicable to NSCC. of the Exchange Act. must maintain to cover the default of the participant family presenting the (B) Clearing Agency’s Statement on 2. Position of NSCC as Utility for largest exposure to the clearing agency Burden on Competition Securities Industry in extreme but plausible market 1. Regulatory Requirements for NSCC is an operating subsidiary of conditions. Proposed Rule Changes The Depository Trust & Clearing NSCC states that these concerns and Corporation (‘‘DTCC’’), which NSCC the interests of its Members, including Section 19(b)(2)(C)(i) of the Exchange states is a user-owned, user-governed their interests relating to issues of Act provides that ‘‘[t]he Commission holding company for NSCC, two other competition and the effect of the shall approve a proposed rule change of registered clearing agencies, a proposed change on competition among a self-regulatory organization if it finds derivatives clearing organization joint Members and between Members and that such proposed rule change is venture, and a number of other other financial market participants, can consistent with the requirements of [the companies that provide a variety of be reconciled. But, NSCC states that Exchange Act] and the rules and post-trade processing and information individual Members that may be regulations issued under [the Exchange services. NSCC states that it and the affected by the proposed change— Act] that are applicable to such other registered clearing agencies in the designed to assure that NSCC has the organizations.’’ The requirements of the DTCC group provide the critical liquidity it needs to safely operate a Exchange Act that are specifically infrastructure for the clearance and clearing and settlement business and applicable to clearing agencies are set settlement of securities transactions in meet its obligations as a registered forth in Section 17A relating to a the United States. These registered clearing agency and central national system for the clearance and clearing agencies operate as utilities for counterparty under the Exchange Act— settlement of securities transactions. their users, allowing such users to must also recognize that some Section 17A(a)(2)(A) of the Exchange compete against each other (for the accommodation may be required on Act directs the Commission to facilitate benefit of their retail and institutional their part. the establishment of the national customers) on the basis of performance system, having due regard for inter alia and price and not on the basis of any 3. Modifications to the Proposed Change the ‘‘maintenance of fair competition relative advantage with respect to Address Competition Concerns among brokers and dealers, clearing clearing and settlement services. In response to comments submitted agencies, and transfer agents.’’ Section As a clearinghouse for securities on the proposed change in the form in 17A(a)(3)(I) of the Exchange Act transactions and a central counterparty, which it was originally filed in the provides that a clearing agency shall not NSCC states that it has no reason, Proposed Rule Change, and dialogue be registered unless the Commission interest, or intent to discriminate among with a number of other Members who determines inter alia that ‘‘[t]he rules of its Members—certainly not to give any did not submit comments but otherwise the clearing agency do not impose any of its Members a competitive advantage provided their input to NSCC, NSCC burden on competition not necessary or or impose on any of its Members a states that it has revised the proposed appropriate in furtherance of the competitive disadvantage in their change in a number of respects that bear purposes of [the Exchange Act].’’ operations. NSCC states that although it upon the issue of competition and Rule 19b–4(a)(i), promulgated by the strives for complete neutrality in its whether the proposed change would Commission under Section 19(b) of the interface with Members, it may be that have an impact or impose any burden Exchange Act, provides that a proposed clearing agency rules of general on competition. rule change by a self-regulatory application to all Members could have First, the Original SLD Proposal organization (which includes a a disparate effect on Members with provided that a Regular Activity registered clearing agency) shall be filed diverse business models and strategies. Liquidity Provider would receive an on Form 19b–4. The General NSCC states that any such disparate offset against its Regular Activity Instructions for Form 19b–4 prescribe effects arising out of choices made by Liquidity Obligation for the amount of individual Members in terms of their its commitment and the commitment of 15 See 17 CFR 240.17Ad–22(b)(3). business models and strategies any affiliate of the Regular Activity

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Liquidity Provider under the Credit authority to be a lender) or enter into the cost of the Credit Facility as an Facility. The Revised SLD Proposal arrangements with a bank to be its operating expense that NSCC factors provides that a Regular Activity Designated Lender—in either case into its overall fee structure, as well as Liquidity Provider would receive an thereby reducing or eliminating the their share of the NSCC Clearing Fund. offset against its Regular Activity need for it to make a cash Regular NSCC states that as a whole, NSCC Liquidity Obligation for the amount of Activity Supplemental Deposit to the believes this collective liquidity funding its commitment, the commitment of any Clearing Fund. approach represents a fair affiliate, and the commitment of any apportionment of NSCC’s aggregate 4. Competition Concerns Raised by Designated Lender of the Regular liquidity needs amongst its Commenters Activity Liquidity Provider under the membership. Credit Facility. As a result, NSCC states Bank Affiliates. NSCC states that some Impact on a Sector of the Market. that any distinction between Members commenters raised concerns on NSCC states that some commenters with bank affiliates and Members competition grounds that the Original raised concerns on competition grounds without bank affiliates, and any SLD Proposal permitted Members and that the SLD Proposal may cause perceived advantage for Members with Affiliated Families with bank affiliates increased concentration of clearing bank affiliates over Members without to reduce or potentially eliminate their activity by requiring smaller firms to bank affiliates, has been eliminated. required cash Required Activity clear through larger financial Second, the SLD Proposal has been Supplemental Deposits by the amounts institutions. NSCC states that implicit in refined to provide that a Regular of the commitments of such bank these comments is a concern that Activity Liquidity Provider would affiliates under the Credit Facility while smaller, less well capitalized firms have receive an offset against its Regular Members and Affiliated Families less access to funding than do larger, Activity Liquidity Obligation for both (i) without bank affiliates could not do so. well capitalized firms. NSCC states, its pro rata share of the commitments of As indicated above, NSCC states that however, that no Member, because of its lenders under the Credit Facility that this limitation to bank affiliates has low capital business model or limited are not Members or their Designated been eliminated from the SLD Proposal. access to funding, should have the right Lenders and (ii) its pro rata share of the NSCC states that any Member or to impose on NSCC (and the rest of the commitments of Members and their Affiliated Family could designate a membership) the burden of bearing the Designated Lenders above the amounts Designated Lender and receive an offset risks of that Member’s clearing of their Regular Activity Liquidity for the commitment of such Designated activities. Moreover, NSCC states that Obligations. As a result of this change, Lender. the SLD Proposal provides incentives NSCC states that the obligation of The Top 30 Cut-Off. NSCC states that for Members to manage the liquidity Regular Activity Liquidity Providers to some commenters raised concerns on risks of their business; by doing so they provide Regular Activity Supplemental competition grounds that Supplemental could reduce the share of their Deposits will be ratably reduced by the Liquidity Obligations are only imposed obligation under the SLD Proposal. amount of such ‘‘excess.’’ on the 30 largest Members and NSCC also states that some Third, the Options Expiration Activity Affiliated Families rather than on the commenters claim that the risk posed by Period has been redefined to mean the entire membership. NSCC states that, brokers with business in mostly agency- days around all monthly options based on an analysis of Members, NSCC based transactions was overstated by expiration dates (12 per year) rather made a business determination that the NSCC in crafting the SLD Proposal than just triple options expiration dates top 30 Members or Affiliated Families because those firms settle transactions (four per year). As a result of this would most appropriately capture the on a delivery-versus-payment (‘‘DVP’’) change, NSCC states that more periods liquidity exposure over and above basis. NSCC states, however, that agency of increased activity would be excluded available NSCC Clearing Fund liquidity. brokers that execute market transactions by NSCC from the calculation of its NSCC states that its liquidity analyses that clear at NSCC are obligated, as Regular Activity Peak Liquidity Need, show that the liquidity requirements principals, to settle those transactions at thereby reducing the Regular Activity attributable to the top 30 Members and NSCC irrespective of whether their Liquidity Obligations of Regular Affiliated Families account for the vast institutional customers complete the Activity Liquidity Providers. majority of NSCC’s liquidity needs. institutional delivery DVP side of the NSCC states that participation in the According to NSCC, as of the end of transaction (which occurs outside of Credit Facility is available to financial February 2013, the top 30 Members and NSCC). According to NSCC, it, as the institutions that have the resources and Affiliated Families represented central counterparty, remains obligated operational capabilities to be lenders approximately 85% of the total to complete the other side of the market under the Credit Facility, subject to membership by peak liquidity needs transaction if the agency broker fails. satisfaction of reasonable lender criteria. over the prior six-month period. NSCC NSCC states that institutional customers Although the Credit Facility was states that the analyses also show that of the agency brokers are not NSCC renewed on May 14, 2013 for an the remaining membership’s peak Members and have no contractual additional term of 364 days, NSCC liquidity demands are covered by the obligation with NSCC to complete those states that there are mechanisms in the required deposits to the NSCC Clearing trades if the agency broker fails. Credit Facility to increase the Fund. Therefore, NSCC states the SLD Therefore, NSCC states that if an agency commitments of existing lenders and Proposal appropriately places the broker fails, NSCC (and its other admit new lenders at any time during burden of providing liquidity on those Members) face the risk that the the term. Accordingly, NSCC states that Members and Affiliated Families who institutional customer will take its own at the time when the SLD Proposal present the largest liquidity risk. While market action, and NSCC will incur the becomes effective and before the time NSCC does not believe it would be liquidity obligation of completing the that any Member may have to satisfy a appropriate to require the entire market settlement. NSCC states that it Regular Activity Liquidity Obligation, membership to bear the burden of the must consider this risk in crafting its such Member would have an liquidity needs that are generated by risk management strategies, and agency opportunity to either join the Credit NSCC’s largest trading firms, it does brokers are not immune from the risk of Facility itself as a lender (if it has the note that all Members currently do bear failure, as recent events have shown that

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they, like other firms, remain subject to in view of the significant legal and Interested persons are invited to market events, as well as technology policy issues raised by the Proposed submit written data, views, and and other risks. Rule Change. As noted above, arguments regarding whether the NSCC states that these comments institution of proceedings does not Proposed Rule Change should be raise a concern that Members are being indicate that the Commission has approved or disapproved by August 5, asked share the burden of funding the reached any conclusions with respect to 2013. If NSCC chooses to file a rebuttal liquidity needs that are dependent on any of the issues involved. Rather, the to any submission, it must file its the actions, including trading levels, of Commission seeks and encourages rebuttal by August 20, 2013. Comments other Members, and thus the amounts interested persons to provide additional may be submitted by any of the are not within the contributing comment on the Proposed Rule Change, following methods: Member’s control. NSCC states that from as amended, to inform the Electronic Comments a fairness perspective, however, that Commission’s analysis of whether to proportionate share of the affected approve or disapprove the Proposed • Use the Commission’s Internet Member’s liquidity burden (whether it Rule Change, as amended. comment form (http://www.sec.gov/ be an agency broker or otherwise) would Pursuant to Section 19(b)(2)(B) of the rules/sro.shtml ); or • always be less than the Member’s own Exchange Act,17 the Commission is Send an email to rule- peak liquidity needs, and each Member providing notice of the grounds for [email protected]. Please include File is in the best position to monitor and disapproval under consideration. In No. SR–NSCC–2013–02 on the subject manage the liquidity risks presented by particular, Section 17A(b)(3)(F) of the line. its own activity. Exchange Act requires that the rules of Paper Comments the clearing agency are not designed to • 5. Impact on Competition permit unfair discrimination among Send paper comments in triplicate NSCC states that for the reasons stated participants in the use of the clearing to Elizabeth M. Murphy, Secretary, above, it believes the changes that have agency.18 Here, the Commission Securities and Exchange Commission, been made to the Original SLD Proposal believes that it is appropriate to solicit 100 F Street NE., Washington, DC eliminate or substantially ameliorate the comment on whether Amendment No. 2 20549–1090. impact that the SLD Proposal might adequately addresses the concern raised All submissions should refer to File No. have on competition, and that any by some commenters that the Proposed SR–NSCC–2013–02. This file number perceived burden on competition Rule Change could have a should be included on the subject line caused by the SLD Proposal is necessary discriminatory impact on NSCC’s non- if email is used. To help the and appropriate in furtherance of the bank affiliated Members who would be Commission process and review your purposes of the Exchange Act. subject to the SLD Proposal but who do comments more efficiently, please use not currently participate in the Credit only one method. The Commission will (C) Clearing Agency’s Statement on Facility.19 post all comments on the Commission’s Comments on the Proposed Rule Internet Web site (http://www.sec.gov/ Change Received From Members, IV. Solicitation of Comments rules/sro.shtml ). Copies of the Participants, or Others Interested persons are invited to submission, all subsequent While written comments on the submit written data, views, and amendments, all written statements Proposed Rule Change, as modified by arguments concerning the foregoing, with respect to the Proposed Rule Amendment No. 2, were not solicited, including whether the Proposed Rule Change, as amended, that are filed with as noted above, NSCC engaged Change, as amended, is consistent with the Commission, and all written significant outreach and discussion with the Section 17A 20 or any other communications relating to the affected Members in developing the SLD provision of the Exchange Act, or the Proposed Rule Change, as amended, Proposal. rules and regulations thereunder. The between the Commission and any Written comments on the Proposed Commission, in its sole discretion, may person, other than those that may be Rule Change, as amended, have been determine whether any issues relevant withheld from the public in accordance filed with the Commission and are to approval or disapproval of the with the provisions of 5 U.S.C. 552, will available on the Commission’s Web site. Proposed Rule Change would be be available for Web site viewing and NSCC states that this Amendment No. 2 facilitated by the opportunity for an oral printing in the Commission’s Public addresses some of the issues raised by presentation of views upon such a Reference Room, 100 F Street NE., those comments. NSCC’s formal request.21 Washington, DC 20549, on official response to the written comments has business days between the hours of been submitted separately to the 17 15 U.S.C. 78s(b)(2)(B). 10:00 a.m. and 3:00 p.m. Copies of such Commission in accordance with the 18 See 15 U.S.C. 78q–1(b)(3)(F). filings also will be available for 19 See, e.g., comment letter from John C. Nagel, inspection and copying at the principal process for submitting comments. Managing Director and General Counsel, Citadel Securities, to Elizabeth Murphy, Secretary, office of NSCC and on NSCC’s Web site III. Proceedings To Determine Whether Commission, dated June 13, 2013, at 7–8 (http:// at http://dtcc.com/legal/rule_filings/ To Approve or Disapprove File No. sec.gov/comments/sr-nscc-2013-02/nscc201302- nscc/2013.php. All comments received SR–NSCC–2013–02 and Grounds for 14.pdf ). will be posted without change; the 20 Disapproval Under Consideration 15 U.S.C. 78q–1. Commission does not edit personal 21 See 17 CFR 201.700(c)(2). Section 19(b)(2) of The Commission is instituting the Exchange Act, as amended by the Securities identifying information from proceedings pursuant to Section Acts Amendments of 1975, Public Law 94–29, 89 submissions. You should submit only 19(b)(2)(B) of the Exchange Act 16 to Stat. 97 (1975), grants the Commission flexibility to information that you wish to make determine what type of proceeding—either oral or determine whether the Proposed Rule notice and opportunity for written comments—is available publicly. All submissions Change should be approved or appropriate for consideration of a particular should refer to File No. SR–NSCC– disapproved. Institution of such proposal by a self-regulatory organization. See 2013–02 and should be submitted on or Securities Acts Amendments of 1975, Report of the before August 5, 2013. NSCC’s rebuttal proceedings is appropriate at this time Senate Committee on Banking, Housing and Urban Affairs to Accompany S. 249, S. Rep. No. 75, 94th comments should be submitted by 16 15 U.S.C. 78s(b)(2)(B). Cong., 1st Sess. 30 (1975). August 20, 2013.

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For the Commission, by the Division of Percent Ridge Indian Reservation Within Trading and Markets, pursuant to delegated Bennett County. 22 authority. Non-Profit Organizations The Interest Rates are: Kevin M. O’Neill, Without Credit Available Deputy Secretary. Elsewhere ...... 2.875 Percent For Economic Injury: [FR Doc. 2013–16819 Filed 7–12–13; 8:45 am] Non-Profit Organizations BILLING CODE 8011–01–P For Physical Damage: Without Credit Available Non-Profit Organizations With Elsewhere ...... 2.875 Credit Available Elsewhere 2.875 Non-Profit Organizations SMALL BUSINESS ADMINISTRATION The number assigned to this disaster Without Credit Available [Disaster Declaration #13647 and #13648] for physical damage is 13645B and for Elsewhere ...... 2.875 economic injury is 13646B. For Economic Injury: Oklahoma Disaster #OK–00073 (Catalog of Federal Domestic Assistance Non-Profit Organizations Numbers 59002 and 59008) Without Credit Available AGENCY: U.S. Small Business Elsewhere ...... 2.875 Administration. James E. Rivera, ACTION: Notice. Associate Administrator for Disaster The number assigned to this disaster Assistance. for physical damage is 13649B and for SUMMARY: This is a Notice of the [FR Doc. 2013–16828 Filed 7–12–13; 8:45 am] economic injury is 13650B. Presidential declaration of a major BILLING CODE 8025–01–P (Catalog of Federal Domestic Assistance disaster for Public Assistance Only for Numbers 59002 and 59008) the State of Oklahoma (FEMA–4117– DR), dated 06/28/2013. SMALL BUSINESS ADMINISTRATION Joseph P. Loddo, Incident: Severe storms, tornadoes Acting Associate Administrator for Disaster and flooding. [Disaster Declaration #13649 and #13650] Assistance. [FR Doc. 2013–16830 Filed 7–12–13; 8:45 am] Incident Period: 05/18/2013 through South Dakota Disaster #SD–00059 06/02/2013. BILLING CODE 8025–01–P Effective Date: 06/28/2013. AGENCY: U.S. Small Business Physical Loan Application Deadline Administration. Date: 08/27/2013. ACTION: Notice. SMALL BUSINESS ADMINISTRATION Economic Injury (EIDL) Loan [Disaster Declaration #13645 and #13646] Application Deadline Date: 04/03/2014. SUMMARY: This is a Notice of the ADDRESSES: Submit completed loan Presidential declaration of a major Iowa Disaster #IA–00054 applications to: U.S. Small Business disaster for Public Assistance Only for Administration, Processing and the State of South Dakota (FEMA–4125– AGENCY: U.S. Small Business Disbursement Center, 14925 Kingsport DR), dated 06/28/2013. Administration. Road, Fort Worth, TX 76155. Incident: Severe Storms, Tornado, and ACTION: Notice. FOR FURTHER INFORMATION CONTACT: Flooding. Incident Period: 05/24/2013 through SUMMARY: This is a Notice of the Alan Escobar, Office of Disaster 05/31/2013. Presidential declaration of a major Assistance, U.S. Small Business Effective Date: 06/28/2013. disaster for Public Assistance only for Administration, 409 3rd Street SW., Physical Loan Application Deadline the State of Iowa (FEMA–4126–DR), Suite 6050, Washington, DC 20416. Date: 08/27/2013. dated 07/02/2013. SUPPLEMENTARY INFORMATION: Notice is Economic Injury (EIDL) Loan Incident: Severe storms, tornadoes, hereby given that as a result of the Application Deadline Date: 04/03/2014. and flooding. President’s major disaster declaration on ADDRESSES: Submit completed loan Incident Period: 05/19/2013 through 06/28/2013, Private Non-Profit applications to: U.S. Small Business 06/14/2013. organizations that provide essential Administration, Processing and Effective Date: 07/02/2013. services of governmental nature may file Disbursement Center, 14925 Kingsport Physical Loan Application Deadline disaster loan applications at the address Road, Fort Worth, TX 76155. Date: 09/03/2013. listed above or other locally announced FOR FURTHER INFORMATION CONTACT: Economic Injury (EIDL) Loan locations. Alan Escobar, Office of Disaster Application Deadline Date: 04/02/2014. The following areas have been Assistance, U.S. Small Business ADDRESSES: Submit completed loan determined to be adversely affected by Administration, 409 3rd Street SW., applications to: U.S. Small Business the disaster: Suite 6050, Washington, DC 20416. Administration, Processing and Primary Counties: Atoka, Canadian, SUPPLEMENTARY INFORMATION: Notice is Disbursement Center, 14925 Kingsport Cleveland, Coal, Hughes, Latimer, hereby given that as a result of the Road, Fort Worth, TX 76155. Lincoln, McClain, Nowata, President’s major disaster declaration on FOR FURTHER INFORMATION CONTACT: Okfuskee, Oklahoma, Okmulgee, 06/28/2013, Private Non-Profit Alan Escobar, Office of Disaster Pittsburg, Pottawatomie, organizations that provide essential Assistance, U.S. Small Business Pushmataha, Seminole. services of governmental nature may file Administration, 409 3rd Street SW., The Interest Rates are: disaster loan applications at the address Suite 6050, Washington, DC 20416. listed above or other locally announced SUPPLEMENTARY INFORMATION: Notice is Percent locations. hereby given that as a result of the For Physical Damage: The following areas have been President’s major disaster declaration on Non-Profit Organizations With determined to be adversely affected by 07/02/2013, private non-profit Credit Available Elsewhere 2.875 the disaster: organizations that provide essential Primary Counties: Bennett, Corson, services of governmental nature may file 22 17 CFR 200.30–3(a)(57). Lawrence, Lincoln, Union, Pine disaster loan applications at the address

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listed above or other locally announced Disbursement Center, 14925 Kingsport SUMMARY: This is an amendment of the locations. Road, Fort Worth, TX 76155. Presidential declaration of a major The following areas have been FOR FURTHER INFORMATION CONTACT: disaster for the State of Illinois (FEMA– determined to be adversely affected by Alan Escobar, Office of Disaster 4116–DR), dated 05/10/2013. the disaster: Assistance, U.S. Small Business Incident: Severe Storms, Straight-line Primary Counties: Appanoose, Benton, Administration, 409 3rd Street SW., Winds and Flooding. Buchanan, Buena Vista, Butler, Suite 6050, Washington, DC 20416 Incident Period: 04/16/2013 through Cherokee, Chickasaw, Clay, SUPPLEMENTARY INFORMATION: Notice is 05/05/2013. Clayton, Crawford, Davis, Delaware, hereby given that as a result of the Effective Date: 07/03/2013. Physical Loan Application Deadline Des Moines, Fayette, Floyd, Administrator’s disaster declaration, Date: 07/09/2013. Franklin, Greene, Grundy, Hardin, applications for disaster loans may be EIDL Loan Application Deadline Date: Henry, Ida, Iowa, Jasper, Johnson, filed at the address listed above or other 02/10/2014. Jones, Keokuk, Lee, Linn, Louisa, locally announced locations. Lyon, Mahaska, Marshall, Mitchell, The following areas have been ADDRESSES: Submit completed loan Monona, Monroe, Obrien, Palo determined to be adversely affected by applications to: U.S. Small Business Alto, Plymouth, Poweshiek, Sac, the disaster: Administration, Processing and Sioux, Story, Tama, Wapello, Primary Counties: Stanly. Disbursement Center, 14925 Kingsport Webster, Winnebago, Wright. Contiguous Counties: Road, Fort Worth, TX 76155. The Interest Rates are: North Carolina: Anson, Cabarrus, FOR FURTHER INFORMATION CONTACT: Davidson, Montgomery, Richmond, Alan Escobar, Office of Disaster Percent Rowan, Union. Assistance, U.S. Small Business The Interest Rates are: Administration, 409 3rd Street SW., For Physical Damage: Suite 6050, Washington, DC 20416. Non-Profit Organizations With Credit Available Elsewhere 2.875 Percent SUPPLEMENTARY INFORMATION: The notice Non-Profit Organizations of the Presidential disaster declaration Without Credit Available For Physical Damage: for the State of Illinois, dated 05/10/ Elsewhere ...... 2.875 Homeowners With Credit 2013 is hereby amended to include the For Economic Injury: Available Elsewhere ...... 3.750 following areas as adversely affected by Homeowners Without Credit Non-Profit Organizations the disaster: Without Credit Available Available Elsewhere ...... 1.875 Businesses With Credit Avail- Primary Counties: (Physical Damage and Elsewhere ...... 2.875 able Elsewhere ...... 6.000 Economic Injury Loans): Putnam, Businesses Without Credit The number assigned to this disaster Warren. Available Elsewhere ...... 4.000 Contiguous Counties: (Economic Injury for physical damage is 13645B and for Non-Profit Organizations With Loans Only): All other information in economic injury is 13646B. Credit Available Elsewhere 2.875 the original declaration remains (Catalog of Federal Domestic Assistance Non-Profit Organizations unchanged. Numbers 59002 and 59008) Without Credit Available Elsewhere ...... 2.875 (Catalog of Federal Domestic Assistance James E. Rivera, For Economic Injury: Numbers 59002 and 59008). Associate Administrator for Disaster Businesses & Small Agricul- James E. Rivera, Assistance. tural Cooperatives Without Associate Administrator for Disaster [FR Doc. 2013–16827 Filed 7–12–13; 8:45 am] Credit Available Elsewhere 4.000 Non-Profit Organizations Assistance. BILLING CODE 8025–01–P Without Credit Available [FR Doc. 2013–16829 Filed 7–12–13; 8:45 am] Elsewhere ...... 2.875 BILLING CODE 8025–01–P SMALL BUSINESS ADMINISTRATION The number assigned to this disaster [Disaster Declaration #13651 and #13652] for physical damage is 13651 B and for DEPARTMENT OF STATE economic injury is 13652 0. North Carolina Disaster #NC–00052 The States which received an EIDL [Public Notice 8380] Declaration # are North Carolina. AGENCY: U.S. Small Business Advisory Committee on International Administration. (Catalog of Federal Domestic Assistance Economic Policy; Notice of Open Numbers 59002 and 59008) ACTION: Notice. Meeting Dated: July 9, 2013. SUMMARY: This is a notice of an Karen G. Mills, The Advisory Committee on International Economic Policy (ACIEP) Administrative declaration of a disaster Administrator. for the State of North Carolina dated 07/ will meet from 2:00 p.m. to 4:00 p.m. on 09/2013. [FR Doc. 2013–16826 Filed 7–12–13; 8:45 am] Wednesday, July 31, 2013, in Room Incident: Severe weather, extreme BILLING CODE 8025–01–P 1107 of the Harry S. Truman Building wind and rain. at the U.S. Department of State, 2201 C Incident Period: 06/13/2013. SMALL BUSINESS ADMINISTRATION Street NW., Washington, DC. The Effective Date: 07/09/2013. meeting will be hosted by the Assistant Physical Loan Application Deadline [Disaster Declaration #13579 and #13580] Secretary of State for Economic and Date: 09/09/2013. Business Affairs, Jose W. Fernandez and Economic Injury (EIDL) Loan Illinois Disaster Number IL–00041 Committee Chair Ted Kassinger. The Application Deadline Date: 04/09/2014. AGENCY: U.S. Small Business ACIEP serves the U.S. Government in a ADDRESSES: Submit completed loan Administration. solely advisory capacity, and provides applications to: U.S. Small Business advice concerning issues and challenges ACTION: Amendment 3. Administration, Processing and in international economic policy. The

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meeting will examine efforts both DEPARTMENT OF STATE SYSTEM LOCATIONS: countries are undertaking to evaluate Department of State, Office of and strengthen our economic [Public Notice 8379] Inspector General (OIG), Office of relationship as requested by Presidents Investigations, SA–39, 1700 N. Moore Pena Nieto and Obama, including Privacy Act; System of Records: State- St., Arlington, VA 22209 (Hard-copy of formation of a High Level Economic 53, Office of Inspector General files); National Aeronautics and Space Dialogue. Subcommittee reports will be Investigation Management System Administration Office of Inspector provided by the Sanctions General, Washington, DC 20546–0001 Subcommittee, and the Stakeholder SUMMARY: Notice is hereby given that (Electronic copy of files maintained for Advisory Board for the U.S. National the Department of State proposes to OIG). Contact Point for the Organization for amend an existing system of records, Economic Cooperation and Office of Inspector General Investigation CATEGORIES OF INDIVIDUALS COVERED BY THE SYSTEM: Development Guidelines for Management System, State-53, pursuant Multinational Enterprises. to the provisions of the Privacy Act of In connection with its investigative This meeting is open to public 1974, as amended (5 U.S.C. 552a) and duties, Office of Inspector General (OIG) participation, though seating is limited. Office of Management and Budget maintains records on the following Entry to the building is controlled; to Circular No. A–130, Appendix I. categories of individuals: (a) Current or former Department of obtain pre-clearance for entry, members DATES: This system of records will be of the public planning to attend should effective on August 26, 2013, unless we State, Broadcasting Board of Governors provide, by Friday, July 26, their name, receive comments that will result in a (BBG) or U.S. Section of the professional affiliation, valid contrary determination. International Boundary and Water Commission (IBWC) employees; government-issued ID number (i.e., U.S. ADDRESSES: Any persons interested in Government ID [agency], U.S. military (b) Individuals (or firms) doing commenting on the amended system of business with the Department of State, ID [branch], passport [country], or records may do so by writing to the drivers license [state]), date of birth, and Broadcasting Board of Governors (BBG) Director; Office of Information Programs or U.S. Section of the International citizenship, to Ronelle Jackson by fax and Services, A/GIS/IPS; Department of (202) 647–5936, email Boundary and Water Commission State, SA–2; 515 22nd Street NW., (IBWC), including contractors, grantees ([email protected]), or telephone Washington, DC 20522–8001. (202) 647–9204. All persons wishing to or others funded in some way by the attend the meeting must use the 23rd FOR FURTHER INFORMATION CONTACT: Department, BBG or IBWC; (c) Members of the Foreign Affairs Street entrance of the State Department. Director; Office of Information Programs community who come under the Because of escorting requirements, non- and Services, A/GIS/IPS; Department of direction, coordination and/or Government attendees should plan to State, SA–2; 515 22nd Street NW., supervision of U.S. Chiefs of Mission; arrive 15 minutes before the meeting Washington, DC 20522–8001. (d) Other individuals whose begins. Requests for reasonable SUPPLEMENTARY INFORMATION: The association with the Department of accommodation should be made to Department of State proposes that the State, Broadcasting Board of Governors Ronelle Jackson before Friday, July 26. current system amend its name from (BBG) or U.S. Section of the Requests made after that date will be ‘‘Records of the Inspector General and International Boundary and Water considered, but might not be possible to Automated Individual Cross-Reference Commission (IBWC) relates to alleged fulfill. System’’ (previously published at 56 FR 7071) to ‘‘Office of Inspector General violations of rules of conduct, the Civil Personal data is requested pursuant to Service merit system or any criminal or Public Law 99–399 (Omnibus Investigation Management System.’’ The proposed system will include revisions civil misconduct affecting the integrity Diplomatic Security and Antiterrorism or facilities of these agencies; Act of 1986), as amended; Public Law or additions to the following sections: System location, Categories of (e) Suspects, witnesses, principals, 107–56 (USA PATRIOT Act); and complainants, confidential or non- Executive Order 13356. The purpose of individuals, Categories of records, Authority for maintenance of the confidential informants; and the collection is to validate the identity (f) All other individuals closely of individuals who enter Department system, Safeguards, Routine Uses, Purpose, Retrievability, and connected with a matter of investigative facilities. The data will be entered into interest. the Visitor Access Control System administrative updates. (VACS–D) database. Please see the The Department’s report was filed CATEGORIES OF RECORDS IN THE SYSTEM: Security Records System of Records with the Office of Management and Records relating to investigations Notice (State–36) at http:// Budget. The amended system including reports, preliminary inquiries, www.state.gov/documents/organization/ description, ‘‘Office of Inspector General complaints, alleged criminal, civil, or 103419.pdf for additional information. Investigation Management System, administrative misconduct. Categories State-53’’ will read as set forth below. FOR FURTHER INFORMATION CONTACT: of records include statements, affidavits, Gregory Maggio, Office of Economic Joyce A. Barr, banking and other financial records, Policy Analysis and Public Diplomacy, Assistant Secretary for Administration, U.S. medical records, and personnel and Bureau of Economic and Business Department of State. other employment-related records Affairs, at (202) 647–2231 or obtained during the investigation. These MaggioGFmailto:@state.gov. STATE–53 records may contain names, dates of birth, passport numbers, Social Security Dated: July 9, 2013. SYSTEM NAME: numbers, account numbers and other Laura Kirkconnell, Office of Inspector General personal identifiers. Director, Office of Economic Policy Analysis Investigation Management System. and Public Diplomacy. AUTHORITY FOR MAINTENANCE OF THE SYSTEM: [FR Doc. 2013–16895 Filed 7–12–13; 8:45 am] SECURITY CLASSIFICATION: The Inspector General Act of 1978, as BILLING CODE 4710–07–P Unclassified. amended (5 U.S.C. Appendix; see 5

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U.S.C. Appendix § 4); Inspector General grant or other benefit; establishment of BBG, and/or IBWC where such recovery (22 U.S.C. 3929); Inspector General for a claim; or initiation of an will accrue to the benefit of the United the Department of State (22 U.S.C. administrative, civil or criminal action; States or where disclosure of the record 4861); Abolition and Transfer of (c) Consumer reporting agency in is needed to enable the recipient of the Functions (22 U.S.C. 6533); and The order to obtain information relevant to record to take appropriate disciplinary Mexican Water Treaty, U.S.-Mex., Feb. an OIG investigation or other action to maintain the integrity of 3, 1944, T.S. No. 994 (59 Stat. 1219). preliminary inquiry; programs or operations of the (d) Any private or public source of Department of State, BBG and/or IBWC; PURPOSE(S): information, witness or subject from (n) A Federal, state, local or foreign Office of Inspector General (OIG) which information is requested in the agency or other public authority to maintains this system of records to course of a legitimate OIG investigation prevent and detect fraud or abuse in conduct investigations concerning the or other preliminary inquiry to the benefit programs administered by any programs and operations of the extent necessary to: agency pursuant to a formal Department of State, Broadcasting Board (1) Identify an individual; memorandum of understanding (MOU) of Governors (BBG) and U.S. Section of (2) Inform the source, witness or for use in computer matching programs; the International Boundary and Water subject of the nature and purpose of the to support civil and criminal law Commission (IBWC) to promote investigation or preliminary inquiry; or enforcement activities of any agency economy, efficiency and effectiveness in (3) Identify the information requested; and its components; or to collect debts the administration of these programs (e) An attorney or other designated and overpayments owed to any agency and operations and to prevent and representative of any source of and its components; detect fraud, waste and abuse. The information, witness or subject in the (o) A public or professional licensing records in this system are used in course of a legitimate OIG investigation organization when such record investigating individuals and entities or other preliminary inquiry; indicates, either by itself or in suspected of having committed illegal or (f) The Department of Justice (DOJ) on combination with other information, a unethical acts and/or assisting in related behalf of: violation or potential violation of criminal and civil proceedings and (1) An employee of OIG in his or her professional standards or reflects on the administrative actions. individual capacity where DOJ has moral, educational or professional agreed to represent the employee, or qualifications of an individual who is ROUTINE USES OF RECORDS MAINTAINED IN THIS (2) The United States where OIG SYSTEM, INCLUDING CATEGORIES OF USERS AND licensed or who is seeking to become determines that litigation is likely to licensed; THE PURPOSES OF SUCH USES: affect the Department of State, the BBG, The records contained in Office of (p) Debt collection contractors for the IBWC or any related components, when purpose of collecting delinquent debts Inspector General (OIG) Investigation any of the above is a party to litigation Management System are collected and as authorized by law. or has an interest in such litigation, and The Department of State periodically maintained in the enforcement of the use of such records by DOJ is Department of State, Broadcasting Board publishes in the Federal Register its deemed by OIG to be relevant and standard routine uses which apply to all of Governors (BBG) and U.S. Section of necessary to the litigation; the International Boundary and Water of its Privacy Act systems of records. (g) A court, grand jury or an These notices appear in the form of a Commission (IBWC) regulations, administrative or adjudicative body Federal civil and criminal statutes, Prefatory Statement. These standard when OIG determines that use of such routine uses apply to Office of Inspector Executive Orders and the Code of records is arguably relevant to the Federal Regulations. These records may General Investigation Management proceeding or when the adjudicator of System, State-53. be disclosed as follows to: an administrative or adjudicative body (a) Congressional Committees, in determines the records to be relevant to POLICIES AND PRACTICES FOR STORING, furtherance of their respective oversight the proceeding; RETRIEVING, ACCESSING, RETAINING, AND functions; (h) A member of Congress at the sole DISPOSING OF RECORDS IN THE SYSTEM: (b) Any Federal, state, local, tribal, discretion of the Inspector General upon STORAGE: territorial, foreign or international a determination of the propriety of such Hard-copy and electronic media. agency, or other public authority or a disclosure and only for such purposes professional organization that: as authorized by the statutory mandate RETRIEVABILITY: (1) Investigates, prosecutes or assists of the Inspector General; Name, Social Security number or case in the investigation or prosecution of an (i) The Department of Justice (DOJ) for number. alleged violation; or enforces, the purpose of obtaining its advice; implements or assists in enforcement or (j) The Office of Management and SAFEGUARDS: implementation of any applicable Budget (OMB) for the purpose of All Office of Inspector General (OIG) statute, rule, regulation or order; obtaining its advice; employees, contractors and others (2) Maintains civil, criminal or other (k) In response to a subpoena issued authorized to access this system of relevant enforcement records or other by an independent Federal agency records have completed thorough pertinent records, such as current having the power to subpoena records of background investigations as required. professional licenses, in order to obtain Executive Federal agencies; Physical access to OIG where these information relevant to: an OIG (l) A Federal agency responsible for records are physically maintained is investigation or other preliminary considering suspension or debarment controlled and admission is limited to inquiry; a decision concerning the action where the record(s) would be those individuals possessing a valid, hiring or retention of an employee or relevant to such action; current identification access card or other personnel action; the issuance of (m) An entity or person, public or individuals entering with proper escort. a security clearance; the establishment private, where disclosure of the record All hard copies are maintained in secure of a claim; or the initiation of an is needed to enable the recipient of the file cabinets located in restricted areas, administrative, civil or criminal action; record to take action to recover money access to which is limited to authorized a contract award; issuance of a license, or property of the Department of State, personnel only.

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Access to electronic files is protected an additional 10 years, and then records are exempted from any part of by: (1) Cryptographic protocols for destroyed. More specific information on the Privacy Act except subsections (b), communications over a network; (2) a Department of State records disposition (c)(1) and (2), (e)(4)(A) through (F), unique user identification (ID) number; schedules may be obtained by writing (e)(6), (7), (9), (10) and (11), and (i). (3) a secure ID authentication token the Director; Office of Information Pursuant to 5 U.S.C. 552a (k)(1), (k)(2) specific to each user and possessing its Programs and Services, A/GIS/IPS; SA– and (k)(5), the records in this system are own encryption; and (4) the direct 2, Department of State; 515 22nd Street exempted from the following provisions supervision of the system manager. The NW., Washington, DC 20522–8100. of the Privacy Act: subsections (c)(3), system manager has the capability of (d), (e)(1), (e)(4)(G), (H) and (I) and (f). SYSTEM MANAGER AND ADDRESS: printing access audit trails for electronic See rules published in the Federal media, thereby permitting regular Special Agent in Charge of Operations Register, 22 CFR part 171. or Designee; Inspector General; Office of scheduled and ad hoc monitoring of [FR Doc. 2013–16891 Filed 7–12–13; 8:45 am] system access. Access privileges are Investigations; SA–39, 1700 North BILLING CODE 4710–42–P consistent with the established need-to- Moore Street, Suite 800; Arlington, know, separation-of-duties and Virginia 22209. supervisory requirements. Inspector NOTIFICATION PROCEDURE: General reports of investigation (ROIs) DEPARTMENT OF TRANSPORTATION Individuals who have cause to believe and investigative files and related Federal Highway Administration records are disseminated only to those that this system might have records pertaining to them and have inquiries U.S. government officials and offices Notice of Final Federal Agency Actions with a clear need-to-know concerning about those records should write to the System Manager at the address listed on the Goethals Bridge Replacement the matter being reported. No secondary Project in New York and New Jersey distribution of ROIs, investigative files above. At a minimum, the individual or related records is permitted without must include his or her: name; date and AGENCY: Federal Highway the express, written permission of the place of birth; current mailing address Administration (FHWA), U.S. DOT. and zip code; signature; and other Inspector General. When it is ACTION: Notice of Limitation on Claims information helpful in identifying the determined that a user no longer needs for Judicial Review of Actions by FHWA record. access, their user account is disabled. and Other Federal Agencies. All users are given cyber security RECORD ACCESS AND AMENDMENT PROCEDURES: awareness training which covers the SUMMARY: This notice announces actions Individuals who wish to gain access procedures for handling Sensitive but taken by the FHWA and other Federal to records pertaining to themselves Unclassified information, including agencies that are final within the should direct those requests, in writing, personally identifiable information (PII). meaning of 23 U.S.C. 139(l)(1). The to the System Manager at the address Annual refresher training is mandatory. actions relate to the Goethals Bridge listed above. The individual must In addition, all Foreign Service and Replacement Project located in Staten specify the records being requested and Civil Service employees and those Island, New York, and Elizabeth, New must include, at a minimum, his or her Locally Engaged Staff who handle PII Jersey. Those actions grant approvals for name; date and place of birth; current are required to take the Foreign Service the project. mailing address and zip code; and Institute distance learning course, PA signature, duly notarized or submitted DATES: By this notice, the FHWA is 459, instructing employees on privacy under penalty of perjury (See 22 CFR advising the public of final agency and security requirements, including part 171; 28 U.S.C. 1746). The request actions subject to 23 U.S.C. 139(l)(1). A the rules of behavior for handling PII should be mailed in an envelope clearly claim seeking judicial review of the and the potential consequences if it is marked ‘‘Privacy Act Request.’’ A Federal agency actions on the highway handled improperly. Before being determination as to exemption(s) shall project will be barred unless the claim granted access to OIG Investigation be made at the time a request for access is filed on or before December 12, 2013. Management System, a user must first or amendment is received. If the Federal law that authorizes be granted access to the Department of judicial review of a claim provides a State computer system. CONTESTING RECORD PROCEDURES: time period of less than 150 days for Remote access to the Department of Individuals who wish to contest filing such claim, then that shorter time State network from non-Department information in the system pertaining to period still applies. owned systems is authorized only to themselves should write to the System FOR FURTHER INFORMATION CONTACT: unclassified systems and only through a Manager at the address listed above. The Jonathan D. McDade, Division Department approved access program. request should clearly and concisely Administrator, Federal Highway Remote access to the network is state what information is being Administration, Leo W. O’Brien Federal configured with the Office of contested, the reason for contesting it, Building, Albany, New York 12207, Management and Budget Memorandum and the proposed amendment to the Telephone (518) 431–4127. M–07–16 security requirements which information. include but are not limited to two-factor SUPPLEMENTARY INFORMATION: Notice is authentication and time out function. RECORD SOURCE CATEGORIES: hereby given that the FHWA and other These records contain information Federal agencies have taken final agency RETENTION AND DISPOSAL: obtained from interviews, reviews of actions by issuing approvals for the All system records are retired in records, authorized investigative following highway project in the State accordance with published Department techniques and other agencies’ systems of New York and New Jersey: Goethals disposition schedules as approved by of records. Bridge Replacement Project. The the National Archives and Records Goethals Bridge provides a direct Administration (NARA). Investigative SYSTEM EXEMPTED FROM CERTAIN PROVISIONS connection between Staten Island, New records that have been closed are retired OF THE ACT: York, and Elizabeth, New Jersey. This to the Federal Records Center three Pursuant to 5 U.S.C. 552a(j)(2), the bridge is part of the Port Authority of years after their closure, maintained for records contained within this system of New York and New Jersey’s (PANYNY)

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Interstate Transportation Network and is Protection and Repatriation Act DEPARTMENT OF TRANSPORTATION considered the primary path of travel (NAGPRA) [25 U.S.C. 3001–3013]. Maritime Administration within the Southern Corridor, 6. Social and Economic: Civil Rights connecting the Staten Island Act of 1964 [42 U.S.C. 2000(d)– [Docket No. MARAD–2013 0080] Expressway (Interstate 278) and the 2000(d)(1)]; American Indian Religious New Jersey Turnpike (Interstate 95). The Freedom Act [42 U.S.C. 1996]; Farmland Requested Administrative Waiver of Goethals Bridge Replacement Project Protection Policy Act (FPPA) [7 U.S.C. the Coastwise Trade Laws: Vessel OFF will consist of a replacement bridge 4201–4209]. COURSE; Invitation for Public with a new six-lane structure directly Comments and entirely south of the existing 7. Wetlands and Water Resources: structure’s alignment. This replacement Coastal Zone Management Act, 16 AGENCY: Maritime Administration, structure will be built in its entirety, U.S.C. 1451–1465; Land and Water Department of Transportation. and after completion, the existing bridge Conservation Fund (LWCF), 16 U.S.C. ACTION: Notice. would be demolished. 4601–4604; Safe Drinking Water Act SUMMARY: As authorized by 46 U.S.C. The actions by the Federal agencies, (SDWA), 42 U.S.C. 300(f)–300(j)(6); 33 12121, the Secretary of Transportation, and the laws under which such actions U.S.C. 401–406; Wild and Scenic Rivers as represented by the Maritime were taken, are described in the United Act, 16 U.S.C. 1271–1287; Emergency Administration (MARAD), is authorized States Coast Guard (USCG) Final Wetlands Resources Act, 16 U.S.C. to grant waivers of the U.S.-build Environmental Impact Statement (FEIS) 3921, 3931; TEA–21 Wetlands requirement of the coastwise laws under for the project, approved on August 4, Mitigation, 23 U.S.C. 103(b)(6)(m), certain circumstances. A request for 2010, adopted by FHWA in the Record 133(b)(11); Flood Disaster Protection such a waiver has been received by of Decision (ROD) issued on June 13, Act, 42 U.S.C. 4001–4128. MARAD. The vessel, and a brief 2013, and in other documents in the 8. Hazardous Materials: description of the proposed service, is FHWA administrative record. The FEIS, listed below. ROD, and other documents in the Comprehensive Environmental DATES: FHWA administrative record file are Response, Compensation, and Liability Submit comments on or before available by contacting the FHWA, or Act (CERCLA), 42 U.S.C. 9601–9675; August 14, 2013. the PANYNJ, at the addresses provided Superfund Amendments and ADDRESSES: Comments should refer to above. The FEIS and ROD can be Reauthorization Act of 1986 (SARA); docket number MARAD–2013–0080. viewed and downloaded from the Resource Conservation and Recovery Written comments may be submitted by project Web site at www.panynj.gov/ Act (RCRA), 42 U.S.C. 6901–6992(k). hand or by mail to the Docket Clerk, U.S. Department of Transportation, goethalsbridge. 9. Executive Orders: E.O. 11990 This notice applies to all Federal Docket Operations, M–30, West Protection of Wetlands; E.O. 11988 Building Ground Floor, Room W12–140, agency decisions as of the issuance date Floodplain Management; E.O. 12898, of this notice and all laws under which 1200 New Jersey Avenue SE., Federal Actions to Address Washington, DC 20590. You may also such actions were taken, including but Environmental Justice in Minority not limited to: send comments electronically via the Populations and Low Income Internet at http://www.regulations.gov. 1. General: National Environmental Populations; E.O. 11593 Protection and Policy Act (NEPA) [42 U.S.C. 4321– All comments will become part of this Enhancement of Cultural Resources; 4351]; Federal-Aid Highway Act [23 docket and will be available for E.O. 13007 Indian Sacred Sites; E.O. U.S.C. 109]. inspection and copying at the above 13287 Preserve America; E.O. 13175 2. Air: Clean Air Act, 42 U.S.C. 7401– address between 10 a.m. and 5 p.m., 7671(q). Consultation and Coordination with E.T., Monday through Friday, except 3. Land: Section 4(f) of the Indian Tribal Governments; E.O. 11514 federal holidays. An electronic version Department of Transportation Act of Protection and Enhancement of of this document and all documents 1966 [49 U.S.C. 303]; Landscaping and Environmental Quality; E.O. 13112 entered into this docket is available on Scenic Enhancement (Wildflowers), 23 Invasive Species. the World Wide Web at http:// www.regulations.gov. U.S.C. 319. (Catalog of Federal Domestic Assistance 4. Wildlife: Endangered Species Act Program Number 20.205, Highway Planning FOR FURTHER INFORMATION CONTACT: [16 U.S.C. 1531–1544 and Section and Construction. The regulations Linda Williams, U.S. Department of 1536], Marine Mammal Protection Act implementing Executive Order 12372 Transportation, Maritime [16 U.S.C. 1361], Anadromous Fish regarding intergovernmental consultation on Administration, 1200 New Jersey Conservation Act [16 U.S.C. 757(a)– Federal programs and activities apply to this Avenue SE., Room W23–453, 757(g)], Fish and Wildlife Coordination program.) Washington, DC 20590. Telephone 202– 366–0903, Email Act [16 U.S.C. 661–667(d)], Migratory Authority: 23 U.S.C. 139(l)(1). Bird Treaty Act [16 U.S.C. 703–712], [email protected]. Issued on: July 3, 2013. Magnuson-Stevenson Fishery SUPPLEMENTARY INFORMATION: As Conservation and Management Act of Jonathan D. McDade, described by the applicant the intended 1976, as amended [16 U.S.C. 1801 et Division Administrator, Albany, NY. service of the vessel OFF COURSE is: seq.]. [FR Doc. 2013–16611 Filed 7–12–13; 8:45 am] Intended Commercial Use of Vessel: 5. Historic and Cultural Resources: BILLING CODE 4910–RY–P ‘‘Carrying up to 6 passengers.’’ Section 106 of the National Historic Geographic Region: ‘‘California, Preservation Act of 1966, as amended Oregon, and Washington.’’ [16 U.S.C. 470(f) et seq.]; Archeological The complete application is given in Resources Protection Act of 1977 [16 DOT docket MARAD–2013–0080 at U.S.C. 470(aa)–11]; Archeological and http://www.regulations.gov. Interested Historic Preservation Act [16 U.S.C. parties may comment on the effect this 469–469(c)]; Native American Grave action may have on U.S. vessel builders

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or businesses in the U.S. that use U.S.- hand or by mail to the Docket Clerk, comment (or signing the comment, if flag vessels. If MARAD determines, in U.S. Department of Transportation, submitted on behalf of an association, accordance with 46 U.S.C. 12121 and Docket Operations, M–30, West business, labor union, etc.). You may MARAD’s regulations at 46 CFR Part Building Ground Floor, Room W12–140, review DOT’s complete Privacy Act 388, that the issuance of the waiver will 1200 New Jersey Avenue SE., Statement in the Federal Register have an unduly adverse effect on a U.S.- Washington, DC 20590. You may also published on April 11, 2000 (Volume vessel builder or a business that uses send comments electronically via the 65, Number 70; Pages 19477–78). U.S.-flag vessels in that business, a Internet at http://www.regulations.gov. By Order of the Maritime Administrator. waiver will not be granted. Comments All comments will become part of this Dated: July 8, 2013. should refer to the docket number of docket and will be available for Julie P. Agarwal, this notice and the vessel name in order inspection and copying at the above for MARAD to properly consider the address between 10 a.m. and 5 p.m., Secretary, Maritime Administration. comments. Comments should also state E.T., Monday through Friday, except [FR Doc. 2013–16892 Filed 7–12–13; 8:45 am] the commenter’s interest in the waiver federal holidays. An electronic version BILLING CODE 4910–81–P application, and address the waiver of this document and all documents criteria given in § 388.4 of MARAD’s entered into this docket is available on regulations at 46 CFR Part 388. the World Wide Web at http:// DEPARTMENT OF TRANSPORTATION www.regulations.gov. Privacy Act National Highway Traffic Safety FOR FURTHER INFORMATION CONTACT: Administration Anyone is able to search the Linda Williams, U.S. Department of electronic form of all comments Transportation, Maritime [Docket No. NHTSA–2013–0074] received into any of our dockets by the Administration, 1200 New Jersey name of the individual submitting the Avenue SE., Room W23–453, Decision That Certain Nonconforming comment (or signing the comment, if Washington, DC 20590. Telephone 202– Motor Vehicles Are Eligible for submitted on behalf of an association, 366–0903, Email Importation business, labor union, etc.). You may [email protected]. review DOT’s complete Privacy Act AGENCY: National Highway Traffic Statement in the Federal Register SUPPLEMENTARY INFORMATION: As Safety Administration, DOT. published on April 11, 2000 (Volume described by the applicant the intended ACTION: Grant of petitions. 65, Number 70; Pages 19477–78). service of the vessel COMPASS ROSE is: SUMMARY: This document announces Dated: July 9, 2013. Intended Commercial Use Of Vessel: decisions by NHTSA that certain motor By Order of the Maritime Administrator. ‘‘Sailboat charters six passengers or vehicles not originally manufactured to Julie P. Agarwal, less’’. comply with all applicable Federal Secretary, Maritime Administration. Geographic Region: ‘‘Maine, New Motor Vehicle Safety Standards [FR Doc. 2013–16890 Filed 7–12–13; 8:45 am] Hampshire, Massachusetts, Rhode (FMVSS) are eligible for importation BILLING CODE 4910–81–P Island, Connecticut, New York, New into the United States because they are Jersey, Pennsylvania, Delaware, substantially similar to vehicles Maryland, District of Columbia, originally manufactured for sale in the DEPARTMENT OF TRANSPORTATION Virginia, North Carolina, South United States and certified by their Carolina, Georgia, Florida’’. manufacturers as complying with the Maritime Administration The complete application is given in safety standards, and they are capable of [Docket No. MARAD–2013–0081] DOT docket MARAD–2013–0081 at being readily altered to conform to the http://www.regulations.gov. Interested standards or because they have safety Requested Administrative Waiver of parties may comment on the effect this features that comply with, or are the Coastwise Trade Laws: Vessel action may have on U.S. vessel builders capable of being altered to comply with, COMPASS ROSE; Invitation for Public or businesses in the U.S. that use U.S.- all applicable FMVSS. Comments flag vessels. If MARAD determines, in DATES: These decisions became effective accordance with 46 U.S.C. 12121 and on the dates specified in Annex A. AGENCY: Maritime Administration, MARAD’s regulations at 46 CFR Part Department of Transportation. 388, that the issuance of the waiver will FOR FURTHER INFORMATION CONTACT: ACTION: Notice. have an unduly adverse effect on a U.S.- Coleman Sachs, Office of Vehicle Safety vessel builder or a business that uses Compliance, NHTSA (202–366–3151). SUMMARY: As authorized by 46 U.S.C. U.S.-flag vessels in that business, a SUPPLEMENTARY INFORMATION: 12121, the Secretary of Transportation, waiver will not be granted. Comments as represented by the Maritime Background should refer to the docket number of Administration (MARAD), is authorized this notice and the vessel name in order Under 49 U.S.C. 30141(a)(1)(A), a to grant waivers of the U.S.-build for MARAD to properly consider the motor vehicle that was not originally requirement of the coastwise laws under comments. Comments should also state manufactured to conform to all certain circumstances. A request for the commenter’s interest in the waiver applicable FMVSS shall be refused such a waiver has been received by application, and address the waiver admission into the United States unless MARAD. The vessel, and a brief criteria given in § 388.4 of MARAD’s NHTSA has decided that the motor description of the proposed service, is regulations at 46 CFR Part 388. vehicle is substantially similar to a listed below. motor vehicle originally manufactured DATES: Submit comments on or before Privacy Act for importation into and/or sale in the August 14, 2013. Anyone is able to search the United States, certified under 49 U.S.C. ADDRESSES: Comments should refer to electronic form of all comments 30115, and of the same model year as docket number MARAD–2013–0081. received into any of our dockets by the the model of the motor vehicle to be Written comments may be submitted by name of the individual submitting the compared, and is capable of being

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readily altered to conform to all standard FMVSS No. 208 both units had 3. Docket No. NHTSA–2013–0022 applicable FMVSS. factory installed airbags and seatbelts for all Nonconforming Vehicles: 2010 BMW Z4 Where there is no substantially seating positions including outward and Passenger Cars similar U.S.-certified motor vehicle, 49 center seat positions in both the front seat Substantially Similar U.S. Certified Vehicles: and the rear seat. U.S.C. 30141(a)(1)(B) permits a 2010 BMW Z4 Passenger Cars nonconforming motor vehicle to be NHTSA believes this response fully Notice of Petition admitted into the United States if its addresses the comment. The agency also Published at: 78 FR 20385 (April 4, 2013) notes that the comment lacks sufficient Vehicle Eligibility Number: VSP–553 safety features comply with, or are (effective date May 28, 2013) capable of being altered to comply with, specificity to provide a basis for the all applicable FMVSS based on denial of the petition. 4. Docket No. NHTSA–2013–0015 destructive test data or such other NHTSA Decision: Accordingly, on the Nonconforming Vehicles: 2012 Porsche GT3 evidence as NHTSA decides to be basis of the foregoing, NHTSA hereby RS Passenger Cars adequate. decides that each motor vehicle listed in Substantially Similar U.S. Certified Vehicles: Petitions for eligibility decisions may Annex A to this notice, which was not 2012 Porsche GT3 RS Passenger Cars Notice of Petition be submitted by either manufacturers or originally manufactured to comply with all applicable FMVSS, is either Published at: 78 FR 20386 (April 4, 2013) importers who have registered with Vehicle Eligibility Number: VSP–552 NHTSA pursuant to 49 CFR part 592. As substantially similar to a motor vehicle (effective date May 21, 2013) specified in 49 CFR 593.7, NHTSA manufactured for importation into and/ publishes notice in the Federal Register or sale in the United States, and 5. Docket No. NHTSA–2012–0164 of each petition that it receives, and certified under 49 U.S.C. 30115, as Nonconforming Vehicles: 2007 Ford Escape affords interested persons an specified in Annex A, and is capable of Multipurpose Passenger Vehicles Manufactured for the Mexican Market opportunity to comment on the petition. being readily altered to conform to all applicable FMVSS or has safety features Substantially Similar U.S. Certified Vehicles: At the close of the comment period, Ford Escape Multipurpose Passenger NHTSA decides, on the basis of the that comply with, or are capable of Vehicles petition and any comments that it has being altered to comply with, all Notice of Petition received, whether the vehicle is eligible applicable Federal Motor Vehicle Safety Published at: 78 FR 20388 (April 4, 2013) for importation. The agency then Standards. Vehicle Eligibility Number: VSP–551 publishes this decision in the Federal Vehicle Eligibility Number For Subject (effective date May 20, 2013) Register. Vehicles: The importer of a vehicle 6. Docket No. NHTSA–2013–0016 NHTSA received petitions from admissible under any final decision must indicate on the form HS–7 Nonconforming Vehicles: 1992, 1993 & 1994 registered importers to decide whether BMW 3 Series Passenger Cars the vehicles listed in Annex A to this accompanying entry the appropriate Substantially Similar U.S. Certified Vehicles: notice are eligible for importation into vehicle eligibility number indicating 1992, 1993 & 1994 BMW 3 Series the United States. To afford an that the vehicle is eligible for entry. Passenger Cars opportunity for public comment, Vehicle eligibility numbers assigned to Notice of Petition NHTSA published notice of these vehicles admissible under this decision Published at: 78 FR 19364 (March 29, petitions as specified in Annex A. The are specified in Annex A. 2013) Vehicle Eligibility Number: VSP–550 reader is referred to those notices for a Authority: 49 U.S.C. 30141(a)(1)(A), (effective date May 6, 2013) thorough description of the petitions. (a)(1)(B) and (b)(1); 49 CFR 593.7; delegations Comments: No substantive comments of authority at 49 CFR 1.50 and 501.7. 7. Docket No. NHTSA–2013–0012 were received in response to 16 of the Issued on: July 2, 2013. Nonconforming Vehicles: 2005 Mercedes- 17 petitions identified in Appendix A. Claude H. Harris, Benz G Class (463 chassis) Long- Wheelbase (LWB) Multipurpose In response to the remaining petition, Director, Office of Vehicle Safety Compliance. which covers 2004 model year Ford F– Passenger Vehicles 150 Crew Cab trucks that were Annex A—Nonconforming Motor Substantially Similar U.S. Certified Vehicles: 2005 Mercedes-Benz G Class (463 manufactured for the Mexican Market Vehicles Decided To Be Eligible for Importation chassis) Long-Wheelbase (LWB) (Docket No NHTSA–2012–0162), the Multipurpose Passenger Vehicles Ford Motor Company stated in pertinent 1. Docket No. NHTSA–2013–0032 Notice of Petition part: Nonconforming Vehicles: 2005, 2006 & 2007 Published at: 78 FR 10686 (February 14, Vehicles that are designed and BMW 5 Series Passenger Cars 2013) Vehicle Eligibility Number: VSP–549 manufactured for export to markets outside Manufactured before September 1, 2006 (effective date April 22, 2013) of the United States are not necessarily tested Substantially Similar U.S. Certified Vehicles: for compliance to all FMVSS requirements, 2005, 2006 & 2007 BMW 5 Series 8. Docket No. NHTSA–2012–0162 Passenger Cars Manufactured before unless the particular export markets have Nonconforming Vehicles: 2004 Ford F–150 September 1, 2006 entirely equivalent safety standards. Crew Cab Trucks Manufactured for the Notice of Petition Therefore, Ford can neither confirm nor deny Mexican Market Published at: 78 FR 24463 (April 25, 2013) that a 2004 F–150 Crew Cab manufactured Substantially Similar U.S. Certified Vehicles: Vehicle Eligibility Number: VSP–555 for sale in the Mexican Market would have 2004 Ford F–150 Crew Cab Trucks (effective date June 7, 2013) complied with FMVSS No. 208 at the time Notice of Petition it was manufactured. 2. Docket No. NHTSA–2013–0031 Published at: 78 FR 13754 (February 28, The petitioner, Mesa Auto 2013) Nonconforming Vehicles: 1991 Volkswagen Vehicle Eligibility Number: VSP–548 Wholesalers, responded in pertinent Transporter Multipurpose Passenger Vehicles part: (effective date April 17, 2013) Substantially Similar U.S. Certified Vehicles: We at Mesa auto wholesalers have 1991 Volkswagen Transporter 9. Docket No. NHTSA–2012–0161 carefully looked at both a 2004 Ford F–150 Multipurpose Passenger Vehicles Nonconforming Vehicles: 2003 Jeep Wrangler that was sold for the American market and Notice of Petition Multipurpose Passenger Vehicles the subject vehicle, in our research we Published at: 78 FR 22944 (April 17, 2013) Manufactured for the Mexican Market discovered that both vehicles were exactly Vehicle Eligibility Number: VSP–554 Substantially Similar U.S. Certified Vehicles: the same and therefore conformed to the (effective date June 7, 2013) 2003 Jeep Wrangler Multipurpose

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Passenger Vehicles 16. Docket No. NHTSA–2013–0035 noncompliance is inconsequential to Notice of Petition Nonconforming Vehicles: 2011 Thule 3008 motor vehicle safety. Published at: 78 FR 13755 (February 28, BL Boat Trailer This notice of receipt of BHC’s 2013) Because there are no substantially similar petition is published under 49 U.S.C. Vehicle Eligibility Number: VSP–547 U.S.-certified version 2011 Thule 3008 30118 and 30120 and does not represent (effective date April 17, 2013) BL Boat Trailer the petitioner sought any agency decision or other exercise of 10. Docket No. NHTSA–2013–0014 import eligibility under 49 U.S.C. judgment concerning the merits of the 30141(a)(1)(B). Nonconforming Vehicles: 1992 Porsche petition. Notice of Petition: Carrera (964 Series) Passenger Cars Equipment Involved: Affected are Published at: 78 FR 24464 (April 25, 2013) Substantially Similar U.S. Certified Vehicles: Vehicle Eligibility Number: VCP–52 approximately 13,305 ‘‘Choice’’ brand 1992 Porsche Carrera (964 Series) (effective date June 7, 2013) reflective warning triangle kits. Each kit Passenger Cars includes three warning devices for a Notice of Petition 17. Docket No. NHTSA–2012–0148 total of 39,915 devices. The affected kits Published at: 78 FR 10687 (February 14, Nonconforming Vehicles: 1991 Mercedes- 2013) were manufactured by Torch Industrial Benz G Class (463 chassis) Multipurpose Vehicle Eligibility Number: VSP–546 Company, LTD (TORCH) in its plant Passenger Vehicles (effective date March 26, 2013) located in Fujin, China. The affected Because there are no substantially similar kits were imported to and distributed in 11. Docket No. NHTSA–2012–0163 U.S.-certified version 1991 Mercedes- Benz G Class (463 chassis) Multipurpose the United States from June 2011 to Nonconforming Vehicles: 2005 Ferrari 612 August 27, 2012 by BHC. Scaglietti Passenger Cars Passenger Vehicles the petitioner sought import eligibility under 49 U.S.C. NHTSA notes that the statutory Substantially Similar U.S. Certified Vehicles: provisions (49 U.S.C. 30118(d) and 2005 Ferrari 612 Scaglietti Passenger 30141(a)(1)(B). Cars Notice of Petition 30120(h)) that permit manufacturers to Notice of Petition Published at: 77 FR 65444 (October 26, file petitions for a determination of Published at: 77 FR 76599 (December 28, 2012) inconsequentiality allow NHTSA to 2012) Vehicle Eligibility Number: VCP–51 exempt manufacturers only from the Vehicle Eligibility Number: VSP–545 (effective date December 11, 2012) duties found in sections 30118 and (effective date February 12, 2013) [FR Doc. 2013–16792 Filed 7–12–13; 8:45 am] 30120, respectively, to notify owners, 12. Docket No. NHTSA–2012–0151 BILLING CODE 4910–59–P purchasers, and dealers of a defect or Nonconforming Vehicles: 2007 Chevrolet noncompliance and to remedy the Corvette Passenger Cars defect or noncompliance. Therefore, Substantially Similar U.S. Certified Vehicles: DEPARTMENT OF TRANSPORTATION these provisions only apply to the 2007 Chevrolet Corvette Passenger Cars 39,915 2 warning devices that BHC no National Highway Traffic Safety Notice of Petition longer controlled at the time it Administration Published at: 77 FR 69539 (November 19, determined that the noncompliance 2012) [Docket No. NHTSA–2012–0145; Notice 1] existed. Vehicle Eligibility Number: VSP–544 Ruled Text: Paragraph S5.2.3 of (effective date January 16, 2013) BHC Investment Corporation, Receipt FMVSS No. 125 requires in pertinent 13. Docket No. NHTSA–2012–0150 of Petition for Decision of part: Nonconforming Vehicles: 2009 Porsche Inconsequential Noncompliance S5.2.3 Each face of the triangular portion Cayenne S Multipurpose Passenger of the warning device shall have an outer AGENCY: Vehicles National Highway Traffic border of red reflex reflective material of Substantially Similar U.S. Certified Vehicles: Safety Administration, DOT. uniform width and not less than 0.75 and not 2009 Porsche Cayenne S Multipurpose ACTION: Receipt of petition. more than 1.75 inches wide, and an inner Passenger Vehicles border of orange fluorescent material of Notice of Petition SUMMARY: BHC Investment Corporation uniform width and not less than 1.25 and not Published at: 77 FR 67732 (November 13, (BHC) 1 has determined that certain more than 1.30 inches wide . . . 2012) ‘‘Choice’’ brand reflective warning Summary of BHC’s Analyses: BHC Vehicle Eligibility Number: VSP–543 triangles that BHC distributed to its (effective date January 16, 2013) explains that the only noncompliance dealers from June 2011 to August 27, that it has confirmed is that the 14. Docket No. NHTSA–2012–0160 2012, do not fully comply with measurement of the inner orange Nonconforming Vehicles: 2009 Porsche 911 paragraph S5.2.3 of Federal Motor fluorescent material is only 1.23 inches (997) Passenger Cars Vehicle Safety Standard (FMVSS) No. versus 1.25 inches required by Substantially Similar U.S. Certified Vehicles: 125 Warning Devices. BHC has filed an paragraph S5.2.3 of FMVSS No. 125. 2009 Porsche 911 (997) passenger cars appropriate report dated August 30, The other discrepancies alleged in the Notice of Petition 2012, pursuant to 49 CFR Part 573, Published at: 77 FR 70541 (November 26, competitor’s notice cannot be verified 2012) Defect and Noncompliance without supplying samples to an Vehicle Eligibility Number: VSP–542 Responsibility and Reports. independent testing laboratory and (effective date January 16, 2013) Pursuant to 49 U.S.C. 30118(d) and having them tested and confirmed. 30120(h) (see implementing rule at 49 15. Docket No. NHTSA–2012–0095 CFR part 556), BHC submitted a petition 2 BHC’s petition, which was filed under 49 CFR Nonconforming Vehicles: 2005 Chevrolet for an exemption from the notification part 556, requests an agency decision to exempt Suburban Multipurpose Passenger and remedy requirements of 49 U.S.C. BHC as a motor vehicle equipment manufacturer Vehicles Chapter 301 on the basis that this from the notification and recall responsibilities of Substantially Similar U.S. Certified Vehicles: 49 CFR part 573 for the affected equipment. 2005 Chevrolet Suburban Multipurpose However, a decision on this petition cannot relieve 1 Passenger Vehicles BHC Investment Corporation is registered under vehicle distributors and dealers of the prohibitions the laws of the state of Delaware, and as the on the sale, offer for sale, introduction or delivery Notice of Petition importer of record for the subject noncompliant for introduction into interstate commerce of the Published at: 77 FR 46803 (August 6, 2012) equipment is treated as a manufacturer of motor noncompliant motor vehicle equipment under their Vehicle Eligibility Number: VSP–541 vehicle equipment with respect to the subject control after BHC notified them that the subject (effective date November 27, 2012) petition. noncompliance existed.

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Therefore BHC decided to suspend sales are sufficient to support the granting of times given above. The documents may of the warning triangles produced by this petition. BHC hopes that this also be viewed on the Internet at TORCH. application and attached materials fully http://www.regulations.gov by following BHC stated its belief that the minor illustrate the seriousness with which the online instructions for accessing the discrepancy between the measurements BHC has taken this matter, including the dockets. DOT’s complete Privacy Act of the orange material and the immediate cessation of sales, attempts Statement is available for review in the luminance tests result has an to verify the suspected deficiencies, and Federal Register published on April 11, inconsequential effect on motor vehicle replacement of unsold stock with 2000, (65 FR 19477–78). safety. The competitor’s test results also compliant equipment. BHC believes that The petition, supporting materials, makes claims regarding whether the such steps are a reasonable and and all comments received before the Torch triangles meet the FMVSS No. satisfactory step for an importer in this close of business on the closing date 125 with regard to stability and position, and that a recall campaign indicated below will be filed and will be reflectivity. BHC has not independently would produce no marginal benefit in considered. All comments and verify these allegations. terms of vehicle safety. supporting materials received after the BHC stated its belief that the subject In summation, BHC believes that the closing date will also be filed and will noncompliance is inconsequential to described noncompliance of its be considered to the extent possible. motor vehicle safety for the following equipment is inconsequential to motor When the petition is granted or denied, reasons: vehicle safety, and that its petition, to notice of the decision will be published 1. The triangles are not an integral exempt from providing recall in the Federal Register pursuant to the part of vehicle operation, and are notification of noncompliance as authority indicated below. limited to use as a visual warning to required by 49 U.S.C. 30118 and Comment Closing Date: August 14, passing motorists of a roadside incident. remedying the recall noncompliance as 2013. 2. Under FMVSS No. 125, a minimum required by 49 U.S.C. 30120 should be Authority: 49 U.S.C. 30118, 30120: of 1.25 inches of orange fluorescent granted. material (see page 18 of Industrial delegations of authority at 49 CFR 1.95 and Comments: Interested persons are 501.8. Testing Laboratory test report number invited to submit written data, views, 120320–05C) must be present. Based on and arguments on this petition. Issued on: July 2, 2013. the laboratory testing results and BHC’s Comments must refer to the docket and Claude H. Harris, own measurements, the Choice notice number cited at the beginning of Director, Office of Vehicle Safety Compliance. triangles’ reflective material has been this notice and must be submitted by [FR Doc. 2013–16793 Filed 7–12–13; 8:45 am] measured as 1.23 inches, a difference any of the following methods: BILLING CODE 4910–59–P inconsequential to vehicle safety. a. By mail addressed to: U.S. 3. The competitor’s testing results Department of Transportation, Docket allege that the reflectivity and stability Operations, M–30, West Building DEPARTMENT OF TRANSPORTATION of the Choice triangles failed to meet Ground Floor, Room W12–140, 1200 NHTSA standards by similarly small New Jersey Avenue SE., Washington, Surface Transportation Board margins, which do not present a DC 20590. [Docket No. FD 35732] material safety risk to vehicle b. By hand delivery to U.S. operations. Although BHC has not Department of Transportation, Docket Sonoma-Marin Area Rail Transit independently verified the competitor’s Operations, M–30, West Building District—Acquisition Exemption—In testing results, it has discontinued Ground Floor, Room W12–140, 1200 Marin County, Cal. selling this item. New Jersey Avenue SE., Washington, 4. BHC has received no reports from DC 20590. The Docket Section is open AGENCY: Surface Transportation Board, any dealer or end use purchaser of the on weekdays from 10 a.m. to 5 p.m. DOT. Choice triangle kits of any failure of except Federal Holidays. ACTION: Notice of Exemption. these products, accidents, injuries, or c. Electronically: by logging onto the SUMMARY: The Board is granting an other incidents allegedly related to the Federal Docket Management System exemption under 49 U.S.C. 10502 from suspected non-compliance. (FDMS) Web site at http:// the prior approval requirements of 49 5. BHC believes that any recall www.regulations.gov/. Follow the online U.S.C. 10902 for Sonoma-Marin Area campaign would be ineffective. BHC is instructions for submitting comments. Rail Transit District (SMART), a Class III in the process of notifying its Comments may also be faxed to 1–202– rail carrier, to acquire an approximately approximately 300 dealers of the issue, 493–2251. and has offered to replace any unsold Comments must be written in the 11.25-mile line of railroad in Marin stock with DOT-compliant products. English language, and be no greater than County, Cal., from Golden Gate Bridge, Based on our best information, BHC 15 pages in length, although there is no Highway, and Transportation District; believes that the retailers of these limit to the length of necessary County of Marin; and Marin County products generally do not maintain attachments to the comments. If Transit District. records on end-use purchasers. BHC comments are submitted in hard copy DATES: The exemption will be effective cannot identify effective point-of-sale or form, please ensure that two copies are on August 14, 2013. Petitions to stay public notice strategies that would provided. If you wish to receive must be filed by July 25, 2013. Petitions effectively notify and remedy the confirmation that your comments were for reconsideration must be filed by suspected noncompliance. received, please enclose a stamped, self- August 5, 2013. BHC also, believes that the addressed postcard with the comments. ADDRESSES: An original and 10 copies of combination of minor and Note that all comments received will be all pleadings, referring to Docket No. FD inconsequential suspected deviations posted without change to http:// 35732, must be filed with the Surface from the DOT standard, the lack of any www.regulations.gov, including any Transportation Board, 395 E Street SW., report of actual failure of the products personal information provided. Washington, DC 20423–0001. In in the field, and the problems faced in Documents submitted to a docket may addition, one copy of each pleading formulating an effective recall program be viewed by anyone at the address and must be served on SMART’s

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representative: Linda J. Morgan, (44 U.S.C. 3501–21), this notice Abstract: The World Wide Web is a Nossaman LLP, 1666 K Street NW., announces that the Veterans Health powerful media for the delivery of Suite 500, Washington, DC 20006. Administration (VHA), Department of information and services to veterans, FOR FURTHER INFORMATION CONTACT: Veterans Affairs, has submitted the dependents, and active duty personnel Amy C. Ziehm, (202) 245–0391. collection of information abstracted worldwide. IRIS allows a customer to [Assistance for the hearing impaired is below to the Office of Management and submit questions, complaints, available through the Federal Budget (OMB) for review and comment. compliments, and suggestions directly Information Relay Service (FIRS) at The PRA submission describes the to the appropriate office at any time and 1–800–877–8339.] nature of the information collection and receive an answer more quickly than SUPPLEMENTARY INFORMATION: its expected cost and burden and through standard mail. IRIS does not Additional information is contained in includes the actual data collection provide applications to veterans or serve the Board’s decision. Board decisions instrument. as a conduit for patient data, etc. and notices are available on our Web DATES: Comments must be submitted on An agency may not conduct or site at www.stb.dot.gov. or before August 14, 2013. sponsor, and a person is not required to Decided: July 9, 2013. respond to a collection of information ADDRESSES: Submit written comments unless it displays a currently valid OMB By the Board, Chairman Elliott, Vice on the collection of information through Chairman Begeman, and Commissioner control number. The Federal Register www.Regulations.gov; or to VA’s OMB Notice with a 60-day comment period Mulvey. Desk Officer, OMB Human Resources Derrick Gardner, soliciting comments on this collection and Housing Branch, New Executive of information was published on March Clearance Clerk. Office Building, Room 10235, 26, 2013, at pages 18426–18427. [FR Doc. 2013–16872 Filed 7–12–13; 8:45 am] Washington, DC 20503 (202) 395–7316. Affected Public: Individuals or BILLING CODE 4915–01–P Please refer to ‘‘OMB Control No. 2900– households. 0619’’ in any correspondence. Estimated Annual Burden: 108,000 FOR FURTHER INFORMATION OR A COPY OF hours. DEPARTMENT OF VETERANS THE SUBMISSION CONTACT: Crystal Estimated Average Burden per AFFAIRS Rennie, Records Management Service Respondent: 10 minutes. [OMB Control No. 2900–0619] (005R1B), Department of Veterans Affairs, 810 Vermont Avenue NW., Frequency of Response: Monthly. Agency Information Collection Washington, DC 20420, (202) 632–7492, Estimated Number of Respondents: Activities Under OMB Review or email: [email protected]. Please 648,000. refer to ‘‘OMB Control No. 2900–0619.’’ Dated: July 9, 2013. AGENCY: Veterans Health By direction of the Secretary. Administration, Department of Veterans SUPPLEMENTARY INFORMATION: Affairs. Title: Inquiry Routing and Information Crystal Rennie, System (IRIS). VA Clearance Officer, U.S. Department of ACTION: Notice. OMB Control Number: 2900–0619. Veterans Affairs. SUMMARY: In compliance with the Type of Review: Revision of a [FR Doc. 2013–16773 Filed 7–12–13; 8:45 am] Paperwork Reduction Act (PRA) of 1995 currently approved collection. BILLING CODE 8320–01–P

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Part II

Department of Health and Human Services

Centers for Medicare & Medicaid Services 42 CFR Parts 431, 435, 436, et al. Office of the Secretary 45 CFR Parts 155 and 156 Medicaid and Children’s Health Insurance Programs: Essential Health Benefits in Alternative Benefit Plans, Eligibility Notices, Fair Hearing and Appeal Processes, and Premiums and Cost Sharing; Exchanges: Eligibility and Enrollment; Final Rule

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DEPARTMENT OF HEALTH AND 457.315, 457.330 and 457.348; coverage, to include requirements to HUMAN SERVICES amendments to 42 CFR 431.10, 431.11, meet new minimum standards, 435.110, 435.116, 435.119, 435.907, including the provision of essential Centers for Medicare & Medicaid 435.916, 435.940, 435.945, 435.948, health benefits, as required by the Services 435.952, 457.340 and 457.350; the Affordable Care Act. In an effort to bring removal of 42 CFR 435.953 and 435.955; consistency and clarity to part 440, we 42 CFR Parts 431, 435, 436, 438, 440, and the redesignation of 42 CFR 435.911 are removing the terms ‘‘benchmark and 447, and 457 through 435.914 as 42 CFR 435.912 benchmark-equivalent plan’’ where they through 435.915 in CMS–2349 (FR Doc. appear together and are replacing these Office of the Secretary 2012–6560) published on March 23, terms with ‘‘Alternative Benefit Plan’’ 2012, which were to become effective in (ABP). 45 CFR Parts 155 and 156 January 1, 2014 are now effective Beginning in calendar year 2014, individuals and small businesses will be [CMS–2334–F] October 1, 2013. Other provisions of this final rule that able to purchase private health RIN 0938–AR04 are codified in title 42 of the Code of insurance through competitive Federal Regulations are effective marketplaces called Affordable Medicaid and Children’s Health January 1, 2014 with the exception of Insurance Exchanges, or ‘‘Exchanges.’’ Insurance Programs: Essential Health amendments to the following which are This final rule: (1) Specifies standards Benefits in Alternative Benefit Plans, effective on October 1, 2013: 42 CFR related to authorized representatives, (2) Eligibility Notices, Fair Hearing and 431.10, 431.11, 431.201, 431.205, outlines criteria related to the Appeal Processes, and Premiums and 431.206, 431.211, 431.213, 431.230, verification of enrollment in and Cost Sharing; Exchanges: Eligibility 431.231, 431.240, 435.119, 435.603, eligibility for minimum essential and Enrollment 435.907, 435.918, 435.1200, 457.110, coverage through an eligible employer- sponsored plan, and (3) further specifies AGENCY: Centers for Medicare & 457.348, and 457.350; and the addition or amends other eligibility and Medicaid Services (CMS), HHS. of 42 CFR 435.1205 and 457.370, which enrollment provisions. This final rule ACTION: Final rule. are effective on October 1, 2013. Regulations in this final rule that are does not address proposed provisions SUMMARY: This final rule implements codified in title 45 of Code of Federal regarding Exchange eligibility appeals, provisions of the Patient Protection and Regulations are effective on September to provide additional time for the Affordable Care Act and the Health Care 13, 2013. careful development of standards that can be effectively implemented, and Education Reconciliation Act of FOR FURTHER INFORMATION CONTACT: particularly for those regarding 2010 (collectively referred to as the Sarah deLone, (410) 786–0615, or coordination with Medicaid and CHIP. Affordable Care Act. This final rule Stephanie Kaminsky, (410) 786–4653, finalizes new Medicaid eligibility Additionally, this final rule does not for provisions related to revisions to address proposed provisions regarding provisions; finalizes changes related to eligibility notice and fair hearing electronic Medicaid and the Children’s the Children’s Health Insurance appeal processes and additional Program Reauthorization Act of 2009 Health Insurance Program (CHIP) eligibility changes for Medicaid and (CHIPRA), certified application eligibility notices and delegation of CHIP. counselors in an Exchange and SHOP appeals; modernizes and streamlines Melissa Harris, (410) 786–3397, for coordination with individual market existing Medicaid eligibility rules; provisions related to essential health Exchanges. We intend to address these revises CHIP rules relating to the benefits. provisions in a future issuance. The substitution of coverage to improve the Leigha Basini, (301) 492–4307, for intent of this final rule is to afford each coordination of CHIP coverage with provisions related to Affordable state substantial discretion in the design other coverage; and amends Insurance Exchanges. and operation of the Exchange requirements for benchmark and SUPPLEMENTARY INFORMATION: established by the state, with greater benchmark-equivalent benefit packages Executive Summary standardization provided where consistent with sections 1937 of the directed by the statute or where there Social Security Act (which we refer to This final rule implements provisions are compelling practical, efficiency or as ‘‘alternative benefit plans’’) to ensure of the Patient Protection and Affordable consumer protection reasons. that these benefit packages include Care Act and the Health Care and This final rule also updates and essential health benefits and meet Education Reconciliation Act of 2010 simplifies the complex Medicaid certain other minimum standards. This (collectively referred to as the premium and cost sharing requirements rule also implements specific provisions Affordable Care Act). This rule reflects to promote the most effective use of including those related to authorized new statutory eligibility provisions, services and to assist states in representatives, notices, and verification implements changes related to Medicaid identifying cost sharing flexibilities. of eligibility for qualifying coverage in and the Children’s Health Insurance Finally, this final rule provides notice an eligible employer-sponsored plan for Program (CHIP) eligibility notices, that we are considering, for purposes of Affordable Insurance Exchanges. This delegation of appeals, and other related the initial open enrollment period for rule also updates and simplifies the administrative procedures with similar enrollment in a Qualified Health Plan complex Medicaid premium and cost procedures used by other health through the Exchange, whether various sharing requirements, to promote the coverage programs authorized under the provisions of the Medicaid and CHIP most effective use of services, and to Affordable Care Act. This final rule also regulations should be effective October assist states in identifying cost sharing modernizes and streamlines existing 1, 2013, or whether a later effective date flexibilities. It includes transition rules. is appropriate. policies for 2014 as applicable. This final rule amends the In this final rule, we do not address DATES: The effective date for the requirements applicable to Medicaid all of the proposed regulatory changes to additions of 42 CFR 435.118, 435.603, benefit packages that provide 42 CFR parts 431, 435 and 457. We are 435.911, 435.949, 435.956, 435.1200, benchmark or benchmark-equivalent focusing on those changes that are most

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needed to implement the changes made 11. Verifications Related to Eligibility for HCERA Health Care and Education by the Affordable Care Act starting in Insurance Affordability Programs Reconciliation Act of 2010 (Pub. L. 111– 2014. We intend to address certain of 12. Eligibility Redetermination During a 152, enacted March 30, 2010) the other provisions in future Benefit Year HHS [U.S. Department of] Health and 13. Annual Eligibility Redetermination Human Services rulemaking. 14. Administration of Advance Payments IHS Indian Health Service Table of Contents of the Premium Tax Credit and Cost- INA Immigration and Nationality Act Sharing Reductions IRA Individual Retirement Account To assist readers in referencing 15. Coordination With Medicaid, CHIP, the IRC Internal Revenue Code of 1986 sections contained in this document, we Basic Health Program, and the Pre- IRS Internal Revenue Service are providing the following table of Existing Condition Insurance Plan MAGI Modified adjusted gross income contents. 16. Special Eligibility Standards and MEC Minimum Essential Coverage Process for Indians MMEA Medicare & Medicaid Extenders Act Executive Summary 17. Enrollment of Qualified Individuals of 2010 (Pub. L. 111–309, enacted I. Background Into QHP’s December 15, 2010) A. Medicaid Eligibility Final Rule Part II 18. Special Enrollment Periods OMB Office of Management and Budget B. Essential Health Benefits in Alternative 19. Termination of Coverage OPM U.S. Office of Personnel Management Benefit Plans D. Medicaid Premiums and Cost Sharing PHS Act Public Health Service Act C. Exchanges: Eligibility and Enrollment 1. Responses to General Comments PRA Paperwork Reduction Act of 1995 D. Medicaid Premiums and Cost Sharing 2. Definitions PRWORA Personal Responsibility and II. Provisions of the Proposed Regulations 3. Update to Maximum Nominal Cost Work Opportunity Reconciliation Act of and Analysis of and Responses to Public Sharing 1996 Comments 4. Higher Cost Sharing Permitted for QHP Qualified Health Plan A. Medicaid Eligibility Expansion Part II Individuals With Incomes Above 100 Secretary Secretary of HHS 1. Responses to General Comments Percent of the FPL SEP Special enrollment period 2. Appeals—Delegation of Authority To 5. Cost Sharing for Drugs SHOP Small Business Health Options Conduct Medicaid Fair Hearings 6. Cost Sharing for Emergency Department Program 3. Notices (ED) Services SMD State Medicaid Director 4. Medicaid Enrollment Changes Under the 7. Premiums SNAP Supplemental Nutrition Assistance Affordable Care Act Needed to Achieve 8. Limitations on Premiums and Cost Program Coordination with the Exchange Sharing SPA State Plan Amendment 5. Medicaid Eligibility Requirements and 9. Beneficiary and Public Notice SSA Social Security Administration Coverage Options Established by Other Requirements SSI Supplemental Security Income Federal Statutes III. Provisions of the Final Regulations SSN Social Security number 6. Coordinated Medicaid/CHIP Open IV. Collection of Information Requirements TANF Temporary Assistance for Needy Enrollment Process V. Regulatory Impact Analysis Families 7. Children’s Health Insurance Program I. Background Changes Regulations Text 8. Premium Assistance Acronyms and Terms A. Medicaid Eligibility Final Rule Part II 9. Changes to Modified Adjusted Gross Income and MAGI Screen Because of the many organizations The Patient Protection and Affordable 10. Single State Agency—Delegation of and terms to which we refer by acronym Care Act (Pub. L. 111–148, enacted on Eligibility Determinations to Exchanges in this final rule, we are listing these March 23, 2010), was amended by the 11. Conversion of Federal Minimum acronyms and their corresponding terms Health Care and Education Income Standards for Section 1931 of the in alphabetical order below: Reconciliation Act of 2010 (Pub. L. 111– Act 152, enacted on March 30, 2010). These B. Essential Health Benefits in Alternative [the] Act Social Security Act laws are collectively referred to as the Benefit Plans Affordable Care Act The Affordable Care Affordable Care Act. In addition, section 1. General Comments Act of 2010 (which is the collective term for 205 of the Medicare & Medicaid 2. Alignment With Essential Health the Patient Protection and Affordable Care Benefits Provisions Act (Pub. L. 111–148) and the Health Care Extenders Act of 2010 (Pub. L. 111–309, 3. Modifications in Applying the and Education Reconciliation Act (Pub. L. enacted December 15, 2010) (MMEA) Provisions of This Final Rule to 111–152)) and the Middle Class Tax Relief and Job Medicaid AFDC Aid to Families with Dependent Creation Act of 2012 (Pub. L. 112–96, 4. All Other Title XIX Provisions Apply Children enacted February 22, 2012) made 5. Preventive Services as an EHB BBA Balanced Budget Act of 1997 additional amendments to the Social 6. Other Changes To Simplify, Modernize, BHP Basic Health Program Security Act (the Act) provisions and Clarify Medicaid Benchmark CHIP Children’s Health Insurance Program affected by the Affordable Care Act. Requirements and Coverage CHIPRA Children’s Health Insurance The Affordable Care Act extends and Requirements Program Reauthorization Act of 2009 7. Summary CMS Centers for Medicare & Medicaid simplifies Medicaid eligibility, and on C. Exchanges: Eligibility and Enrollment Services March 23, 2012, we issued a final rule 1. Definitions [the]Code Internal Revenue Code of 1986 (referred to as the ‘‘Medicaid Eligibility 2. Approval of a State Exchange DHS Department of Homeland Security final rule’’) addressing certain key 3. Functions of an Exchange DOL U.S. Department of Labor Medicaid and CHIP eligibility, 4. Authorized Representatives DRA Deficit Reduction Act of 2005 enrollment, and renewal issues. 5. General Standards for Exchange Notices EITC Earned Income Tax Credit This final rule provides states with 6. Definitions and General Standards for EPSDT Early and periodic screening, additional flexibility and guidance for Eligibility Determinations diagnosis, and treatment delegation of appeals and 7. Options for Conducting Eligibility FEHBP Federal Employees Health Benefits implementation of electronic notices, Determinations Program (5 U.S.C. 8901, et seq.) 8. Eligibility Standards FFE Federally-facilitated Exchange and modernizes administrative 9. Eligibility Process FFP Federal financial participation procedures to further promote 10. Verification Process Related to FMAP Federal medical assistance coordination across multiple health Eligibility for Enrollment in a QHP percentage coverage programs, including Through the Exchange FPL Federal poverty level enrollment in a qualified health plan

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through the Exchange with advance Affordable Care Act describes the functions of an Exchange are based on payments of the premium tax credits minimum functions of an Exchange, the general authority of the Secretary and cost-sharing reductions, as including the certification of QHPs. under section 1321(a)(1) of the authorized by the Affordable Care Act, Section 1321 of the Affordable Care Affordable Care Act. Medicaid and the Children’s Health Act discusses state flexibility in the 2. Stakeholder Consultation and Input Insurance Program (CHIP). These operation and enforcement of Exchanges coverage programs are collectively and related requirements. Section HHS has consulted with interested referred to as ‘‘insurance affordability 1321(c)(1) directs the Secretary to stakeholders on policies related to the programs.’’ For more information on the establish and operate an Exchange eligibility provisions and Exchange legislative overview, please refer to the within each state that either: (1) does functions. HHS held a number of Medicaid, CHIP, and Exchanges not elect to establish an Exchange, or (2) listening sessions with consumers, proposed rule (78 FR 4594). as determined by the Secretary on or providers, employers, health plans, and before January 1, 2013, will not have an state representatives to gather public B. Essential Health Benefits in Exchange operational by January 1, input, and released several documents Alternative Benefit Plans 2014. Section 1321(a) also provides for public review and comment. HHS For plan, policy, or coverage years (as broad authority for the Secretary to also released a bulletin that outlined our applicable) beginning in 2014, most issue regulations setting standards to intended regulatory approach to health insurance coverage 1 in the implement the statutory requirements verifying access to employer-sponsored individual and small group markets, related to Exchanges, QHPs, and other coverage and sought public comment on Medicaid benchmark and benchmark- standards under title I of the Affordable the specific approaches. equivalent plans (now also known as Care Act. Finally, HHS consulted with Alternative Benefit Plans (ABPs)), and Section 1401 of the Affordable Care stakeholders through regular meetings Basic Health Programs (if applicable) Act creates new section 36B of the with the National Association of will be required to cover essential Internal Revenue Code of 1986 (the Insurance Commissioners (NAIC), health benefits (EHBs), consistent with Code), which provides for a premium regular contact with states through the the definition under section 1302 of the tax credit for eligible individuals who Exchange grant process, consultation Affordable Care Act and implementing enroll in a QHP through an Exchange. with Medicaid directors, and meetings regulations at 45 CFR Parts 147, 155, Section 1402 of the Affordable Care Act with tribal leaders and representatives, and 156, Patient Protection and establishes requirements for reducing health insurance issuers, trade groups, Affordable Care Act; Standards Related the cost-sharing obligations of eligible consumer advocates, employers, and to Essential Health Benefits, Actuarial individuals who enroll in a QHP other interested parties. Value, and Accreditation; Final Rule. through an Exchange, including special We considered input from these Under that definition, EHBs include cost-sharing rules for certain Indians. stakeholder meetings and in response to items and services in 10 statutory Under section 1411 of the Affordable the bulletin on verifying access to benefit categories, such as Care Act, the Secretary is directed to employer-sponsored coverage, as well as hospitalization, prescription drugs, and establish a program for determining comments provided in response to the maternity and newborn care, and are whether an individual meets the proposed rule as we developed the equal in scope of benefits to a typical eligibility standards for enrollment in policies in this final rule. employer plan, which will constitute QHPs through the Exchange, advance minimum coverage in an ABP. payments of the premium tax credit, 3. Structure of the Final Rule cost-sharing reductions, and exemptions C. Exchanges: Eligibility and Enrollment The regulations related to Exchanges from the shared responsibility payment and QHPs outlined in this final rule are 1. Legislative Overview under section 5000A of the Code. codified at 45 CFR parts 155 and 156. Section 1311(b) and section 1321(b) of Sections 1412 and 1413 of the Part 155 outlines the standards related the Affordable Care Act provide that Affordable Care Act and section 1943 of to eligibility for insurance affordability each state has the opportunity to the Social Security Act (the Act), as programs to facilitate a streamlined establish an Exchange that: (1) added by section 2201 of the Affordable process for eligibility for enrollment in Facilitates the purchase of insurance Care Act, contain additional provisions a QHP through the Exchange and in coverage by qualified individuals regarding eligibility for advance insurance affordability programs. Part through qualified health plans (QHPs); payments of the premium tax credit and 156 outlines the standards for health (2) assists qualified employers with the cost-sharing reductions, as well as insurance issuers for participation in an enrollment of their employees in QHPs; provisions regarding simplification and Exchange. This final rule: and (3) meets other standards specified coordination of eligibility • Revises existing definitions and in the Affordable Care Act. Section determinations and enrollment with finalizes new definitions to 45 CFR part 1311(k) of the Affordable Care Act other insurance affordability programs. 155 subpart A. • specifies that Exchanges may not This final rule supplements and Provides a technical correction to amends provisions originally published 45 CFR part 155 subpart B. establish rules that conflict with or • prevent the application of regulations as the March 27, 2012 rule titled Finalizes standards related to promulgated by the Secretary under ‘‘Patient Protection and Affordable Care authorized representatives under 45 Act; Establishment of Exchanges and CFR part 155 subpart C. subtitle D of title I of the Affordable • Care Act. Section 1311(d) of the Qualified Health Plans; Exchange Finalizes standards related to Standards for Employers’’ (hereafter eligibility determinations for enrollment 1 For more information on status as a referred to as ‘‘Exchange Final Rule’’) in a QHP and for insurance affordability grandfathered health plans under the Affordable (77 FR 18310) which encompasses key programs under 45 CFR part 155 subpart Care Act, please see Interim Final Rule, ‘‘Group functions of Exchanges related to D. Health Plans and Health Insurance Coverage eligibility and enrollment. • Finalizes standards related to Relating to Status as a Grandfathered Health Plan enrollment-related transactions, special Under the Patient Protection and Affordable Care Unless otherwise specified, the Act.’’ Available at http://cciio.cms.gov/resources/ provisions in this final rule related to enrollment periods, and terminations regulations/index.html#gp. the establishment of minimum under 45 CFR part 155 subpart E.

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• Finalizes standards related to sharing (sections 1916 and 1916A of the The following sections summarize termination of coverage under 45 CFR Act) into a unified framework. comments about the rule in general, as part 156 subpart C. well as specific comments about certain II. Provisions of the Proposed Rule and policies. It should be noted that the 4. Alignment With Related Rules and Analysis of and Responses to Public summarized comments are structured to Published Information Comments explain the provisions being finalized As noted above, on March 27, 2012, A. Medicaid Eligibility Part II Final Rule and do not necessarily follow the order we published the Exchange final rule. of the regulation text: This final rule revises and supplements In the January 22, 2013 Federal the Exchange final rule, including by Register (78 FR 4594), we published the 1. Responses to General Comments finalizing Exchange and Medicaid proposed rule entitled ‘‘Essential Health Generally, commenters were provisions associated with the eligibility Benefits in Alternative Benefit Plans, supportive of the policies in the changes under the Affordable Care Act Eligibility Notices, Fair Hearing and proposed rule to continue the process of of 2010. Appeal Processes for Medicaid and streamlining Medicaid and CHIP Exchange Eligibility Appeals and Other eligibility rules, policies and D. Medicaid Premiums and Cost Provisions Related to Eligibility and procedures; to support a consumer Sharing Enrollment for Exchanges, Medicaid friendly approach, and provide Section 1916 of the Act describes and CHIP, and Medicaid Premiums and increased flexibility for states. long-standing limitations and Cost Sharing.’’ Comment: Several commenters were requirements applicable in states that We received a total of 741 timely concerned about the complexity of the elect to provide for premiums and other comments from individuals, state proposed rules and the significance of cost sharing under Medicaid. Under Medicaid and CHIP agencies, advocacy the changes that need to be made to section 1916 of the Act, certain groups, tribes and tribal organizations, fully implement the provisions of the individuals are protected from policy and research organizations, Affordable Care Act. Many commenters premiums and cost sharing, and cost health care providers, employers, were concerned about the short sharing cannot be imposed on certain insurers, and health care associations. timeframes for implementation and services. Permissible cost sharing under The comments ranged from general about states’ ability to make needed section 1916 of the Act is limited to support or opposition to the proposed changes to policy, operations, and ‘‘nominal’’ amounts (except in some provisions to very specific questions or information technology systems. circumstances for non-emergency use of comments regarding the proposed Response: We recognize that the a hospital emergency room). Section changes. timing of this final rule may result in 1916 of the Act also establishes In this final rule, we are only implementation challenges, especially authority for states to impose premiums addressing some of the provisions of the from a systems perspective. As such, we on medically needy beneficiaries and proposed rule. We are reserving action have evaluated the provisions of the specific groups of individuals with January proposed rule and are finalizing family incomes above 150 percent of the on other provisions and intend to address those provisions in a in this rule only those provisions that federal poverty level (FPL). The Deficit we believe states are already in the Reduction Act of 2005 (DRA) subsequent final rule. We discuss below only those public comments associated process of implementing or must be established a new section 1916A of the finalized to meet statutory deadlines. Act, which gives states additional with provisions addressed in this final rule. The remaining provisions of the flexibility, allowing for alternative proposed rule will be addressed at a premiums and cost sharing beyond what We have revised some of the proposed later date. is permitted under section 1916 of the regulations after careful consideration of We will continue to work with states Act for somewhat higher income the comments received. Some to support their implementation efforts, beneficiaries. Such alternative cost- comments were outside the scope of the ensure successful partnerships between sharing approaches may be targeted to proposed rule, and therefore, are not states and the federal government. We specific groups of individuals and addressed in this final rule. In some will also continue to offer intensive payment may be required as a condition instances, commenters raised policy or technical assistance and support to of providing services. All premiums and operational issues that will be addressed states, and facilitate sharing of cost sharing imposed under sections through forthcoming regulatory and experience and knowledge across states. 1916 and 1916A of the Act cannot subregulatory guidance to be provided Consistent with one commenter’s exceed 5 percent of a family’s income. subsequent to this final rule; therefore, recommendation, we will also utilize For more background information on some, but not all comments are other tools, including subregulatory the streamlined and expanded addressed in the preamble to this final guidance and the State Operations and flexibility regarding premiums and cost rule. Technical Assistance (SOTA) initiative sharing, please refer to (78 FR 4657 and Brief summaries of the proposed to address additional state questions 78 FR 4658). provisions that are being finalized in that arise. We initially implemented the DRA this rule, a summary of the public authorities through regulations that comments we received on those 2. Appeals—Delegation of Authority To mirrored the dual statutory provisions provisions (except specific comments Conduct Medicaid Fair Hearings by adding a set of additional regulations on the paperwork burden or the We proposed to implement sections on alternative cost sharing under section economic impact analysis), and our 1413 and 2201 of the Affordable Care 1916A of the Act to existing regulations responses to the comments are as Act in part through procedures to setting forth the framework for cost follows. Comments related to the coordinate Medicaid fair hearings under sharing under section 1916 of the Act. paperwork burden and the impact section 1902(a)(3) of the Act concerning We believe states found this duality analyses are addressed in the eligibility for populations whose income confusing and, in this final rule, we ‘‘Collection of Information is determined using modified adjusted have integrated the two statutory Requirements’’ and ‘‘Regulatory Impact gross income (MAGI)-based authorities for premiums and cost Analysis’’ sections in this final rule. methodologies of the Act with appeals

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of eligibility determinations that are relating to accessibility in the fair entity. We note that such delegation is made using MAGI-based methodologies hearing process or as it relates appeals at state option. States are not required by Exchanges for advance payment of and notices at § 431.205(e) and to delegate such authority, but may premium tax credits and cost-sharing § 431.206(e) at this time, fair hearing continue to have the Medicaid agency reductions under section 1411(f) of the processes and notices must continue to conduct all Medicaid fair hearings. Affordable Care Act. Consistent with the be provided in an accessible manner in We understand commenters’ concern requirements to streamline and accordance with relevant federal about duplication of effort in requiring coordinate eligibility determinations, statutes, including the Americans with that Medicaid agencies retain an under section 1943(b)(3) of the Act, as Disabilities Act and Title VI of the Civil infrastructure independent of the added by section 2201 of the Affordable Rights Act of 1964, as well as any Exchange appeals process to conduct Care Act, we proposed to provide states applicable state laws. MAGI-based Medicaid eligibility with an option to delegate the authority We received the following comments appeals when the state has delegated to conduct appeals to an Exchange or regarding the proposed regulations authority for MAGI-based eligibility Exchange appeals entity. The option is related to delegation of fair hearings and appeals to an Exchange. There are two similar to the option states have to reinstatement of applications in certain key reasons why the Medicaid agency delegate Medicaid eligibility circumstances, which we are addressing must maintain its own appeals determinations to an Exchange under in this rulemaking: infrastructure. First, an individual § 431.10. We also proposed changes to Comment: Many commenters whose application for Medicaid is existing regulations at part 431 subpart supported our approach to permit denied or not acted upon with E to support further modernization and delegation of fair hearings to an reasonable promptness has a right under streamlining of the Medicaid fair Exchange or Exchange appeals entity so section 1902(a)(3) of the Act to an hearing process. that an integrated hearing could be opportunity for a fair hearing before the conducted to address Medicaid and Medicaid agency. We do not anticipate In this final rule, we are finalizing the Exchange-related eligibility issues that individuals will necessarily prefer provisions of our proposed rule related together. We also received comments to have their appeal heard by the to delegation of authority to conduct supporting the proposals to streamline Medicaid agency, but the statute Medicaid fair hearings to an Exchange and simplify our current fair hearings requires that the option be provided in and an Exchange appeals entity at rules. While not providing specific such delegation through our regulations. sections §§ 431.10, 431.205(b), recommendations, the commenters Second, in a state where the Federally- 431.206(d) and (e), 431.240 and the asked that we consider additional facilitated Exchange (FFE) is operating, proposed rule related to reinstatement measures to coordinate Medicaid and the HHS appeals entity will only of an application at §§ 435.907(h) and Exchange eligibility appeals even more conduct appeals related to MAGI-based 457.340(a). As discussed in section effectively. A few commenters requested eligibility determinations made by the II.A.3. of this final rule (relating to that the final rule maintain state FFE. Thus, in states where the FFE is notices), we also are adopting proposed flexibility for states to retain the operating, the Medicaid agency will revisions to the current regulations at Medicaid appeals function within the need to conduct all Medicaid fair sections §§ 431.211, 431.213, 431.230, Medicaid agency. hearings related to MAGI-based and 431.231, related to modernizing the Several commenters were concerned eligibility determinations made by the process of providing notices to that our proposed rules require Medicaid agency. For these reasons, we applicants and beneficiaries of their fair duplicative processes because states are finalizing the requirement as hearing rights and decisions. In addition must maintain the infrastructure and proposed. to providing substantive comments on capacity to hear MAGI-based appeals, States have options to streamline the the proposed regulations related to even if the state delegates the authority appeals infrastructure and reduce the coordination of appeals across the to conduct fair hearings to an Exchange. number of appeals that will come before Exchange, Medicaid and CHIP, a One commenter requested that we the Medicaid agency, in addition to the number of commenters requested eliminate the requirement at proposed options to delegate Medicaid appeals delayed implementation of those § 431.10(c)(1)(ii) and § 431.205(b)(1)(ii) authority under this final rule as provisions. To provide states with that an individual be provided an discussed above. In a state that has additional time to consider and opportunity to request a fair hearing established a state-based Exchange, the effectuate implementation of such before the Medicaid agency when the state Medicaid agency may delegate coordination, as well as to provide us state has otherwise delegated authority authority to conduct fair hearings of with additional time to consider the to conduct the individual’s fair hearing MAGI-based determinations to the state- comments received, we are not to the Exchange, and instead make this based Exchange by requesting a waiver addressing proposed provisions at provision a state option. The commenter under the Intergovernmental §§ 431.200, 431, 201, 431.205(e), believed that this requirement would Cooperation Act of 1968 (ICA), as long 431.206(b), (c)(2), (e) as it relates to undermine the efficiencies achieved as the state-based Exchange is a state accessibility under § 435.905(b), through delegation. Another commenter agency and the state can assure 431.210, 431.220, 431.221, 431.224, recommended that only one hearing sufficient oversight of the delegated fair 431.232, 431.241, 431.242, or 431.244. opportunity be made available to hearing process. As we noted in the Further, we are not addressing the individuals, instead of requiring a preamble to the proposed rule, when a definitions related to appeals proposed hearing if determined ineligible for state has an ICA waiver permitting in 435.4, nor the provisions related to Medicaid and a hearing related to the delegation of fair hearings to another coordination of appeals in § 435.1200. eligibility for advance payment of state agency, the state is not required to We expect to address these proposed premium tax credits and cost-sharing offer individuals an option to have their provisions in a subsequent rulemaking. reductions. hearing conducted by the Medicaid Until final regulations are released, Response: We appreciate the support agency. current rules in part 431, subpart E for the proposal to permit states to In states where the FFE is operating, continue to apply. We note that while delegate MAGI-based eligibility appeals a state Medicaid agency that allows the we are not finalizing our proposed rules to an Exchange or Exchange appeals FFE to make a Medicaid eligibility

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determination delegating such authority only an assessment of potential transferred to the Medicaid agency for a under § 431.10(c)(1)(i) has appeal Medicaid eligibility. A few commenters full evaluation by the agency in delegation options not available to a requested clarification about whether a accordance with § 155.345(b) or (c) of State that proceeds with the assessment delegation of authority to conduct the March 2012 Exchange eligibility model. If the Medicaid agency Medicaid fair hearings to a state-based final rule. If the Medicaid agency still authorizes the FFE to make MAGI-based Exchange would extend to an appeal to determines the individual ineligible, he eligibility determinations, the agency the HHS appeals entity. The or she would be able to appeal that may also delegate authority to the HHS commenters were concerned that decision using the Medicaid agency’s appeals entity to conduct fair hearings appeals could not be coordinated at the fair hearing process. related to determinations of Medicaid HHS appeals entity, rendering In states in which the Exchange will ineligibility made by the FFE, meaningless any efforts to achieve make an assessment of Medicaid establishing an integrated appeals coordination at the state level. eligibility, and will not make final process with simultaneous appeals Response: States may choose to Medicaid eligibility determinations or related to a determination of advance delegate authority to conduct Medicaid denials, an assessment of ineligibility payments of the premium tax credits or fair hearings for MAGI-based eligibility for Medicaid based on MAGI will not cost-sharing reductions. The Medicaid determinations to the Exchange trigger Medicaid appeal rights. This is agency would still need to maintain the operating in the state regardless of because an assessment is not a final ability to conduct fair hearings for whether the Exchange is the FFE, the Medicaid eligibility determination. As eligibility determinations and denials state-based Exchange or a partnership indicated in § 155.302(b)(4) of the made by the Medicaid agency, as well between the state and the FFE in March 2012 Exchange rule, as revised in as when delegations are made under accordance with the final rules at this rulemaking, applicants assessed by these regulations for individuals who § 431.10(c) and (d). There is no the Exchange as not potentially eligible opt out of a coordinated appeal before difference in the delegation authority for Medicaid based on MAGI but as the Exchange or Exchange appeals under the regulations, as proposed or as potentially eligible for Medicaid on entity, and specifically request a hearing finalized, based on the type of another basis will be transferred to the before the Medicaid agency. States will Exchange. In accordance with such Medicaid agency for a full Medicaid also need to continue to conduct fair delegation, the Exchange or Exchange determination; for these applicants, hearings related to non-MAGI based appeals entity may provide a fair Medicaid appeal rights will be triggered eligibility determinations, as well as fair hearing on Medicaid issues, but when the Medicaid agency makes a final hearings related to termination, individuals must have the option to eligibility determination. Under suspension, or reduction of covered have their Medicaid fair hearing heard § 155.302(b)(4), applicants assessed as benefits and other adverse directly before the single state agency. not potentially eligible for Medicaid on determinations. As discussed below, states with state- any basis will have a choice whether to Finally, with respect to the based Exchanges that are state withdraw their Medicaid application or recommendation that a right to only one governmental agencies also have an obtain a full determination by the hearing be made available, we note that additional way to coordinate appeals, Medicaid agency. If the applicant there are two separate statutory beyond delegation under our rules, withdraws his or her Medicaid authorities for appeals related to through a waiver granted under the application, a final determination or Medicaid and enrollment in a QHP and Intergovernmental Cooperation Act. denial of Medicaid will not be made, eligibility for APTC and cost sharing Under such a waiver, individuals would and therefore no appeal rights arise at reductions, at section 1902(a)(3) of the not have a right to have their Medicaid that point. (The applicant will have the Act and section 1411(f) of the appeal heard by the single state agency. ability to reinstate their Medicaid Affordable Care Act, respectively. While In a state that has delegated authority application in certain circumstances, we permit states to integrate these to the Exchange to make Medicaid discussed more fully below). When an hearings and processes as much as eligibility determinations based on applicant obtains a formal possible, both state Medicaid agencies MAGI, individuals have the right to determination by the Medicaid agency, and the Exchange have distinct request a fair hearing when the the Medicaid agency’s determination responsibilities to provide for such Exchange has determined the individual will trigger appeal rights, if applicable. hearings, and we do not have authority ineligible for Medicaid based on MAGI. Finally, if a state agency delegates to eliminate individuals’ statutory Thus, the determination of ineligibility authority to conduct MAGI-based rights, or a Medicaid agency’s or by the Exchange will trigger the eligibility appeals to an Exchange, Exchange’s statutory responsibility. We individual’s appeal rights. If the state including a state-based Exchange, in note that we are not addressing in this has delegated authority to the Exchange accordance with § 431.10(c) and (d) of final rule the proposed requirements to conduct fair hearings under these this final rule, such a delegation would relating to coordination of notices. regulations, such an individual found extend to any government agency Those proposed rules will be addressed ineligible for Medicaid by the Exchange adjudicating an Exchange appeal, in future rulemaking. could request a fair hearing at the including the HHS appeals entity. We Comment: Several commenters Exchange or Exchange appeals entity so note, however, that if a state delegates requested clarification of our proposals that there would be one integrated authority to conduct fair hearings on delegation of Medicaid appeals to the hearing conducting the Exchange- through an ICA waiver to another state FFE, a state-based Exchange, or a state related and Medicaid appeals at the agency, including a state-based with a partnership with the FFE. In same time, or the individual may Exchange or state-based Exchange addition, commenters sought instead request his or her Medicaid appeals entity, Medicaid decisions clarification regarding when an issue be heard at the Medicaid agency. made by that entity could not be individual’s appeals rights are triggered If, an individual who is found by the appealed to the HHS appeals entity. The in states which have delegated authority Exchange to be not eligible for Medicaid ICA waiver is a waiver of single state to make Medicaid eligibility based on MAGI seeks a determination agency requirements that permits determinations to the Exchange versus based on non-MAGI criteria, the alternative arrangements of state agency states in which the Exchange will make individual’s electronic account is functions to another state agency. Once

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such an agency has issued a decision appeals entity under the regulation at we permit delegation under the after a Medicaid fair hearing, that § 431.10(c)(1)(ii), the FFE will only regulation only to an independent state Medicaid decision would be the final accept a delegation of appeals involving agency employing Administrative Law decision of the Medicaid agency and determinations rendered by the FFE. Judges, and that delegation to any other thus no further right of appeal would be The permissible scope of delegation state agency still require an ICA waiver available to the individual. If the under § 431.10(c)(1)(ii) to an Exchange to ensure transparency and opportunity individual decided to appeal his or her or Exchange appeals entity is limited to for stakeholder input. A few advance payment of premium tax credit, appeals of MAGI-based eligibility commenters asked for clarification of cost-sharing reduction or Exchange determinations. Appeals related to the conditions and process required eligibility decision to the HHS appeals denials of eligibility for individuals when requesting an ICA waiver. One entity, that entity would need to adhere excepted from application of MAGI- commenter opposed delegation of to the Medicaid appeals entity decision based methodologies (for example, authority to conduct fair hearings to any under § 155.302(b)(5), as revised in this eligibility based on disability) may not other state or Exchange entity stating final rule, and § 155.345(h) which will be delegated under the regulation. As that any delegation is duplicative, as prevent inconsistent decisions between discussed above, states may delegate state agencies still will be required to the HHS appeals entity and the state- such appeals to another state agency, conduct Medicaid MAGI-based based Exchange or Exchange appeals including a state-based Exchange, by hearings. entity. requesting an ICA waiver. Response: Under proposed Comment: Many commenters Comment: One commenter asked § 431.10(c)(1)(ii), states would be able to requested clarification on the scope of whether there is a timeframe under delegate authority to conduct MAGI- fair hearings that may be delegated from which the individual must request a fair based fair hearings to an Exchange or a Medicaid agency to an Exchange or hearing before the Medicaid agency to Exchange appeals entity, but to delegate Exchange appeals entity. Commenters effectuate the requirement under Medicaid fair hearings to another state specifically requested clarification § 431.10(c)(1)(ii) that the state agency agency, states would need to request an regarding whether fair hearings of must provide an individual an option to ICA waiver. We sought comment on eligibility determinations on bases other have his or her Medicaid appeal whether states also should be permitted than MAGI may be delegated to an conducted at the Medicaid agency when to delegate authority to conduct fair Exchange or Exchange appeals entity, delegating authority to conduct fair hearings to another state agency under and whether findings other than MAGI- hearings to an Exchange or Exchange the regulation. based income determinations may be appeals entity. The purpose of the proposed rule is delegated to an Exchange or Exchange Response: An individual must be to promote coordination of appeals and appeals entity. provided the opportunity to opt to have simplification of the appeals process by Response: The term ‘‘MAGI-based his or her Medicaid appeal adjudicated permitting delegation of Medicaid determinations’’ is used to refer to at a hearing conducted at the Medicaid appeals to the Exchange or Exchange determinations in which financial agency, instead of having his or her appeals entity. Because coordination eligibility is determined using the appeal for both enrollment in a QHP between insurance affordability MAGI-based methods described in and eligibility for APTC and CSR and programs is a key goal of the Affordable § 435.603 of the March 2012 final eligibility for Medicaid addressed at an Care Act, we are finalizing, with minor Medicaid eligibility rule. However, in integrated hearing at the Exchange or modifications, the proposed regulations accordance with § 435.911(c) of the Exchange appeals entity. Section at § 431.10(c)(1)(ii) and at March 2012 final Medicaid eligibility 431.206(d) specifies that the individual § 431.205(b)(1)(ii) to permit delegation rule, a determination of eligibility based must be informed of how to exercise of authority to conduct Medicaid fair on MAGI also entails a determination this right. We note that we clarify our hearings for denials of MAGI-based that an individual meets the non- proposed regulation at § 431.206(d) to eligibility to the Exchange or Exchange financial conditions of eligibility, require that individuals must be appeals entity, including the FFE, state- including state residency and informed of this option in writing. We based Exchange or HHS or state-based citizenship or satisfactory immigration are revising the regulation text at Exchange appeals entity, provided these status, and the denial of eligibility for an § 431.10(c)(1)(ii) to clarify that the entities are government agencies or individual considered for coverage request for a hearing before the public authorities that maintain under a MAGI-based eligibility group Medicaid agency would need to be personnel standards on a merit basis. may be based on failure to meet any of requested instead of the Exchange After consideration of the comments, we the financial or non-financial conditions hearing. While we are not specifying a have determined not to extend authority of eligibility. A delegation of fair specific timeframe, we would expect to delegate Medicaid fair hearings to hearing authority under that if an individual was opting for a state agencies other than a state-based § 431.10(c)(1)(ii) to an Exchange or hearing before the Medicaid agency, that Exchange or an Exchange appeals entity Exchange appeals entity regarding a request would be made at the time that under the regulations because it is denial of MAGI-based eligibility will the individual is requesting a hearing. already allowed through an ICA waiver. need to address any or all of the bases Thus, we finalize these proposed We note that the main goal and of denial, just as a fair hearing regulations with these minor justification for the delegation of fair conducted by the Medicaid agency modifications. hearings under the regulation is to would. We note that we have made Comment: Many commenters believed achieve coordination across insurance some technical modifications to the that delegation of fair hearing authority affordability programs, something regulation text at § 431.10(c)(1)(ii) to under the regulation should be which would not be served by help clarify this point. As also noted in permitted. Some of the commenters delegation to another state agency. the preamble to the proposed rule, we emphasized the need to permit Furthermore, Medicaid agencies already remind states that while all appeals for delegation only in the simplest manner can delegate conduct of fair hearings to an individual with a MAGI-based reducing burden to the consumer, and other state agencies through an ICA eligibility determination may be without any duplication of appeals waiver, and there is nothing additional delegated to an Exchange or Exchange processes. A few commenters suggested that states would be able to accomplish

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through delegation under the regulation decision rendered by the Exchange or However, the hearing officer’s inclusion as opposed to an ICA waiver. Indeed, Exchange appeals entity conflicts with a of the wages and child support income the flexibility available to states under fair hearing decision concerning the in total MAGI-based household income an ICA waiver is greater than that which same individual rendered by the involves an application of MAGI-based is available under the regulation since Medicaid agency, the Exchange must methodologies, described in § 435.603 delegation of fair hearings under an ICA adhere to the Medicaid fair hearing of the March 2012 Medicaid eligibility waiver does not require that states decision. A number of commenters final rule, as implemented by the state, provide individuals a right to opt for a supported the limitation of the agency which would be reviewable as a hearing before the Medicaid agency, nor review process to conclusions of law. conclusion of law. In this case, the would the delegation be limited to One commenter requested that the inclusion of wages would be correct, but MAGI-related appeals. option be extended to findings of fact. the inclusion of child support income We have and will continue to apply Others recommend that the option be would be incorrect, and the agency similar conditions to the delegation of eliminated altogether. These upon finding such an erroneous fair hearings under an ICA waiver as commenters discussed that any review application of state or federal rules those we require under § 431.10(c) and by the state agency of a hearing officer’s could reverse the hearing officer’s (d). As explained in the proposed rule, legal or factual conclusions would decision to conclude that, based on an ICA waiver may be requested violate the due process protections household income of $800, the through a straightforward process using afforded under Goldberg v. Kelly to have individual is Medicaid eligible. a state plan amendment (SPA), and CMS the appeal decided by a neutral arbiter. Because of the important role that an staff is available to provide technical One commenter suggested that the impartial hearing officer plays in assistance to states in completing that regulation at § 431.10(c) specify the evaluating evidence and weighing process. We note that our rules relating timeframe in which the Exchange or credibility in making findings of fact, to hearing officers do not require that Exchange appeals entity be required to we are not extending the option at hearing officers be Administrative Law issue a decision for the state agency to § 431.10(c)(3)(iii) to include agency Judges or set any particular complete its review within the time review of findings of fact. We note that qualifications for hearing officers other limits set forth in § 431.244. fair hearings conducted under a than impartiality. States have flexibility Response: We are finalizing this delegation of authority in accordance to set such requirements in provision as proposed with minor with § 431.10(c)(1)(ii) must be implementing fair hearings as they see revisions to clarify the scope of the conducted in accordance with appropriate. Thus, we do not set review process. We note the provision at § 431.10(d)(1), which requires that the standards regarding the qualifications of § 431.10(c)(3)(iii) is a state option for delegation agreement between the hearing officers for states that delegate Medicaid agencies to establish a process agency and the Exchange or Exchange authority to conduct fair hearings or that permits a limited review of the appeals entity must set forth the specify rules if the state agency employs decisions made by the Exchange or responsibilities of each party to Administrative Law Judges in this final Exchange appeals entity to ensure effectuate the provisions of part 431 rule. Medicaid fair hearings are made with subpart E of the regulations. Section Comment: One commenter expressed the proper application of federal and 431.205(d) provides that the fair hearing concern that the proposal to remove state Medicaid law and regulations, process under subpart E must meet the § 431.10(e)(2) and (e)(3) weakens the including subregulatory guidance and due process standards set forth in single state agency authority when written interpretive policies. The Goldberg v. Kelly, 397 U.S. 254 (1970), delegating authority to conduct appeals proposed regulation text is being revised which requires that any review process to another agency. Other commenters to clarify the scope of what the agency be conducted by an impartial official, supported the removal of those may review would be limited to the and be based solely on the information paragraphs because they are legal conclusions made during the fair and evidence in the record. We have inconsistent with the goals of delegation hearing to ensure that they made a minor modification to of authority of appeals. appropriately apply federal and state § 431.205(b)(1)(ii) to clarify that the Response: We are finalizing our Medicaid law and regulations, including hearing process provided through proposal to remove paragraphs subregulatory guidance and written delegation of authority to conduct a fair § 431.10(e)(2) and (e)(3) as they are interpretive policies properly and that hearing to an Exchange or Exchange inconsistent with the option to delegate the review process be conducted by an appeals entity would include the review the authority to conduct fair hearings to impartial official who was not directly by the agency of the Exchange or an Exchange. We believe that the involved in the initial determination. Exchange appeal entity’s application of proposed language in § 431.10(e), which By way of example, suppose that the federal and state Medicaid law and we are finalizing without modification, Exchange hearing officer finds that an regulations, if such review is elected by clearly provides that only the Medicaid individual has $800 in wages and $200 the state under § 431.10(c)(3)(iii) and agency may develop and issue rules and in child support income each month conducted by an impartial official who policy related to the Medicaid program. and, based on these amounts, concludes was not directly involved in the initial Comment: Several commenters that the individual’s MAGI-based determination. We note also that the requested clarification of the kinds of household income is $1,000 per month. state’s election under § 435.10(c)(3)(iii) conclusions of law that could be subject Suppose also that the applicable income to conduct this limited review does not to review by the agency under standard for the applicable household create a right for the individual to § 431.10(c)(3)(iii). They also asked how size for this individual is $900 per request or receive a de novo hearing the agency review process a state may month, and that the hearing officer before the agency. establish to decisions made by an upholds the initial denial of eligibility. The review process that can be Exchange or Exchange appeals entity The findings of $800 in wages and $200 established under § 431.10(c)(3)(iii) conducting Medicaid fair hearings of child support per month would be functions completely independently under this provision relates to the factual findings, which the Medicaid from the ‘‘trumping rule’’ at ‘‘trumping rule’’ at § 155.302(b)(5), agency could not review under the § 155.302(b)(5) of the Exchange which provides that if an appeals option provided at § 431.10(c)(3)(iii). proposed rule. The former comes into

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play when an individual’s fair hearing Exchange appeals entity reversed the effective retroactive to the date the has been delegated to, and is heard by, initial assessment and found the individual submitted his or her the Exchange or Exchange appeals individual to be potentially eligible for application to the Exchange (not the entity. The ‘‘trumping rule’’ at Medicaid. A few commenters sought date the application is reinstated) to § 155.302(b)(5) as modified by this clarification regarding the retroactive protect the effective date of coverage rulemaking and at § 155.345(h) is nature of the reinstatement effective as required under § 435.914 of the current invoked when the Medicaid agency has of the date the individual submitted the regulations (redesignated at § 435.915 in conducted the Medicaid fair hearing application to the Exchange. Another the March 2012 Medicaid eligibility relating to the appeal of a denial of commenter asked how this provision final rule). We also proposed a similar Medicaid eligibility and the Exchange or relates to the timeliness requirements application reinstatement provision for Exchange appeals entity also has for Medicaid agencies to process an CHIP at § 457.340(a), which we are conducted a hearing related to an appeal application under § 435.912 of the finalizing as proposed with a minor of an award of advance payments of March 2012 Medicaid eligibility final modification to remove the reference to premium tax credits. Similar to the rule. A few commenters raised a § 435.909 which was inadvertently ‘‘trumping rule’’ at § 155.302(b)(5) of the concern that if an Exchange appeals inserted in the proposed rule and has no March 2012 Exchange final rule relating entity hearing officer upholds the relationship to CHIP. We note that states to initial eligibility determinations, if finding of eligibility for advance also will need to develop reasonable the Medicaid agency’s fair hearing payment for premium tax credit, the timeliness standards for such reinstated decision conflicts with the Exchange reinstatement would not take effect. applications in accordance with appeals decision, the Exchange must These commenters recommended that § 457.340(d) of the March 2012 adhere to the Medicaid agency or fair the Medicaid application be reinstated Medicaid eligibility final rule. hearing decision for Medicaid eligibility whenever an individual files an appeal We have not modified the proposed under § 155.302(b)(5) and § 155.345(h). with the Exchange or Exchange appeals regulation text to reinstate the Medicaid Finally, we do not believe it is entity to capture a broader set of or CHIP application of every individual necessary to require in the Medicaid individuals who may be eligible for who has withdrawn his or her Medicaid regulations specified timeframes within Medicaid or CHIP. or CHIP application in accordance with which an Exchange, in conducting a Response: We appreciate the support § 155.302(b)(4) of the March 2012 delegated fair hearing, must transmit a for the provision at § 435.907(h) to Exchange final eligibility rule and who decision to the Medicaid agency. reinstate the Medicaid application of an then subsequently appeals the Instead, as part of the agreement determination of eligibility for advance required under § 431.10(d), in individual who has withdrawn his or payments of the premium tax credits or delegating the fair hearing authority to her Medicaid application upon initial cost-sharing reductions at § 435.907(h) the Exchange or Exchange appeals assessment of Medicaid ineligibility by and § 457.340(a). We believe that the entity, the parties will need to stipulate the Exchange, but who is subsequently interests of individuals filing an each party’s responsibilities to ensure assessed as potentially Medicaid eligible Exchange appeal who should have been that the time frames established under following an appeal related to an award assessed as potentially Medicaid eligible § 431.244(f) are met. of advance payments of the premium Comment: One commenter sought tax credits or cost sharing reductions. by the Exchange, but who nonetheless clarification of whether the review We are finalizing this provision as withdrew their Medicaid application process of appeal decisions made by the proposed, except to clarify that the 45- following the Exchange’s assessment, Exchange which the commenter day or 90-day timeliness standards do will be protected through the Exchange expressed as ‘‘required’’ at not apply to these reinstated appeals process because the Medicaid § 431.10(c)(3)(iii) is considered in the applications. By the time the Exchange application for those assessed agency’s quality assurance Payment appeal decision is rendered, 45 or 90 potentially Medicaid eligible will be Error Rate Measurement (PERM) days from the date of application may reinstated, and their account transferred sampling. already have elapsed, making to the Medicaid agency for a full Response: The regulation at compliance by the Medicaid agency determination. On the other hand, to § 431.10(c)(3)(iii) does not set a unrealistic. Instead we clarify that the reinstate the Medicaid application of requirement, but provides states an timeliness standards required under every applicant for whom the Exchange option to establish a review process of § 435.912 of the March 2012 Medicaid appeals processes ultimately confirms appeal decisions as a part of its eligibility final rule apply based on the the initial assessment of Medicaid oversight of the delegation of authority date the application is reinstated. ineligibility made by the Exchange— to conduct fair hearings to an Exchange However, we note that the 45 and 90 regardless of how high above the or Exchange appeals entity. We note the days prescribed in the regulation Medicaid income standard the agency has other means to oversee its represent the outer limit for all individual’s income may be—would delegation of authority to conduct applications. In the case of a reinstated create confusion for individuals and hearings. Implications for PERM are application which has been the subject impose, we believe, unnecessary beyond the scope of this regulation; we of an Exchange appeal, we would expect administrative burden on state Medicaid intend to issue additional guidance on that the individual’s electronic account agencies. We expect to work closely PERM. would be comprehensive, and that with Exchanges to ensure accurate Comment: Many commenters considerably less time would be needed assessments of Medicaid and CHIP supported the reinstatement of an for the Medicaid agency to act on the eligibility in accordance with federal individual’s Medicaid application at case. We would expect states to take this regulations. § 435.907(h) when the individual had into account in establishing timeliness Comment: One commenter sought withdrawn his or her application after standards for prompt determinations on clarification of when Medicaid agencies an assessment of Medicaid ineligibility reinstated applications under will have to decide whether or not to by the Exchange, appealed the level of § 435.911(c) and § 435.912 of the March delegate eligibility determinations or APTC and CSR awarded by the 2012 Medicaid eligibility final rule. The fair hearings to the Exchange, and Exchange, and the Exchange or reinstated application must be made whether there will be additional

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requirements if the agency chooses not hearings in the same manner as any receive notices regarding fair hearings to delegate such responsibility. other context and is not affected by the electronically, consistent with proposed Response: There is no deadline to state’s delegation decision. § 435.918. We note that we are not elect to delegate eligibility Comment: A few commenters addressing in this final rule comments determinations or appeals to an suggested that we revise § 431.240 to related to accessibility of fair hearing Exchange or Exchange appeals entity. require that hearing officers who notices. We will consider these As discussed in section II.A.6. of adjudicate Medicaid fair hearings abide comments and this portion of preamble, the regulation permitting by specific ethical standards, either the § 431.206(e) when we finalize our rules delegation of eligibility and fair hearings National Association of Hearing related to accessibility for individuals goes into effect on October 1, 2013. Officials’ Model Code of Ethics or the who are limited English proficient and Once a state decides to delegate National Association of Administrative individuals with disabilities in a future authority to conduct eligibility or Law Judiciary’s Model Code of Judicial rulemaking. We also proposed appeals, it must indicate such an Conduct for State Administrative Law modifications to §§ 431.211, 431.213, election through the state plan, establish Judges. We did not receive any 431.230, and 431.231 to update and a written agreement with the Exchange comments related to our proposed modernize the language in the or Exchange appeals entity, and modification of § 431.240 related to regulation to remove the term ‘‘mail’’ otherwise comply with the provisions access to information. and instead use ‘‘send,’’ to reflect the set forth in the regulation. A state may Response: As discussed above, option for beneficiaries to receive revoke its delegation at a later time existing regulation at § 431.240 require notices electronically, consistent with through the same process. Whether or hearing officers to be impartial. the consumer protections in proposed not a state chooses to delegate authority, Additionally, existing regulations at § 435.918. We proposed in it must comply with the provisions of § 431.205 require hearing systems to § 457.110(a)(1) the same consumer § 435.1200, § 457.348 and § 457.350, comport with due process standards of option and protections for electronic issued in the March 2012 Medicaid Goldberg v. Kelly, 397 U.S. 254 (1970). notices in CHIP, and we are making eligibility final rule, to ensure Current regulations do not require technical changes in the final rule to coordination across all insurance hearing officers to belong to a particular better align the provisions. A affordability programs and a seamless profession, and we did not propose to modification was also proposed to consumer experience. We proposed modify this policy in the proposed rule. paragraph (a) in § 457.110 regarding the revisions to these provisions in the Therefore, we are not making any accessibility of information for January 2013 proposed rule to address changes to § 431.240 in response to this individuals who are limited English the agencies’ responsibilities to comment. However, as noted above, we proficient and individuals with coordinate notices and appeals, but are are addressing this comment, in part, by disabilities. However, we will finalize not finalizing them in this final rule. including that an impartial decision- this provision in future rulemaking. Comment: One commenter questioned maker must be used if a state is electing We received many comments whether a state might be able to obtain to establish a review process of legal the enhanced matching funds for regarding the requirement to provide conclusions made by hearing officers individuals with the option to receive systems enhancement at a 90/10 match operating under delegated fair hearing for enhancement of their appeals notices electronically, the majority of authority. We also encourage states to which supported this option as an systems. Another commenter asked for examine this issue further and to ensure clarification as to whether federal important part of modernizing the that the requirement to utilize impartial financial participation (FFP) would be notification process provided that strong hearing officers at § 431.240 are adhered available for appeals delegated to an consumer protections are in place. to when conducting fair hearings. We Exchange. Comment: We received many Response: The enhanced FFP match finalize § 431.240(c) without comments regarding proposed rate of 90/10 for the design, modification. § 435.918(a)(1), which would require the development, and installation of 3. Notices agency to confirm by regular mail the eligibility systems is available only for individual’s election to receive notices a. Electronic Notices (§ 435.918) components of the Medicaid electronically. Some commenters Management Information System Current notice regulations require recommended, instead, allowing (MMIS), including eligibility and paper-based, written notices. To electronic confirmation for individuals enrollment systems through the end of establish a more timely and effective applying on-line. One commenter 2015, subject to meeting the seven notification process, proposed § 435.918 suggested that in states with a FFE, the conditions and standards outlined in would direct states to provide FFE should be responsible for issuing the April 19, 2011 final rule at 74 FR individuals with the option to receive all mailed confirmations. Also, several 21950. A 75/25 match rate is available notices through a secure, electronic commenters were concerned that the for operations and maintenance of these format in lieu of written notice by proposed written confirmation actually systems. Appeals systems do not qualify regular mail. Consumer safeguards were required individuals to choose receipt of for enhanced funding under these rules. proposed to ensure that individuals electronic notices twice, and that this Instead, FFP at a 50/50 rate is available. make a conscious choice to receive would be confusing and burdensome for For more details on 75/25 match rate notices in electronic format, and would the agency and these consumers. Many discussion, see http:// be able to opt-in and opt-out of their other commenters encouraged CMS to www.medicaid.gov/State-Resource- election. We solicited comments maintain the requirement to confirm an Center/FAQ-Medicaid-and-CHIP- regarding the proposed consumer individual’s election through regular Affordable-Care-Act-ACA- safeguards. In addition, we requested mail to ensure that individuals have Implementation/Downloads/Affordable- comments on whether other types of made an informed decision, and to Care-Act_-Newest-Version.pdf. The communications, in addition to provide them with an opportunity to availability of FFP and responsibility for eligibility notices, should be offered in change their election. One commenter funding subject to cost allocation rules electronic format. We are finalizing suggested that the mailed confirmation applies to administration of fair § 431.206(e), to permit beneficiaries to include a list of the types of notices that

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the agency will send in electronic Comment: Several commenters electronic notices are likely to increase format. requested that electronic notices be the receipt of important eligibility Response: Proposed section default method for notice delivery such information, as individuals will have § 435.918(a)(1), redesignated that if an individual fails to indicate greater flexibility to access notices § 435.918(b)(1) in our final rule, requires whether he or she prefers an electronic regardless of changes to their postal the agency to send, via regular mail, or paper format for notices, notices address. written confirmation that an individual would automatically be provided Comment: We received a few has elected to receive electronic notices electronically. One commenter comments that recommended we amend and that forthcoming notices will be suggested that electronic notices should § 435.918 to include specific language delivered electronically. This be the default for specific populations, noting the importance of ensuring that communication must also instruct the such as those individuals determined the notice must be accessible to persons individual on how to change this eligible through an Exchange Web site. who are limited English proficient and election if the individual made the Response: We maintain that electronic individuals with disabilities. initial choice inadvertently or wishes to notices should be provided only if the Response: We agree that all eligibility change his or her mind. The purpose of individual affirmatively opts for such notices must be accessible to persons the mailed communication is to affirm notices. The default approach makes an who are limited English proficient and the individual’s choice and allow the assumption that the individual has the individuals with disabilities, and we individual an early opportunity to opt- technology to regularly retrieve notices will be addressing such rules in future posted to his or her electronic account. out of receiving notices in electronic rulemaking. Even if an individual applies through an Comment: One commenter requested format. The individual does not have to Exchange Web site, the individual may clarification on what constitutes an respond to this written notice to not have regular access to technology to ‘‘undeliverable’’ communication in complete his or her election to receive enable ongoing retrieval of electronic § 435.918(a)(5). electronic notices; he or she need only notices. Consequently, we do not Response: ‘‘Non-delivery reports’’ are respond if he or she wanted to change believe this change is appropriate at this system messages that report the delivery the initial election. Therefore, there will time as it could pose a barrier to status to the sender. We expect that if not be any need for individuals to applicants and beneficiaries with the agency receives a non-delivery request electronic notices twice, as some limited access to technology. report, this constitutes an undeliverable commenters thought. We are clarifying Comment: Several commenters communication. at § 435.918(b)(1) of the final regulation recommended that Medicaid and CHIP Comment: One commenter requested that it is the agency’s responsibility to eligibility notices be provided in both clarification regarding how to date a ensure that the individual’s election to electronic and in paper format until an paper version of an electronic notice. receive notices electronically is individual indicates in writing that they When an electronic communication is confirmed by regular mail, since the no longer wish to receive such notices undeliverable, indicating an individual individual will receive all future by regular mail. Some commenters also may not be aware of an electronic notice communication from the Medicaid recommended that all notices regarding posted to his or her account, agency including information on how to adverse actions always be sent in paper § 435.918(a)(5) requires that the agency establish an electronic account with the format via regular mail to allow for send a paper version of the electronic state, if he or she has not already done additional protection against delivery notice within three business days. The so. If a different arrangement makes error. One commenter recommended commenter, noting the ability to send more sense in a given state, the that hearing scheduling notices should the paper version of the electronic Medicaid agency and Exchange can always be sent via regular mail to ensure notice within 24 hours, supported delegate this responsibility to the other adequate hearing slot availability. maintaining the same date on both agency in the agreement entered into Response: We are concerned that notices. under § 435.1200(b)(3). We are not requiring agencies to provide dual Response: It is important for the date requiring that this communication electronic and paper notices may pose of the paper notice to reflect the date it specify which types of notices will be an administrative burden for some is sent, not the date of the undelivered delivered in electronic format, but states. While we require that agencies electronic notice. We anticipate that suggest that states take this under provide individuals with a choice to while some states may be able to issue consideration as it would enable receive notices in electronic format in a paper version of the electronic notice individuals to better anticipate the type lieu of paper format, at state option, all within 24 hours, other states may take of notices that will be posted to an notices or a subset of notices, such as up to the required limit of 3 days. electronic account. We anticipate, based those relating to adverse actions, could Individuals are given a limited time to on one state’s experience piloting be provided in dual formats. We take action, such as requesting a date for electronic notices, few individuals will appreciate the concern expressed for a hearing, and this is based on the date revert back to paper notices. However, ensuring consumer protections against the notice is sent to the individual. given that electronic notification will be delivery error. In § 435.918(a)(4), the Comment: One commenter requested a new approach for many individuals, agency is required to send an email or clarification as to whether agencies are we believe this is an important other electronic communication alerting required to monitor an individual’s consumer protection to ensure that the individual that a notice has been account to determine if a notice was individuals make a deliberate choice posted to his or her account. To guard accessed. regarding the format in which they against delivery error, if the required Response: We are not requiring that receive information. In future years, alert is returned as undeliverable, the agencies monitor accounts to determine when electronic notices are more agency must send such notice by regular whether notices are accessed. If the prevalent, we will revisit whether mail within three business days of the electronic alert is not undeliverable, the written confirmation of the individuals date of the failed electronic agency should assume an individual is choice to receive notices in electronic communication. This requirement has able to access his or her notice. format is still a relevant consumer been further clarified by a revision to Comment: One commenter protection. § 435.918(a)(5). We believe that recommended that we include a

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requirement that allows the agency to place to offer beneficiaries and b. Coordinated Notices (§ 435.1200) limit the number of times an individual applicants the option to receive notices For individuals whose electronic can request that an electronic notice be electronically. We have amended account is transferred to the Medicaid provided in paper format. § 435.918(a) to delay the requirement to agency for a determination of eligibility Response: We believe that it is an provide notices electronically until from another insurance affordability important consumer protection to allow January 1, 2015, but permit states to program, § 435.1200(d)(6) of the March individuals to request notices in a paper implement October 1, 2013 if their 2012 Medicaid eligibility final rule format. Some individuals may not have systems are ready. directs that the Medicaid agency notify the technology available to readily print Comment: One commenter suggested such other program of its final notices from an electronic account. determination of eligibility or Comment: A number of commenters that we clarify whether ‘‘send’’ in ineligibility only for individuals who supported offering additional types of § 431.230 means send by mail or in have enrolled in the other program communications through an electronic electronic format consistent with pending completion of the agency’s format. In addition to eligibility notices § 435.918. final determination. We proposed to and information specified in subpart E Response: Under proposed redesignate and modify this requirement of part 431, there are other § 431.206(e), all information required at § 435.1200(d)(5) to require that the communications that occur between an under subpart E of part 431 must be Medicaid agency notify the other individual and the Medicaid or CHIP provided in electronic format in program of the final determination of agency. Some of these communications accordance with § 435.918, if an Medicaid eligibility or ineligibility for include requests for additional individual elects to receive such all individuals whose electronic account information, annual renewal forms and information in electronic format. To was transferred from another insurance reminders, premium payment further clarify, we have added to affordability program. The same information, and information on § 431.201, that the definition of ‘‘send’’ requirement was proposed for CHIP at covered services. means deliver by mail or in electronic § 457.348(d)(5). No comments were Response: We do not believe it is format consistent with § 435.918. received regarding these specific necessary to amend § 435.918(a) to provisions. We also proposed a number include other types of communications. Comment: One commenter requested of other changes to § 435.1200 and In § 435.918(a), we specify that clarification regarding § 431.231(c)(2), § 457.348 relating to coordination of eligibility notices and information in which provides beneficiaries 10 days to notices and appeals. In this final rule, part 435, and notices and information request a hearing from receipt of the we are codifying § 435.1200(d)(5) of the required under subpart E of part 431, be notice of action. The date on which the proposed rule at paragraph provided in electronic format. For notice is received is considered to be 5 § 435.1200(d)(6). Other proposed example, information on covered days after the date on the notice, unless changes to § 435.1200 of the March 2012 services must be available electronically the beneficiary shows that he or she did Medicaid final eligibility rule, including in addition to paper format, as required not receive the notice within the 5-day the redesignation of paragraph (d)(6), as by § 435.905(a). Annual renewal forms period. The commenter specifically appropriate, will be addressed in must also be offered in electronic format requested clarification regarding how an subsequent rulemaking. We are also in accordance with § 435.916. We do not individual might show proof that they finalizing proposed § 457.348(d)(5) as think it is appropriate or operationally did not receive an electronic notice § 457.348(c)(6), but other proposed feasible to require other types of within the 5-day time period. changes to § 457.348 will be addressed communications to be provided Response: We understand the concern in subsequent rulemaking. electronically. We encourage states with expressed by the commenter, but do not the capacity to provide additional believe that this issue is specific to the 4. Medicaid Enrollment Changes Under communications electronically, and receipt of electronic notices, but receipt the Affordable Care Act Needed To with beneficiaries preferring that mode of notices in general. It is challenging Achieve Coordination With the of communication, to do so, as long as for an individual to provide proof of a Exchange in compliance with any existing negative, however, it is important to a. Certified Application Counselors regulations that govern the type of provide individuals with the (§ 435.908 and § 457.340) communication. opportunity to demonstrate that they Comment: One commenter asked did not receive notices. One example of Many state Medicaid and CHIP whether proposed § 435.918(b), which how an individual might demonstrate agencies have a long history of asserts that the agency may only provide that he did not receive an electronic supporting providers and other electronic notices if the individual eligibility notice is by providing organizations to assist individuals in elected to receive electronic notices and documentation that he closed the email applying for and maintaining coverage. must be permitted to change such account on record with the agency. If an Commonly referred to as ‘‘application election at any time, is duplicative of individual cannot receive the emailed assisters’’ and referred to in this paragraph § 435.918(a). alert that a notice is posted to the rulemaking as ‘‘certified application Response: We agree with the electronic account, the individual is not counselors,’’ these organizations and commenter, and the provision has been in receipt of the notice. individuals provide direct assistance to amended by removing redundant individuals seeking coverage, and can Comment: A few commenters language in § 435.918(b)(1) and play a key role in promoting enrollment requested that we define whether the ‘‘5 § 435.918(b)(2). among low-income individuals. The Comment: A number of commenters days’’ § 431.231(c)(2) refers to calendar proposed regulations at § 435.908(c) requested a later effective date for days or business days. sought to ensure that certified implementing electronic notices. Response: We are not defining application counselors, whom we Response: We recognize that states are whether the ‘‘5 days’’ refers to calendar expect to continue to play an important at different places in the development of days or business days, but allow states role in facilitating enrollment in the their eligibility and enrollment systems, the flexibility to define this in their expanded coverage options available and that the technology needs to be in operating procedures. under the Affordable Care Act, will have

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the training and skills necessary to § 435.908(c)(3)(i). Although not certified application counselors as a tool provide reliable, effective assistance to required, states may elect to develop in meeting their responsibilities to make consumers. We proposed basic these portals to support the work of their programs accessible to individuals standards for states to certify certified application counselors. with limited English proficiency and application counselors, which we Comment: One commenter requested individuals with disabilities. But, while believe are consistent with the practice that we issue guidance on the some organizations providing in many states today. These standards availability of federal funding to help application assistance to individuals include proposed procedures to ensure support grants or payments to certified applying for coverage under an that these trained certified application application counselors—in particular insurance affordability program may be counselors have clear authority to information about how Medicaid subject to civil rights laws independent access and protect confidential administrative claiming can be used to of the fact that they are serving as a information about individuals they match community-based investments in certified application assistor (for serve, and with that authority have a application assistance. example, as a condition of accepting special relationship with the Medicaid Response: FFP is available for state federal funding), we do not believe it agency that enables the counselors to expenditures to certify and support appropriate to hold them responsible for track and monitor applications. The certified application counselors, but, meeting the accessibility standards proposed regulations at § 435.908(c), as since community-based application established for state Medicaid and CHIP finalized in this rulemaking, are counselors are not state or local agencies under our regulations. applicable to CHIP, as well under employees, FFP is not available for Moreover, to require a community § 457.340(a) of the March 2012 salaries or other direct costs of certified organization or provider with a mission Medicaid eligibility final rule; no application counselors. to provide targeted assistance to one revisions are needed or made to Comment: Many commenters segment of the population to also be § 457.340(a). We received the following requested that we require that certified able to provide assistance to all others, comments concerning the proposed application counselors be trained to would threaten the participation of certified application counselor provide culturally and linguistically valuable state partners in maximizing provisions: competent services. They believed that enrollment across the state’s entire Comment: We received a few it is not sufficient to remind Medicaid population. comments expressing support for the and CHIP agencies of their Comment: Some commenters proposed requirement that states have a responsibility to ensure access to supported the option provided to states designated web portal for use by individuals with limited English to certify application counselors. These certified application counselors that has proficiency and those living with commenters pointed to existing a secure mechanism for granting rights disabilities, and urged us to provide programs in which states work with for only those activities the certified states with specific guidance and community organizations to expand application counselor is certified to examples of how to fulfill this enrollment, and that state flexibility to perform. Commenters stated that such a responsibility. Some commenters continue current, successful programs is portal will increase the proportion of recommended that to be certified, important. Other commenters applications that are submitted application counselors must be trained recommended that certification of electronically, thereby providing more in providing culturally and application counselors be required for applicants with access to electronic linguistically appropriate services. all Medicaid and CHIP agencies. These verification and real-time eligibility Some commenters recommended that commenters discussed that there will be while increasing the state’s we require training for application organizations providing application administrative efficiency. Other counselors include accommodating the assistance in every state, that these commenters also recommended a health care needs of specific organizations need to be trained, and clarification that states may use the populations, such as children. that consumers need to know who is same portal for Navigators and non- Response: Consistent with title VI of available to provide competent Navigator assistance personnel the Civil Rights Act of 1964, the assistance. authorized under 45 CFR 155.205(d) Americans with Disabilities Act, and Response: We agree that a network of and (e) with proper assignment of rights other civil rights laws, state Medicaid application counselors can be a valuable and functionality. and CHIP agencies must ensure that asset and can support states’ outreach Response: We appreciate the support their programs are accessible to and enrollment efforts. We urge all for the establishment of a designated individuals with limited English states to consider working with web portal for use only by properly proficiency and individuals with interested organizations and providers trained and certified application disabilities. This responsibility is in creating an application counselor counselors. However, given the systems codified, in part, at § 435.905(b), program. However, we believe states are challenges states face in preparing for § 435.907(g), § 435.908(a), and § 457.330 best able to determine the need for such the initial open enrollment period and (incorporating by reference the a program, and we do not believe it is starting up the new system of insurance requirements of § 435.907) of the March necessary to require that state Medicaid affordability programs, we are 2012 Medicaid eligibility final rule, and programs create such programs. concerned that requiring such a portal is also contained in non-Medicaid Comment: We received a number of could disrupt well-functioning specific regulations implementing the comments on certified application application counselor programs that Americans with Disabilities Act and counselors and requirements related to exist today. Therefore, while we other civil rights laws. Note that conflicts of interest. Some commenters encourage states to consider such clarifying changes were proposed in the stated that in addition to receiving portals as an effective vehicle for January 2013 proposed rule to the training on conflict of interests, certified administering and overseeing certified accessibility standard in § 435.905(b); application counselors should be application counselor programs, we are those proposed changes are not contractually required to serve in the removing from the final rule the addressed in this final rule, but we best interests of clients and to disclose requirement that such portals be intend to address them in subsequent any existing relationships with qualified established as proposed at rulemaking. State agencies can use health plans or insurance affordability

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programs to consumers. Some inefficient to maintain separate systems counselors certified by another program. commenters recommended that health of assistance. To the extent to which an application insurance issuers, their subsidiaries and Response: States may be able to use counselor is certified by one program licensed insurance brokers and agents certified application counselors to help but not the other, the counselor would be explicitly excluded from being meet the outstationing requirements set assist the individual in submitting the certified as certified application forth in current regulations at § 435.904, single streamlined application for all counselors given their inherent financial under which state Medicaid agencies insurance affordability programs to the conflict of interest. are required to provide pregnant women entity by which they are certified. It is Response: We are clarifying the and children an opportunity to apply for important to note that regardless of the language in § 435.908(c)(1)(iii) to make coverage at designated ‘‘outstation entity to which the application clear that certified application locations.’’ Section 435.904(e) requires counselor submits the application, the counselors must adhere to all rules that, except for outstation locations that application will be evaluated for prohibiting conflicts of interest. States are infrequently used by the pregnant eligibility in QHPs and all insurance may not certify any organization or women and children targeted under the affordability programs. individual who does not meet this regulation, the state agency must have Comment: One commenter requested standard, or who may be motivated to staff available at each outstation more information about the act in a manner contrary to best interest location. Under paragraph (e)(3) of that development and review of training of the individual being helped. Thus, section, properly trained provider or materials for certified application any organization that the state finds to contractor staff or volunteers—which counselors. This commenter stated that have an inherent conflict could not, could include organizations, staff and although the regulations provide that under the proposed regulation, be volunteers certified as application any individual providing customer certified as an application counselor. counselors—may be used in lieu of, or service must be trained in a host of areas We do not believe it necessary or as a supplement to, agency staff to meet related to the insurance affordability appropriate to identify specific types of this requirement, subject to certain programs, no specificity is provided organizations as categorically barred conditions set forth in the regulation. about the development and review of Comment: Commenters asked for from serving as application counselors the materials, and they requested clarification on the overlap of functions and are finalizing this regulation as clarification on whether states will have and certification requirements between proposed. the opportunity to review and comment Comment: A few commenters certified application counselors in on materials prior to their use. We also requested that we require states to Medicaid and application counselors as received comments that recommended maintain a current list of certified proposed for the Exchange at § 155.225. we require certified application application counselors on the agency Response: Although the exact Web site, and the list should include language of the Exchange application counselors to apply for recertification any limitations on services that they are counselor regulation at proposed 45 annually or biannually to ensure that certified to provide. Commenters CFR 155.225 (which is not being they are qualified and up to date on suggested that it will be important for finalized in this rulemaking) and that of changes in policy and procedures. consumers to not only be informed of the Medicaid regulation at § 435.908(c) Response: Under § 435.908(c)(1)(ii) the functions and responsibilities of differ, the policies reflected are and (iii), states must ensure that certified application assisters, as consistent. The main substantive application counselors are properly required in § 435.908(c)(3)(i), but to also difference is that the Exchange trained prior to certification, and we know who is certified and whether there regulation at proposed 45 CFR 155.225 expect states will need to develop are any limitations on the services each would not permit certified application training and any training materials to be certified application counselor is counselors to limit the activities that used to satisfy this requirement. We certified to provide. they agree to perform, but instead would note that materials will be developed by Response: We encourage states to require them to perform all assistance HHS for use by certified application adopt the practice recommended by the activities identified in the regulation, counselors registered with an FFE, commenter, as an effective mechanism whereas states can permit Medicaid and including State Partnership Exchanges, to connect consumers with needed CHIP application counselors to elect to and state Medicaid and CHIP agencies assistance. However, utilization of limit the activities which they will may adapt such materials to support certified application counselors is at perform for applicants. their training efforts. FFP is available for state option, and while we believe such As noted in the preamble to the costs to the state of conducting training a mechanism will enhance consumers’ proposed rule, we remind the or testing of certified application ability to identify resources available to commenters that state Medicaid and counselors, including any costs to the help with applications we do not think CHIP agencies and the Exchange are state for preparation and assembly of it appropriate to require states to post a charged under § 435.1200 and § 457.348 training materials. Being effectively current list of counselors on their Web of the Medicaid eligibility final rule and trained in the rules and regulations of site. We note that such a requirement proposed § 155.345 of the Exchange rule the different insurance affordability could deter some states from creating or to enter into agreements with each other programs in accordance with expanding their application counselor to create a seamless and coordinated § 435.908(c)(1)(ii) necessarily requires program if they do not have the application and enrollment process keeping abreast of any pertinent changes resources to create and maintain such a across all insurance affordability in those rules, and under these list. programs, and the state agencies and the regulations states will need to ensure Comment: A commenter asked CMS Exchange should consider such that application counselors are kept up- to clarify that states can meet their coordination in developing their to-date. However, there are different outstationing requirements under application counselor programs. States ways to accomplish this goal—annual or § 435.904 with application counselors at could elect, for example, to create a periodic recertification is one-way, the appropriate locations. They single certification process for all refresher trainings or written suggested that given the overlap of insurance affordability programs, or communications may be another—and functions described it would seem each program could accept application we believe states should have flexibility

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in determining the process that best b. Authorized Representatives Comment: We received a number of works in each state. (§ 435.923) comments regarding who may serve as Comment: A few commenters We proposed regulations intended to an authorized representative. One recommended that applicants and be consistent with current state policy commenter recommended that enrollees be able to opt to designate and practice, regarding the definition, organizations should not be permitted to their certified application counselor to designation, and responsibilities of be designated as authorized receive copies of notices, or to access ‘‘authorized representatives’’ to act on representatives. Another commenter electronic notices in the client account. behalf of applicants and beneficiaries in recommended that we allow states to decide whether to permit organizations Response: As discussed in the applying for and maintaining coverage. Authorized representatives have to be authorized representatives. The preamble of the proposed rule, the commenter suggested that by permitting certified application counselor program historically provided valuable support to individuals needing help navigating only individuals to serve as authorized is not designed to provide the level of representatives, states will be better able the application and enrollment process, personal assistance to applicants and to ensure transparency and as well as ongoing communications beneficiaries that is provided by an accountability of the authorized with the agency, particularly to seniors authorized representative, discussed in representative. Another commenter and individuals with disabilities, and the next section in the preamble. recommended that we add a definition we expect their role to continue. We However, there is nothing to prevent an of organization to § 435.923(e) to clarify proposed to define the term ‘‘authorized applicant or beneficiary from what types of organizations may act as representative’’ as an individual or designating a certified application authorized representatives, for example, organization that acts responsibly on counselor to also serve as his or her only non-profit organizations. authorized representative, and for such behalf of an applicant or beneficiary in Response: We believe that there are counselor to assume that function, in assisting with the individual’s situations in which an individual may accordance with § 435.923, as finalized application and renewal of eligibility need an organization to serve as his or in this rulemaking. and other ongoing communications with her authorized representative and it is the Medicaid or CHIP agency. Under Comment: One commenter suggested appropriate for an organization to serve current regulations at § 435.907, in this capacity, such as for individuals that regulations governing application retained in the March 2012 Medicaid assistance are not necessary. The residing in a nursing home who do not eligibility final rule, states must accept have family available to assist them. We commenter believed that, absent any applications from authorized evidence that application counselors are finalizing the regulation as proposed representatives acting on behalf of an in this regard. Protections at proposed currently working in states to help applicant. We received the following individuals apply for Medicaid do not § 435.923(e), finalized in this comments concerning proposed rulemaking, are designed to ensure that have the training and skills necessary to provisions relating to authorized provide reliable, effective assistance to organizations serving as an authorized representatives: representative adhere to laws and consumers, or would not meet Comment: One commenter requested confidentiality requirements, there is no regulations relating to conflicts of clarification on whether states may interest and act in the best interest of reason to regulate state practices in this enforce additional requirements not area. the individual. specifically listed in the federal Comment: We received a number of Response: We recognize the regulations on authorized comments related to the timeframe for successful development of application representatives. An example of this designation of authorized assistor, or application counselor, would be state specific regulations representatives. One commenter programs by many states without the governing who may serve as an recommended that states be given existence of federal regulations, and authorized representative for options or flexibility in this area, have aimed to develop regulations that individuals who are not medically or explaining that states may wish to make will not disrupt existing, successful legally competent. the designation of the authorized programs and practice. However, given Response: Under proposed representative last for 12 months by the significant changes to the § 435.923(a), legal documentation of default, for example, unless the availability of and access to affordable authority to act on behalf of an applicant or beneficiary designates health coverage created under the applicant or beneficiary under state law, otherwise. Another commenter Affordable Care Act—including the such as a court order establishing legal recommended that we add that the advent of coverage in a QHP through the guardianship or power of attorney may authorization is valid until the Exchange, with premium tax credits and serve in place of a written designation application is denied or benefits are cost sharing reductions available to from the applicant or beneficiary, signed terminated and the appeal process is qualifying individuals, the coordinated and submitted in accordance with completed. eligibility and enrollment process § 435.923(f). Under the regulation, Response: Our regulations clearly required across all insurance however, states may not limit state that applicants and beneficiaries affordability programs, and the authorized representatives to are able to change authorized expansion in use of online applications, individuals identified in such a legal representatives at any time. States may with the possibility confidential document or granted authorization not make a designation automatically information being returned to under operation of state law or expire such that an individual would consumers in real time through an otherwise impose requirements other need to redesignate an authorized electronic interface—we believe that than those listed in § 435.923 on other representative after a given period of establishment of baseline federal individuals whom an applicant or time. However, they are allowed to standards, to be applied consistently beneficiary wishes to have serve as his provide beneficiaries with the across states and programs, is important or her authorized representative. We opportunity to change their authorized to safeguarding consumer interests and have separated the regulation text as representative at the renewal point. For ensuring the integrity of the assistance proposed at § 435.923(a) at example, states can indicate that a provided. § 435.923(a)(1) and § 435.923(a)(2). beneficiary has an authorized

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representative and remind the legal documentation to allow immigration status are detailed and individual that they may keep or change individuals or organizations to act as complex, and qualified entities cannot the representative on the renewal authorized representatives would be reasonably be expected to understand or document. difficult. Another commenter suggested explain them to individuals being asked Comment: One commenter asked for that legal documentation of authority to to attest their status. Some commenters clarification on whether the scope of the act on behalf of an application or stated that states should have the option authorization is defined by the beneficiary under state law, such as to request self-attestation of citizenship. beneficiary or applicant, or whether, court order establishing legal Response: We clarify that our once invoked, the representative guardianship or a power of attorney, proposed rule gave states the option to assumes all of the duties named in the should serve in place of written require qualified entities or qualified regulations, including ‘‘all other authorizations by the applicant or hospitals to request this information but matters’’ with either agency. beneficiary. did not require it. We believe that this Response: We clarify that the scope of Response: Under section § 435.923(a), option is important in the context of the authorization is defined by the legal documentation of authority to act extending the ability to conduct Medicaid applicant or beneficiary. on behalf of an applicant or beneficiary presumptive eligibility determinations Comment: We received a number of under state law, such as a court order to hospitals because it limits the comments on § 435.923(c), specifically establishing legal guardianship or power possibility that individuals who are not related to the fact that the designation of attorney may serve in place of the citizens or qualified immigrants or of an authorized representative can only applicant or beneficiary’s designation. residents of the state are found eligible be revoked in writing. Commenters The option to submit such on a presumptive basis, receive suggested that it would be more documentation is intended to enable expensive services, only ultimately to be appropriate and efficient to allow the applicants who do not have the capacity determined ineligible for Medicaid. designation to be revoked by all of the to provide a signature to authorize Therefore, we are retaining the language modalities by which it can be made in representation. as proposed and maintain this provision the first place. as a state option. Response: We agree with the 5. Medicaid Eligibility Requirements Comment: One commenter requested commenter’s suggestion and have and Coverage Options Established by that we add current foster care children revised the regulation text accordingly. Other Federal Statutes Comment: One commenter requested as a presumptive eligibility group in our a. Presumptive Eligibility for Children final regulation. clarification on whether the permissions (§ 435.1102) given the authorized representative may Response: We clarify that former be granted in part, for example in tiers, We proposed to revise existing foster children are already a population if an applicant so chooses. The regulations to align with the adoption of that is eligible to be determined commenter suggested that an applicant MAGI-based methodologies. presumptively eligible. We do not may wish to authorize someone to sign Comment: One commenter suggested currently have the authority to add his or her application, but not to receive that presumptive eligibility could be current foster care children as a his or her notices, for example. better streamlined by using only a gross presumptive eligibility group, but this is Response: We are clarifying that the income standard for eligibility unnecessary because current foster permissions given to the authorized determinations. children are automatically eligible for representative may be granted in part. Response: Current regulations allow Medicaid and do not need to be The proposed regulation allows states to use either gross income or to determined presumptively eligible. have qualified entities make a closer applicants and beneficiaries to designate b. Presumptive Eligibility for Other approximation of the countable family an individual or organization to act on Individuals (§ 435.1103) their behalf and that the scope of income, which would be used for a authorization is defined by the regular determination by the state Comment: Some commenters stated applicant or beneficiary. agency, by applying simple disregards. that states should have the option to Comment: One commenter asked us We believe it is appropriate to retain elect how many presumptive eligibility to confirm that the definition provided this flexibility for states once MAGI- periods should be allowed for each for authorized representatives is the based methodologies are in place. pregnancy. Others supported our same definition that the Social Security Therefore, we are codifying the proposed rule to permit only one Administration uses. flexibility of states in § 435.1102(a), as presumptive eligibility period per Response: We clarify that the proposed, to direct qualified entities to pregnancy. definition is not the same. use either gross income or to apply Response: We believe that providing Comment: A few commenters simplified methods, as prescribed by the pregnant women with one presumptive requested additional clarification state, to better approximate MAGI-based eligibility period per pregnancy is regarding situations in which an household income, as defined in reasonable in accordance with section individual is unable to personally elect § 435.603 of the March 2012 final rule. 1920 of the Act, under which pregnant an authorized representative due to Comment: Many commenters objected women may receive ambulatory medical incapacity. One commenter to the state option to obtain an prenatal care during a presumptive agreed that written designation by the attestation of citizenship or satisfactory eligibility period, defined as continuing individual or legal documentation immigration status, or state residency as through the date a full Medicaid should be obtained in most instances, part of a presumptive eligibility determination is made under the State but the proposed rule may be overly determination. They suggested that plan, or, if a woman does not submit a restrictive in that it could result in requiring an attestation of immigration regular application through the end of unreasonable delay in determining some status would likely deter some the month following the month during individuals’ eligibility for Medicaid. potentially eligible individuals who which the presumptive eligibility The commenter recommends that states often need urgent access to health care determination was made. Therefore, we be given the authority to waive this services from receiving care. Further the are finalizing the regulation as proposed regulation in instances when obtaining commenters suggested that the rules on to provide one presumptive eligibility

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period for pregnant women per Response: We are finalizing in proposed § 435.1110(c)(1) was not pregnancy. § 435.1110(d)(1) as proposed. Oversight intended to eliminate presumptive of qualified entities making presumptive eligibility determinations by hospitals c. Presumptive Eligibility Determined eligibility determinations, including for other populations included in by Hospitals (§ 435.1110) qualified hospitals under § 435.1110, is § 435.1103 (that is, former foster care We proposed to add § 435.1110 to a state responsibility. Under recipients or women with breast or implement section 1902(a)(47)(B) of the § 435.1110(d)(1), states may establish cervical cancer or individuals seeking Act, added by the Affordable Care Act, state-specific standards for qualified coverage of family planning services). to give hospitals the option to determine hospitals that conduct presumptive We are revising the regulation text at presumptive eligibility for Medicaid. eligibility determinations related to the § 435.1110(c)(1) to clarify that states The statute provides hospitals success of assisting individuals electing to limit the presumptive participating in Medicaid with this determined presumptively eligible who eligibility determinations which option whether or not the state has submit a regular application and/or are hospitals can make must permit the elected to permit qualified entities of approved for eligibility by the agency. hospitals to make presumptive the state’s selection to make We believe this is an area more eligibility determinations based on presumptive eligibility determinations appropriate for state flexibility, than for income for all of the populations for children, pregnant women or other imposition of a uniform federal standard included in § 435.1102 and § 435.1103. specific populations under other for all participating hospitals across all Under § 435.1110(c)(2), which we sections of the statute. states. Therefore, we are finalizing finalize as proposed in this rulemaking, We received the following comments § 435.1110(d), as proposed. We will states may also permit hospitals to make concerning the hospital presumptive monitor implementation and consider presumptive eligibility determinations eligibility provisions: whether further guidance is warranted. for populations for which income is not Per § 435.1110(d)(2), which we also Comment: We received many the only factor of eligibility (for are finalizing as proposed, state agencies comments related to the establishment example, for individuals who may be are required to take appropriate of standards under proposed eligible under an eligibility group based correction action for any hospital that on disability, or individuals eligible § 435.1110(d)(1) for hospitals that opt to does not meet the standards established under a demonstration project approved make presumptive eligibility by the state or which the state otherwise under section 1115 of the Act). determinations. Some commenters determines is not making, or is not Comment: A commenter expressed encouraged CMS to provide states with capable or making, presumptive that hospitals wishing to make maximum flexibility to implement eligibility determinations in accordance presumptive eligibility determinations presumptive eligibility standards for with state policies and procedures. In should be required to attend training on hospitals, while other commenters fulfilling their responsibility under policies and procedures established by stated that the Secretary should § 435.1110(d)(2), states may develop the states. The commenter suggested establish federal standards applicable to other proficiency standards, training that this was important to maximize the hospitals making presumptive eligibility and audits, with which hospitals would likelihood that eligible individuals determinations in all states. Other need to comply, to be authorized to complete the full Medicaid eligibility commenters supported the flexibility make presumptive eligibility process. They supported the proposed given to state agencies to establish determinations in the state. rule that states may require hospitals standards, and some stated that states Comment: We received many electing to make presumptive eligibility should have even broader authority to comments on the populations for which determinations to assist individuals in establish clear criteria and qualifications hospitals can make presumptive completing and submitting the full which hospitals would have to meet to eligibility determinations. Some application and understanding any make presumptive eligibility commenters stated that hospitals should documentation requirements. determinations. Some believe that the be allowed to make presumptive Response: In accordance with Secretary should establish minimum eligibility determinations for all of the § 435.1110(a) of the proposed rule, federal standards and qualifications, patient populations they serve. Some finalized as proposed in this with the state option to impose commenters recommended that states be rulemaking, states are required to additional standards. Commenters given the option to elect and limit the provide Medicaid during a presumptive generally requested additional guidance populations that may be determined eligibility period, to individuals who are to states on how they must work with presumptively eligible by hospitals. determined to be presumptively eligible hospitals that elect to make presumptive Some commenters stated that the by a qualified hospital, subject to the eligibility determinations. Finally, some preamble did not align with the same requirements as apply to the State commenters stated that the Secretary regulation text relating to this issue in options under §§ 435.1102 and 435.1103 should establish federal standards for the proposed rule. Many commenters regardless of whether the state hospitals that opt to make presumptive requested additional clarification on the otherwise has opted to provide eligibility determinations under populations for which hospitals may Medicaid during a presumptive § 435.1110 of the regulations, related to make presumptive eligibility eligibility period under either of those the proportion of individuals determinations. sections. While not necessarily determined presumptively eligible by Response: We intended to propose requiring establishment of a formal the hospital that submits a regular that qualified hospitals must be training program, current regulations at application and the percent of such permitted to make presumptive § 435.1102(b) require states to provide individuals who are ultimately eligibility determinations based on qualified entities with information on determined eligible by the agency. income for all of the populations for relevant state policies and procedures Commenters suggested that states which presumptive eligibility may be and how to fulfill their responsibilities should use the federal standards to available in accordance with § 435.1102 in making presumptive eligibility determine which hospitals are capable and § 435.1103. The specific reference determinations. This requirement is of making presumptive eligibility to children, pregnant women, parents unchanged in this rulemaking and will determinations. and caretaker relatives, and other adults apply in the case of hospitals electing to

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be a qualified hospital under § 435.1110. individual completes the eligibility application. At a minimum, states have If a hospital does not follow state process and is determined not ‘‘newly a responsibility to ensure that an policies and procedures, or is not eligible’’ or eligible for coverage under individual determined presumptively successful in helping individuals to the adult group. Commenters suggested eligible by qualified hospitals is submit regular applications in that enhanced federal funding is informed about how to apply and can accordance with standards established necessary because there will not be obtain an application. by the state, proposed § 435.1110(d)(2) sufficient information available to Comment: We received several would require states to institute determine whether the presumptively comments on the viability of appropriate corrective action, including eligible individual should be claimed at presumptive eligibility determinations (but not requiring) termination of the 100 percent federal funding or the with the advent of real-time eligibility hospital as a qualified hospital. We are state’s regular FMAP at the time of the determinations. One commenter revising proposed § 435.1110(d) by initial presumptive eligibility recommended that states should have adding paragraph (d)(3) to provide that determination. the latitude to require hospitals to use the agency may disqualify a hospital as Response: While we understand the the state’s online application system a qualified hospital only after it has first commenters’ concerns, there is no basis and determine presumptive eligibility provided the hospital with additional to provide the 100 percent FMAP during only if a real-time full eligibility training or taken other reasonable a presumptive eligibility period. The determination cannot be made. Another corrective action measures. state would receive the increased FMAP commenter suggested that if eligibility Comment: A few commenters provided under the Affordable Care Act can be determined in real-time, then requested that states should be able to only for individuals who the state there is no need for presumptive receive 100 percent FMAP for any determines actually (not presumptively) eligibility, and asked us to clarify recoupments or disallowances CMS may qualify for Medicaid under the adult whether the state could terminate use of seek related to an improper eligibility group and are determined to be ‘‘newly presumptive eligibility without determination by a hospital. One eligible.’’ The methodology for such violating the Affordable Care Act’s commenter questioned whether a state claims is set forth in the final FMAP Maintenance of Medicaid Eligibility can make a qualified hospital liable regulation (78 FR 19918). However, requirements, as added by section when a presumptive eligibility states may retroactively adjust claiming 2001(b) of the Affordable Care Act determination results in a denial for a to receive the enhanced matching rate (codified at sections 1902(a)(74) and full Medicaid category. for individuals determined 1902(gg) of the Social Security Act (the Response: Under existing regulations, presumptively eligible who Act). there is no recoupment for Medicaid subsequently complete a regular Response: We agree that the promise provided during a presumptive application, are determined by the state of real-time eligibility determinations eligibility period resulting from to be eligible for Medicaid under the makes the role of presumptive eligibility erroneous determinations made by adult group and are found to be ‘‘newly different than it has been in the past. In qualified entities. Payment for services eligible.’’ Such retroactive adjustment is guaranteed during a presumptive may extend back to the first month of situations in which the individual files eligibility period; without such a the month in which the regular a regular application right away, the guarantee, providers could not rely on application was filed or up to 3 months presumptive eligibility period would the determination. Under this provision, prior to the month of application in likely be considerably shorter—and states will not be permitted to recoup accordance with § 435.914 of the eliminated altogether, as a practical money from the hospital (and CMS will regulations (redesignated at § 435.915 in matter, if a real-time determination is not recoup FFP from the state). the March 2012 Medicaid final made. However, even with the most However, under § 425.1110(d)(2), a state eligibility rule). modernized systems, there inevitably may disqualify a hospital from Comment: One commenter requested will be individuals for whom a real-time conducting presumptive eligibility that we confirm that § 435.1110(b)(2) of eligibility determination will not be determinations if the state finds that the the proposed rule gives states the option possible. There also will be individuals hospital is not making, or is not capable to require that to participate as a who will not be comfortable with the of making, accurate presumptive qualified hospital, a hospital must assist online application, and will instead opt eligibility determinations in accordance individuals in completing and to use the paper application. In such with applicable state policies and submitting the full application and help situations and for such individuals, procedures. Such a disqualification is individuals understand any presumptive eligibility remains a useful permitted only after the state has documentation requirements. The tool to facilitate prompt coverage and provided additional training or taken commenter suggested that this function enrollment in the program. States have reasonable corrective action measures to is the same as that of an application flexibility to minimize the length of address the issue. Finally, we clarify counselor and requests clarification on presumptive eligibility periods by that states may not make a qualified whether a state could also require that requiring that hospitals and other hospital liable when an individual who a hospital that performs presumptive qualified entities assist individuals in was found presumptively eligible by the eligibility determinations must follow submitting the single streamlined hospital submits a full application and regulations in § 435.908 relating to application online. States may not is subsequently denied Medicaid certified application counselors. terminate use of presumptive eligibility eligibility. Response: Although we are not for pregnant women or individuals with Comment: Some commenters requiring hospitals that perform breast or cervical cancer prior to 2014 or requested that for individuals presumptive eligibility determinations for children prior to October 1, 2019 determined presumptively eligible by a to also furnish services of certified without violating maintenance of effort. hospital for the adult group under application counselors, states may Comment: One commenter requested § 435.119 of the March 2012 Medicaid impose specific requirements on clarification on how hospital final eligibility rule, a state should hospitals to ensure that they fulfill their presumptive eligibility will interact receive 100 percent federal funding for role in assisting individuals with with eligibility in breast and cervical services provided unless and until the completing and submitting the full cancer groups.

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Response: If a state has elected to Medicaid (or their children eligible for Response: We appreciate the provide presumptive eligibility for Medicaid or CHIP), they were told to operational challenges states face in individuals with breast or cervical return several months later and submit preparing for implementation of the cancer under § 435.1103(c)(2), it can a new application. Affordable Care Act, but we believe that limit qualified entities under that Response: We agree with the these effective dates are central to the section to providers which conduct commenters that acceptance of the success of open enrollment and we have screenings for breast and cervical cancer single streamlined application by state consistently targeted the October 1 date under the state’s Centers for Disease Medicaid and CHIP agencies starting in as we have worked with states to Control and Prevention (CDC) breast October 2013 is needed to ensure finance and develop their IT systems. and cervical cancer early detection coordination with the Exchange, and in We have identified a set of seven critical program (BCCEDP), and if it has done facilitating new coverage that will be success factors that states must meet by so, the state may limit hospitals which available to Medicaid-eligible eligible October 1 in an attempt to prioritize may determine presumptive eligibility individuals in January 2014. Therefore, what must be accomplished within this for individuals with breast or cervical we are finalizing the rule as proposed timeframe. We have regularly shared cancer on that basis to hospitals that and confirm that individuals may not be these with states via webinars, on the conduct screenings under the state’s required to return in January to reapply. CALT at https://calt.cms.gov/sf/go/ BCCEDP. In states that do not opt to Comment: Some commenters doc16369?nav=1, through State provide presumptive eligibility for expressed concern that it is Operational Technical Assistance individuals with Breast or Cervical unreasonable to require states to comply (SOTA) calls and in IT gate reviews. Cancer under § 435.1103(c), states with the prescribed time frames for These include the following: (1) Ability similarly may limit hospitals’ ability to coordinated enrollment with the to accept application data, (2) MAGI determine presumptive eligibility for Exchange in the proposed rule. They rules engine in eligibility system, (3) individuals with breast or cervical noted that states must make major MAGI Conversion, (4) Submission of cancer under § 435.1110 to those that policy, operations, and systems changes state income thresholds and flexibilities, conduct screenings under the state’s to implement federal requirements, (5) Connection to Federally Facilitated BCCEDP. which will impact agency eligibility Exchange (or establishment of State Based Exchange), (6) Connection to 6. Coordinated Medicaid/CHIP Open staff, vendors, clients, and other Federal Data Services Hub, and (7) Enrollment Process (§ 435.1205 and stakeholders. Pending final and Ability to confirm Minimum Essential § 457.370) complete federal guidance, it is a significant challenge for states to Coverage. We proposed to implement section We recognize the efforts that states are develop policies, design efficient 1943 of the Act and section 1413 of the making across a broad range of areas, business processes, build systems and Affordable Care Act to require that and have released regulations, new interfaces, and effectively Medicaid and CHIP agencies begin information technology (IT) guidance, accepting the single streamlined communicate changes to clients and funding opportunities, business process application during the initial open stakeholders by the proposed federal models and other tools to assist states as enrollment period to ensure a implementation dates. One commenter they design, develop, implement, and coordinated transition to new coverage noted that its state legacy system cannot operate new systems. We will continue that will become available in Medicaid process or transfer electronic accounts, to help states fully comply with all and through the Exchange in 2014. Our which means that the proposed rule has relevant eligibility and enrollment proposed rule seeks to ensure that no effectively shortened the timeframe to changes, as well as achieve the matter where applicants submit the implement its new eligibility system by necessary degree of interoperability single, streamlined application during 3 months. Another commenter noted between IT components in the federal the initial open enrollment period, they that Medicaid eligibility systems, and state entities that work together to will receive an eligibility determination policies and staff are not structured to provide health insurance coverage for all insurance affordability programs operate in a time-limited open through Medicaid and CHIP, and and be able to enroll in appropriate enrollment environment or to apply Exchanges. We are finalizing the coverage for 2014, if eligible, without competing eligibility criteria regulation as proposed. delay. concurrently, and cannot be changed to Comment: Several commenters Comment: Many commenters do so with only a few months’ notice. expressed concern that, in the states supported the proposal in Commenters recommended that which are relying on the FFE and will § 435.1205(c)(1) that Medicaid and CHIP Medicaid agencies not be required to not be ready to implement the single, agencies to begin accepting the single begin accepting streamlined streamlined application by October streamlined application and MAGI applications or determinations from the 2013, there is a significant risk that determinations from the Exchange and Exchange prior to January 1, 2014. people who apply for coverage through to process MAGI eligibility starting in Instead, during the initial open the FFE will be told that they are likely October 2013. Commenters believe this enrollment from October 1, 2013 to eligible for Medicaid or CHIP, and be is necessary to ensure coordination with December 31, 2013, commenters sent away without any real opportunity the Exchange, and to facilitate a requested that at state option, to enroll in coverage or complete the seamless transition to the new coverage individuals may be required to apply application process. These commenters that will become available in Medicaid separately to the Medicaid agency and recommended that HHS strengthen this and through the Exchanges in 2014. to the Exchange and to have their provision by setting forth a specific Many commenters acknowledged that eligibility determined by the timeframe and set of procedures that the public will be hearing about new corresponding agency. One state states must follow to ensure that they coverage options throughout the suggested, as an alternative, the are ready to implement the single, summer and fall of 2013, and expressed information exchanged will be limited streamlined application when open concern that it would result in to only the Medicaid-specific enrollment begins in October 2013. confusion if, when people went to apply information that is included in the Specifically, they recommended for coverage and were found eligible for single streamlined application. modifying the final rule to require states

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relying on the FFE to submit determination, or to redirect applicants Comment: One commenter stated that information, by September 1, 2013, on to new application; or, states should requiring post-eligibility data matching whether they intend to: (1) accept the have flexibility to process applications to ensure continued eligibility as of FFE’s determinations of Medicaid/CHIP using 2013 rules and determine January 1, 2014 for individuals eligibility; or (2) to treat the FFE’s eligibility based on MAGI proxy when determined not eligible in October- finding as an assessment and complete possible. December but eligible in January, the eligibility determination themselves. Response: We recognize the challenge creates an enormous burden during a In addition, they recommend including of appropriately evaluating all time when new systems are being a provision to clearly outline that before applications submitted during the open implemented and states will be a state can elect the option to treat the enrollment period under both the experiencing the largest influx of newly FFE’s findings as an assessment, the MAGI-based rules effective January 1, eligible individuals into their system. state must demonstrate that it is (or will 2014 and under rule in effect in 2013. The commenter noted this would create be by October 2013) capable of acting However, all applicants must have the duplication of efforts when an upon such assessments in full opportunity to have their Medicaid individual who was determined eligible accordance with federal law. eligibility assessed based on existing prior to January is already notified of Response: We have a process in place Medicaid rules for 2013 as well as for their reporting requirements and states for working with states on prospective enrollment effective January should be allowed to rely on recipients implementation, including the adoption 2014. At a minimum under the reporting rather than handling the same of mitigation strategies where necessary. regulation at § 435.1205(c)(4)(ii), states cases twice in a 3–4 month timeframe. We do not believe that a change in the must inform individuals who submit the Response: Post-eligibility data regulations is needed to effectuate these single streamlined application during matching is an option for states to strategies. October–December 2013 that coverage ensure continued eligibility as of Comment: Many commenters believe may be available in 2013, but that a January 1, 2014 and/or through the first that it would be time-consuming and different application will need to be regularly-scheduled renewal. It is not impractical to require states to evaluate completed for consideration of such required. The agency also has the option all cases for eligibility effective in 2013, coverage, and how the individual can to schedule the first renewal for but that there is a subset of cases that obtain and submit such application. individuals who apply during the open states should be required to evaluate. Alternatively, under § 435.1205(c)(4)(i), enrollment period, and determined Specifically, parents whose MAGI-based states can use the information on the eligible effective January 1, 2014, to income falls very close to the state’s single streamlined application occur anytime between 12 months from current income eligibility threshold for submitted to make a determination of the date of application and January 1, parents should be evaluated based on eligibility effective in 2013, based on 2015. Consistent with § 435.916, 2013 eligibility rules. Commenters 2013 rules, following up with the beneficiaries are required to report any suggested HHS provide guidance to individual to obtain additional change in circumstances that may states on the appropriate MAGI income information if needed through impact their eligibility. In the absence of threshold to use for determining additional questions or use of a any reported change that could affect whether an individual appears to be supplemental form, if needed. States eligibility, no post-eligibility data potentially eligibility under 2013 rules also can pursue a combination of these matching is required. and should be assessed for eligibility strategies—using the process outlined in Comment: One commenter requested using those rules. Some commenters § 435.1205(c)(4)(i) for targeted that CMS clarify § 435.1205(c)(3)(ii) that also believe that states should be individuals more likely to be found this state option [to schedule the first required to inform people when it eligible under 2013 rules (for example, renewal under § 435.916 to occur appears that their children qualify for parents and caretaker relatives with anytime between 12 months from the coverage under 2013 Medicaid and MAGI-based income within a threshold date of application and January 1, 2015] CHIP rules because families are more margin of the applicable income authorizes less than annual periods of likely to pursue applications if they standard and individuals indicating coverage/eligibility before renewal in believe that their children will be found potential disability on the single instances where renewal date is set eligible for coverage. Finally, a few streamlined application), while before January 1, 2015. commenters believed states should be directing those not seen as likely- Response: This option does allow for given the option to notify a subset of eligible under the 2013 rules to submit less than 1 year of coverage for a limited applicants about the process to apply for a separate application in accordance time. For example, if someone applies coverage with an effective date in 2013 § 435.1205(c)(4)(ii). on November 1, 2013, and is determined (for example, only those applicants who States may wish to avoid having to eligible for coverage to begin January 1, appear to be potentially eligible under operate two sets of rules for children, the state may schedule renewal on 2013 rules based on the available parents and caretaker relatives, pregnant November 1, 2014. This would result in information provided on the single women and other non-disabled, non- less than a year of coverage. This one- streamlined application). elderly adults that may be eligible for time option is intended to provide for Some commenters stated that they are Medicaid enrollment during this period. ease of administration in the renewal of already planning for an October 2013 To address this, we are offering states coverage for a large number of implementation date of MAGI eligibility the opportunity to begin using the new individuals whose coverage begins on and requested that states be given this MAGI-based methodology for these January 1, 2014 and would otherwise option without need for a waiver. These populations effective October 1, 2013, to need to be renewed at the same time. commenters recommend states have coincide with the start of the open Comment: We sought comments in flexibility in handling applications enrollment period. See State Health the proposed rule on which sections of based on 2013 rules for assessing 2014 Official Letter #13–003: Facilitating both this rulemaking as well as the coverage. States should be allowed to Medicaid and CHIP Enrollment and March 2012 Medicaid eligibility final request applicants submit supplemental Renewal in 2014 at http:// regulation need to be effective October form that includes additional www.medicaid.gov/Federal-Policy- 1, 2013 (as opposed to January 1, 2014) information to make MAGI Guidance/Downloads/SHO-13-003.pdf. to enable states to meet their

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responsibilities under § 435.1205 and health insurance issuers offering group consistent with the 90-day maximum § 457.370 of this rulemaking. We or individual coverage. This standard, waiting period described in Section received no comments in response to though not directly applicable to CHIP, 1201 of the Affordable Care Act. this request. is currently exceeded in roughly half of Comment: Many commenters were Response: In the absence of any the states that impose CHIP waiting concerned that the proposed policy for comments regarding this question, we periods today. We also proposed to a maximum 90-day waiting period have determined that the following require several exemptions to waiting would require states and Exchanges to provisions of the March 2012 Medicaid periods, consistent with policies that set up administratively complicated eligibility final rule are effective October many states have in place today, such as processes to temporarily enroll children 1, 2013 for purposes of effectuating for individuals working for employers in QHPs and to receive APTCs and CSRs § 435.1205 and § 457.370 of this final that stopped offering coverage of while awaiting CHIP eligibility during regulation during the initial open dependents. We received the following the waiting period. Several commenters enrollment period beginning October 1, comments on our proposed waiting expressed concerns with the 2013: period policy as described below. administrative complexity of the • Sections 435.603, 435.911, Comment: Many commenters urged interactions that must occur between 435.1200, 457.315, 457.330 and 457.348; CMS to eliminate waiting periods on the Exchange and the CHIP agency if a • Amendments to §§ 431.10, 431.11, January 1, 2014, rather than permit waiting period is in place, including the 435.110, 435.116, 435.119, 435.907, states to continue to impose waiting requirement at § 457.350 for the CHIP 435.916, 435.940–435.956, 457.340 and periods of any length of time for agency to send the electronic record 457.350, and the redesignation of children. A few commenters encouraged back to the Exchange for enrollment in § 435.911 through § 435.914 as § 435.912 CMS to retain its current policy of a QHP if the child is determined not through § 435.915. providing states with the discretion to eligible for CHIP. These commenters In addition, the following provisions maintain waiting periods and establish also expressed concern that these of this final rule are effective October 1, their own procedures to minimize potential complications do not align 2013: §§ 435.918, 435.1205, 457.370, displacement of private insurance, and with the streamlined eligibility and and revisions to §§ 431.10, 431.11, some states expressed their intent to enrollment process envisioned by the 431.201, 431.205, 431.206, 431.211, eliminate waiting periods in their CHIP Affordable Care Act. Many commenters 431.213, 431.230, 431.231, 431.240, programs in 2014. One commenter stated that requiring the change to a 90- 435.119, 435.603, 435.907, 435.1200, suggested that waiting periods be day maximum waiting period policy 457.110(a)(1), 457.348, and 457.350. applied only to children with family would be administratively burdensome Although effective for purposes of incomes above 200 percent of the FPL. and costly to states at a time when codification in the Code of Federal Commenters’ concerns with the information technology systems are Regulations October 1, 2013 for proposed 90-day waiting period were already overburdened in preparation for application during the initial October 1– related to the administrative burden of significant eligibility changes in 2014. December 31 open enrollment period, waiting periods for state CHIP agencies Some commenters highlighted that it is absent a waiver under § 1115 of the and Exchanges, potential hindrances to likely that some state systems will not Social Security Act approved by the streamlined and coordinated have the capacity to track children who Secretary, financial eligibility based on enrollment, disruptions in continuity of are locked out of CHIP during a waiting MAGI-based methodologies codified at care for children and a lack of evidence period and others expressed concern as § 435.603 and § 457.315 and eligibility of substitution. to whether states or the Federal Response: While we acknowledge the for adults under § 435.119 are not government have the capacity to commenters’ concerns related to the effective under the Affordable Care Act smoothly implement waiting periods in continuation of waiting periods for until January 1, 2014. Technical the manner suggested in the proposed children in 2014, we also see a need to revisions to § 435.119 to retain the rule without a disruption in coverage for permit states flexibility to determine an applicability date of January 1, 2014, children. Some commenters also appropriate substitution prevention even as the effective date of that section indicated that if waiting periods were to strategy, with a full range of options is moved to October 1, 2013, are made exist in 2014, state CHIP agencies would from monitoring to imposition of need to both track when these children in this rulemaking. No revisions to waiting periods up to 90 days. Some would become eligible for CHIP and § 435.603 or § 457.315 are required, as states have already eliminated their also initiate action to enroll children in those sections, as published in the CHIP waiting periods and we encourage the program. March 2012 Medicaid final eligibility other states to consider taking this step. Response: For states that opt to apply rule, already provide for the January 1 Nothing in this final rule precludes a a waiting period in 2014, we agree that applicability date. state from doing so. States may also transitioning a child from one insurance 7. Children’s Health Insurance Program elect to eliminate waiting periods affordability program to another upon Changes specifically for children at lower income the conclusion of a 90-day waiting levels and/or identify additional period may present operational a. CHIP Waiting Periods (§ 457.340, exemptions to the waiting period challenges. States must take into § 457.350, § 457.805 and § 457.810) beyond those required in this rule. consideration their system capabilities We proposed revisions to existing Therefore, to maintain states’ flexibility and weigh the perceived benefits of regulations regarding prevention of in identifying substitution strategies opting to have a waiting period against substitution of coverage at § 457.805 to while also limiting the period of time a any additional administrative or system limit the use of CHIP waiting periods to child may not be eligible for CHIP due requirements needed to effectuate a a maximum of 90 days. This policy to a waiting period, we are finalizing the seamless transition of such children aligns with section 1201 of the provisions at § 457.350, § 457.805 and from coverage in the Exchange and Affordable Care Act, which amended § 457.810 as proposed to permit states to APTC to the state’s CHIP at the section 2708 of the Public Health impose a waiting period of no more than conclusion of the 90-day period. We Service Act to prohibit waiting periods 90 days, with certain specified agree that CHIP agencies will need to exceeding 90 days for health plans and exemptions. We note that this policy is track when these children become

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eligible for CHIP as required at section 1201 of the Affordable Care Act. preamble of the existing regulation (66 § 457.350. In addition, we have further We encourage states to examine the FR 2490, January 11, 2001) required that clarified at § 457.340(d)(4), that without costs and benefits of imposing a waiting states that provide CHIP coverage to requiring new applications or period in the context of the Affordable children at or below 200 percent of the information previously provided, CHIP Care Act. To make the transition from Federal poverty level (FPL) must have agencies must implement processes to Exchange coverage to CHIP as smooth as procedures for monitoring the rate of ensure a smooth transition for children possible for children, states that do substitution of coverage, between 200 from coverage through the Exchange to choose to maintain waiting periods will and 250 percent of the FPL must CHIP at the end of a waiting period, as need to meet the requirements at monitor substitution and identify well as facilitate the enrollment of § 457.350(i), including providing specific strategies to limit substitution if otherwise CHIP-eligible children who notification to the appropriate insurance levels become unacceptable, and for have satisfied the waiting period, but affordability program (for example, the coverage above 250 percent of the FPL who were not covered in the Exchange. Exchange) promptly and without undue states must describe how substitution is For example, a state could automatically delay of the date on which the waiting monitored and implement specific enroll a previously determined CHIP- period will end and the child will be strategies to prevent substitution. We eligible child at the end of the waiting eligible to enroll in CHIP. We will clarify in this final rule that effective period without requesting any provide states with technical assistance January 1, 2014, monitoring of additional information from the family. in this area. substitution is a sufficient approach for Another option would be for a state to Comment: Several commenters addressing substitution at all income suspend applications for all children indicated that while there were initial levels. We expect that if this monitoring subject to a waiting period. Once these concerns upon implementation of CHIP demonstrates a high rate of substitution, children have completed the waiting in the late 1990s that the incentives for a state will consider strategies such as period, the state would then reactivate substitution of public coverage for improving public outreach about the the application and determine whether private coverage would be significant, range of health coverage options that are the child is eligible for CHIP based on states and researchers have had ample available in that state. the information previously provided on opportunity to examine this issue over Comment: Some commenters the application. There is nothing in the the last 15 years. These commenters requested that CMS provide clarity above options that precludes a state stated that numerous studies have regarding the criteria for specific from checking data sources for updated shown that substitution is difficult to exemptions (for example, children with information or processing a change in measure, there continues to be much special health care needs), and circumstances reported by the family. conjecture regarding the degree to suggested additional types of mandatory Comment: Many commenters stressed which substitution occurs, and that exemptions at the Federal level (for that waiting periods of any length could there is no evidence that procedures like example, employees that have negatively impact children’s access to waiting periods actually prevent employers that have changed health continuous and coordinated health substitution. These commenters also plans or products). Some commenters coverage. For example, commenters noted that there is evidence that noted that states have previously expressed concern that the proposed uninsured children, including children implemented many of the proposed rule permitting CHIP-eligible children to in waiting periods, frequently forego required exemptions and that the enroll in qualified health plans (QHPs) medical services due to high out-of- majority of applicants already qualify in the Exchange during a waiting pocket costs. for state-identified exemptions to the period, and subsequently enroll in CHIP One state reported that during an waiting period. at the end of a waiting period, will almost 15-year period, there has been no Response: As noted by some stimulate churning between QHPs and evidence that crowd out is a concern, commenters, many of the mandatory CHIP. These commenters emphasized including for children at higher income exemptions in the proposed rule have that disruptions in coverage will impact levels. The commenter reported that the previously been instituted by states on the health status of children who are left percentage of children in families who a voluntary basis and have been uninsured and/or may have to change dropped their employer sponsored effective. Therefore, we are adopting in plans or providers. Some commenters coverage and substituted it for CHIP has our final rule the proposed exemptions stated that movement between plans been consistently below 2 percent since at § 457.805. In addition, and as and programs will inhibit the QHPs’ the inception of CHIP. This commenter discussed in the preamble of our ability to measure the quality of care recommended that we permit proposed rule, we are adding an provided to children, and makes it monitoring of crowd out at all income affordability exemption at difficult to hold plans accountable for levels rather than continuing to require § 457.805(a)(i) for cases when a child’s improvements in quality outcomes for a substitution strategy, such as a waiting parent is determined eligible for APTC children over time. period, for higher income children. for enrollment in a QHP through the Response: We acknowledge that the Another commenter stated that in their Exchange because the employer- use of waiting periods may create delays experience in operating CHIP, nearly all sponsored insurance (ESI) in which the in eligibility for CHIP and increase the families with former employer- family was enrolled is determined likelihood of churning between the sponsored insurance meet at least one of unaffordable in accordance with 26 CFR Exchange and CHIP, which could result the exemptions to waiting periods 1.36B–2(c)(3)(v). We consider this in disruptions in coverage that could included in its CHIP state plan. exemption to be essential to preventing negatively impact the health status of Response: We recognize that there is families from having to choose between children. Therefore, this final rule a robust but inconclusive evidence base continuing ESI that has been confirms states’ ability to eliminate in the literature calling into question the determined to be unaffordable for the waiting periods to accommodate these prevalence of substitution. And, we are parent, and thereby forgoing premium concerns. In addition, the final rule therefore, revising our existing tax credits and cost-sharing reductions codifies the limitation of waiting regulations to provide states with for enrollment in an QHP, or dropping periods to a maximum of 90 days, to be flexibility to determine how best to the ESI and allowing their child to go consistent with waiting periods under operate their CHIP programs. The without coverage for a period of time to

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qualify for CHIP. We note that states premiums at the end of the lock-out premium. We have also maintained the continue to have the flexibility to period before re-enrollment. In requirement that children must be provide additional exemptions beyond particular, commenters strongly permitted to enroll in CHIP subsequent those specified in this final rule, but supported that the CHIP agency must to a 90-day lock-out period regardless of other than the affordability exemption at review the family’s circumstances whether the family continues to owe § 457.805(a)(i), there will be no (§ 435.570(b)) to determine if their past due premiums. In addition, we are additional exemptions added in this income has declined, making the child also including requirements for non- final rule. We note that we intend to eligible for Medicaid or a lower cost- payment of premium that are intended issue further sub-regulatory guidance sharing category. Some commenters also to align CHIP policies with policies related to criteria for required waiting strongly opposed the imposition of lock- applicable in the Exchange, to the extent period exemptions. out periods for any length of time for a possible. In CHIP and for those Comment: One commenter requested CHIP child, and urged CMS to modify individuals with APTC in the Exchange, that CMS delay the effective date of this § 457.570 to ban lock-out periods. These individuals are provided with a provision to give states adequate time to commenters indicated that lock-outs are premium payment grace period, may be make the necessary changes related to contrary to the goals of a reformed disenrolled for non-payment of its waiting period policy, such as a health system, as well as the health of premiums, and will not be required to change in state law and/or budget. children. Some commenters stressed pay past due premiums to reenroll in Response: This provision will be that a quarter of a year without health coverage. Exchange eligible individuals effective on January 1, 2014 unless a insurance can have a significant impact will have a longer grace period (90 days change in state law is needed for a state on a child’s healthy development, a as opposed to 30 days) than CHIP, but to comply with this provision. child should not be subject to penalties will not be permitted to enroll in Specifically, for states with annual for a failure to pay by another family coverage until the next open enrollment legislative sessions, the effective date for member, and the Affordable Care Act period. Therefore, the amount of time an the application of the 90-day maximum recognizes that children should connect individual may have to wait before waiting period and required exemptions with their medical home eight times in reenrollment in a Qualified Health Plan must be no later than the first day of the the first year of life alone. One will vary, depending on when the next fiscal year beginning after the close commenter also stated that lock-out premiums are missed in relation to the of the first regular session of the 2014 periods in CHIP create disruptions in next scheduled open enrollment period, state legislature. For states that have a care, burdens on families, unnecessarily but will be no longer than 90 days for 2-year legislative session, each year of increase administrative costs, and that a child in CHIP. the session is considered a separate the elimination of lock-out periods is an We note that neither CHIP nor the regular session for this purpose. important consumer protection. Exchange have explicit rules governing b. Limiting CHIP Premium Lock-Out A few commenters asked whether the debt forgiveness policies. More Periods (§ 457.570) process of premium collection and debt information on the Exchange rules forgiveness will be aligned with the related to non-payment of premiums is We proposed to define a CHIP premium collection regulations for the available at http://www.gpo.gov/fdsys/ premium lock-out as a period not Exchange. pkg/FR-2012-03-27/pdf/2012-6125.pdf. exceeding 90 days when, at state option, Response: In response to the support Comment: A few commenters a CHIP eligible child may not be of our proposed rule by the majority of requested clarification on policies permitted to reenroll in coverage if they commenters, and comments received by governing non-payment of premiums. have unpaid premiums or enrollment states related to the need to continue to They requested clarification on policies fees. Following a premium lock-out have non-payment of premium policies related to ‘‘forgiving’’ past due period, we proposed that the child must in place to manage program costs (as premiums and enrollment fees, as well be permitted to enroll without regard to described below), we are adopting in as whether a state can continue to try to past due premiums. We proposed at our final rule the proposed provisions obtain the outstanding premium amount § 457.570 to permit states to impose that authorized states to institute a without affecting eligibility. One premium lock-out periods only for maximum 90-day lock-out period for commenter indicated that funds should families that have not paid outstanding non-payment of premiums. Lock-outs be recoverable using a debt collection premiums or enrollment fees, and only are permitted for non-payment of process. The same commenter also up to a 90-day period. We also specified premiums, but only as long as the non- asked how many cycles of premium that a premium lock-out period must payment continues and subject to a 90- forgiveness would be allowed for an end once a family has paid the premium day maximum. We also want to clarify individual. Another commenter asked or enrollment fee. We also invited that requirements related to reasonable CMS to generally clarify what steps comments on any alternative late notice of nonpayment, and review of the states and health plans would be payment policies to encourage families family’s circumstances to determine if permitted to take in situations in which to make their CHIP premium payments their income has declined (for example, a CHIP enrollee re-enrolls after a lock- in a timely manner to avoid gaps in making the child eligible for Medicaid out period and again does not pay coverage. We received the following or a lower cost-sharing category), are premiums. comments concerning the proposed existing regulatory provisions that we Response: We believe that lock-out period provision. have not modified by this rulemaking. disenrolling a child from coverage and Comment: The majority of We appreciate the concerns expressed potentially requiring a child to go commenters supported the proposed by some commenters with regard to the without coverage up to 90 days rule requiring reasonable notice of non- potential impact of any lock-out period (assuming the family has not paid the payment, limiting the use of lock-outs on children, and for these reasons, we premium or enrollment fee), is a only for non-payment of premiums (and also adopted in the final rule the significant deterrence to prevent a only as long as the non-payment proposed restriction that lock-out family from establishing a pattern of continues, and subject to a 90-day periods may only apply to families who non-payment of premiums and re- maximum), and disallowing states from have not paid their premiums, and must enrollment. Therefore, this rule does not requiring payment of outstanding end if a family pays its past due place a limit/cap on the number of times

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an individual may be re-enrolled after Comment: Some commenters year. However, we are not aware of any non-payment of their premiums. expressed concerns for potential evidence that these situations represent Nothing in this rule precludes a state unintended consequences of the a significant number of cases. And, as from electing to establish policies for proposed policies. One commenter stated in our response to the comment collecting debt from families that have stated that the proposed rule creates an above, as long as states adhere to not made their premium payments. Nor incentive for individuals who are regulations at § 457.570, nothing in this does this rule preclude states and health otherwise able to pay their premium to rule precludes a state from continuing to plans from offering incentives to cycle through CHIP eligibility every establish policies for collecting debt encourage timely payment of premiums. other three month period and from families that have not made their Comment: Some commenters encourages gaps in access to medical premium payments. We also encourage recommended that states only be services for children, who may states to continue implementing permitted to terminate coverage during subsequently present to the CHIP with approaches for simplifying premium a continuous eligibility period for higher acuity levels and higher cost payment arrangements and coping with failure to pay premiums as proposed at needs. The commenter also stated that administrative concerns families may § 457.342(b) after complying with the the proposed rule increases costs for have, and we continue to encourage disenrollment protections at § 457.570. states and the federal government, and states in this area to minimize the Several commenters stressed that the diminishes health outcomes for number of families that are disenrolled proposed rule should be strengthened to children. The commenter encouraged for non-payment of premiums. capture the intent noted in the preamble CMS to continue to require member Comment: One commenter stated that that ‘‘prohibiting a child from accountability in the CHIP program by if CHIP lock-out periods are allowed in enrollment after the family pays the allowing the collection of outstanding 2014, CMS should prohibit states that unpaid premium or enrollment fee is premiums in the presence of a 90-day use this option from requiring children counter to promoting enrollment in and grace period. Another commenter subject to a lock-out period to reapply continual coverage.’’ Some commenters objected to the proposed rule to limit for coverage and that a child returning also recommended that the final rule lock-out periods to 90 days and allow an to coverage following a lock-out period specify that if a family pays its individual to re-enroll upon payment of should be handled in the same manner outstanding premium between the end past due premiums, regardless of as a renewal. The commenter believes of their payment grace period and before whether the lock-out period has that because such children were eligible the end of the lock-out period, the child expired. The commenter stated that this for CHIP apart from non-payment of be reinstated back to the effective end approach creates adverse selection, in premiums or enrollment fees, the state date with no gap in coverage and no loss that families may stop paying their agency should be able to reassess of 12-month continuous eligibility (if premium when they may not have eligibility based on available electronic applicable). immediate health care needs, and then data sources and families should only Response: We agree that coverage again pay their premiums only when be asked for additional information if terminations occurring during a they are in need of health care. what has already been provided and continuous eligibility period for failure Additionally, this commenter stated currently available electronic data are to pay premiums can be implemented individuals should be required to pay not sufficient to establish eligibility. only after complying with the Response: While we encourage states any past due premiums as a condition disenrollment protections at § 457.570, to consider the potential administrative of retaining eligibility for CHIP, even and we have modified § 457.342(b) to cost savings and reduced burden on after a lock-out period has been clarify this requirement. In addition to families that could result from assigning satisfied. This commenter also stated the preamble language describing that a pending eligibility status to a child for that the proposed rule discards the plain families that pay their premiums or non-payment of premiums rather than statutory authority of title XXI that enrollment fees prior to the end of a requiring a new application, we will delegates this policy to states. Another lock-out period must be re-enrolled in continue to permit states to have the commenter noted that CHIP is a CHIP, we have also specified this flexibility to make this decision. requirement at § 457.570(c)(2) under ‘‘stepping stone’’ between Medicaid and Comment: One commenter requested this final rule. Section 2103(e)(3) of the employer-sponsored insurance or clarification on whether a child can Act describes a statutory premium grace Exchange coverage, and that premiums receive APTC or CSR during a premium period during which CHIP enrollees in its current CHIP are minimal in lock-out period. may pay their monthly premiums before comparison to employer-based coverage Response: We anticipate that this being disenrolled. This provision and private coverage. The commenter issue will be addressed in further requires States to grant individuals requested that premiums not be waived guidance from the Department of enrolled in separate child health in states with requirement to repay Treasury. programs a 30-day grace period, from outstanding premiums and no lock-out Comment: The preamble to our the beginning of a new coverage period, period. The commenter stated that proposed rule specified that a state may to pay any required premium before waiving premiums does not promote not require the collection of past due enrollment may be terminated. The new responsibility, intrinsic value, or the premiums or enrollment fees as a coverage period begins the month effective management of program costs condition of eligibility for reenrollment following the last period for which a for states. once the lock-out period has expired, premium was paid. Aside from these Response: The goal of allowing regardless of the length of the lock-out requirements, states have, and will coverage for families that make current period. One commenter recommended continue to have, flexibility to payments must be balanced with the that this policy also be specified in determine when coverage can be concern that families will game the § 457.570(c)(2). reinstated. As specified in our proposed system to try to obtain coverage without Response: Section 457.570(c)(2) rule at § 457.342(b), continuous paying premiums. We agree that there clearly specifies that ‘‘a state may not eligibility may be terminated for failure may be situations where families either require the collection of past due to pay required premiums or enrollment elect, or are unable to pay their premiums or enrollment fees as a fees. premiums multiple times during a given condition of eligibility for reenrollment

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once the State-defined lock out period provided in Medicaid and CHIP. understand the cost sharing differences has expired, regardless of the length of Commenters urged CMS to take steps to between Medicaid and CHIP and QHPs. the lock-out period.’’ We have not made ensure that states provide families and They recommended that we create any modifications to this section. individuals with all of the information requirements for coordination between Comment: Some commenters they need regarding the benefits to Medicaid and the QHP issuer to ensure indicated that providing multiple ways which they are entitled. They noted that that people do not exceed permissible to pay premiums and sending multiple, the information states track to ensure cost sharing and asked CMS to provide non-threatening payment due reminders cost-effectiveness should also be used to guidance on how to monitor cost are helpful in encouraging payment. assess whether children and adults are sharing. These commenters suggested that CMS receiving the full package of Medicaid Response: We expect states to have consider future sub-regulatory guidance or CHIP services. One commenter mechanisms in place to provide benefits to states to promote best practices in suggested that states should be required that wrap around health plan coverage premium payments. to ensure that beneficiaries experience a to the extent that the health plan offers Response: Most CHIPs report efforts to seamless enrollment process and that fewer benefits, or has greater cost facilitate payment of premiums and they have a single insurance card and sharing requirements than in Medicaid enrollment fees, easing the process for point of contact for all benefits. or CHIP. These mechanisms will need to families, and the majority of states also Response: Under all premium be coordinated with the health plan to send multiple payment due reminders assistance arrangements, Medicaid and successfully implement a premium and allow a variety of payment methods CHIP-eligible individuals remain assistance program. As noted above, we (such as allowing families to make Medicaid or CHIP beneficiaries and are requiring at § 435.1015(b) that states payments at multiple locations). We continue to be entitled to all Medicaid/ inform individuals how to access will consider issuing further sub- CHIP benefits and cost sharing additional benefits not provided by the regulatory guidance in this area. protections. Thus, we require at insurer, and also inform individuals 8. Premium Assistance (§ 435.1015) § 435.1015(a)(2) and (a)(3) that the state how to receive cost sharing assistance. agency furnish all benefits covered We are not proposing any specific We proposed to codify the last under the state plan that are not requirements about the way in which sentence of section 1905(a) of the Act available through the individual health such coordination can be effectuated, that authorizes payment of ‘‘other plan and also that the individual does however, because we believe that states insurance premiums for medical or any not incur any cost sharing in excess of should have flexibility to develop other type of remedial care or the cost that allowed in Medicaid. We expect effective coordination procedures thereof’’ to support enrollment of states to have mechanisms in place to consistent with state systems and individuals eligible for Medicaid in ensure that beneficiaries understand procedures, including variation in state plans in the individual market, their available choices of either direct health care delivery systems. including enrollment in QHPs doing state plan coverage or coverage through Comment: Many commenters business on the Exchange. Premium premium assistance for an individual requested clarification of the cost- assistance is one mechanism for health plan, including a QHP in the effectiveness test for premium facilitating the coordinated system of Exchange, under the premium assistance. They stressed the importance coverage between Medicaid, CHIP, and assistance option, as well as how to of a strong cost-effectiveness test to the Exchange in 2014. It provides an access any additional benefits or cost ensure that taxpayer dollars are spent option for states to assist families who sharing assistance. Therefore, we have wisely and also that beneficiaries do not wish to enroll in the same health plan revised § 435.1015(b) to include lose important benefits and cost sharing when some family members are eligible provisions requiring informed choice protections. They were concerned that for either Medicaid or CHIP while other and information on the process for the proposed rule could be interpreted family members obtain coverage in the accessing additional benefits and help to include only the cost of premiums to Exchange with advance payments of the with cost sharing, if the individual purchase coverage and not to include in premium tax credit, and it can provide elects to receive coverage through the the test the costs associated with paying a way to minimize the extent to which premium assistance option. We do not copayments, deductibles, and other cost individuals have to change plans when believe, however, that it is appropriate sharing requirements. They believe that their circumstances change such that to direct through rulemaking the this should be clarified in the final rule their eligibility for an affordable health specific procedures states must employ to explicitly include cost sharing. Other insurance plan changes. The proposed to provide any necessary ‘‘wraparound’’ commenters stated that this cost- rule reflected longstanding statutory benefits or cost sharing; under the state effective analysis should be performed provisions in light of the new coverage plan option, states have the flexibility to on an annual basis to ensure that the options available in 2014. We received determine how best to meet these cost premium assistance program remains the following comments to proposed sharing and benefit responsibilities. We cost-effective even if Medicaid and the premium assistance provisions: have also clarified in § 435.1015(b) that individual market experience different Comment: Many commenters were states must require that individuals who rates of cost growth. supportive of states’ ability to use have elected to receive premium Response: Consistent with our premium assistance authority to assistance must obtain covered items approach to cost-effectiveness in all purchase private insurance coverage for and services through the individual premium assistance authorities, we health plans in the individual market, health plan to the extent that the insurer intend for states to consider the cost including QHPs doing business on the is contractually or otherwise responsible sharing requirements of the private Exchange. At the same time, however, to pay for such benefits. health plan (and therefore the cost of they emphasized the importance of Comment: Some commenters providing the cost sharing protections) ensuring that Medicaid and CHIP- expressed specific concerns about cost when determining whether premium eligible individuals receive the full sharing policies and urged CMS to assistance is a cost-effective option, and scope of services to which they are consider putting additional beneficiary we agree that this should be clarified. guaranteed in Medicaid and CHIP, such protections in place specific to premium Therefore, we are revising as the full range of pediatric services assistance to ensure that people § 435.1015(a)(4) accordingly. States

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implementing premium assistance must 1902(a)(17) of the Act that, in regulations governing enrollment in a describe their cost-effectiveness determining the amount of medical QHP through the Exchange and all methodology, and to the extent that assistance, states may consider available insurance affordability programs such a methodology relies on annual per resources, and the provision in section operated in the state. In addition, the person costs, we would expect states to 1902(a)(25) of the Act that requires that Exchange regulations at 45 CFR 155.210 be re-running the analysis at least states ensure that liable third parties pay require that Exchange Navigators annually, as new cost data is available. primary to Medicaid. We address the provide impartial information and Comment: Many commenters issue of requiring enrollment in assistance. A Medicaid or CHIP enrollee requested additional detail on how the premium assistance for certain who is receiving benefits in whole or in option would be operationalized by populations in the last response in this part through a premium assistance state Medicaid agencies, Exchanges, and section. arrangement with a QHP will not be QHPs. One noted that successful Comment: Several commenters eligible for a premium tax credit under premium assistance programs require expressed concern that permitting state section 36B of the Internal Revenue robust data sharing, data mining, Medicaid programs to establish Code because such credits are not automated calculations using cost- premium assistance programs could available to individuals who, for the effective algorithms, and strong affect premiums in the Exchange. Some coverage month, are eligible for relationships with private insurers. commenters recommended that CMS minimum essential coverage through Some commenters requested that CMS revise the proposed § 435.1015(a)(4) to Medicaid or CHIP. provide states with a template or other require that premium assistance not Comment: A few commenters tools to simplify the implementation of increase federal costs and not increase questioned whether section 1905(a)(29) premium assistance. premiums in the individual market. of the Act creates the authority for Response: We will continue to Response: Medicaid beneficiaries premium assistance in the individual provide technical assistance to states on enrolled in a QHP would be included in market. Many commenters the operational aspects of pursuing this the individual market single risk pool of recommended that CMS eliminate the premium assistance approach, relying the health insurance issuer of the plan proposed policy to allow premium on the experience states have had over in which they are enrolled, just as any assistance for plans in the individual the years implementing premium other individual obtaining coverage market, or otherwise tightly assistance. through such plans. § 435.1015(a)(4) circumscribe it, citing cost concerns, as Comment: Some commenters stated requires the cost of premium assistance well as concerns about the operational that families should have the choice of to be ‘‘comparable’’ to the cost of complexity and potential consumer either premium assistance or direct providing direct coverage under the confusion for consumers created by the Medicaid state plan coverage, even state plan. We do not use a more ‘‘wrap’’ requirement. when premium assistance is cost- restrictive word to allow flexibility Response: As we stated in the effective for the state, and they because the amount, duration, and preamble of the proposed rule (78 FR supported the proposed rule’s provision scope of the QHP coverage, or the nature 4624 and 4625), in section 1905(a)(29) that states may not require enrollment of the QHP service delivery system, of the Act, ‘‘medical assistance’’ is in premium assistance as a condition of might be different from direct coverage defined to include payment of part or all Medicaid eligibility. Other commenters under the state plan. of the cost of ‘‘other insurance requested that CMS remove the Comment: Some commenters stated premiums for medical or any other type voluntary participation requirement that CMS must take additional steps to of remedial care or the cost thereof.’’ We either entirely, or if this requirement is ensure that states do not steer family have interpreted this provision to retained, they asked that states be members of Medicaid-eligible permit payment of FFP for premiums for allowed to make participation in individuals into less expensive plans to health plans for Medicaid-eligible premium assistance mandatory for accommodate a premium assistance individuals, provided the state certain Medicaid enrollees, such as model and also to ensure that any determines it cost-effective to do so. adults up to 138 percent of the FPL who enrollees who will be using premium CMS has approved state premium would be part of the state’s Medicaid tax credits have sufficient choice in assistance programs under this authority expansion population, or for pregnant QHPs. The commenters stated that prior to the enactment of the Affordable women with incomes above 133 percent regulations should require states to Care Act. The Affordable Care Act of the FPL. remain impartial in providing all provided for new rules regulating the Response: Consistent with the statute, available information on all QHPs so the operation of the individual and small we are retaining the provision at family can choose the best plan or plans group insurance markets, and expanded § 435.1015(b) that states may not require for the entire family, and also that access to insurance coverage through a Medicaid-eligible individual, as a Navigators, application assisters, and QHPs participating in the Exchange. condition of receiving Medicaid application counselors must be trained This results in new opportunities for benefits, to enroll in a health plan in the on the premium assistance program and states to deliver Medicaid coverage individual market through a premium provide impartial assistance to families. through the purchase of private health assistance arrangement. Enrollment in Response: As noted above (and at insurance in the individual market. Our individual market coverage is not a § 435.1015(b)), when a state implements goal is to work with states to ensure that statutory condition for eligibility. We the state plan premium assistance their premium assistance approaches are also clarifying in § 435.1015(b) that option, the beneficiary’s participation result in a cost-effective, seamless, and states must require that individuals who must be voluntary. We also expect states coordinated system of health care for have elected to receive premium to ensure that application assisters and beneficiaries. assistance must obtain covered items certified application counselors comply Comment: Several commenters and services through the individual with the requirements in § 435.908 of recommended delaying implementation health plan to the extent that the insurer this part and § 457.340 under subpart C of premium assistance until rates are is contractually or otherwise responsible of part 457, which include requirements determined for QHPs in the Exchange, to pay for such benefits. This is that they be effectively trained in the and the individual market has settled consistent with the provision in section eligibility and benefits rules and from the changes it will experience in

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2014, and states have experience the purposes of Medicaid and CHIP assistance through a section 1115 implementing the Medicaid expansion. eligibility determinations. demonstration, which could include Response: As we noted above, The premium assistance option mandatory enrollment into premium premium assistance is an option permits Medicaid or CHIP funds to be assistance, we will only consider available under current law. Some states used to deliver coverage to Medicaid or demonstrations under which states have already expressed interest in using CHIP-eligible individuals through the make arrangements with the health plan the premium assistance model to deliver purchase of private health insurance, to provide wraparound benefits and cost benefits to their Medicaid expansion and it is not limited to Medicaid or sharing assistance. For further beneficiaries through QHPs doing CHIP-eligible individuals who have information on the section 1115 option, business on the Exchange. In addition, family members enrolled in a QHP. In including guidelines for proposals, beginning in 2014, some low-income some cases, the Medicaid or CHIP please refer to Premium Assistance children will be covered by Medicaid or beneficiary could be enrolled in a health Frequently Asked Questions (FAQs) that CHIP while their parents obtain plan that provides individual coverage CMS issued on March 29, 2013, coverage in the Exchange with advance only, while in other situations, the available at http://medicaid.gov/State- payments of the premium tax credit, Medicaid or CHIP beneficiary would be Resource-Center/FAQ-Medicaid-and- and premium assistance provides an enrolled in a health plan that provides CHIP-Affordable-Care-Act-ACA- opportunity for state Medicaid and family coverage, depending on the Implementation/Downloads/FAQ-03-29- CHIP programs to offer coverage to such categories of family coverage offered in 13-Premium-Assistance.pdf families through the same plan, even if the Exchange. Comment: Some commenters, who 9. Changes to Modified Adjusted Gross supported by different payers. It also Income and MAGI Screen provides opportunities for continuity of were in favor of the continued We proposed to implement sections care by increasing the likelihood that authorization of premium assistance 1902(e)(14) and 1943 of the Act, and individuals could remain in the same programs, stated that states should be section 1413 of the Affordable Care Act health plan when moving back and forth allowed to determine how to make the concept work and urged CMS to allow as they pertain to the definition of between Medicaid and Exchange complete state flexibility in designing ‘‘modified adjusted gross income’’ coverage due to fluctuations in income and implementing benefit structures (MAGI) and ‘‘household income’’ in or other changes in circumstances. We and cost sharing requirements. section 36B(d)(2) of the Internal are not establishing new authority but Response: Individuals receiving Revenue Code of 1986 (‘‘36B rather ensuring that the existing coverage through premium assistance definitions’’). We also proposed a authority reflects the new coverage are Medicaid beneficiaries and are modification to previously issued options in the individual and small entitled to the full range of protections, regulations implementing section group markets established by the including benefits and cost sharing, 1902(e)(14)(I) of the Act. The proposed Affordable Care Act. available under the law. States have rule applied the 5 percent disregard Comment: Many commenters flexibility under the state plan option to established by the Act for purposes of supported the retention of the proposed design how they will effectuate the determining the income eligibility of an regulation text that makes FFP available coverage that is required while meeting individual for medical assistance whose for payment of health plan premiums applicable statutory and regulatory eligibility is determined based on for ‘‘individuals’’ eligible for Medicaid. requirements. To the extent a state MAGI, provided the determination was They believe that this language supports needs additional flexibility, the state for the eligibility group with the highest the enrollment of Medicaid-eligible may wish to explore demonstration income standard under which the individuals in individual market plans, options under section 1115 of the Act. individual could be determined eligible including plans offering family Comment: Several commenters using MAGI-based methodologies. The coverage, while not incorporating recommended that premium assistance proposed changes are discussed in more limiting definitions of ‘‘family’’ that programs might require, or best be detail in the January 22, 2013 Medicaid would unnecessarily limit the benefits operated under, a Medicaid section Eligibility proposed rule (78 FR 4625 of the rule to individuals in families that 1115 demonstration. through 4627). We received the do not comprise a taxpayer household. Response: States have the flexibility following comments concerning the One commenter asked for CMS to clarify to adopt premium assistance as an proposed changes to MAGI provisions: the meaning of ‘‘family’’ as used in the option under the state plan if it is Comment: Some commenters premium assistance section of the voluntary for beneficiaries and adheres supported the proposal to apply the 5 preamble of the proposed rule. The to all applicable statutory and regulatory percent disregard only to the highest commenter also questioned whether this provisions. Enrollment in individual income threshold under a MAGI-group option is limited to Medicaid and CHIP- market coverage is not a statutory available for the individual and the eligible individuals who have family condition of eligibility. Some states related impact on the number of members enrolled in an individual have expressed interest in submitting individuals for whom states will be able health plan, and if so, asked if we proposals for section 1115 to claim the ‘‘newly eligible’’ enhanced proposed to limit this option to demonstrations to require enrollment in match rate. members of the same tax household, premium assistance and to allow for Response: The Affordable Care Act MAGI assistance group, or to immediate consideration of a broader range of established a 5 percentage point of the family members. factors when cost-effectiveness is FPL disregard ‘‘for the purposes of Response: We have not proposed a assessed. In response to these inquiries, determining income eligibility’’ for definition of ‘‘family’’ that is unique to we will consider approving a limited individuals whose eligibility is based on premium assistance. Regulations at number of premium assistance MAGI. The objective of the proposal is § 435.603 of this part (and at § 457.301 demonstrations that are determined to to balance giving beneficiaries the and § 457.315 under subpart C of part further the objectives of the Medicaid benefit of the disregard for eligibility 457 for CHIP) contain definitions and program and which will test these new purposes, with the intent to give states requirements related to family size, arrangements and inform policy. For the opportunity to claim enhanced household, and MAGI-based income for states that implement premium match for all newly eligible individuals

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if the state chooses to extend coverage they would otherwise. Moreover, any the new calculation and continue to to the new adult group. We propose adverse impact of a shift of beneficiaries apply the 5 percent across- the-board doing so by ensuring that the disregard from the parent group to the new adult disregard. Others requested that all is applied to the income calculation of group with coverage through an ABP states be given the option to apply the individuals for whom the disregard will be minimized by the medically frail 5 percent disregard only to the highest matters for a determination of eligibility exception to benchmark coverage income threshold under MAGI as for Medicaid under MAGI-based rules— limitations. For pregnant women with proposed in our proposed rule. that is, those for whom the application income at the border between full Response: We believe that applying of the disregard means the difference benefits and pregnancy-related benefits, the 5 percent FPL disregard to between being eligible for Medicaid and although the absence of the disregard determine eligibility based on overall being ineligible. These individuals are may result in a pregnancy-related eligibility rather than eligibility group is those whose income is within 5 FPL benefit package instead of full benefits, the best interpretation of section percentage points of the highest net our March 2012 rule revised 1902(e)(14)(I) of the Act. Therefore, we income standard for which they can § 435.116(d)(3) to clarify that a State’s are adopting our proposed policy as obtain Medicaid eligibility under MAGI- coverage of pregnancy-related services final, subject to the flexibility in based income rules. The disregard must be consistent with § 440.210(a)(2) implementation schedules discussed would not be applied for a and § 440.250(p), which allows States to above. determination of eligibility for a provide additional services related to Comment: One commenter asked particular eligibility group, but rather pregnancy to pregnant women (see 77 whether the 5 percent MAGI income for eligibility for Medicaid. FR 17149). disregard would be applicable to only Comment: One commenter questioned Comment: Several commenters eligibility for the coverage group or whether the proposed policy is recommended that CMS not revise the whether it would also be applicable to consistent with federal law, which the MAGI disregard rules. They raised cost-sharing or premium determinations commenter views as entitling all concerns that there is too little time for —within the coverage group. applicants to the 5 percent disregard. states to make the systems and business Response: Under this final rule, the 5 The commenter stated that our proposed process updates required to comply percent disregard under section policy could affect beneficiaries’ cost with the October 1, 2013 open 1902(e)(14)(I) of the Act applies to sharing or benefits because it could enrollment period. They noted that the income determinations relative to result in a change in their eligibility proposed rule requires more complex Medicaid eligibility. It does not apply to groups. Some commenters noted that, programming compared to simply determine into which eligibility group for example, some parents could receive adding 5 percent to all MAGI-based an individual should be placed. Nor is ABP coverage instead of the traditional categories and that this policy could it intended to be applied to determine Medicaid benefit package. The impact a state’s ability to implement the income for premium or cost-sharing commenters noted, however, that this MAGI requirements timely. In addition, payments. concern should be minimal since newly they noted that although the 90/10 Comment: One commenter requested eligible adults who are medically frail matching funds are available to make clarification about whether, in a state and likely to need additional services such systems-related changes, states that implements the eligibility covered under the regular Medicaid must still finance 10 percent of the cost expansion under section 2001 of the benefit package would have a choice of of these changes despite experiencing Affordable Care Act (that is, adopts the benefit package, between what is offered severe budgetary issues. adult group), the state would need to through an ABP that is based on section Response: We understand that many apply the 5 percent disregard to a parent 1937 requirements, inclusive of EHB’s, states relied upon the March 2012 final or caretaker relative age 65 or older that and ABP coverage that is not subject to eligibility rule when planning their was not eligible for the expansion section 1937 requirements, and includes eligibility system builds for 2014. We group. the services approved in the state’s appreciate that it may be difficult at this Response: The 5 percent disregard is Medicaid plan. Other commenters cited point in time to make programming not applied based on an eligibility concerns about pregnant women and changes for eligibility systems and have group, but based on whether the categories that offer only limited those changes take effect by January 1, disregard would affect MAGI-based pregnancy-related services. 2014. In light of this challenge, we are income eligibility for Medicaid as stated Response: The proposal to apply the finalizing our proposal, but we will not above. In the case of a parent or 5 percent disregard to determine take any compliance actions for states caretaker relative age 65 or older, the 5 Medicaid eligibility rather than whose systems cannot accommodate percent disregard would be applied in eligibility for a particular category is this eligibility determination determining MAGI-based income if the consistent with section 1902(e)(14)(I) of requirement. We will approve eligibility individual would otherwise be the Act. It is not necessarily the case determination systems even if as of ineligible based on income. For that not applying the 5 percent January 1, 2014, the system applies the example, if the parent/caretaker disregard for purposes of determining 5 percent disregard across the board to eligibility standard in a state was 80 eligibility category would result in all individuals whose eligibility is percent of FPL and the individual’s moving individuals into a different determined using MAGI-based rules, income before application of the eligibility group with different benefit based on a state’s assurance that by disregard put them over the 80 percent and possibly cost-sharing rules because January 1, 2015 the state will update the standard, the 5 percent disregard would if the 5 percent disregard were applied system to apply the disregard only for be applied and the individual would be as a general disregard, states would set a determination of eligibility for eligible if the disregard brought their income eligibility standards at levels Medicaid under MAGI-based rules. countable income below 80 percent of that would compensate for that impact. Comment: Some commenters the FPL. For example, if the 5 percent disregard requested that states that are not Comment: Another commenter asked was applied generally, states might set expanding to cover the new adult for clarification of whether the 5 percent the income eligibility standard for group—and thus not claiming enhanced is only applied when an individual parents at a level 5 percent less than FMAP—should have the option to use would not be eligible in another group

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or if it would apply to all individuals both for the highest Title XIX eligibility issue policies, rules and regulations on being determined for eligibility in the group available to the child, as well as program matters and to exercise group. The commenter specifically to the separate CHIP program to cover discretion in the administration or asked about whether the 5 percent similarly situated children at a higher supervision of the plan. We also disregard would be applied to keep income standard. The result would be proposed to make changes to § 431.11 family coverage in the Transitional that children with a MAGI in the 5 regarding state organization. We Medical Assistance (TMA) group. percent band above the Medicaid received the following comments Response: TMA is beyond the scope income standard at issue would be concerning the proposed changes to the of this rulemaking. TMA will be determined eligible for Medicaid. To single state agency provisions: addressed in future guidance. clarify, we are modifying the language Comment: The majority of Comment: Several commenters in the final rule at § 435.603(d)(4) to commenters strongly support the questioned whether applying the 5 specify that the 5 percent disregard decision to revert to the policy percent disregard to the MAGI income should be applied to the highest income originally proposed in the August 2011 standards equivalent being produced standard in the applicable Title of the Medicaid eligibility rule that delegation through the process generally referred to Act under which the individual may be of the authority to determine eligibility as ‘MAGI conversion’ creates a double determined eligible using MAGI-based for Medicaid is limited to Exchanges counting of the disregard. Other methodologies. We do not believe this that are government agencies commenters asked whether states are will impact the children for whom the maintaining personnel standards on a being required to expand their income state can claim enhanced match, merit basis. One state specifically levels for pregnant women and children because the state can claim enhanced commented that it supports this change by 5 percent due to application of the match for any child whose income is as it allows states to maintain program disregard. greater than the upper income threshold integrity. Several other commenters Response: We considered carefully under Medicaid on March 31, 1997, noted that this construct has been a the requirements in section whether that child is covered under consistent legal interpretation for many 1902(e)(14)(A) of the Act in our Title XIX or Title XXI. decades. Other commenters noted that December 2012 guidance to states on the Comment: One commenter asked many state Medicaid employees are establishment of converted MAGI-based whether there is any reason it would not trained social workers who have the income standards equivalent to levels be permissible for a state to program its knowledge and experience to help our used at the enactment of the Affordable eligibility system to build in the 5 country’s most vulnerable citizens, Care Act (‘‘MAGI conversion’’). See percent disregard and effectively set the ensuring consistency and accessibility http://www.medicaid.gov/Federal- income limit at 5 percent higher than to benefits. Policy-Guidance/downloads/ the state’s established limit for MAGI Response: We appreciate commenters SHO12003.pdf. Under this guidance, related eligibility groups. support for our proposed policy, and converted MAGI-based income Response: Because the disregard is therefore, we are adopting in this final standards are set without regard to the applied at the individual level, rule the policy that delegation of the 5 percent disregard, since the MAGI increasing the eligibility income authority to determine eligibility for income conversion requirements in standard for a group would not be the Medicaid is limited to Exchanges that section 1902(e)(14)(A) of the Act are best way to program an eligibility are government agencies maintaining independent of the 5 percent disregard system. Furthermore, doing so would be personnel standards on a merit basis. at section 1902(e)(14)(I) of the Act. inconsistent with the statutory purpose This is the policy that we originally MAGI-equivalent income standards are of developing a uniform income proposed in our August 2011 proposed established taking into account determination methodology applicable rule and that was re-proposed in the disregards that are currently in effect in all states, which could be applied by January 2013 proposed rule. We believe but which will no longer be in effect the Exchange as well as the State that under the best read of the statute, under MAGI. As a result, there is no Medicaid or CHIP agency. Therefore, determining Medicaid eligibility is an double-counting of the 5 percent this would not be permissible. Instead if inherently governmental function that disregard. The 5 percent disregard the eligibility system cascades must be performed by governmental would apply once when calculating an sequentially through possible eligibility agencies. individual’s MAGI-based income if the options, it should apply the 5 percent as For purposes of delegation, we are individual would otherwise be one last eligibility step, only when the treating a quasi-governmental entity or ineligible. system has returned a determination of public authority running an Exchange Comment: Several commenters ineligibility because the individual is and employing merit system protection requested clarification regarding how over scale for income. principles as a government agency such the 5 percent disregard under MAGI that delegation to it would be permitted. applies to applicants under a separate 10. Single State Agency—Delegation of Although we were explicit in the CHIP program. Similarly, commenters Eligibility Determinations to Exchanges proposed regulation at asked how the 5 percent disregard is (§ 431.10 and § 431.11) § 431.10(c)(1)(i)(B), § 431.10(c)(2) and applied to individuals at the boundary We proposed to revert to the policy § 431.10(c)(3)(i) regarding authority to between Medicaid and CHIP eligibility. proposed in the Medicaid eligibility delegate to public authorities, we are Response: The 5 percent disregard proposed rule published on August 17, deleting these references to public should be applied to individuals who 2011 (76 FR 51148), that single state authorities in the final rule to conform may be eligible for the highest income Medicaid agencies will be limited to with the Exchange regulation which standard under the applicable Title of delegating eligibility determinations to only explicitly requires at § 155.20 that the Act (for example, Title XIX or Title Exchanges that are government agencies Exchanges be governmental agencies or XXI) for which the individual may be maintaining personnel standards on a non-profit entities established by a state. determined eligible using MAGI-based merit basis. We retained many of the Comment: Some commenters wrote methodologies. Therefore, in states that provisions strengthening the control and that they especially appreciate the have separate CHIP programs, the oversight responsibilities of the single recognition that Medicaid agencies income disregard should be applied state agency including the authority to would not be parties to contractual

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relationships between the Exchange and coordinated system by engaging non- multiple agencies when trying to secure an entity engaged by the Exchange to profits and private contractors in the coverage for themselves or their determine eligibility, which would process of supporting the Medicaid and children. make it impossible for the Medicaid CHIP eligibility determination, while Response: States will be required to agency to provide appropriate oversight. not allowing them to determine establish performance standards in their They support maintaining the eligibility. Recommendations included state plans in accordance with requirement that the Medicaid agency providing assistance to consumers with § 435.912. To further this work, earlier provide oversight when responsibility the application and enrollment process this year, we issued a request for for the eligibility determination is as certified application counselors and information (RFI) regarding performance delegated to another agency, because operating call centers, providing basic indicators for Medicaid and CHIP monitoring and oversight is necessary information to potential applicants. One business functions. The RFI explained regardless of whether the delegation is commenter suggested that any contract that CMS intends to begin collecting to a government or non-government over the amount of $1 million entered and reporting on information including agency. They recommended that such into by the State for services which data regarding individual (applicant and oversight should include review of a support eligibility determination, such beneficiary) experience with eligibility sample of eligibility decisions made by as data-matching or application/ and enrollment. One of the indicators the Exchange, scrutiny of the ‘‘logic’’ eligibility screening, be submitted to the proposed under the eligibility and used in information technology systems Department of Health and Human enrollment domain was ‘‘accurate to ensure that Medicaid policy is being Services for review. eligibility determinations,’’ including a applied in an accurate manner, regular Response: We agree that certified proposed ‘‘accurate transfer rate’’. The observations of the processes used by application counselors and call center accurate transfer rate would be the Exchange in making eligibility administration are ways to engage non- measured by the percent of individuals determinations, participation by profits and private contractors in the transferred to Medicaid, CHIP, or the Medicaid agency staff in training of Medicaid eligibility process while Exchange, as applicable, who are Exchange staff, and monitoring of assuring all final eligibility determined eligible by that agency. We complaints and appeals. Many determinations are made by are currently reviewing the comments commenters suggested more specific governmental entities. However, we do received and finalizing our proposal for requirements in regulation that should not believe it necessary to subject state implementation of performance be added to § 431.10(d), specifying the contracts for support services related to reporting. For further information about oversight and monitoring required in eligibility determinations to special the RFI, see our Web site at http:// the agreement between the Medicaid oversight rules. We believe that the www.medicaid.gov/Medicaid-CHIP- agency and Exchange or Exchange single state agency’s responsibility for Program-Information/By-Topics/Data- appeals entity include training for the determining and/or overseeing and-Systems/Downloads/RFI- Exchange or Exchange appeals entity, as eligibility determinations includes Performance-Indicators-1-24-13.pdf. well as monitoring of the systems being oversight of such support functions. Comment: One commenter noted that, Comment: One commenter requested built. that we provide public access to Response: We agree that the single while there is value in continuing the agreements between the Medicaid state agency should be required to role of public employees in Medicaid agency and other entities conducting provide oversight when responsibility eligibility determinations, this decision for the eligibility determination is can be expected to have the inadvertent determinations. Some commenters also delegated to another agency and are effect of requiring ‘‘hand offs’’ in some requested that we require public posting finalizing our proposal requiring this. states between privatized Exchanges of the agreements on internet Web sites. We appreciate the commenter’s various and Medicaid agencies. Specifically, in Response: We have provided in suggestions regarding quality control states operating a privatized Exchange, § 431.10(d) that agreements with federal, and oversight by the Medicaid agency the Exchange will now be unable to state or local entities making eligibility and believe they are within the ambit of conduct a full Medicaid determination, determinations or appeals decisions be what is intended by § 431.10(c)(3)(ii), which means that an individual who available to the Secretary upon request. requiring the Medicaid agency to applies for coverage via an Exchange To the extent that the Secretary requests exercise appropriate oversight over the and is found likely eligible for Medicaid and obtains a copy of an agreement eligibility determinations and appeals will be ‘‘bounced’’ to the Medicaid under § 431.10(d), the public can decisions made by such agencies to agency for a final determination. request a copy of the agreement through ensure compliance with paragraphs Families with children, in particular, the Freedom of Information Act, 5 (c)(2) and (c)(3)(i) of this section and are likely to be ‘‘bounced’’ because they U.S.C. 552. These agreements may also institute corrective action as needed. We are eligible for Medicaid or CHIP at far be obtained at the state level under state believe § 431.10(c)(3)(ii) can be higher income levels than adults in all freedom of information act laws. exercised in various ways including states. As a result the commenter Comment: Some commenters opposed those suggested by the commenters. We recommended that § 435.1200(d) this policy reversal from the previous also agree that participation by include a new subpart requiring states Medicaid eligibility rule, and noted that, Medicaid agency staff in training of to report to HHS and to make publicly since that rule was issued, several states Exchange staff would be valuable. We available data on the share of applicants have relied on it to inform their believe that the requirements in who are determined potentially eligible decisions on establishing a State-Based § 431.10(d) which specify the for Medicaid or CHIP by an Exchange Exchange, as well as to plan for requirements for the agreement between who are eventually enrolled. Moreover, Exchange and Medicaid systems and the Medicaid agency and the Exchange they recommended that procedures operations in future years. They believe or Exchange appeals entity include the should be outlined for HHS to evaluate these decisions and activities cannot requisite quality control and oversight the data and take corrective action if easily be amended or changed in a short language. data revealed that significant numbers timeframe, and this policy change could Comment: Many commenters of people are ‘‘falling through the have a major impact on the work states recommended ways to ensure a cracks’’ because they must navigate have completed, as well as their future

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plans. They requested that CMS revoke we are finalizing our proposal in prescription drug coverage to the list of the proposed change. § 435.116 that this income limit should benefits that must be included in Response: We appreciate the also be converted. benchmark-equivalent coverage; challenges facing states, which is why required the provision of Essential B. Essential Health Benefits in we signaled nearly a year ago on May Health Benefits (EHBs) beginning in 16, 2012, in guidance titled ‘‘General Alternative Benefit Plans 2014; and directed that section 1937 Guidance on Federally-facilitated Section 1937 of the Act provides benefit plans that include medical/ Exchanges’’ our intent, in light of public states with the flexibility to amend their surgical benefits and mental health and/ comments received on the final Medicaid state plans to provide for the or substance use disorder benefits Medicaid and Exchange eligibility use of benefit packages other than the comply with the Paul Wellstone and regulations, to propose further comment standard Medicaid state plan benefit Pete Domenici Mental Health Parity and regarding ways that States could ensure package offered in that state, for certain Addiction Equity Act of 2008 coordinated systems when engaging populations defined by the state. These (MHPAEA). non-profits and private contractors in ABPs are based on benchmark or In addition, we proposed to the process of making Medicaid benchmark-equivalent packages. There implement section 1902(k)(1) of the Act, eligibility evaluations, while having are four benchmark packages described which requires that medical assistance government agencies make eligibility in section 1937 of the Act: for, the new eligibility adult group for determinations. See http:// • The benefit package provided by low-income adults under section cciio.cms.gov/resources/files/ the Federal Employees Health Benefit 1902(a)(10)(A)(i)(VIII) of the Act must ffe_guidance_final_version_051612.pdf. plan (FEHB) Standard Blue Cross/Blue receive medical assistance provided We have also shared our intent to Shield Preferred Provider Option; through an ABP (which must include propose revised rules in webinars with • State employee health coverage that coverage of EHBs as of the same date). states on the eligibility rules and in is offered and generally available to We also proposed to implement individual state meetings. state employees; section 1937(a)(2)(B)(viii) of the Act, • The health insurance plan offered which provides that individuals in the 11. Conversion of Federal Minimum through the Health Maintenance new mandatory eligibility group for Income Standards for Section 1931 of Organization (HMO) with the largest former foster care children under age 26 the Act (§ 435.110 and § 435.116) insured commercial non-Medicaid are exempt from mandatory enrollment We proposed to require conversion of enrollment in the state; and in an ABP. the federal minimum income standard • Secretary-approved coverage, We proposed to implement section for section 1931 of the Act to comport which is a benefit package the Secretary 1937(b)(7) of the Act, which provides with the new rules regarding modified has determined to provide coverage that medical assistance to individuals adjusted gross income (MAGI) that will appropriate to meet the needs of the described in section 1905(a)(4)(C) of the take effect on January 1, 2014. Sections population provided that coverage. Act (individuals of child bearing age) 1902(e)(14)(A) and (E) of the Act ensure Benchmark-equivalent coverage is through enrollment in an ABP shall that, in the aggregate, individuals who provided when the aggregate actuarial include family planning services and would have been eligible under value of the proposed benefit package is supplies. Medicaid rules in effect prior to the at least actuarially equivalent to the We proposed to codify in § 440.345(e) Affordable Care Act remain eligible coverage provided by one of the benefit the process to determine how often once the new MAGI-based packages described above, for the states would need to update ABPs after methodologies go into effect. Our identified Medicaid population to December 31, 2015. proposal to direct conversion of the which it will be offered. Section 1937 of We also proposed to add a new federal minimum standard for section the Act further provides that certain § 440.347 to incorporate section 1931 implements the conversion categories of benefits must be provided 2001(c)(5) of the Affordable Care Act. requirements in the statute more in any benchmark-equivalent plan, and Furthermore, anti-discrimination consistently, which is particularly other categories of benefits must include provisions found at section 1302(b)(4) of important in light of the Supreme ‘‘substantial actuarial value’’ compared the Affordable Care Act were proposed Court’s decision in National Federation to the benchmark package. to be codified § 440.347(e). of Independent Business v. Sebelius, That said, we appreciate that it may 1. General Comments ll U.S. ll; 132 S. Ct. 2566; 183 be difficult at this point to make L.Ed. 2d 450 (2012). The proposed changes to the ABP that take effect by Comment: One commenter stated they changes are discussed in more detail in January 1, 2014. In light of this support the structure for implementing the January 22, 2013 proposed rule (78 challenge, we will partner with states to EHBs as proposed. FR 4628 and 4629). work as quickly as possible to come into Response: CMS appreciates the We received no comments on our full compliance with these provisions. support. proposed policy to convert the federal We do not intend to pursue compliance 2. Alignment With Essential Health minimum standard for section 1931 of actions on these issues to the extent that Benefits Provisions the Act, and therefore, are finalizing our states are working toward but have not a. Scope of Alternative Benefit Plans proposal in § 435.110. This policy completed a transition to the new ABPs (§ 440.305) relates to the coverage levels for parents on January 1, 2014. and caretaker relatives in states that do We proposed to add the new adult not implement the eligibility expansion Conforming Changes to Medicaid To eligibility group as an eligibility group in section 2001 of the Affordable Care Align With Essential Health Benefits that must receive benefits consistent Act to provide coverage for the low- We proposed to implement section with section 1937 of the Act. We also income adult group. In addition, 2001(c) of the Affordable Care Act that proposed that groups provided ABP because pregnancy benefits for pregnant modifies the benefit provisions of coverage under section 1937 of the Act women under § 435.116(d)(4)(i) are tied section 1937 of the Act. Specifically, may be identified based on individual to the same May 1, 1988 AFDC income section 2001(c) of the Affordable Care characteristics and not by the amount or standard for the applicable family size, Act added mental health benefits and level of FMAP funding.

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Comment: Many commenters needs of the new adult population, Comment: One commenter believed commended the addition of language including those with varying health care that the Affordable Care Act provided prohibiting states from targeting needs. As long as each benefit package an unprecedented opportunity to Medicaid expansion populations solely contains all of the EHBs, much improve access to somatic and on the basis of applicable matching rate. flexibility exists for states to meet the behavioral health treatment for the ‘‘jail- In addition, many commenters needs of beneficiaries. involved’’ population. The commenter applauded language proposing to codify Comment: One commenter was noted that up to 6 million incarcerated the flexibility HHS has given to states to concerned that individuals age 50 to 64 individuals have income below 133 use the Secretary-approved option in may not be provided EHBs that are at percent which would make them newly section 1937 of the Act to extend least equal to those available to high- eligible for Medicaid under the comprehensive Medicaid coverage to income individuals who purchase Affordable Care Act. These individuals the newly-eligible expansion coverage on the commercial markets. could represent up to 1⁄3 of the newly population. The commenters further Response: We understand that there eligible population, underscoring the urged CMS to partner with states to could be some variation in EHBs as importance of considering the particular ensure that this population’s full range defined for the individual market and circumstances of incarcerated of mental health and substance use for Medicaid based on the selection of individuals in implementation of the needs and other health needs will be different benchmark plans to define Affordable Care Act. met. EHBs. But the flexibility to select Response: Paragraph (A) following Response: We thank the commenters different benchmark plans to define section 1905(a)(29) of the Act and for their support. EHBs for Medicaid ABPs will allow implementing regulations at § 435.1009, Comment: One commenter questioned states to address the unique needs of specify that Medicaid is prohibited from the inclusion of the sentence which each circumstance and promote making payments for care or services for states, ‘‘Enrollment in ABPs must be administrative simplicity, while still any individual who is an inmate of a based on the characteristics of the providing a floor for coverage. As long public institution, except as an inpatient individual rather than the amount or as that floor is met, Medicaid in a medical institution. We read this level of federal matching funds.’’ The beneficiaries in the new adult group can prohibition to apply generally to commenter stated this to be an also receive benefits from the selected medical assistance, whether provided unnecessary statement since eligibility coverage options under section 1937 of through the regular coverage plan or for FMAP is based on eligibility the Act or through substitution of through an ABP. Regular coverage or category. It is unclear why enrollment in benefits. regular Medicaid benefit package is a benchmark plan would impact FMAP. Comment: One commenter stated it is defined as Medicaid state plan services Response: People who qualify for important that all individuals obtaining including services defined in section eligibility under the new adult Medicaid coverage under the Affordable 1905(a), 1915(i), 1915(j) and 1945 eligibility group will be determined to Care Act receive health coverage authorities. Thus, while we agree with be either newly eligible or already appropriate for their needs, including the commenter that incarcerated eligible. For Medicaid coverage strong coverage for mental health and individuals may be eligible for provided to the newly eligible substance use disorders. The commenter Medicaid, they would not be entitled to population, the state will receive 100 also wrote it is important that ABP benefits inconsistent with the percent FMAP in 2014 and for those traditionally Medicaid eligible payment exclusion. We note that this is who are determined to be eligible under populations that may be enrolled in consistent with the exclusion of December 2009 state rules, the state will ABPs are guaranteed adequate coverage. incarcerated individuals from eligibility receive its otherwise applicable FMAP. Response: ABP flexibility is an option to enroll in coverage through the We included this language to clarify that that states can choose to use in Exchanges. It is also consistent with the states may not design different benefit redesigning their current Medicaid responsibility under the Eighth packages based on the level of FFP they benefit program. The requirement that Amendment of the United States will receive, but rather the benefit ABPs include EHBs and comply with Constitution of governmental entities to package should be designed based on mental health parity requirements provide necessary medical care to the medical needs of the population ensures a minimum level of sufficiency individuals who they are holding as being served. of the coverage. inmates, which effectively creates a Comment: One commenter believed Comment: One commenter requested liable third party for such care. that the use of ABPs will assist states that HHS require or give states the States should suspend, rather than with expanding coverage in a option to provide EPSDT coverage to 19- terminate, the Medicaid eligibility of meaningful way. However, the new and 20-year olds who qualify for the individuals who are enrolled in adult population may have unique new adult group. Medicaid when entering a public health care needs, including a high Response: The existing provisions of institution, so as to ensure ease of incidence of behavioral health and § 440.345 require states to make reinstitution of coverage post-release. social issues. The commenter believed available EPSDT services as defined in Additionally, if an individual is not that the use of the ABPs would be most section 1905(r) of the Act that are already enrolled in Medicaid, states can beneficial if they are used to tailor the medically necessary for those enroll eligible individuals prior to their scope of services and alignment of individuals under age 21 who are release so that the individual can benefits to ensure adequate delivery covered under the State plan. We did receive Medicaid covered services in a systems for high need populations. not propose to change this requirement. timely manner upon discharge. Response: Section 1937 of the Act To the extent that any medically Comment: One commenter believed offers flexibility for states to provide necessary EPSDT services are not that the new eligibility category is likely medical assistance by designing covered through the ABP plan, states to attract younger and healthier different benefit packages plan for must supplement the ABP plan to populations than traditional Medicaid. different groups of eligible individuals. ensure access to these services. EPSDT The commenter believed that a We agree with the commenter that ABPs provisions apply to 19- and 20-year olds percentage of those who are newly can be successfully designed to meet the who qualify for the new adult group. eligible will acquire a condition or

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disability after they are enrolled in an underlying plan. The commenter sections 1902(a)(1) (related to state- ABP. The commenter recommended requested that CMS clarify and/or wideness) and 1902(a)(10)(B) (related to that HHS standardize an effective confirm the interpretation of this comparability) of the Act. This process for ensuring that beneficiaries provision. flexibility is provided at § 440.376 and whose health status changes have the Response: We confirm that the § 440.380, respectively. opportunity to access in a timely individual’s interpretation is correct. Comment: One commenter was manner other ABP or traditional state Section 1902(k)(1) of the Act provides unclear why the term ABP is being Medicaid plans which meet their needs. that individuals in the new adult group used. The Affordable Care Act The following standards were suggested: receive benchmark or benchmark- references ABPs specifically for A process for participants to request and equivalent coverage subject to the evaluation of the ABPs as required receive clinically appropriate benefits requirements of section 1937 of the Act under the Class Independence Advisory not routinely covered by the plan; a (except that individuals who would Council. Other sections reference process for participants to request and otherwise be exempt may choose to alternative benefits or programs receive coverage for benefits beyond the receive benchmark or benchmark- specifically under section 1937 of the limits set by the plan where equivalent coverage that is not limited Act or the establishment of Basic Health extraordinary circumstances exist; and a by section 1937 of the Act, and thus Plans. The commenter believed the use process for participants to request and have the option of benchmark or of the term is confusing and receive coverage of specialty care not benchmark-equivalent coverage that is unnecessary since benchmark plans are routinely coverage by the plan when equal to the Medicaid benefit package not alternative plans or programs as medically necessary and appropriate. otherwise available). Such coverage can originally identified in the law. Another Response: As noted, states have the be in the form of Secretary-approved commenter found § 440.305 confusing flexibility to define different benefit coverage, which may, at state option, as paragraph (a) refers to ‘‘benchmark packages to meet the needs of disparate include a broader range of services than and benchmark-equivalent’’ however populations. In addition, individuals in public employee or commercial paragraph (b) refers to ABP. The the new adult group meeting the benchmark options. commenter suggested revising exemption criterion found in section Comment: Many commenters paragraph (a) by replacing benchmark 1937 of the Act have the ability to requested CMS clarify that the federal and benchmark-equivalent with ABP. choose between ABP benchmark matching rate is based on the individual Response: The Deficit Reduction Act coverage designed by the state using the and not the services provided. A few of 2005 amended the Act by adding a rules of section 1937 of the Act commenters requested clarification that new section 1937 of the Act to provide including EHBs as a minimum level of services provided through the Secretary- for the use of benefit packages other coverage, or ABP benchmark coverage approved ABP process for Medicaid than the standard benefit package, defined as the state’s approved regular expansion individuals will be covered namely benchmark and benchmark- state plan benefit package, which is not at the enhanced rate and that Medicaid equivalent packages. The Affordable subject to the requirements of section expansion individuals who are Care Act made statutory changes to 1937 of the Act. exempted into traditional Medicaid section 1937 of the Act, one of which is Comment: One commenter supported coverage will also be covered at the the requirement that section 1937 providing states with flexibility to add enhanced rate. coverage packages include EHBs. We state plan benefits and services found in Response: We clarify that the issued regulations outlining how the base-benchmark plans to benchmark- enhanced FMAP rate for newly eligible precise parameters of EHBs will be equivalent benefits. The commenter also individuals is available for all services established in the non-grandfathered believed it would helpful to clarify that they receive. The matching rate is based plans in the individual and small group adding such benefits would be possible on the individual, not on the services markets and, to some degree, how they and appropriate for individuals in the provided to them. will be implemented in section 1937 Medicaid expansion group. Comment: One commenter urged HHS coverage plans. In that regulation, the Response: We appreciate the to clarify the flexibility that states will term ‘‘base-benchmark’’ was used to commenter’s support, and clarify here have to design multiple ABPs targeting refer to the base plan used by states to that individuals in the new adult group specific populations. The commenter determine EHBs for coverage plans in can receive benchmark-equivalent understands this provision will allow the non-grandfathered plans in the coverage or Secretary-approved states to put in place ABPs for sub- individual and small group markets. coverage which can include a broader populations within the newly eligible That base-benchmark plan becomes the range of services than in public group (that is, people living with EHB-benchmark plan after it is employee or commercial benchmark chronic viral hepatitis or other chronic supplemented with any missing coverage options. conditions) and urges CMS to clarify categories of EHBs. In an effort to Comment: One commenter that this is an appropriate use of the prevent confusion between the term interpreted the proposed rule to say that ABP flexibility. ‘‘benchmark’’ used for the non- individuals who are newly eligible Response: Section 1937 of the Act grandfathered plans in the individual adults—and not deemed medically provides states with significant and small group markets, and the use of frail—do not qualify for additional flexibility to design Medicaid benefit ‘‘benchmark’’ by section 1937 coverage services above and beyond what is coverage under the State plan. There are plans, we chose from the statutory required under section 1937 of the Act many options in selecting an ABP, and construct of section 1937 of the Act the and the EHB. Based on that states may offer different ABPs to term ‘‘Alternative Benefit Plan’’ (ABP) interpretation, if a state wanted to different targeted populations (except to hereafter refer to Medicaid provide wrap around services for a that, as discussed elsewhere, targeting benchmark and benchmark-equivalent particular population, in which some of cannot be based on the amount or level plans as ABP. the newly eligible would fall under, it of federal matching funding). Section Comment: One commenter indicated would not be allowable unless the state 1937 of the Act provides states with the that there was no adult group under created a Secretary-approved plan that statutory construct to provide an ABP section 1902(a)(10)(A)(i)(VIII) of the Act incorporates the benefits into the without regard to requirements at on or before February 8, 2006 so the

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exception in subsection (b) does not benefits being interchanged must be package than the existing population appear to fit. actuarially equivalent. Benefits do not would receive. Response: Section 6044 of the Deficit have to be similar in nature, they must Response: We understand the Reduction Act of 2005 amended Title only be in the same EHB category and commenter’s concern, and it is true that XIX by adding a new section 1937 of the actuarially equivalent. Furthermore, the benefit package may be different Act that allows States to amend their states may substitute more than one because of the requirement that ABPs Medicaid State plan to provide for ABPs benefit that when combined are provide EHBs. However, it is not clear and limits application of this provision actuarially equivalent to a single benefit. that the ABP benefit package provided to individuals whose eligibility is based States may use their Medicaid state plan to the new adult eligibility group will be on an eligibility category under section benefits for substitution if the state plan more generous than the existing 1905(a) of the Act that could have been benefit is actuarially equivalent and in Medicaid benefit package. In addition, covered under the State’s plan on or the same EHB category of benefit that we remind readers that the EHB before February 8, 2006. In 2010, section will be replaced. requirements apply to all individuals 2001(a)(1) of the Affordable Care Act Comment: Consistent with the receiving services through an ABP, not amended Title XIX to establish a new provisions of sections 1902(k)(1) and just those in the new adult group. optional adult eligibility group for low- 1903(i)(36) of the Act, the commenter Summary: We did not make any income adults age 19 to 64. Effective requested that CMS confirm that the changes to proposed regulation text as a January 1, 2014, States that implement coverage for individuals eligible only result of comments in this section. this new eligibility group must provide through section 1902(a)(10)(A)(i)(VIII) of b. Exempt Individuals (Former Foster medical assistance for that group the Act is limited to benchmark or Care Children) (§ 440.315) through an ABP. As specified, all benchmark-equivalent coverage. provisions of section 1937 of the Act We proposed to implement section Response: That is correct. This still 1937(a)(2)(B)(viii) of the Act, added by apply to the new adult eligibility group leaves states with significant flexibility except that those individuals in the new section 2004 of the Affordable Care Act, to design coverage using the options of as amended by section 10201(a) of the adult group who meet the exemption benchmark coverage, which includes criteria will have a choice between ABP Affordable Care Act, by providing that Secretary-approved coverage, and individuals eligible under section benchmark benefits as defined by the benchmark equivalent coverage. Section state under the rules of section 1937 of 1902(a)(10)(A)(i)(IX) of the Act will be 1937 of the Act must also provide EHBs, exempt from mandatory enrollment in the Act and ABP benchmark benefits which through selection of a base- defined as the state’s approved an ABP. benchmark plan, supplementation and Comment: Many commenters Medicaid state plan, without regards to substitution, will be used to define the the rules of section 1937 of the Act. commended HHS for confirming that EHBs. EHBs are then incorporated with Comment: A few commenters the new former foster care children the section 1937 benchmark coverage to believed the final rule should clarify group is exempt from mandatory that an ABP designed for individuals lead to a complete benefit package. enrollment. Many other commenters within the new adult eligibility group Comment: Several commenters stated expressed support for affirming at can align with traditional Medicaid that the option to offer specialized § 440.315(h) that former foster care coverage through the process of benefit packages, in the form of more children are statutorily exempt from designing of a Secretary-approved plan. than one ABP, to different target mandatory enrollment in an ABP, and Response: We understand the populations creates an administrative therefore, can access the full Medicaid importance of this issue, and reiterate burden and confusion for families. The benefit, including EPSDT services, up to guidance here. Secretary-approved option to offer specialized benefit age 21. coverage, which can include the full packages might require more than one Response: We appreciate commenter regular Medicaid state plan benefit design process and public notice; support. Individuals under age 21 package, is one of the four statutorily additional actuarial analyses of the receive EPSDT either through the ABP specified coverage benchmarks available different benefit packages for rate or as additional coverage that under section 1937 of the Act. States setting; an extra process for tracking supplements the ABP. can choose to use Secretary-approved individuals; and a state’s contracted Comment: One commenter wrote that coverage to significantly align the MCOs would have to manages different while the proposed rule clarifies that benefits offered to the new adult benefit packages. former foster care youth up to age 26 are eligibility group with the regular state Response: The flexibility to provide eligible for full Medicaid benefits, may Medicaid package. Like with the other specialized benefit packages to one or not be mandated into an ABP, and will three statutorily specified coverage more targeted populations is at the have access to full EPSDT services up to benchmarks, the Secretary-approved option of the state. Each state will age 21, after age 21, former foster care coverage must include EHBs as determine whether it is appropriate or youth will no longer have access to described in section 1302(b) of the administratively feasible to design and EPSDT benefits and requested Affordable Care Act and applicable offer different benefit packages for clarification as to the meaning of ‘‘full regulations. In all cases, EHBs are first different groups of beneficiaries. Medicaid benefits.’’ According to the defined as the benefits from the base Comment: One commenter was commenter, the American Academy of benchmark plan and supplemented with concerned with the disparities in Pediatrics recently reported that benefits from other base benchmark coverage that the proposed EHB policy children in foster care experience plans as necessary. CMS is clarifying in would create. That is, the guidance significantly higher rates of medical and this rule that substitution of benefits as suggests that the policy only mental health challenges, and therefore, defined at § 156.115(b) is applicable to mandatorily applies to the newly believes that youth aging out of foster EHBs in ABPs. We believe that states eligible category of adults. In states that care require comprehensive health will appreciate this added flexibility. wish to take up the new expansion coverage that recognizes their unique Substitution of benefits can occur option this creates a situation in which needs. Once a youth turns 21 they lose benefit by benefit. The benefits must fit the higher income expansion population EPSDT coverage but continue to have into the same EHB category and the will receive a more generous benefit the same health needs. The commenter

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therefore requested that CMS define c. Benchmark-Equivalent Health Response: A clerical error was made ‘‘full Medicaid benefits’’ to include Benefits Coverage (Prescription Drugs in § 440.335(c)(1). The regulation has benefits akin to EPSDT, including and Mental Health Benefits) (§ 440.335) been corrected to read, ‘‘. . . for any dental coverage, mental health services We proposed to implement section additional benefits of the type which are and physical health care. 2001(c) of the Affordable Care Act that covered in 1 or more of the standard One commenter stated she appreciates added mental health benefits and benchmark . . .’’ the clarification that former foster care prescription drug coverage to the list of Comment: One commenter was children are exempt from mandatory benefits that must be included in concerned that only provision § 440.335(c)(1) was being amended enrollment in an ABP and that they will benchmark-equivalent coverage. leaving (c)(2) and (c)(3) intact. The receive full Medicaid benefits. However, Comment: Many commenters were commenter believed this will result in it is not clear whether this means they supportive of paragraphs (b)(7) and conflict with newly added can receive EPSDT. The commenter (b)(8) implementing the statutory § 440.335(b)(7) and (8) as these urged CMS to consider mandating, or at requirements for benchmark-equivalent provisions provided that four benefits a minimum, allowing states to provide coverage to include prescription drugs (prescription drugs, mental health, EPSDT benefits for this at risk and mental health benefits. A few vision and hearing services) must population because in a majority of commenters commended the broad list represent 75 percent of the actuarial states oral health is not part of the adult of services included in the proposed value and are not required to be Medicaid benefit package and evidence rule. Response: We agree that the inclusion covered. suggests that roughly 35 percent of Response: We disagree that the children in foster care have significant of prescription drugs and mental health benefits as defined within ABPs are existing provision § 440.335(c)(2) will oral health problems. Making sure oral conflict with § 440.335(b)(7) and (b)(8). health issues are addressed as former important and necessary and we appreciate the support of commenters The actuarial value of the coverage for foster care youth move into adulthood prescription drugs, mental health will have a significant impact. regarding the coverage of the benchmark-equivalent health benefits. services; vision services; and hearing Response: We acknowledge that Comment: A few commenters were services must still be at least 75 percent children in foster care generally pleased that HHS listed services that of the actuarial value of the coverage for experience significantly higher rates of can be vital to people with disabilities that category of service in the medical and mental health challenges and chronic health conditions as benchmark plan used for comparison by and that these health challenges often allowable in benchmark-equivalent and the state. continue after aging out of foster care. Secretary-approved coverage. However, provision § 440.335(c)(3) is For this reason, Congress provided Response: We acknowledge the in conflict with § 440.335(b)(7) and statutory protection for an individual special medical needs of individuals (b)(8). The state will, by default, meet who receives aid or assistance under with chronic health conditions. The the conditions of (c)(3) because part B of title IV of the Act for children final rule provides a clear path to prescription drugs and mental health in foster care or an individual for whom coverage for chronic disease services are now required benchmark- adoption or for whom foster care management under § 440.347. equivalent coverage and states will not assistance is made available under part Comment: A number of commenters have an option to provide such coverage E of title IV of the Act, without regard requested that CMS clarify paragraph as regulation currently allows. States to age, by exempting these individuals (c)(1). The commenters believed that also have the ability to add vision and from mandatory enrollment in an ABP. CMS is suggesting it will use a similar hearing services through new Under the existing provisions of policy for benchmark-equivalent requirements for additional coverage at § 440.345, States must make available coverage as it does for Secretary- § 440.335(c), for individuals not in the EPSDT services, as defined in section approved coverage and, thus, allow new adult group. Individuals in the new 1905(r) of the Act, for those individuals addition of benefits through the adult group can receive these vision and under age 21 who are enrolled in an benchmark-equivalent coverage process. hearing services, at state option, through ABP. To the extent that medically The commenters believed there is no the use of Secretary-approved coverage. necessary EPSDT services are not legal impediment to this approach and Therefore, we have stricken otherwise covered through the ABP for supported it. The commenters urged § 440.335(c)(3) from the final rule. Summary: As a result of comments individuals under 21, states are required CMS to confirm this interpretation. Response: We confirm this received in response to the proposed to supplement the ABP to ensure access interpretation. The rule provides states regulation, CMS has deleted to these services. However, there is no the flexibility to include coverage for § 440.335(c)(3) from the final rule. statutory authority to require states to benefits beyond the required coverage Additionally, an error was made in provide EPSDT services beyond age 21. and allows for states to create § 440.335(c)(1). The regulation has been We note that states have the flexibility benchmark-equivalent coverage that can corrected to read, ‘‘. . . for any to design an ABP targeted to former include benefits not available through additional benefits of the type which are foster care children that provides a more the benchmark options. covered in 1 or more of the standard comprehensive array of health coverage Comment: Numerous commenters benchmark coverage packages described than is provided through the regular were confused by the language in in § 440.330(a) through (c) of this part or state plan and to offer voluntary § 440.335(c)(1) allowing addition of State plan benefits . . .’’ Otherwise, enrollment in such a plan. Through the services available in ‘‘2 or more’’ CMS has not made any changes to this ABP option, states can provide this benchmark options, as opposed to the section. population with oral health and other language of ‘‘1 or more’’ which appears services not otherwise available to in § 440.330 and in current regulation. d. EPSDT and Other Required Benefits adults through State plan coverage. The commenters believed this may be a (Family Planning Services and Summary: We have not changed clerical error and recommended the ‘‘1 Supplies) (§ 440.345) proposed regulation text as a result of or more’’ language to maximize state We proposed to codify section 2303(c) comments received in this section. flexibility. of the Affordable Care Act by adding

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paragraph (b) to § 440.345 to provide beneficiary choice of family planning services and supplies required under that ABP coverage provided to provider in this provision, since this EHB as specified in § 440.347(a) for individuals described in section provision deals only with coverage consistency and clarity and to ensure 1905(a)(4)(C) of the Act (individuals of issues under an ABP, and not with consumer protections. child bearing age), include family issues such as freedom of choice of Response: Coverage of infertility planning services and supplies. provider. That issue is separately services is generally at the option of the Comment: Many commenters thanked addressed in our regulations at § 431.51 state. However, coverage of infertility CMS for codifying the important and § 441.20. services becomes part of the ABP benefit provision requiring that ABP coverage Comment: One commenter addressed package either: (1) if the state selects a provided to individuals of child-bearing section 2(B)(1) of the preamble, coverage plan under section 1937 of the age include family planning services specifically the statement ‘‘Consistent Act that includes such coverage or and supplies. This will help insure that with the current law, states have the chooses to include such coverage as part Medicaid beneficiaries can access flexibility within those statutory and of a benchmark-equivalent coverage essential family planning services and regulatory constructs to adopt prior plan; or, (2) if the base-benchmark plan supplies regardless of the type of authorization and other utilization chosen by the State to define EHBs Medicaid plan in which they are control measures, as well as policies covers infertility treatment in an EHB enrolled. that promote the use of generic drugs.’’ category, unless the state elects the Response: We thank the commenters The commenter is concerned that the option set forth in 45 CFR 156.115(b) to for their support. interpretation of this statement could substitute actuarially equivalent benefits Comment: One commenter requested provide too much flexibility for states in in defining EHBs. We are reiterating further clarification as to the specific the use of utilization control measures, here that CMS is clarifying in this rule services and supplies that fall into this creating a barrier to necessary family that substitution of benefits as defined category. Clarification was also planning supplies for Medicaid at 45 CFR 156.115(b) is applicable to requested on which services are covered enrollees, as women need access to the EHBs in ABPs. We believe that states for individuals of child bearing age, full range of contraceptive methods to will appreciate this added flexibility. including minors who can be utilize the method most effective for Under 45 CFR 156.115(b)(1), considered to be sexually active, who them. The commenter requested HHS to substitution of benefits can occur are eligible under the state plan, and issue sub-regulatory guidance that benefit by benefit. The benefits must fit who want such services required under prohibits barriers to the full range of into the same EHB category and the section 1905(a)(4)(C) of the Act. Because FDA-approved contraceptive methods benefits being interchanged must be family planning services are not clearly guaranteed under the Affordable Care actuarially equivalent. Furthermore, defined in federal law or regulation, the Act. states may substitute more than one commenter urged CMS to clarify in this Response: Prior authorization and benefit that when combined are rule that family planning services and utilization control measures are actuarially equivalent to a single benefit. supplies include but are not be limited common practices used within regular States may use their Medicaid state plan to: examination and treatment by Medicaid, public employee, and benefits for substitution if the state plan medical professionals; medically commercial insurance products. Benefit benefit is actuarially equivalent and in appropriate laboratory examinations packages designed within ABPs also the same category of benefit that will be and tests; counseling services and have this flexibility. These approaches replaced. We do believe it is necessary patient education; medically approved should not be used as a barrier to to explicitly list the EHB categories in methods; procedures, pharmaceutical needed services. This proposed rule and the regulation text for benchmark- supplies; and devices to prevent final rule added the Affordable Care Act equivalent coverage, as section 1937 of contraception and infertility services, requirement that all ABPs must include the Act was amended to require both including sterilization reversal. coverage of family planning services benchmark and benchmark-equivalent Several recommended HHS clarify and supplies. Nothing in the final rule coverage to include all EHBs. States will family planning to specify coverage of authorizes deviation from the protection identify substituted benefits in the ABP section 1905(a)(4)(C) of the Act services of beneficiary free choice of family SPA when submitted to CMS. and supplies and require states to assure planning provider, consistent with Summary: We will not be making compliance with section 1902(a)(23) of section 1902(a)(23) of the Act and changes to proposed regulation text as a the Act freedom of choice for family § 431.51, or an exception to the result of comments received. planning services and supplies, since it requirement at § 441.20 that the state is likely that many states will contract plan provide that beneficiaries are e. EPSDT and Other Required Benefits with managed care organizations, some protected from coercion or mental (Mental Health Parity) (§ 440.345) of which may have no Medicaid pressure and are free to choose the Section 2001(c) of the Affordable Care experience. They believe that explicitly method of family planning to be used. Act directed that benefit plans under requiring freedom of choice will Comment: One commenter wrote that section 1937 of the Act that include increase the likelihood that all plans discrimination in benefit plan design is medical and surgical benefits and will comply with the freedom of choice a persistent practice in the insurance mental health and/or substance use requirement. industry and the exclusion of treatment disorder benefits comply with MHPAEA Response: Family planning services for infertility is one example. Infertility and we codified this at § 440.345(c) in and supplies are described in section affects an estimated 12 percent of the proposed rule. 1905(a)(4)(C) of the Act. We have women of child bearing age and Comment: Almost all commenters chosen not to use this rule as the vehicle infertility treatments are more expressed support for the requirement for issuing additional guidance on commonly prescribed for women than in § 440.345(c) requiring that mental family planning services, as such for men. Another commenter health or substance abuse benefits must guidance would need to have broader recommended that the list of required be provided by ABPs and must comply implications than this rule provides. In categories of services for benchmark- with MHPAEA. Many also commended addition, we do not believe it is equivalent coverage incorporate each of CMS for clarifying that ABPs must necessary to address issues relating to the benefits including family planning include mental health parity as this will

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lead to the provision of necessary must psychiatric habilitation be Health Officials Letter, we have also services to millions of individuals. A required, and that CMS should assure provided technical assistance to states number of commenters wrote about how that a robust package of mental health regarding the application of MHPAEA to extremely important it is that all coverage is part of ABPs. Commenters ABPs prior to submission of the ABP individuals gaining Medicaid eligibility indicated that supplementation, state plan amendments. under the Affordable Care Act receive substitution, parity and other Comment: A commenter requested coverage appropriate for their needs protections are the best approaches for that we clarify the applicability of including strong coverage of mental EHBs to meet the complex health needs mental health parity to Medicaid health and substance use disorders. of the low-income adults who will gain managed care organizations that provide Many expressed their appreciation for Medicaid eligibility under expansion. benchmark or benchmark-equivalent CMS’s strong support for this provision. The commenters encouraged CMS to do coverage. The commenter wanted to Many stated that they appreciated the whatever is within its authority to know if states would be required to proposed rule’s explicit recognition of encourage all plans to expand their provide services (for example; the Affordable Care Act requirement mental health and substance use rehabilitation, habilitation, substance that ABPs must provide the EHBs, disorder treatment to provide better care abuse services, etc.) that are optional including mental health and substance by providing the full range of MH/SUD services for Medicaid programs if they use disorder (MH/SUD) services. services and to ultimately reduce costs are not currently covered. Response: CMS thanks the and unnecessary loss of productivity Response: The January 16, 2013 State commenters for their support on the and life. Health Official Letter specifically states language in the regulation. Response: States must offer services that all Medicaid ABPs (including Comment: Some commenters asked in all ten EHB categories, including MH/ Secretary-approved coverage) must meet CMS to provide additional detail on SUD services, and must provide such the parity requirements, regardless of how the requirements of MHPAEA MH/SUD services in a manner that whether services are delivered in apply to ABPs including details on how complies with the parity requirements managed care or non-managed care to supplement benchmark or of MHPAEA. We do not intend to arrangements. In addition, under benchmark-equivalent coverage to bring require or request states to include § 440.347, ABPs must include MH/SUD it into compliance with parity and how specific services within EHB categories services regardless of whether they are to identify violations in parity offered by their ABP. As states currently covered in the state’s compliance. Commenters requested determine their ABP service package, Medicaid plan. clarification that MHPAEA requires states must use all of the EHB services Comment: One commenter requested ABPs to offer the same scope of MH/ from the base-benchmark plan selected that CMS clarify the guidelines SUD services as medical services, by the state to define EHBs for concerning ABP benefit substitutions including adequate prescription drug Medicaid, substituting or that involve mental health benefits. One coverage. supplementing as necessary. We believe wrote that substitutions should not be Response: On January 16, 2013, CMS this will allay concerns expressed by allowed if they would diminish the released a State Health Official Letter commenters, as commercial plans must value of the mental health coverage regarding the application of MHPAEA to also adhere to mental health parity provided by the EHB-benchmark plan Medicaid MCOs, CHIP, and ABPs. This requirements. on which ABP benefits are based. The guidance specifically states that all Comment: One commenter wrote that commenter recommended that this issue Medicaid ABPs (including Secretary- final MHPAEA regulations are not yet be carefully monitored; if possible, CMS approved coverage) must meet the released, and therefore, CMS should should develop an easily applied, parity requirements, regardless of provide a detailed framework for objective test to evaluate whether a whether services are delivered in determining and enforcing parity proposed benefit substitution would managed care or non-managed care compliance in this final rule. The reduce the value of mental health arrangements. This includes ABPs for commenter recommended that HHS coverage compared to the mental health individuals in the new low-income establish a clear process for how states coverage provided by the EHB Medicaid expansion group, effective can modify a plan to ensure parity benchmark plan. Additionally, some January 1, 2014. compliance if it is not compliant; clarify commenters stated there still is Comment: Many commenters wrote that the term ‘‘treatment limitation’’ confusion about how to apply the parity that more than just requiring includes both quantitative and non- requirements. Commenters encouraged compliance was needed in this final quantitative treatment limitations and CMS to issue explicit guidance on rule because of the documented includes limits on scope of service and whether benchmark plans will be disparity between coverage of medical duration of treatment; require full evaluated for compliance with parity surgical benefits and coverage of MH/ disclosure of benefit and medical requirements as necessary before they SUD services in commercial and management criteria from states and are approved by CMS as ABPs. employer health coverage. With about plans to ensure MHPAEA compliance in Response: As discussed above and one quarter of adults suffering from a ABPs; ensure that ABPs may not apply below in the summary, substitution will diagnosed mental health disorder, a financial requirement or treatment be allowed according to provisions at 45 disparity in services and cost sharing limitation, as specified in MHPAEA; CFR 156.115(b) except that states will has wide ranging impact. Some stated include examples of parity violations perform substitution rather than issuers. that studies and literature indicate and detailed information on how to We will review all ABP state plan deficits in employer coverage of mental supplement coverage that falls short of amendment requests from states against health benefits and that limits on MH/ the parity requirements; and review all applicable federal laws and regulations, SUD services were lower than those for ABPs to ensure compliance with including MHPAEA. medical surgical benefits. Some MHPAEA. Comment: Some commenters wrote commenters stated that in clarifying the Response: The January 16, 2013 CMS that because they are not specifically application of mental health parity CMS State Health Officials Letter provided a enumerated in MHPAEA, inpatient should make clear that if psychiatric framework for States to apply MHPAEA mental health substance abuse disorder rehabilitation services are provided, so to ABPs. Since the release of this State (MH/SUD) services are often not

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covered. Many commenters stated that assistance furnished through an ABP. exclusion that applies to all Medicaid the definition of ‘‘inpatient’’ in the This means that FFP is not available for services provided to an individual Interim Final Rules implementing any services, including services residing in an IMD, not solely a MHPAEA leaves the definition up to the provided through an ABP, furnished to payment exclusion for services provided state and insurance companies. This is an individual under age 65 who resides in or by an IMD. The statute excludes important and unfortunate because it in an IMD, except for inpatient services furnished to residents of an allows for avoidance of MHPAEA and psychiatric hospital services furnished IMD from the term ‘‘medical invites litigation. A number of to individuals under age 21. Finally, we assistance,’’ and we read this exclusion commenters stated that HHS can easily clarify that the requirement that all to apply whether medical assistance is rectify this deficiency by explicitly ABPs comply with MHPAEA includes furnished through regular coverage or mandating residential coverage as an compliance with MHPAEA through an ABP. (Above we clarify that ‘‘inpatient service which must be requirements regarding treatment limits. we have a parallel reading of the similar offered on par with medical/surgical Comment: A commenter wrote that payment exclusion for inmates of a coverage.’’ Some urged CMS to under the traditional Medicaid program, public institution.) Thus, we clarify that explicitly restate the requirement that the term ‘‘medical assistance’’ does not the IMD payment exclusion applies to all Medicaid ABPs must cover MH/SUD include care or services for any coverage offered through ABPs. Benefits services. A number of comments stated individual who is a patient in an furnished through ABPs can be that inpatient services must be defined institution for mental disease, but structured so that individuals have as including residential services, benchmark coverage does not have an inpatient options for mental health including Institutions for Mental express exclusion of care and services treatment outside of IMDs, but to the Diseases (IMDs). HHS can improve the for such individuals. The commenter extent that an individual resides in an interpretation of relevant definitions by asserted that for benchmark coverage, IMD, the IMD exclusion would apply. incorporating by reference those which includes coverage for EHBs, We are not aware of any contrary definitions as set forth by the American exclusion of these same services for congressional intent, and this position is Psychiatric Association in its Diagnostic patients residing in an IMD would consistent with the express statutory and Statistical Manual of Mental directly conflict with the plain language exclusion from the definition of medical Disorders. By offering a federal floor of of the law because section 1937 of the assistance. required services states can take comfort Act provides for no exception for Comment: A few commenters stated that they have met the mandated individuals between ages of 21 and 65 that MH/SUD services are sometimes requirement. One commenter wrote that residing in an IMD, but does contain an provided in facilities that are considered IMD restrictions present an access exemption from other provisions of an institution of mental disease for barrier for the expansion population and Title XIX (to which the IMD exclusion which FFP is excluded and requested the Affordable Care Act is clear that applies). The commenter states that just that CMS reconcile the requirement that ABPs should include the EHB as an ABP is exempt from complying these services must be provided as an hospitalization and mental health with the requirements related to state- EHB. services that are included in commercial wideness and comparability in the Response: For the reasons discussed coverage that must cover EHB. Another Medicaid statute because they conflict above, we are clarifying that the IMD commenter wrote that HHS should with the benchmark authority, so too is payment exclusion does apply to prohibit ABPs from including mental the plan exempt from complying with medical assistance furnished through health benefits that are subject to higher the IMD exclusion which cannot be ABPs. We expect that ABPs will ensure limitations on amount, scope, and applied in a consistent manner with the that coverage for MH/SUD services is duration than benefits intended for EHB requirements. The commenter also available consistent with MHPAEA and physical/medical conditions, or added that, just as application of the the final regulations that govern EHBs narrowly specifying that mental health IMD exclusion to an ABP would be under Medicaid. There may be options services cannot be a component of other ‘‘directly contrary’’ to a state’s ability to for inpatient services other than EHB categories, such as the mental offer EHBs, the exclusion is also inpatient services in IMDs that states health rehabilitation needs that are contrary to any of the benchmark/ may wish to consider to meet MHPAEA required following a traumatic medical benchmark-equivalent coverage obligations under ABPs. event. described in the statute. Another Comment: One commenter stated that Response: States must offer services commenter argued the same points and exclusions for otherwise-covered in all ABPs that reflect the ten EHB also stated that the IMD exclusion is not benefits such as mental health services categories, including MH/SUD services. consistent with the definition of an ABP that treat eating disorders and gender We do not intend to require states to to include, among a selection of plans, disorders should not be permitted, as include specific services within EHB the health insurance plan offered these exclusions carve out coverage categories offered through an ABP. Nor through the HMO that has the largest explicitly on the basis of health are we specifically requiring coverage of insured commercial non-Medicaid condition and are discriminatory. any particular residential mental health enrollment in the state. As such Response: We will review ABP state services as part of ‘‘inpatient services,’’ coverage would necessarily be available plan amendments to ensure their provided that the coverage complies on par to individuals residing inside compliance with applicable federal with MHPAEA. States may, however, be and outside of an IMD, the commenter statutes and regulations, including required to provide residential mental asserted that Congress never intended MHPAEA, and EHB anti-discrimination health services that are included in the the IMD exclusion to apply to Medicaid provisions. section 1937 coverage plan that is the beneficiaries enrolled in an ABP. Comment: One commenter stated that basis for the ABP, or that is included in Response: We do not agree with the healthcare providers who provide MH/ the base-benchmark plan selected by commenters’ statements that the IMD SUD treatment services were states to define EHBs for Medicaid. exclusion does not apply to medical encouraged by the passage of MHPAEA We clarify, however, that the IMD assistance furnished through an ABP. but many states and insurance payment exclusion does apply to all The IMD exclusion is not a service or companies are ‘‘stonewalling’’ medical assistance, even medical benefit exclusion. It is a payment implementation and inclusion of MH/

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SUD treatment as a mandate. EHB Response: A response on the timing of Medicaid ABPs. Additionally, the requirements will not correct this a final MHPAEA regulation is beyond commenter stated that MHPAEA holds problem unless HHS rules provide the scope of this regulation. out the promise that everyone will be better clarity regarding implementation Comment: One commenter wrote that able to get help but strong enforcement of parity, in particular inclusion of insurance companies have sought to of MHPAEA is necessary. inpatient services. avoid implementation of MHPAEA and Response: It is unclear exactly what Response: MHPAEA does not require states that do not currently require the commenter is asking. Therefore, we the provision of specific MH/SUD mental health parity may be concerned will not be able to respond to this services. Rather, it requires these that compliance will result in the state comment at this time. services to be provided in parity with incurring the costs associated with the Comment: A commenter wrote that medical/surgical services, when benefit expansion of state mandates. Two this rule as proposed rule fails to link packages include both sets of services. commenters stated that there are MHPAEA compliance to adherence to The release of the January 13, 2013 State lingering concerns with some of the the Interim Final Rule which Health Official Letter has provided parity language in the proposed operationalizes MHPAEA. The initial guidance to states and managed regulation, which states in § 440.345 previously issued Proposed Rule for care plans regarding the application of that ABPs that provide both medical Standards Related to Essential Health MHPAEA to the Medicaid program. We and surgical benefits, and mental health Benefits, which addressed the design of believe that guidance provides useful or substance use disorder benefits, must EHBs for commercial market insurance information to states regarding their comply with MHPAEA. CMS should beneficiaries, made specific reference to efforts to apply MHPAEA to their revise this language to make it clearer the Interim Final Rule effectuating Medicaid ABPs. In addition, CMS is and more accurate. The commenters MHPAEA. The proposed rule simply reminding commenters that inpatient asserted that MHPAEA does not apply says the EHBs of ABPs must comply hospitalization is a required EHB for to coverage under section 1937 of the with MHPAEA. The commenter ABPs. Act that is delivered in a non-managed questioned whether this lack of direct Comment: One commenter stated that care arrangement; rather the Affordable reference to the existing law mean Medicaid regulations should employ the Care Act extended the protections of Medicaid ABPS need not comply with same disorder carve-outs for the MHPAEA to this coverage without all provisions of the Interim Rule. The expansion population as used for amending MHPAEA. Specifically, commenter strongly urges CMS to existing populations and remain in regarding coverage under section 1937 clarify whether or not these ABPs must compliance with federal parity laws. of the Act, the Affordable Care Act comply with all provisions of the Further, states should not be required to requires that ‘‘the financial Interim Final Rule and what if any law, provide different or additional MH/SUD requirements and treatment limitations in whole, or in part, it will use to assess benefits to the expansion populations applicable to such mental health or ABP compliance with MHPAEA. than what is furnished to existing substance use disorder benefits comply Response: On January 16, 2013, CMS beneficiaries. with the requirements of section 2705(a) released a State Health Official Letter Response: This regulation does not of the PHS Act (MHPAEA) in the same regarding the application of MHPAEA to prohibit states from using their current manner as such requirements apply to a Medicaid MCOs, CHIP, and ABPs. This delivery systems or designing new group health plan’’ and the final rule guidance specifically states that all delivery systems to offer EHBs, should include similar language. Medicaid ABPs, including Secretary- including MH/SUD services. States are Response: It is unclear exactly what approved coverage, must meet the parity required to offer MH/SUD services the commenter is asking, in terms of requirements, regardless of whether consistent with the process set forth in incurring expenses associated with state services are delivered in managed care this regulation regarding the benefit requirements. Therefore, we will or non-managed care arrangements. development of ABPs and MHPAEA. not be able to respond to this comment Comment: Several commenters wrote Because of the need to select a public at this time. We disagree with the that exclusions of mental health, employee or commercial plan to define commenters’ assertion that mental substance use disorders and behavioral EHBs for Medicaid, there could be health parity requirements do not apply health treatments that fail to meet the differences between the ABP benefit to ABPs using non-managed care parity standards required by MHPAEA package and the services otherwise delivery systems. Parity requirements are discriminatory. Despite existing offered in the regular Medicaid coverage apply to all ABPs, regardless of the use parity requirements state package. of managed care. implementation and enforcement of Comment: Many commenters strongly Comment: One commenter wrote that MHPAEA has varied widely and urged CMS to release final MHPAEA because of changes in the income patients seeking metal health services regulations as soon as possible and to eligibility standards we expect Medicaid are frequently subjected to excessive include how to apply parity to EHBs expansion is more likely to enroll and inappropriate non-quantitative and ABPs and to give examples of individuals who are working but have limitations. Another commenter stated violations. A commenter stated that no insurance and who need this that CMS should identify a standard to without the final rule on MHPAEA, coverage to access treatment to maintain determine whether the coverage effective compliance will not be employment. People with addictions provided complies with non- possible. Another commenter requested enter treatment at different phases and discrimination provisions of the prompt release of additional guidance will use different parts of the Affordable Care Act. referenced in the January 13, 2013 State continuum, and elimination of any part Response: As stated in the January Health Official Letter, concerning any of the continuum would violate 13th State Health Official Letter, ABPs requirements to apply parity principles MHPAEA and cost human lives. The must comply with MHPAEA. across multiple managed care delivery commenter urged CMS to adopt the Comment: One commenter suggested systems and urged a flexible approach same standards set forth in the proposed that the goal of Affordable Care Act to measuring parity in carve-out setting rule for the Affordable Care Act coverage was to include the 10 EHBs in promotion of continuity for existing standards related to EHB, Actuarial including mental health and substance arrangements and authorities. Value, and Accreditation for purposes of use disorder services.

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Response: We agree with the does not contract with an FQHC or rural Comment: One commenter requested commenter that one goal of Affordable health clinic and that payment for these clarification that the Affordable Care Care Act coverage was to include services must be made in accordance Act established a floor of coverage using coverage of the 10 EHB categories, with the payment provisions of section EHBs. Benefits should not be limited including mental health and substance 1902(bb) of the Act. The inclusion of solely to EHBs as no ceiling was use disorder services in ABPs. We EHBs within section 1937 of the Act established. The Affordable Care Act support providing a floor of coverage to establishes a minimum level for only restricts costs for state mandated Medicaid beneficiaries. As mental benefits, to which other benefits benefits from being passed onto the health parity also applies, this will lead required as part of section 1937 of the federal government via the EHBs. to parity among mental health and Act are added. Response: Yes, EHBs are considered a substance use services and other Comment: Many commenters were minimum level of coverage. ABPs are medical and surgical services. supportive of the Affordable Care Act’s not limited solely to EHB benefits; ABPs Summary: We will not be making application of EHB requirements to are constructed based on the coverage changes to proposed regulation text as a ABPs and providing a floor of benefits. plan under section 1937 of the Act result of these comments. However, we Some commenters also supported selected by the state, including EHBs are clarifying that the payment inclusion of updates and modifications based on the state selected base exclusion for services provided to made thereafter. Some commenters benchmark plan, supplemented as individuals residing in an institute of went further to support the inclusion of necessary and subject to substitution of mental disease (IMD) continues to apply mental health and substance use actuarially equivalent benefits as to all individuals participating in ABPs. disorder benefits as consistent with the permitted under 45 CFR 156.115(b). The This is important because many MHPAEA. section 1937 coverage plan selected by commercial products offer coverage of One commenter generally supported the state can include a Secretary- residential services in settings that for implementing EHBs in ABPs to provide approved coverage plan that may Medicaid purposes are considered a stable set of core services for people include benefits that are not available IMDs, and federal matching funds will receiving benefits in the ABP, and to under other section 1937 coverage not be available for medical assistance help align the rules for patients and options. Furthermore, ABPs are required providers to ensure continuity of care. for individuals who reside in such to cover certain benefits including rural This is important for people who will settings. health clinics, FQHCs, and family churn between Medicaid, the f. EPSDT and Other Required Benefits planning services and supplies. EPSDT commercial markets and potentially a (ABPs Include EHBs and All Updates services for individuals below age 21 state basic health plan. also apply within section 1937 of the and Modifications) (§ 440.345) Response: CMS appreciates the Act. MHPAEA also applies to the We proposed at § 440.345(d) the support of commenters. requirement that ABPs provide EHBs Comment: A few commenters provision of MH/SUD services. and include all updates and identified that EHB definitions will Comment: One commenter requested modifications thereafter by the Secretary affect how individuals maintain access that CMS consider adding an EHB to the definition of EHBs. to health care, services and drugs and requirement for hospitals and Comment: Several commenters wrote biologicals that they need. pediatricians to conduct risk that the revisions make Federally Response: We agree with these assessments of all newborns for severe Qualified Health Center (FQHC) commenters. The new coverage will respiratory syncytial virus (RSV) requirements within ABPs less clear. likely be different from the coverage that disease. The EHBs are the floor of ABP coverage beneficiaries receive today. States will Response: These services can be and that the requirement to provide have discretion regarding how to define covered if states select coverage options EHBs within ABP does not circumvent EHBs using the process outlined in this that cover such services. Furthermore, existing requirements within section regulation, namely selecting the base- children must receive all EPSDT 1937 of the Act, which includes benchmark plan to define EHBs. For services as part of the ABP, and states coverage of FQHCs. The commenter Medicaid, we remind readers that EHBs may consider such risk assessments to stated to identify that the regulation as are only the floor for coverage, and be part of the required EPSDT screening drafted is confusing as subsections (a) states have options for offering coverage services. For the new adult group, only describing the requirement that at least that exceeds this floor. States can also 19- and 20-year olds will be covered by the ten categories of EHBs be included add additional coverage for beneficiaries EPSDT. There are both requirements in section 1937 of the Act and (b) receiving ABPs who are not eligible for and flexibility for states in both describing the requirements to include the new adult group. selecting plans and constructing EHBs the benefits covered in one of the state Comment: One commenter suggested and section 1937 coverage options. selected benchmark plans and that home care services should be Please refer to the summary at the end subsection (a) does not indicate that it included in the Medicaid ABP to the of this section for further discussion of is a floor. The commenters requested same extent that they are included in these steps and flexibilities. that CMS reiterate or clarify revisions to the existing regular Medicaid program. Summary: We have not made any the regulation to reaffirm this. Response: The rules for establishing changes to regulation text, based on Response: There are several benefits coverage are different between the public comments received. specified by section 1937 of the Act that regular state Medicaid program and g. EPSDT and Other Required Benefits are required in addition to EHBs. We flexibility provided within section 1937 (Process for Updating EHBs) (§ 440.345) did not change § 440.365, which reflects of the Act. States must provide home section 1937(b)(4) of the Act, providing health services as a mandatory benefit In § 440.345(e), we proposed that the that states must assure access to these in the regular Medicaid state plan. This ABPs that include EHBs will remain services through the benchmark or is not a minimum requirement for effective through December 31, 2015 benchmark-equivalent coverage or coverage under of section 1937 of the without a need for updating. We also otherwise, to rural health clinic services Act and is not required as an element of proposed that we will consult with and FQHC services, even if the state EHBs. states and stakeholders and evaluate the

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process to determine updates to the base-benchmark as well as with public more than one base benchmark plan for ABPs after that date. employee or commercial plans that may defining EHBs for Medicaid ABPs. Comment: Several commenters have been selected as section 1937 Comment: One commenter stated they offered support of the intent of our coverage options. Commercial plans are support the structure for implementing proposed policy concerning the usually updated annually. All ABP Essential Health Benefits as proposed. updating of ABPs that have been SPAs are required to have public notice Response: CMS appreciates the determined to include EHBs as of and approved SPAs will be placed on a support. January 1, 2014. One commenter CMS Web site. We are also updating the Comment: One commenter supported supported the Department’s intent to Medicaid Statistical Information System § 440.347, which allows states to have issue future guidance for updating EHB (MSIS) to improve the quality, accuracy, more than one ABP to reflect the health benefits for 2016 and subsequent years. and timeliness of data submitted to CMS care needs of a targeted population and Similarly, another commenter indicated by states. That said, we appreciate that use a different base benchmark plan for support of the alignment of the it may be difficult at this point to make each ABP. A few commenters supported transition period for updating ABPs changes to the ABP that take effect by HHS implementing the statutory with the transition period designated for January 1, 2014. In light of this requirements to at a minimum include updating EHBs in 45 CFR Part 156. challenge, we will partner with states to EHBs. One commenter supported the Response: We appreciate the support. work as quickly as possible to come into general approach to coverage of EHBs. Comment: A few commenters full compliance with these provisions. Another commenter supported states indicated concern that imposing a We do not intend to pursue compliance having broad flexibility to choose a requirement to update section 1937 actions on these issues to the extent that benchmark plan, including the same benchmark plans would add significant states are working toward but have not options available in the commercial new workload for states. One completed a transition to the new ABPs market and the ability to use a different commenter believed that there is on January 1, 2014. plan from the one that was selected for currently no statutory requirement to Comment: One commenter indicated the state’s commercial plans. This make updates to section 1937 plans, and that the applicability of the proposed commenter also recommended that the suggested that the Secretary allow for provision was unclear when applied to state’s Medicaid State Plan be grandfathering of currently offered states that choose not to expand considered for Secretary-approved section 1937 benchmark benefit plans. coverage as of January 1, 2014, but coverage for the ABPs. They requested Many commenters also recommended might choose to offer a benchmark clarification of the timeframe for that HHS reserve some authority to benefit plan prior to December 31, 2015. approval of Secretary-approved plans. resolve significant problems with the Response: These provisions apply to Response: We appreciate the support benefits package during this time period all existing and new ABPs that have an of our policy to allow states the by revising the proposed provision to effective date of January 1, 2014 or later. flexibility to use different base add that states with approved ABPs as Summary: We will not be making benchmarks in Medicaid from those of January 1, 2014 do not have to update changes to proposed regulation text as a used for the non-grandfathered plans in benefits until December 31, 2015, result of comments received. the individual and small group markets. ‘‘unless the Secretary determines that We confirm that Secretary-approved h. Essential Health Benefits (§ 440.347) there are exceptional circumstances to coverage is part of the ABP template, update a plan.’’ Several commenters We proposed to add EHBs within and can include the full coverage urged the Department to set up a formal section 1937 of the Act and that otherwise available under the approved mechanism to ensure that adequate data individuals in the new adult group who state plan, as long as all requirements of is collected for ABPs in 2014 and 2015 meet the criteria for exemption from this regulation are met. The entire to inform updating benefits in 2016 mandatory enrollment will receive a template is considered a state plan through a transparent process in which choice of benchmark coverage defined amendment to be completed and consumers help guide any necessary as the benefit package using section submitted by the state to CMS for changes. Similarly, several other 1937 rules or the state’s approved approval. The timing of action on state commenters urged the Department to Medicaid state plan that is not subject plan amendments is addressed in our consider a more robust stakeholder to the section 1937 rules. We proposed regulations at § 430.16, which include engagement in all aspects of processes a process for establishing EHBs within one 90-day review period, the option for used to assess the current EHB approach an ABP that is consistent with the CMS to request additional information, and whether to adopt a new approach general provisions for established EHBs and an additional 90-day review period. in 2016. in the individual and small group Comment: One commenter requested Response: CMS has been working market, but reflects the particular that HHS clarify that states can design with states to submit state plan circumstances of Medicaid. In ABPs for subpopulations within the amendments using a standardized particular, the process reflects the fact newly eligible group. template that includes the information that the state establishes coverage rather Response: We confirm that states can needed for approval from CMS. The than an insurance issuer, and that the offer different ABPs to subpopulations CMS review process allows for coverage is consistent with the within the newly eligible group. Under resolution of issues identified within requirements of section 1937 of the Act. section 1937(a)(1)(A) of the Act, the ABP prior to approval. We aligned We also proposed that, while EHBs will coverage through an ABP can be offered the timeframes with CMS policy to be defined by the state using a selected to ‘‘groups specified by the State’’ allow for implementation efficiencies. base benchmark from the list of those without regard to the comparability or As we develop the process, we will take plans that can be chosen to define EHBs statewideness requirements at section into account balancing potential in the individual and small group 1902(a)(10)(B) of the Act and § 440.240. workload of the state and CMS and the market, the base benchmark plan for (Other requirements, such as civil rights need for information to keep the ABP defining EHBs for Medicaid can be protections, still apply and may affect current with changing commercial different than the base benchmark plan the nature of the groups that a state may market products. It is important for chosen for the commercial market. We specify.) As a result, states may offer ABPs to stay current with changes in the further proposed that there could be ABPs that are appropriate for the unique

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characteristics of subgroups of the new benchmark plans for defining EHBs ABPs serve a different population than adult group; for example, states may include the same choices in both private health plans, the single EHB offer different ABPs to individuals in Medicaid and the non-grandfathered benchmark does not need to be the same different geographic regions, or to plans in the individual and small group as the one chosen for the state’s individuals who have particular markets. States may choose a different individual and small group market. medical, service or support needs. base benchmark plan for Medicaid than Another commenter asked that CMS Comment: The flexibility for states to for the individual and small group clarify that states do not have the select EHBs at § 440.347(b) and (c) to markets. But, recognizing that Medicaid flexibility to vary amount, duration, and achieve targeting of populations causes coverage is provided in a different scope of benefits within populations on more harm than good according to some context than coverage in the individual a plan-by-plan basis as currently commenters. The commenters believe and small group markets, we provide allowed, which would only increase that states already have significant that states may choose a different base complexity. This commenter also flexibility to target ABPs through the benchmark plan for Medicaid than the requested clarification related to Secretary-approved process and the individual and small group markets, whether the limited authority provided targeting flexibility adds little but and may choose more than one base through the DRA and now expanded creates confusion. CMS would be better benchmark plan for Medicaid. We also through this rule can be superseded by served in terms of administrative provide that states exercise the options section 1115 authority. This commenter simplicity, oversight, and consumer available in the individual and small also responded that a state may try to understanding if one EHB standard was group market to insurance issuers. This combine flexibilities for EHB, ABP, applicable in the commercial markets regulation identifies those aspects of 45 premium assistance, and amount, and ABPs. These commenters CFR part 156 that are modified within duration, and scope to shift to a model recommend that HHS require states to Medicaid under the section of the that has not been adequately explored use the state-selected base benchmark preamble entitled ‘‘Modifications in for unintended consequences. plan that applies for the commercial Applying the Provisions of This Response: While it is true that markets for ABPs as well. Another Proposed Rule to Medicaid.’’ coverage of EHBs will be required for commenter believes that EHBs should Comment: Several commenters non-grandfathered plans offered in both establish a minimum floor of coverage suggested that the list of required the individual and small group markets and that all plans should be required to categories of services for benchmark- and Medicaid, we think it is important use the state-selected base-benchmark equivalent coverage include the EHBs as to provide states flexibility to define plan that applies for the commercial specified in § 440.347(a) for consistency EHBs as appropriate in each context. In markets for purposes of section 1937 of and clarity as ABP coverage must the non-grandfathered plans offered in the Act as well. This will reduce include at least the EHBs. Another the individual and small group markets, administrative burden and better align commenter suggested that CMS should states have some flexibility to define standards between EHB in the pursue parity between Medicaid state EHBs through selection of a base commercial markets and in Medicaid. plan benefits and the new ABP for benchmark plan. For Medicaid Response: The flexibility provided at newly eligible adults to assist with coverage, we believe that additional § 440.347(b) and (c) permits states to ‘‘churn’’ between Medicaid and the flexibility will enable states to tailor design different benefit packages that at commercial markets. coverage to the needs of the Medicaid a minimum include EHBs. Response: Section 1302 of the population. While states can, for Alternatively, one benefit package could Affordable Care Act establishes EHBs simplicity, choose one standard to be used for multiple populations. States that must be provided as part of determine EHB in both the individual also have the choice to use the same benchmark benefit coverage. A and group markets and in Medicaid, base benchmark in ABPs and the benchmark-equivalent benefit package they are not required to do so. We are commercial markets, which would must be actuarially equivalent to the permitting states flexibility to choose a result in aligning standards for EHB in benchmark plan that is chosen. We do single standard or multiple standards coverage under ABPs and the not believe it is necessary to specifically for EHB in Medicaid to ensure a full commercial markets. We have adopted add the EHB categories to benchmark- range of coverage options. States must policies that would maximize state equivalent coverage because we are determine whether multiple standards flexibility while ensuring sufficient instead setting out procedures to ensure would result in administrative burdens. coverage for beneficiaries. that coverage includes EHBs that govern We are reminding states that the floor of Comment: One commenter is seeking both benchmark and benchmark- coverage is EHBs defined by the clarification of the phrase set forth in equivalent coverage. benefits, including limitations on § 440.347 ‘‘consistent with the Comment: Section 440.347(c) allows amount, duration, and scope, from the requirements set forth in 45 CFR [part] states to select more than one EHB selected base benchmark plan (but states 156’’, particularly if it adds obligations option for ABPs. A few commenters may be required to, or may have options to the requirement to select a urged CMS to limit states to choosing a to, cover benefits above that floor benchmark plan that includes benefits single EHB option for Medicaid to consistent with section 1937 of the Act). in each of the ten EHB categories. A few provide a floor of benefits. They Please refer to the summary at the end commenters request clarification of the asserted that Congress intended of this section for further discussion of specific provisions of 45 CFR Part 156 consistency among ABPs by applying these steps and flexibilities. related to EHB that apply. EHB requirements to them. Some Comment: Several commenters Response: This regulation is commenters asserted that allowing for recommend that the Department ensure consistent with the EHB requirements selection of multiple options will create that Secretary-approved coverage is under 45 CFR Part 156, but specifically unnecessary administrative burdens on actuarially equivalent to the other addresses the application of those state Medicaid programs and this benchmark coverage options. These requirements for purposes of commenter suggests that there should be commenters support the clarification compliance with section 1937 of the Act only one EHB benchmark option for that Secretary-approved coverage must as amended by section 2001(c) of the ABPs. But other commenters agreed provide robust benefits. However, these Affordable Care Act. The base- with our proposed rule that, because commenters indicate that it is important

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for Secretary-approved coverage to Comment: The commenter stated Response: We believe that the provide the same level of coverage as general agreement with the approach regulations offer significant flexibility other benchmark plan options to that CMS has recommended for the ABP for states to create benefit packages for prevent newly eligible people from to be offered to certain populations all or for different groups of its newly receiving lesser coverage. under the expansion of Medicaid. The eligible population. Appropriate benefit Response: This rule is not intended to commenter requested clarification that package design for the population’s change the assessment of Secretary- the state would choose an ABP from needs may contribute to long-term approved coverage, except to the extent four benchmark packages and would financial stability. that it must include EHBs. The standard compare that choice to the private Comment: A few commenters were that we apply for assuring the market EHB, supplementing coverage of concerned with disparities in coverage sufficiency of the benefit package the ABP if necessary to ensure that all as the guidance suggests that the policy established using Secretary-approved EHB categories are included. only mandatorily applies to the newly coverage is whether the benefits are Response: There are both eligible category of adults. In states that appropriate to meet the needs of the requirements and flexibility for states in expand their Medicaid programs to population provided that coverage, as constructing EHBs and section 1937 include these new categories of outlined in § 440.330(d). EHBs establish coverage options. Please refer to the eligibility, they note that a higher a floor of benefits for ABP populations summary at the end of this section for income expansion population will and must be provided with Secretary- further discussion of these steps and receive a more generous package than approved coverage as with any ABP. flexibilities. existing populations. This will create a Secretary-approved coverage permits Comment: One commenter would like churn in Medicaid where states will states flexibility to design a benefit plan to underscore the importance of likely have to expand coverage for all that might differ from the other options promoting seamless coverage among adult populations within Medicaid to available under section 1937 of the Act. low-income individuals. Many of the prevent churn. They assert that this As mentioned previously, in all cases a individuals newly eligible for Medicaid would result in significant financial cost state must first select a base benchmark in 2014 are likely to have fluctuations to states to expand benefits to all adults to define EHBs. The EHBs in the base in income, and therefore are likely to as new benefits for the existing benchmark plan serve as the minimum ‘‘churn’’ between Medicaid and population are ineligible for the floor of coverage that is supplemented subsidized Exchange insurance enhanced match offered under the for any missing EHBs. Using coverage. This churn could result in Affordable Care Act for the newly substitution, states may achieve a treatment disruptions among patients eligible expansion population. benefit package that includes benefits and create administrative complexity for Response: The Medicaid statute from the regular state plan. Exchanges, plans, and providers. Thus, provides that coverage may be different Comment: One commenter believed promoting seamless coverage for this for those people who receive coverage that extending full Medicaid benefits to population and ensuring coordination of through an ABP established under the newly-eligible expansion care during coverage transitions will be section 1937 and those who receive population, supplemented as needed to critical. regular Medicaid coverage. People in comply with the EHB, parity, and other Response: We appreciate the the new adult group must receive protections in the law, is the best circumstances that the commenter benchmark or benchmark-equivalent approach for meeting the complex identified for individuals that may have benefits, including EHBs. Consistent health needs of low-income adults who fluctuations in income. States have with the statute, the rules promulgated will gain Medicaid eligibility under the options for minimizing treatment in this regulation will apply to all ABPs, expansion. The commenter urged CMS disruptions and CMS will work with not just for those people in the new to work with States to ensure that this states to promote continuity of care. adult group. As long as ABP (including population’s full range of substance use Comment: One commenter urges CMS EHB) requirements are met, states have disorders and mental health needs and to consider revising certain sections of significant flexibility in designing other health needs will be met. The the proposed rule to allow states the benefit package options that commenter further suggested that CMS greatest opportunity to develop ABPs approximate regular state plan benefits. include language in the final rule that that are reflective of the population that Comment: Many commenters explicitly restates the requirement that they serve and ensure the long-term recommended that ABPs provide all Medicaid ABPs must cover mental financial sustainability of this category appropriate coverage to meet the needs health services and substance use of eligibility. This commenter believes of the population in all ten EHB disorder services for all enrollees. that the proposed regulations create a categories as per the general Response: States have much cumbersome and confusing process and requirements of § 440.330. These flexibility, but are not required to use appear to strongly incentivize states to commenters suggest that the lack of a benefits from their regular Medicaid essentially mirror state plan benefits. minimum standard in each of the ten benefit package for the new adult This commenter wants maximum categories is a flaw in the Exchange EHB coverage group, as long as EHBs are creativity to define the benefit package standard that gets further magnified in assured. The statute and regulation that will be provided to the newly Medicaid. For women’s health, this is direct that mental health parity eligible population, and encourages particularly important in terms of requirements and EHB requirements, CMS to use this opportunity to allow for preventive services, prescription drugs, including the provision of mental health greater innovation at the state level by and maternity care. Several commenters and substance use services, be met. In allowing design of benefit packages that support the EHB requirement as a strong some circumstances, we anticipate that simply take pieces of both Medicaid and floor for ABPs and indicate that states the coverage furnished to the new adult the commercial market while also should have ample flexibility to add to coverage group may include certain covering all EHBs. This approach will the floor. These commenters also benefits, such as certain substance abuse lead states to compare Medicaid to provided recommended regulatory treatment services, that the state has private and commercial market benefits language for § 440.347(a) through (c). elected not to cover under the state’s and potentially add benefits to the Response: EHBs are a floor to regular Medicaid benefit package. Medicaid state plan. coverage and states have flexibility to

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design an ABP that includes coverage choose to provide services to recognize the need for states to target above the minimum level of EHBs. individuals enrolled in ABPs that populations to address specific health Section 1302(b)(2) of the Affordable involve care in an institution should be care needs. Care Act directs the Secretary to required to include home and Response: We are providing flexibility determine EHBs by reference to benefits community-based care as well. for states to select base benchmark plans typically offered in the group market, Response: Section 1902(k)(1) of the in Medicaid that are different than the which is the same standard that we are Act provides that medical assistance for one selected for the individual and applying in Medicaid by requiring that the new adult eligibility group is limited small group market, and to select states determine EHBs by selecting a to benchmark and benchmark- multiple base benchmark plans, to base benchmark from among the equivalent coverage. Section 1902(k)(1) maximize the ability for states to define regulatory options described in of the Act also provides an exception to ABPs that serve the unique needs of § 156.100. All benefits within the base the requirements of section 1937 of the Medicaid populations and benchmark that defines EHBs will need Act for individuals who would be subpopulations. to be incorporated into the ABP, described in the exemptions at section Comment: One commenter requested supplemented as necessary and subject 1937(a)(2) of the Act. This means that CMS include autism coverage in the to substitution of actuarially equivalent individuals in the new adult eligibility EHB package to correct the omission. benefits as permitted under 45 CFR group that otherwise meet the Lack of coverage can create significant 156.115(b). But the ABP can include exemption criteria are required to be financial burden on families and other benefits based on the state choice enrolled in benchmark or benchmark- discourages autism professionals from of coverage option. equivalent coverage, but their practice. Families also may decide to For groups other than those in the benchmark or benchmark-equivalent not pursue treatment. new adult group, states can also offer coverage is not limited by the Response: States have choices in additional benefits to supplement the requirements of section 1937 of the Act. determining in the benefit package that benchmark or benchmark equivalent Therefore, these individuals must have will be covered in their state within coverage that includes EHB and other a choice to receive ABP benefits as federal guidelines, but all ABPs must required services. Sections 1902(k)(1) defined by the state applying the provide for coverage of EPSDT services and 1903(i)(26) clarify that individuals requirements of section 1937 of the Act for individuals under the age of 21. We in the new adult group receive using benchmark or benchmark- expect that services to treat autism may benchmark or benchmark-equivalent equivalent coverage (including EHBs be covered through a variety of coverage coverage (that includes EHB and other and other required coverage) or ABP categories and many would be included required services and, as we explain benefits defined without regard to the in a state’s ABP either because the below, for individuals who would requirements of section 1937 of the Act, services are within the section 1937 otherwise be exempt from enrollment in which consists of regular Medicaid coverage option or included as part of an ABP, the option to receive an ABP coverage under the state plan. Home EHBs. that consists of regular Medicaid care is not a standardized term in Comment: One commenter applauds coverage). We intend to issue an ABP Medicaid, so clarification would be HHS for including coverage of the full state plan amendment template and needed to determine which Medicaid package of EHBs, as it includes coverage corresponding implementation guides benefit category is actually applicable. of screening and brief counseling for for the states to use when submitting We agree that states are obligated to domestic and interpersonal violence, in ABP state plan amendments. comply with the Americans with the Medicaid ABPs. Comment: One commenter supports Disabilities Act and the Olmstead Response: We thank the commenter requiring coverage of all ten EHBs, as decision. for the support. While it is not certain this will go a long way toward ensuring Comment: One commenter requests that every ABP will include counseling that Medicaid participants have that crisis services be included in the for domestic and interpersonal violence, adequate health care coverage. They mental health and substance abuse such services will be provided if they request that HHS define the scope and services category in the EHB package. are part of the EHBs. services within each of the ten benefit This commenter requests that it be Comment: One commenter believes categories to ensure that the covered offered by qualified health plans and in that strong and comprehensive oversight services are at a minimum the same and new Medicaid expansion benefits in and enforcement of EHBs and provide a level of guaranteed coverage. each state. These are important services nondiscrimination standards at the state This is necessary to ensure that there is to the safety net and for 24/7 crisis care, and federal level will help ensure adequate coverage within categories and suicide prevention and access to consistent coverage of transplant balance between categories, and emergency health care services, benefits and eliminate discriminatory necessary to determine if ABPs are especially in communities where insurance practices. Therefore, the equivalent to the EHB package and emergency mental health clinics or commenter asserted, ABPs must cover comply with Affordable Care Act. mobile health services are unavailable. all EHB categories without Response: We thank the commenter Response: CMS is not requiring discrimination for people who have or for the support. specific services to be included in any will acquire health conditions that lead Comment: One commenter indicated of the EHB categories, but all ABPs must to end stage organ failure. The that ABPs should include an array of include all EHBs defined through the commenter stated that a wide range of home care services that exist in process described in our regulations. medical services are required during the traditional Medicaid benefit programs to Comment: Several commenters transplant process and fall under the comply with the American with suggest that EHBs should comply with categories of ambulatory services, Disabilities Act and Supreme Court a consistent standard across ABPs as hospitalization, chronic disease Olmstead decision. To the extent that they are concerned that the proposed management, mental health services, EHBs include institutional care or rule allows for states to select more than rehabilitative services, and prescription inpatient settings, a state must offer a one option for establishing EHB to drugs. The commenter urged that all of choice of ‘‘the least restrictive implement multiple ABPs for targeted these treatments must be covered under environment.’’ Similarly, states that populations. These commenters also ABPs.

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Response: If transplant services are described in section 4302 of the applicable, then the individual would covered as part of the coverage option Affordable Care Act. have a choice of an ABP that includes chosen by the state, or the benefits Response: This information does not at least the EHBs, and is subject to the under the selected base benchmark appear to be related to the review of requirements of section 1937 of the Act, plan, as supplemented (and subject to EHBs. We note, however, that we are or benchmark or benchmark-equivalent permissible substitution of benefits), developing a Transformed Medicaid coverage that is not subject to the then they will be covered as part of the Statistical Information System that will requirements of section 1937 of the Act, ABP. include expanded data elements and thus, includes all regular Medicaid Comment: According to one regarding beneficiaries, claims and state plan benefits. Other individuals do commenter, the Affordable Care Act providers per Affordable Care Act. not have that choice but this rule does specifies that entities covered under Comment: One commenter supports not affect their right to appeal denials of section 340B(a)(4) of the Public Health inclusion of all ten EHB to reflect coverage through the state’s fair hearing Services Act, which includes federally appropriate balance in each category system. recognized Hemophilia Treatment and requested that anesthesia and pain Comment: Commenters requested Centers, be designated as essential management services be included in the clarification and further guidance on the community providers and that ten categories of benefits covered by the supplementation process established in designation requires that qualified ABPs. This commenter also requested both the proposed rule for the EHBs in health plan networks to include that CRNAs and other non-physician the commercial market and the Hemophilia Treatment Centers. This providers who bill for Medicare Part B proposed rule for EHBs in Medicaid commenter requests that state Medicaid be included in Medicaid ABPs. ABPs. Many commenters requested that programs be encouraged or required to Response: The coverage of particular CMS clarify what benefits would include essential community providers services will depend upon the coverage constitute coverage in each category and in their networks. option selected by the state, and the identify a threshold to trigger Response: Coverage through an ABP EHBs that are determined based on the supplementation of a benefit category. It remains subject to requirements under state-selected base benchmark plan, as appears that a single service could be the state plan to provide for beneficiary supplemented (and subject to determined to be sufficient to define an free choice of provider, and provider substitution of actuarially equivalent EHB in Medicaid and therefore would payment rates that are consistent with benefits) consistent with the process not achieve MHPAEA compliance. A efficiency, economy, and quality of care described in 45 CFR part 156. This rule few commenters also stated that a single and assure sufficient access to services. will not affect the ability of states to set service would not meet non- States have options to limit free choice provider qualifications for covered discrimination requirements in addition of provider in some circumstances, for services. to the balance requirement, which example, managed care service delivery Comment: One commenter requested requires a much stronger minimum set consistent with section 1932 of the Act, that dollar limits on a specific category of benefits in each category. One or through selective contracting of benefits and targeted use of commenter requested clarification of the arrangements authorized under a waiver utilization management techniques be Medicaid EHB supplementation process under either section 1915 of the Act or prohibited. including the extent to which the scope section 1115(a) of the Act. In any of Response: Annual dollar limits are of services in one EHB category must be these cases, states must assure sufficient prohibited in the public employee or consistent with services offered other beneficiary access to services. commercial plans that are the basis for health service categories. Several Comment: Several commenters coverage options and the base commenters believe that additional suggested that the review of EHB, in the benchmark options according to section provisions need to be added to ensure private insurance market and Medicaid, 2711 of the Public Health Service Act. that the level of benefits in each EHB consider whether limits in coverage and Utilization management techniques are category are meaningful and adequate to changes in medical evidence or common practice for benefit meet the needs of the population. scientific advancement affect whether management and will continue to be Several commenters also requested that enrollees have difficulty accessing allowed in Medicaid. We expect that CMS clarify what benefits would services. The EHB should be based on these practices will be non- constitute coverage in each category and the most recent and reliable clinical discriminatory and not impede access to explain how CMS would enforce the evidence available and a process should needed, covered services. non-discrimination and balance be developed to inform and shape EHBs Comment: One commenter indicated requirements. based on these factors over time. If not that HHS should specify in the final rule Response: Supplementation occurs available, there should be an allowance that to meet the health care needs of when a base-benchmark plan does not for some physician discretion. diverse segments of the population, an include items or services within one or Response: Consistent with the ABP must provide a process for more of the categories of EHB. Benefits provisions of section 1302(b) of the participants to request and receive: from the base benchmark that are Affordable Care Act, CMS has in the clinically appropriate benefits not determined to be EHBs must be regulations at 45 CFR part 156 defined routinely covered by the plan, included as an EHB, unless substituted EHBs by reference to coverage plans especially when the ABP is less costly by the state. While the rules at available in the commercial market. than the covered benefit; coverage for § 156.115(b) indicates that the ‘‘issuer’’ Comment: Several commenters also benefits beyond limits set by the plan; may substitute benefits, in Medicaid, requested that review of EHBs be coverage of specialty care not routinely the state functions as the issuer and we disaggregated to include demographic covered by the plan when medically thus provide that the state can exercise categories. HHS should require states to necessary and appropriate. the option to substitute benefits. We report enrollees’ race, ethnicity, Response: We are specifying in the indicated that requirements at § 156.110 language, sex, and disability status data final rule that, if an individual in the apply unless we specifically modified uniformly, as well as data on other new adult group meets the criteria for the approach in Medicaid. Section demographic areas such as sexual exemption from mandatory enrollment 156.110(e) that specifies balance orientation and gender identity, as in an ABP that would otherwise be requirements also apply to EHBs

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established in Medicaid. All benefits of this challenge, we will partner with commercial market plan selected by the within the section 1937 coverage option states to work as quickly as possible to state to define EHBs for Medicaid to set must also be provided. CMS will come into full compliance with these the floor for EHB coverage (with conduct a review of all ABP SPAs to provisions. We do not intend to pursue supplementation as needed and determine appropriateness for approval. compliance actions on these issues to substituted as desired). States then have There are both requirements and the extent that states are working toward the authority to offer other services flexibility for states in constructing but have not completed a transition to (including through Secretary-approved EHBs and section 1937 coverage the new ABPs on January 1, 2014. coverage for the new adult group). options. Please refer to the summary at Comment: Many commenters are Comment: One commenter requested the end of this section for further concerned that there is no requirement that HHS clarify that the requirement for discussion of these steps and regarding adequacy of benefits. These balance among EHB categories ensures flexibilities. commenters specifically requested that robust coverage in each category and Comment: The HHS February 17, HHS provide a cross-reference to cannot be used to lower other categories 2012 Bulletin allows for substitution of § 440.230(b) and state explicitly that the if one or more categories lacks robust services within the rehabilitative and requirement that every service offered coverage. habilitative benefit, allowing the plan to through the Medicaid state plan ‘‘be Response: Consistent with the facilitate substitution of services at the sufficient in amount, duration, and requirements of 45 CFR 156.110, EHB provider level based on patient need not scope to reasonably achieve its categories must be appropriately predetermined by the issuer, according purpose’’ also applies to EHBs in the balanced to ensure that benefits are not to one commenter. The November 20, ABPs. A few commenters recommended unduly weighted toward any category. 2012 Patient Protection and Affordable that the regulations be revised to require Any benefits that are determined to be Care Act; Standards related to Essential states to supplement the benefits in a EHBs from the base benchmark plan Health Benefits, Actuarial Value, and benchmark plan if any service in the must be provided. Section 1937 of the Accreditation proposed rule indicated EHB category is not sufficient in Act also has an ‘‘equal to’’ standard that that the issuer would create a amount, duration, or scope to indicates that all benefits from a section substituted benefit plan, which would reasonably achieve its purpose. 1937 coverage option must be provided. leave providers with no choice but to Response: Under section 1937of the When Secretary-approved coverage is provide services in the benefit package Act, states are authorized to offer ABPs used, benefits must meet Medicaid and potentially lead to an individual that include benefits derived from sufficiency standards as well as the choosing a plan that does not cover the public employee or commercial market requirement that the benefit package be services that they need. products, essential health benefits and appropriate to meet the needs of the Response: States, not issuers, define certain other required benefits. population. benefits within section 1937 of the Act. Sufficiency standards applicable to the Comment: Many commenters Section 156.115(b) outlines the traditional Medicaid benefit package reiterated concerns regarding the EHB substitution policy that will also be generally do not apply to ABPs. If proposed rule and EHB benchmark plan applicable to Medicaid except that, in Secretary-approved coverage is chosen standards. This concern remains for Medicaid, states have the role of issuers as the section 1937 coverage option, ABPs as the Department does not and will indicate the substituted however, then we would require that sufficiently define the scope of coverage benefits. Substitution requires that the benefit package must ‘‘provide in any statutorily required category benefits be in the same EHB category appropriate coverage to meet the needs specifically maternity care. The base and that they are actuarially equivalent. of the population provided that benchmark plans may include coverage This means that a state for example, coverage’’ under § 440.330(d). of maternity services, but the plan could substitute a personal care benefit Sufficiency standards at § 440.230 will documents do not specify which for an in vitro fertilization benefit in the be applied in our review of proposed services define maternity coverage or EHB Ambulatory Services category, as Secretary-approved coverage. provide details on coverage including long as they were actuarially equivalent. Comment: Many commenters limits. The lack of clear definitions Within the rehabilitative and requested that CMS reconsider the further complicates the substitution and habilitative services and devices EHB, proposed approach and define supplementation methodology. Several benefits can be substituted as long as the comprehensive federal EHBs for section commenters want the Department to resulting benefits still provide for 1937 coverage that all states would be establish clear standards for what must coverage of both rehabilitative and required to use to supplement their be covered as required by sections habilitative services. We expect that the chosen benchmark or benchmark- 1302(b)(1) and 1302(b)(4)(C) of the benefit design will result in clinically equivalent coverage. They urged that Affordable Care Act to ensure a appropriate services based on medical CMS should go further and require comprehensive standard. The adoption necessity. The resulting ABP, which states to cover comprehensive benefits of coverage should not result in a includes EHBs that have been in each of the EHB categories and work discriminatory benchmark. supplemented if necessary, individual with states to ensure that minimum One commenter expressed concerns benefits that have at state option been coverage is met. One commenter went related to the ambiguously defined EHB substituted, and benefits from the further to suggest that CMS and HHS categories and encouraged HHS to section 1937 coverage option, must be adopt a comprehensive, national EHB in definitively confirm the extent to which approved by CMS. Once approved, a 2016, when the trial period for the cost effective, clinically effective description of the benefits included in current approach is complete. nutrition care services such as medical the final ABP should be publicly Response: EHBs in Medicaid will nutrition therapy are included as EHBs available so that beneficiaries are generally be defined in the same fashion within Medicaid benchmark and knowledgeable of the benefits to which as they are defined in the individual benchmark-equivalent plans. This they are entitled. That said, we and small group market, except for commenter requests adequate federal appreciate that it may be difficult at this certain EHB categories discussed in the oversight and approval of benchmark point to make changes to the ABP that proposed rule and this final rule. This plan selection by HHS to reflect the vital take effect by January 1, 2014. In light approach allows the public employee or and unique role that nutrition plays in

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improving and maintaining health for Comment: One commenter Comment: One commenter requests all Americans, but also recognizes the recommended that HHS specify in the that HHS specify that appropriate need to define EHBs flexibly. This final rule that ABPs must include balance of EHB coverage includes commenter seeks clarification in the benefits routinely covered by the coverage of benefits across the care final rule on the metrics and bases upon benchmark plan, regardless of whether continuum, prohibits substitution which HHS will determine whether a those benefits are listed in the data between categories of EHB (for example, benchmark or benchmark-equivalent collection template used to report base prohibit coverage of rehab therapy but plan meets the EHBs mandated by benchmark benefits to HHS. include drug coverage) and between Affordable Care Act. Furthermore, all benefits within benefits (cover wheelchairs instead of Response: Section 1937 of the Act categories of care that list more than one rehabilitative hospital care to restore a permits states to offer coverage through benefit must be covered. For example, person’s ability to walk), cover all EHBs an ABP without regard to sufficiency an ABP should be required to cover as within the settings and by specialists requirements that are applicable to three distinct benefits rehabilitative which provide the current standard of regular state plan benefits, except that services, habilitative services, and care, and protect patients’ access to we would apply sufficiency standards rehabilitative and habilitative devices as appropriate and medically necessary in our review of proposed Secretary- opposed to only covering one of them. care as provided by skilled medical approved coverage as the section 1937 Response: We intend to develop a professionals. coverage option. Substitution is allowed template for states to use to define the Response: Substitution of benefits can in section 1937 of the Act using ABP in Medicaid that will result in the be achieved when defining the EHBs requirements found at 45 CFR submission of a state plan amendment. according to 45 CFR 156.115(b). Benefits 156.115(b) except that the state will be This is a different process than the one must be in the same EHB category and exercising the option for substitution used for states to submit the base actuarially equivalent. Balance rather than an individual market issuer. benchmark benefits for the individual requirements at 45 CFR 156.110(e) Comment: Commenters requested that and small group market. A state can apply, as CMS did not indicate that they CMS provide clear regulatory guidance select a different base benchmark plan do not apply in Medicaid. CMS will be to states to ensure that the process for for the individual and small group reviewing each state plan submission. supplementing coverage to meet the market than it does for Medicaid As with all Medicaid services, states additional requirements of Affordable purposes. We anticipate issuing further will establish medical necessity criteria Care Act is clear. This is especially guidance on these operational issues. for the receipt of ABP services. important given that EHBs are not Comment: A commenter indicated universally covered well by state Comment: One commenter strongly understanding that benefit substitution Medicaid programs such as mental encourages CMS to provide further among EHB categories would be health and substance use services. guidance on alignment issues during the prohibited for ABPs as it is prohibited Furthermore, for states that choose to plan comparison and supplementation for Exchange plans. However, this use benchmark-equivalent coverage, this process. This commenter encourages commenter believes that substitution commenter requests that CMS establish CMS to clarify that during even within benefit categories could be clear limits on states’ ability to use supplementation, states must create the extremely problematic for children’s benchmark-equivalent coverage to most comprehensive benefit package and pregnant women’s access to needed undermine the EHB protections as it possible, drawing from services covered services. Commenters urged HHS to appears that under the proposed rule in either the section 1937 coverage prohibit substitutions or at a minimum that they can reduce the value of EHBs option or the comparison base give states the flexibility to disallow under the benchmark-equivalent option benchmark plan, which could include substitutions. If benefit substitution to anything short of elimination. These drawing across categories if necessary to within categories is retained, this commenters request that CMS ensure create a robust set of services that will commenter recommends that a more the comprehensiveness of the benefits result in adequate coverage of EHBs. restrictive standard than an actuarial for all beneficiaries covered by section Response: To clarify, the ABP must equivalence test on the value of the 1937 of the Act regardless of the ABP include as a floor the EHBs covered by benefits compared to the EHB chosen by the state. the base benchmark plan selected by the benchmark plan be implemented. Response: Benchmark-equivalent state to define EHBs for Medicaid, Response: Substitution of benefits benefit packages must be at least supplemented as necessary and subject within EHB categories will be at state actuarially equivalent to one of the to substitution of actuarially equivalent option, according to parameters section 1937 benchmark coverage benefits as permitted under 45 CFR described in 45 CFR 156.115(b). This options and must include benefits 156.115(b). Balance requirements of 45 process will be the same for Exchange within certain categories of basic CFR 156.110(e) also apply. In addition, plans and ABPs, except that states will services. In addition, the Affordable the ABP must include any benefits from be in the role of the health insurance Care Act amended section 1937 of the the section 1937 coverage option that issuer for purposes of substitution. Act to require the provision of EHBs in are not in the base benchmark plan, Comment: Commenters note that in benchmark equivalent coverage, so we whether they are EHBs or not. If the some states the EHB benchmark covers do not believe that use of this section section 1937 coverage option that is one services beyond those included in the 1937 coverage authority will undermine of the three public employee or Medicaid state plan. They argue that the EHB protections. The process for commercial products provides a service requiring states to supplement coverage supplementation is found at 45 CFR in a greater amount, duration, or scope to make it comparable to the EHB 156.110(b)(1) through (4) and than the EHB provided in the base benchmark is not a workable solution substitution requirements are at benchmark plan, the state must utilize for states, particularly for states that § 156.110(b). All benchmark-equivalent that section 1937 standard for that wish to expand in 2014. They further coverage packages must adhere to service. If the section 1937 coverage assert that some of the immediate section 1937 requirements, and must option is Secretary-approved coverage, operational challenges include the need not violate the EHB anti-discrimination then the state may choose which benefit to enroll new providers, set principles. to use. reimbursement rates, design claims and

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payment rules, and incorporate those would now be required to add services citizens, the birth to three population, rules into systems, and if managed care that are not currently covered and need to have access to all necessary high is used, new capitation rates will need categorized as optional, and also quality, comprehensive physical, to be designed, which will result in a wondered if EHB supplementation only developmental, mental health and large administrative burden. applies to benefits for newly eligible medical care to ensure positive growth Response: It is true that ABPs under people or must the state meet this and development. section 1937 of the Act will contain requirement for all benchmarks offered Response: Current and proposed different benefits than those offered in regardless of population. regulation at § 440.335(d) states that regular Medicaid, based on the coverage Response: States are required as part Secretary-approved coverage must be options and EHBs that a state elects. of the ABP to cover all EHBs. While appropriate to meet the needs of the These differences are inherent in the most of the EHBs are also included population being served. CMS will statutory design. While EHBs will under regular Medicaid coverage, there review proposed Secretary-approved establish a minimum level of benefits, may be exceptions. For example, coverage against that standard. And that level may result in greater or lesser substance abuse services and CMS will apply the sufficiency benefits than are available under regular habilitative services may not be part of standards of § 440.230 in evaluating Medicaid. ABPs require that benefits a State’s regular Medicaid benefit. The benefits included in Secretary-approved that are based on commercial insurance EHB requirement applies to any ABP coverage. In addition, all ABPs, products include the benefit, the benefit offered by the state, including those including Secretary-approved, must description and limitations on amount, based on Secretary-approved coverage. include the full range of EPSDT services duration, and scope as the minimum Comment: One commenter indicated for individuals under age 21, which standard. States have been working with that the regulatory language fails to ensures that they will have access to CMS toward defining EHBs and ABPs specify that states must supplement comprehensive screening and necessary missing categories. This commenter and as part of that process states may medical care. need to undertake contracting activities recommends that the Department clarify Comment: Several commenters and system changes to offer and that states must follow the process expressed concern regarding the process administer the ABP. established in 45 CFR part 156 to ensure Comment: In the proposed rule that any missing categories are proposed by CMS to demonstrate concerning EHBs, requirements could supplemented in the final rule. The compliance with EHB, saying it is too be different in different states according Department should also ensure that burdensome and applying the EHB to one commenter. Since two of the four benefit design in ABPs does not result definition that was created for small benchmarks are tied to what is available in less comprehensive benefits than the group health plans for commercial to state employees in the state and what private insurance market, and therefore, products in the private market is available from the largest HMO in the ABPs should be required to include needlessly complicates section 1937 of state, employers may have confusion benefits at least as robust as those in the the Act. They asserted that requiring about the requirements in a particular state’s full EHB package. that states begin by using one of the ten state. This commenter requests Response: EHBs establish a floor of commercial benchmark plans as the identification of who oversees an benefits for ABPs offered under section EHB base is not useful for states that employer that has employees with a 1937 of the Act and are based on want to use the full Medicaid benefit set principle place of employment in commercial market products, which under Secretary-approved coverage. multiple states, and wonders whether it means at a minimum EHBs will include They argued that using the full would be the Department of Labor. benefits at least as robust as those in the Medicaid benefit set allows all Medicaid Response: The standards discussed in base benchmark chosen by the state. clients to receive the same benefit set this regulation relate to the The supplementation process in section and states would not have to implementation of EHBs for Medicaid. 1937 of the Act will follow 45 CFR operationalize a post-eligibility review Employers do not offer Medicaid as part 156.110(b). process to screen people for opting out of their offerings to employees and Comment: Several commenters of the ABP for the traditional state plan. therefore, this question is outside the generally supported the proposed Their position was that, given the scope of this regulation. process to designing the Medicaid ABP. number of changes that states must Comment: One commenter asked if, However, HHS must establish implement in 2014, maintaining a single given the requirement that states must transparent, minimum standards for benefit set reduces administrative supplement the benchmark package if states using ‘‘Secretary-approved’’ burden and confusion for clients and EHBs are not covered, states would be coverage. It will be critical to ensure minimizes the number of required required to add these benefits to the that the state cannot develop an ABP system changes. According to one state plan under the Secretary-approved based on the weakest benefit level commenter, it is essential that the new coverage option that is based on state available at each step of the process. adult group have the same benefit set as plan coverage. The commenter asserted The commenters expressed concern that the full state Medicaid benefit set. that it is unclear if the state must the rule offers very little guidance about Furthermore, the commenter asserted supplement services that are covered in what the ABP must cover to meet the that the mandatory Medicaid benefit set the base-benchmark selection for the ten categories of EHBs required by should be an option to serve as the basis Exchange, and that it is unclear if Affordable Care Act and the scope of for demonstrating EHB compliance supplementation is only for the required coverage. They indicated that under the Secretary-approved option benchmark plans provided to newly this lack of clarity may lead to people without supplementation. A few eligible individuals or if states that are in the Medicaid expansion group not commenters recommend that HHS seeking to provide a Secretary-approved receiving the full range of services create a second definition of EHB benchmark plan to newly eligible available to people at higher income compliance that would be based on the individuals will be required to amend levels accessing private market or Medicaid mandatory benefit set, limit the state plan to add the new EHB Exchange coverage in their state. An that definition to the ABP in Medicaid services not otherwise covered. The additional commenter expressed that programs, and allow states to use this commenter also asked whether states the youngest and most vulnerable benefit set as the basis to build a

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coverage option for Secretary-approved Response: We believe that our group people together to receive specific coverage. response to the question above also benefit packages. Response: Section 2001(c) inserted responds to this question; the statute Comment: One commenter expressed new paragraph (b)(5) into section 1937 requires that all ABPs, even Secretary- support for the inclusion of the new of the Act. This amendment requires approved coverage, include EHBs. There provision clarifying that individuals that benchmark and benchmark- are both requirements and flexibilities cannot be discriminated against based equivalent benefit packages must for states in constructing EHBs and on their ‘‘age, expected length of life, or provide EHBs described in section section 1937 coverage options. The an individual’s present or predicted 1302(b) of the Affordable Care Act, process for defining and including EHBs disability, degree of medical beginning January 1, 2014. The same is the process used under section dependency, or quality of life or other process to define EHBs applies to both 1302(b) of the Affordable Care Act, health conditions.’’ The commenter commercial plans and Medicaid, with adapted to the unique circumstances of seeks age-appropriate care and benefits adjustments only to reflect the unique the Medicaid program. for children, whether through family or nature of Medicaid. Thus, EHBs must be Comment: One commenter indicated child-only coverage. established within section 1937 using that the intersection of § 440.345(d) and Response: We appreciate the support. one of the state options for base § 440.347(a) is confusing, and Comment: Several commenters benchmark plans as set forth in 45 CFR recommends that CMS clarify in indicated that while they understand part 156. States may still elect to offer regulation that EHBs form a floor for the that section 1937 of the Act allows Medicaid state plan benefits in their ABPs and do not supplant any states the flexibility to amend Medicaid section 1937 coverage option using preexisting requirements under section state plans to provide certain Secretary-approved coverage, as long as 1937 of the Act and 42 CFR part 440, populations (as defined by the state) all requirements of this regulation are subpart C. Regulations would be clearer with benefits packages other than those met. if § 440.347 were worded as a definition offered in the standard Medicaid state Comment: Many commenters of EHB rather than a restatement of the plan, HHS must closely monitor this indicated that states electing state plan mandate to include EHB in an ABP and and ensure there is no discrimination in benefits using the Secretary-approved for clarity should simply reference benefit design for certain populations. option should not be required to relevant provisions in 45 CFR part 156. Response: Benefit design should not supplement with additional EHB Response: Section 440.345(d) is discriminate against individuals who services. Although they acknowledged intended to establish the universe of receive a benefit package under section that section 1937 of the Act requires benefits required within the ABPs. In 1937 of the Act based on age, disability, inclusion of EHBs as defined under addition, state must assure access to life expectancy or condition but may section 1302(b) of the Affordably Care RHC and FQHC services and include benefits designed to meet the Act, they asserted that this does not transportation to and from medically special medical needs of segments of the mandate importation of entire segments necessary services as set forth at covered population. Benefit packages of coverage from private plans nor does § 440.365 and § 440.390 respectively. designed in section 1937 of the Act it require a wholesale matching of these Section 440.347 is intended to specify include the same oversight as the offerings in Medicaid. They asserted the categories of EHBs and the process regular Medicaid state plan. Aside from that implementing EHBs in section 1937 by which those EHBs are established the EHB anti-discrimination of the Act in this way is onerous and within the ABP. Both sections should be requirements, § 440.230(c) indicates that could result in the relatively less read in conjunction to the other. state Medicaid agencies cannot vulnerable, higher income expansion Summary: We are adopting the arbitrarily deny or reduce the amount, group as compared with Medicaid following approach for treatment of duration, or scope of a required service beneficiaries receiving more generous individuals in the new adult group who to an otherwise eligible recipient based benefits such as substance use disorder meet the exemption criteria from solely on diagnosis, type of illness or services. They further asserted that mandatory enrollment in benchmark or condition. Congress certainly could not have benchmark-equivalent coverage in the Comment: Several commenters intended for the new enrollees to end final rule. If an individual in the new expressed support of the requirement up receiving more robust coverage than adult population meets the criteria for that EHB benefit design cannot the categorically needy base. They exemption, then they have a choice of discriminate on the basis of an stated that this also creates the ABP based on benchmark or individual’s age, expected length of life, administrative complexity for states and benchmark-equivalent coverage or an individual’s present or predicted a situation where incoming beneficiaries including at least the EHBs, or an ABP disability, degree of medical who may be disabled must choose with coverage defined as the state’s dependency, or quality of life or other between disparate benefit schedules. approved Medicaid traditional state health conditions. The commenters The commenters believed that the only plan, which is not subject to any other believe these non-discrimination way to mitigate disparate benefit requirement of section 1937 of the Act, provisions will require vigorous schedules is for states to expand all including EHB requirements. We are not monitoring and strong enforcement. benefits for existing and new eligible making any changes as a result of these Response: We thank the commenters beneficiaries, something states are not in comments. for their support. We expect states to a fiscal position to do. They further comply with these provisions and asserted that the Affordable Care Act i. Essential Health Benefits (Non- implement benefit packages that do not did not authorize a departure from long Discrimination Policy) (§ 440.347) discriminate. ABPs will be subject to the standing state discretion under Title Section 1302(b)(4) of the Affordable same monitoring process as currently XIX to develop appropriately balanced Care Act provides that benefit design used in the Medicaid state plan. benefits and suggested that, if states cannot discriminate and CMS codified Comment: Many commenters must expand all benefits for existing this section of the Affordable Care Act expressed support for the inclusion of a and newly eligible beneficiaries, then at § 440.347(e). Benefit design non-discrimination provision in states must receive 100 percent FFP for discrimination policies do not prevent § 440.347(e). But some commenters these benefits. states from using targeting criteria to pointed out that, while the proposed

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rule recognized the importance of non- subject to the Age Discrimination Act of national origin, sex, sexual orientation, discriminatory plan design § 440.347(e) 1975. Therefore, these protections are gender identity, age expected length of fails to state the full range of already applicable to Medicaid. life, or of an individual’s present or nondiscrimination protections We appreciate commenters pointing predicted disability, degree of medical applicable to the EHB. Many out deficiencies in § 440.347(e) and dependency, or quality of life or other commenters expressed concern that the have revised it to align with the health conditions. Other commenters preamble only references section regulation implementing EHBs in the recommended § 440.347(e) be amended 1302(b)(4) of the Act and the Exchanges. as follows: (e) EHBs cannot be based on requirements proposed in § 440.347(e) Comment: A few commenters a benefit design or implementation of a state only the protections under that indicated appreciation of CMS’s work to benefit design that discriminates on the statutory provision. Therefore the revise current Medicaid rules such that basis of an individual’s age, expected commenters believe that the they incorporate statutory non- length of life, an individual’s present or requirements in § 440.347(e) reflect an discrimination provisions from section predicted disability, degree of medical incomplete and insufficient standard. 1302(b)(4). The commenters strongly dependency, or quality of life or other The commenters believe that the encourage CMS to also codify all health conditions, race, color, national protections under section 1557 of the statutory non-discrimination provisions origin, language, sex, sexual orientation Affordable Care Act also apply, and the applicable to issuers of QHPs that meet or gender identity. final rule must expressly state a EHB requirements. CMS should specify Response: The suggested change to comprehensive and consistent that § 156.200 and § 156.225 also apply § 440.347(e) is unnecessary because the nondiscrimination standard, explicitly to ABPs. Section 156.200 specifically protections described are already requiring EHB benefit design to comply prohibits discrimination based on reflected in existing Medicaid with section 1557 of the Affordable Care factors including but not limited to race, regulations. Act. The commenters recommend the disability, and age. Section 156.225 Comment: Many commenters final rule be revised to include the codifies section 1311(c)(1)(A) of the expressed concern about the lack of language used in the nondiscrimination Affordable Care Act which prohibits guidance under the proposed rule for standard set out in the proposed EHB marketing practices and benefit designs monitoring and enforcement of the rule. The commenters believe that that result in discrimination against proposed nondiscrimination provisions, without the additional requirements the individuals with significant or high cost and believe that the final rule must benefits of both section 1557 and the health care needs. The commenters better define how individual states will Affordable Care Act as a whole in believe that all Affordable Care Act non- assess, monitor, and enforce the law’s ensuring comprehensive coverage for all discrimination provisions applicable to nondiscrimination provisions. individuals will be undermined. Lastly, QHPs issuers and EHB standards must Moreover, the commenters do not the commenters also requested the similarly apply to ABPs in Medicaid to believe it is sufficient to delegate all regulation prohibit ABPs from including ensure consistency of standards across monitoring and enforcement to states. all of the following: all forms of all health care coverage. The commenters recommend the final • Participant cost-sharing designs that Response: The requirements in 45 rule define how CMS will take are more burdensome on some benefits CFR part 156 apply to QHP issuers and enforcement action when states are not than others. not Medicaid managed care plans. ensuring compliance with the • Unreasonable and arbitrary visit However, there are similar protections nondiscrimination standards and dollar limits on a specific category in place in the regulations governing established under the Affordable Care of benefits, so as to discourage Medicaid managed care plans. If ABPs Act. The commenters also recommend participation by individuals with brain are delivered through a Medicaid that CMS develop a clear standard for injury. managed care plan, those protections, what constitutes a discriminatory • Targeted use of utilization including marketing, appeals and benefit design. This standard must management techniques for some grievances, beneficiary information, and address both individual cases of benefits, and not to others. non-discrimination based on health intentional discrimination and benefit • Defining the benefits in such a way status will apply to the Medicaid designs that are facially neutral but that to exclude coverage for those services managed care plans providing ABP have the effect of systematically based upon age, disability, expected benefits. There are similar protections disadvantaging members of protected length of life, or the willingness or on many of these issues for Medicaid fee classes. Ultimately, this standard must capacity to participate in wellness for service delivery systems, requiring make clear that the determination of programs or behavioral incentive fair hearing, free choice of provider, and whether a coverage limitation or programs. beneficiary information. exclusion is discriminatory should turn Response: Some of the protections We take this opportunity to clarify on the degree to which the benefit sought by commenters are already that States have the flexibility to use design is based on sound standards of contained in laws applicable to state managed care to deliver ABP benefits clinical appropriateness rather than on Medicaid programs. Section 430.2, an without regard to statewideness and arbitrary distinctions between health existing regulation, identifies other comparability of services. Further, conditions or personal characteristics. regulations applicable to state Medicaid freedom of choice of provider may also To assist federal and state regulators in programs including 45 CFR part 80, be disregarded to the extent the State rectifying discrimination in benefit which requires that programs receiving can demonstrate that freedom of choice design, CMS should follow up on the federal assistance, through the would be contrary to the effective and final rule with sub-regulatory guidance Department of Health and Human efficient implementation of an ABP. explaining how to evaluate products for Services, include effectuation of Title VI Comment: Many commenters also impermissible discrimination and of the Civil Rights Act of 1964 and 45 recommended § 440.347(e) be amended providing examples of discriminatory CFR part 84, which implements Section as follows: EHBs cannot be based on a benefit designs such as those listed 504 of the Rehabilitation Act of 1973, benefit design or implementation of a above. In addition, CMS should require prohibiting disability discrimination. In benefit design that discriminated on the trained evaluators in each state to addition, state Medicaid programs are basis of an individual’s race, color, regularly and transparently review

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coverage available through ABPs for recipients. The commenters believe that coverage under section 1937 of the Act discriminatory benefit designs and to focusing on a number of drugs covered, with the requirements for covered ensure identified instances of as opposed to ensuring a breadth of outpatient drugs under section 1927 of discrimination are remedied in an drugs are covered, could result in a the Act in further detail later in this expedient manner. Where CMS selection of drugs that meets the final rule. determines that a state Medicaid agency minimum requirement but Comment: Some of the commenters is not fulfilling its responsibilities in discriminates against potential are concerned that CMS allows states to this area, CMS should establish a review enrollees. place limitations on amount, duration, procedure to focus on ensuring that all Response: While we understand the and scope and adopt prior authorization services deemed part of the EHBs are commenters’ concerns, the statute and other utilization control measures, available to all eligible individuals for permits states a certain amount of as well as policies that promote the use whom they are medically necessary, flexibility in determining and of generic drugs. The commenters without arbitrary discrimination on the structuring ABPs that meet the needs of believe that for people living with basis of any protected personal enrollees and are consistent with overall chronic conditions, use of utilization characteristic. state objectives. We must clarify a management techniques can have a Response: ABPs are Medicaid state statement in the preamble to the detrimental impact and inhibit people plan amendments and are subject to the proposed rule, indicating that from accessing needed treatments. The same monitoring and oversight that requirements under section 1927 of the commenters also believe that these occurs in the Medicaid state plan. Act are applicable to ABPs under limitations can violate the non- Under this process, states review section 1937 of the Act. Section 1927 of discrimination requirements in the law. applicable requirements and design the Act does not affect the flexibility of In particular, commenters indicated their program, including ABPs. The states to define ABP benefit packages that it is imperative that non- proposed design is submitted to CMS consistent with a coverage benchmark discrimination protections found in for approval, and CMS reviews the and including EHBs. The amount, § 440.347 are strictly and clearly applied proposal for compliance with federal duration, and scope of prescription drug to the ABP prescription drug benefit. requirements. If approved, CMS may coverage would thus be governed by the HIV care and treatment standards also review state implementation for requirements of section 1937 of the Act. maintained by Federal agencies compliance with federal requirements. To the extent that a prescription drug is recommend a combination of In addition, issues can be raised by within the scope of the ABP benefit as medications for effective management of beneficiaries through the fair hearing a covered outpatient drug, section 1927 HIV disease (see http:// process if services are denied. As with of the Act is then applicable. For such www.aidsinfo.nih.gov). Quantitative any Medicaid service, we recognize the covered outpatient drugs, since payment limits on the number of drugs covered important role that all stakeholders play is available under the state plan, all per month are discriminatory against in making CMS aware of any perceived drug rebate obligations under the rebate people with HIV and others whose ABP noncompliance. We will consider agreement are required for drug quality of life and health depend on issuing further guidance on this topic. manufacturers under 1927(b) of the Act. access to a specific regimen of multiple Comment: One commenter is To explain in more detail, the prescription drugs to treat both HIV and concerned that the proposed rule does amount, duration, and scope of coverage co-occurring conditions as not establish sufficiently robust for an ABP is determined under section recommended by their medical oversight or enforcement framework to 1937 of the Act, which authorizes provider. The application of the non- provide states with essential guidance to benchmark or benchmark-equivalent discrimination provisions should implement such a program. The coverage ‘‘notwithstanding any other prohibit states from applying regulatory text does not expressly provision that would be directly quantitative limits on monthly drug require the Exchanges, states or OPM to contrary.’’ But, the drug rebate coverage for the expansion population, monitor plans for compliance with the obligation applies under section 1927 of and the commenters urged that this prohibition on discrimination. This the Act when payment is made under standard also be applied to the commenter urges CMS to adopt an the Medicaid state plan for covered traditional Medicaid population. If express requirement in the regulatory outpatient drugs as part of the ABP. In monthly drug limits are considered, text of the rule that the Exchanges, addition, to the extent that covered there must be provisions to allow for a states and OPM monitor for non- outpatient drugs are within the scope of timely override process that does not discrimination. ABP coverage, the protections and delay immediate and uninterrupted Response: Medicaid is a federal and limitations for such coverage under access to the medications when state partnership and as such, states section 1927 of the Act apply. So, for recommended by a medical provider. have the first line of responsibility to example, to the extent that coverage Commenters also requested that CMS design and implement their program in under an ABP includes a class of adopt a more robust standard for compliance with federal requirements, covered outpatient drugs, a state could evaluating limitations on amount, including the non-discrimination impose limitations on that coverage duration, and scope and prior requirements. Federal oversight is only consistent with the provisions of authorization and utilization control implemented using the existing state section 1927(d) of the Act. In general the measures that may be discriminatory by plan process, as well as ongoing requirements for prescription drug design. These evaluations should be monitoring of program operations. coverage under section 1937 of the Act, specific to the population and based on Comment: Several commenters through the requirement for coverage of sound medical evidence regarding the expressed concern that applying the EHBs, will mean that ABPs will meet prescription drugs necessary to provide EHB standard to prescription drug existing section 1927 requirements for adequate coverage. Restrictions to coverage in Medicaid would not provide Medicaid payment of covered outpatient prescription drug coverage in Medicaid, appropriate protections for people with drugs, which we believe will address such as monthly drug limits, could chronic conditions like cancer, diabetes, the commenters’ concerns. We discuss leave some Medicaid beneficiaries with Parkinson’s, HIV/AIDS, schizophrenia, the interaction between the less comprehensive coverage than that epilepsy, obesity and organ transplant requirements for prescription drug offered to individuals covered in the

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Exchange because of limitations that are health condition contrary to the non- discrimination protections will require a discriminatory based on health care discrimination provisions being adopted thoughtful and thorough review of need. in this final rule at § 440.347. preferred drug lists (PDLs). They stated A few commenters also expressed Comment: One commenter suggested that the following approaches could concern that the proposed rule does not that in developing an analysis help ensure meaningful access: (1) PDLs discuss the circumstances in which a framework to aid in testing for should only be permitted to categorize limitation on drug coverage could discriminatory plan benefits, CMS must a drug as non-preferred when there are violate the non-discrimination ensure that ABPs refrain from using genuine therapeutic alternatives requirement. CMS should provide benefit designs that treat patients in a classified as preferred; (2) PDLs should additional guidance about its disparate manner based on age. For allow for appropriate access to drugs or interpretation of the nondiscrimination example, where FDA approves a drug or drug classes needed for adherence to rule and its enforcement strategies, biologic for use in patients within a widely accepted treatment guidelines; particularly for prescription drugs. The certain population, such as pediatrics, (3) The most commonly used commenters believe that this should the commenter argued that ABPs should medications (or therapeutically similar include oversight functions to actively not be permitted to restrict coverage or medications) for conditions with high monitor and test for discriminatory plan employ varying utilization techniques prevalence in the Medicaid population design and implementation, and to for children of different age ranges should be categorized as preferred report such activities to CMS. For within that pediatric population. The drugs; and (4) Most importantly, instance, the implications of plan commenter requested CMS’ vigilant medications used by particularly substitutions within a category of EHBs oversight to protect children from being vulnerable Medicaid beneficiaries, such or prescription drug cost-sharing subject to age-based discrimination in as those living with HIV/AIDS, cancer designs for high risk enrollees should be accessing FDA-approved products. or serious mental illness, should be considered. Response: The non-discrimination largely available as preferred drugs, Response: States have considerable provisions adopted in this final rule at given the importance of avoiding flexibility in implementing the § 440.347 require that states will need to medical complications and provision of Medicaid services through assess whether their ABP benefits, interruptions in therapy for individuals ABPs. While this flexibility permits including any limitations placed on the with those conditions. states in some instances to limit amount, duration and scope of any Response: For covered outpatient prescription drug coverage based on the benefit, discriminate on the basis of the drugs, a PDL is permitted under section coverage offered under other public individual’s age, expected length of life 1927 of the Act, as long as it is under employee or commercial plans, it also or any individual’s present or predicted a prior authorization program that meets includes the ability to exceed the disability, degree of medical the requirements of section 1927(d)(5) of amount, duration, and scope of dependency, or quality of life or other the Act. Furthermore, as we discuss in prescription drugs covered by those health conditions. A limitation on the cost sharing sections of this final plans, as long as the services provided medically necessary care provided to rule, a PDL may also be established for are consistent with the Medicaid pediatric patients would violate the cost sharing purposes. requirements. requirement under section 1937 of the Comment: Many commenters The non-discrimination provisions Act that ABPs include the full range of expressed concern that the regulation adopted in this final rule at § 440.347 medically necessary EPSDT screening did not provide examples of what require that states will need to assess and treatment services. Thus, the issue would be considered discriminatory whether their ABP benefits, including would not be one of benefit design but benefit design. The commenters request any limitations placed on the amount, of compliance in providing a covered CMS identify a clear standard to duration and scope of any benefit, benefit. determine whether the coverage discriminate on the basis of the Comment: A few commenters stated provided complies with the non- individual’s age, expected length of life that CMS should adopt similar guidance discrimination provisions of the or any individual’s present or predicted and review processes as required under Affordable Care Act. Additionally, the disability, degree of medical Medicare Part D program in the commenters believe that CMS should dependency, or quality of life or other Medicaid EHB final rule. These proven provide examples to States of what health conditions. We will consider non-discrimination policies and would constitute violations, monitor whether additional sub-regulatory processes have been critically important ABP coverage for compliance with the guidance on these matters is needed. in assuring that all Medicare non-discrimination requirements, and Comment: One commenter stated that beneficiaries—from the healthiest enforce these provisions of the law. private market carriers argue that beneficiaries to the most vulnerable Many other commenters added that the exclusions for services or drugs beneficiaries with serious and chronic rule also did not establish a process to commonly provided for the treatment of illnesses—can obtain affordable Part D bring discriminatory benefit design or conditions such as HIV/AIDS are not coverage that meets their individual practice into compliance. CMS should discriminatory because they apply to all needs. Additionally, CMS’ experience consider developing more detail in the plan enrollees, regardless of their assessing Medicare Advantage plans’ final regulation defining these specific negative effect on people with cost-sharing and benefit designs for protections. This should include a these conditions. discriminatory effects may help point process for bringing a State’s chosen Response: Under the law, states must the way. benchmark or benchmark-equivalent assess whether their ABP benefit Response: We appreciate the option into compliance with the law. designs, including service or drug comments regarding the use of Part D Response: States will submit exclusions that are applied to all non-discrimination standards and will Medicaid state plan amendments for beneficiaries, discriminate based on an consider those standards as we evaluate federal approval to implement ABPs individual’s age, expected length of life, these issues and the need for further and receive FFP. The state will assure or an individual’s present or predicted guidance. in that submission that they will comply disability, degree of medical Comment: Several commenters with non-discriminatory requirements dependency, or quality of life or other indicated that meaningful non- as set forth in § 440.347(e). If issues are

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detected with adherence to these further guidance on discrimination closely monitored to ensure that plans requirements, we will pursue benefit design would be useful. have not put in place barriers to services appropriate action with the state to Comment: One commenter pointed to or excluded or limited certain items or rectify the issues. As always, we the Affordable Care Act’s provision services solely to deny access to care for appreciate the ongoing input of barring discrimination in EHB as people with chronic and complex health stakeholders to help inform states and prohibiting disability-based conditions. The commenters urge HHS CMS of concerns relating to these discrimination in making decisions to develop a list of practices that matters. about coverage, reimbursement rates, amount to discrimination to help guide Comment: One commenter indicated establishing incentive programs, and monitoring and enforcement activities. that it is unclear how the requirement designing benefits, and the commenters For instance, requiring step therapy for that EHBs cannot be based on a benefit believe those requirements should apply HIV treatment without a medical design or implementation of a benefit to Medicaid ABPs. The commenter override provision is a discriminatory design that discriminates on the basis of recommends the Department provide utilization management technique that an individual’s age, expected length of additional guidance concerning should be barred. Similarly, a monthly life, or of an individual’s present or applications of the Affordable Care Act limit on prescription drugs (for predicted disability, degree of medical EHB non-discrimination mandate to example, several states have monthly dependency, or quality of life or other ABPs. The commenter believes the limits of three or four prescription health condition will be evaluated in Department should also identify a drugs) is also per-se discriminatory, as the context of benchmark plans for minimum scope of services that plans applied to people living with HIV and specified population. It is unclear must cover to comply with the other chronic conditions. whether targeting permitted under other Affordable Care Act’s parity and • Physician network size and sections such as section 1915(i) of the nondiscrimination requirements and the composition must be evaluated to Act would be permitted. The requirement that EHB take into account ensure that Medicaid managed care plan commenter wondered whether it would the ‘‘needs of diverse segments of the networks include providers that are able preclude the establishment of specialty population, including . . . persons with to deliver quality care for people living plans based on diagnosis. disabilities.’’ with HIV and other chronic and Response: Section 1937 of the Act Response: The United State Supreme complex conditions. A plan network does allow for a waiver of comparability Court decision in Olmstead v. L.C. that excludes HIV providers violates at § 440.230(c); thus permitting states to rendered on June 22, 1999 held that network adequacy standards outlined in identify groups of people, populations, unjustified segregation of people with qualified health plan standards and is a based on certain characteristics such as disabilities constitutes discrimination in discriminatory plan design practice that presence of a chronic condition. States violation of Title II of the ADA. Public forecloses access to EHB services. In can then design benefit packages that agencies must provide services to addition, patient protections (for are suitable for the population, but this people in the community when services example, standing out-of-network activity does not permit benefit designs are appropriate, people do not oppose referrals) will be necessary to ensure a that are inherently discriminatory. services in the community, and the smooth transition to coverage and to Comment: A few commenters community-based services can be expressed concern that neither earlier reasonably accommodated, taking into support continuity in care. The rules on EHB nor this proposed rule account the resources available to the commenters strongly urge CMS to specifically define ‘‘discrimination’’ in entity and the needs of others who are require Medicaid managed care plans to the context of discriminatory benefit receiving disability services from the contract with Essential Community design. The commenters urge HHS to entity. Medicaid beneficiaries must Providers, including Ryan White develop and promulgate a definition of medical providers. receive services in the most integrated • ‘‘discrimination’’ that will allow states setting appropriate. We agree with the For chronic and complex to evaluate health plans uniformly. The commenter that benefit design, conditions, where the standard of care proposed rule delegates entirely to including rate structures, should not is rapidly evolving, reference to clinical states the task of evaluating EHB for create a pathway to institutionalization guidelines is particularly important to discriminatory design or intent with no or segregation. Setting is not an ensure that coverage decisions are based further guidance at all. The absence of appropriate targeting criterion, because on established medically accepted a definition of discrimination will it is potentially discriminatory as guidelines. inevitably lead to a 50-state patchwork different benefits could be designed Response: Thank you for your of definitions. The commenters strongly based on where individuals live and suggestions. We agree that Medicaid believe that the definition of therefore, it would not be acceptable as managed care provider networks need to discriminatory benefit design should a waiver of comparability. be adequate to provide services to all of not vary among states. Comment: Many commenters their members. It is at state discretion to Response: Medicaid is a federal and recommend CMS use the following data include (or not) standards for managed state partnership that allows states to to determine compliance with the non- care providers in the contracts that the design state-specific programs within discrimination requirements: state holds with the managed care broad federal guidelines and, more • Medical necessity requirements for organizations in the state. Managed care generally, that allocates responsibilities Medicaid must be evaluated and entities can contract with any provider to both states and the federal standardized, and HHS should monitor operating within the scope of their government. By identifying states as state implementation of medical license to provide services. accountable for determining that benefit necessity to ensure that people living Comment: A few commenters design is not discriminatory, we with HIV, chronic disabilities and other recommend ongoing procedures for recognize their important role in chronic and complex conditions have states to monitor and share data on how assuring compliance with this important unimpeded access to essential care and they are meeting their benefit design statutory directive. Such accountability treatment. and anti-discrimination obligations over does not negate federal responsibility. • Utilization management techniques, time, and make this information As noted, we will consider whether exclusions, and service limits must be transparent and readily available in at

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least an aggregate fashion to HHS, the Comment: Many commenters non-discrimination standards, the public, and to health advocates. representing the Lesbian Gay Bi-Sexual commenters refer CMS to its proposed Response: We appreciate the and Transgender (LGBT) community regulatory language for a comprehensive comments. We are currently redesigning stated that the final rules must also set of patient protections. data collection procedures and address gaps in enforcement of this Response: In Medicaid, utilization standards and will consider these prohibition on discriminatory management processes are at state comments. exclusions by providing clear guidance discretion. States have flexibility to Comment: One commenter is to state Medicaid agencies on design and implement the Medicaid requesting that any coverage under the implementation of these program in the state according to state Affordable Care Act, including nondiscrimination standards. policies and procedures. States will Medicaid Programs, adequately cover Enforcement is a major concern for assure in the state plan amendment therapies that cancer patients absolutely these commenters in two areas: (i) submission that anti-discrimination must take whether or not there is an instances of discrimination against practices at § 440.347(e) are met. We actuarial equivalent at a lower cost. individual enrollees, and (ii) clarify here that Medicaid cost sharing Coverage of drugs and services related discriminatory benefit design. The parameters apply to services provided to cancer care should not create cost former is very important for LGBT in a managed care delivery system. barriers to patients through cost-sharing enrollees, and they encourage CMS to Furthermore, we have oversight schemes such as burdensome co-pays work with state Medicaid Directors to responsibility of state programs to and co-insurance. To do so would be ensure that robust and transparent insure that federal rules and unfairly discriminatory, and could appeals procedures are equally available requirements are being followed. impact a patient’s ability to access their to all individuals who need them. With Comment: One commenter pointed care, particularly low-income patients regard to discriminatory benefits design, out that § 440.347 deals exclusively enrolled in Medicaid. The commenter they are particularly concerned about with patient non-discrimination. The would like to see strong protections and enforcement in the context of potential commenter indicated that there is also oversight established to prevent disagreement as to what kinds of benefit provider discrimination within health discrimination. limitations and exclusions constitute plans, where sometimes entire classes of Response: We agree that a patient’s impermissible discrimination in benefit healthcare professionals are excluded ability to pay cost sharing imposed for design. from providing services under the a service can affect a patient’s access to Response: We appreciate the concerns benefit solely based on their licensure or care and that low-income patients are expressed by these commenters. We certification. The commenter believes particularly sensitive to such costs. intend to work with states on these such discrimination can limit or deny Medicaid cost sharing rules at § 447.52 matters as well as consider ways in patient choice and access to a range of generally and § 447.53 for drugs apply which discrimination for LGBT beneficial, safe and cost-efficient to ABPs. States design cost sharing for enrollees may be rooted in benefit healthcare professionals, impairing therapies and drugs using those rules, limitations and exclusions as well as in competition, patient access to care, and and cost sharing rules may not be appeals processes. optimal healthcare delivery. The implemented in a manner that would be Comment: Several commenters stated commenter recommends the rule discriminatory. Annual dollar limits on that the proposed rule requires that a require ABPs offering EHBs to align services will not be allowed on benefits Medicaid benchmark plan’s benefit payment systems to adhere to existing in the public employee or commercial design cannot be discriminatory, and state provider non-discrimination laws plans that are the basis for the base the final regulation must ensure as applicable, and to the federal benchmark options used to define EHBs adequate protections against provider non-discrimination provision per section 2711 of the Affordable Care discrimination. The commenters in the Patient Protection and Affordable Act. recommend the regulation require the Care Act (Sec. 1201, Subpart 1, creating Comment: A few commenters believe following non-discrimination standards: a new Public Health Service Act Sec. that § 440.347(e) sets out a strong non- • Processes for review of plan 2706, ‘‘Non-Discrimination in Health discrimination requirement. However, benefits design to avoid discrimination Care’’, 42 U.S.C. 300gg–5) slated to take the commenters also believe that there caused by unfair utilization effect January 1, 2014. will be times when individuals are management techniques or other plan Response: We require that all going to need access to legal advocacy design elements. providers are operating within the scope to seek redress from discrimination and • Requirements for plans to disclose of their licensure or certification when enforce these due process protections. to all prospective and current members providing services to Medicaid The commenters recommend that the all utilization management techniques beneficiaries. states be required to assist individuals as well as all limits on services. Summary: We appreciate the to use the due process and appeals • Final authority at the federal level comments and suggestions and may processes, this would include: (1) to approve any state non-discrimination consider further guidance. No change in Information and assistance in pursuing review processes to ensure appropriate the substance of the regulatory text is complaints and appeals; (2) negotiation measures are in place to guarantee that needed. However, CMS made and mediation; (3) case advocacy plans are meeting the requirements of grammatical changes to the regulation assistance in interpreting relevant law; this section. text at § 440.347(e) as a result of (4) reporting on patterns of non- • Federal monitoring programs to comments received in this section. compliance by plans as appropriate; and ensure appropriate checks are in place (5) individual case advocacy in to guarantee that plans are meeting 3. Modifications in Applying the administrative hearings and court federal requirements. Provisions of This Final Rule to proceedings relating to program In addition, the commenters urge Medicaid benefits. CMS to clarify that Medicaid cost- We proposed in the implementation Response: We appreciate these sharing limits apply to the managed care of section 1937 of the Act and the suggestions; however, they are outside organizations participating in the provisions in the Affordable Care Act the scope of this regulation. Medicaid program. For more details on relating to EHBs, a process in Medicaid

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for designing ABPs. The Affordable Care provided to assist a person to prevent One commenter requested that HHS Act modified section 1937 of the Act to deterioration and regain or maintain a recognize that habilitative services are implement two standards for minimum skill or function acquired and then lost similar in type and scope to coverage provision; not only must EHBs, or impaired due to illness, injury or rehabilitative services (for example, as defined by the Secretary, be disabling conditions. The NAIC also physical therapy, occupational therapy, provided, but all requirements of defines habilitative services and devices speech-language pathology). One section 1937 of the Act continue to as services and devices provided for a commenter believed that habilitation apply. Furthermore, we outlined person to prevent deterioration or attain should be covered in the same setting expectations for specific EHBs as they or maintain a skill or function never and include the same type of providers are implemented in Medicaid including: learned or acquired due to a disabling and specialists as covered in the habilitative services; pediatric or and condition. CMS will consider the need rehabilitation benefit. vision services; prescription drugs; for future guidance, once experience is A number of commenters believed preventive services as an EHB; and the gained in implementing these EHB that setting clear, comprehensive, and fact that all other Title XIX provisions services and devices. We also note that uniform standards for habilitative apply. while there is a definition of habilitative services will prevent non-aligned services under existing sections 1915(c) localized definitions that could create a. Essential Health Benefits and 1915(i) of the Act, this definition is serious problems across programs and (Rehabilitative and Habilitative Services not necessarily applicable and may in states. A few commenters requested and Devices) (§ 440.347) fact not be appropriate for the formal guidance on what the minimal The proposed rule requested population covered under ABPs. expectation is for habilitative services. comment on an approach for defining Comment: A number of commenters A few commenters believed that when habilitative services in Medicaid and we believed that by requiring coverage of states adopt the habilitative benefit for reserved regulatory text to do so. We habilitative services in the ten ABP, HHS require that they do not received varied comments, and are mandatory EHB categories, Congress impose financial requirements, adopting in this final rule the clearly indicated its intent to meet the quantitative treatment limitations, or requirement that services covered by the health needs of individuals with financial limitations that are more base benchmark are the floor of EHB functional limitations following illness, restrictive than the predominant coverage, substituted as desired by the injury, disability or due to a chronic requirements or limitations that apply to state. Under 45 CFR 156.110(f), if no condition. The commenters all other benefit categories. habilitative services and devices are recommended that HHS develop an Response: We believe the provision of included in the base benchmark, states objective minimum national standard habilitative services is in addition to have the option to determine generally for habilitative services based on rehabilitative services and devices as an the required EHB services that are in the ‘‘appropriate coverage to meet the needs EHB. As EHBs are based on commercial category of habilitative services and of the population,’’ and allow states market products, we are interpreting devices. If the state has done so, the flexibility to add to this minimum for rehabilitative services as an EHB to base benchmark, and coverage under the purposes of innovation. more closely align with commercial ABP, must reflect that determination. If A few commenters recommended market definitions, rather than the the state has not made a general HHS better define this category of broader definition of rehabilitation in determination of the habilitative services including providing clarity as Medicaid. We therefore, are establishing services that are required for this EHB to how plan definitions and scope of that the commercial market definition of category, the state must exercise the coverage will be assessed to ensure EHBs is the floor of coverage, subject to option set forth in 45 CFR 156.115(a)(5) compliance with non-discrimination substitution flexibilities. If the to determine EHB for the specific ABP. provisions. A number of commenters commercial market coverage is not Under that option, habilitative services requested HHS cover habilitation at adequate, states, not issuers, define the and devices must be included as EHBs parity with rehabilitation, with some benefit. At state discretion, as indicated either in an amount, duration, and comments suggesting this standard also above, states may offer coverage of scope no more restrictive in terms of require habilitative services under habilitative services and devices that is treatment and benefit limitations than Medicaid to be at least as generously no more restrictive in terms of amount, rehabilitative services and devices, or defined as in the private market. duration, and scope than rehabilitative otherwise to an extent determined by Many commenters requested that services and devices. We expect that the the state and reported to HHS. In other HHS require coverage of habilitative services will be clinically appropriate to words, if the base benchmark does not devices without arbitrary restrictions meet the needs of individuals based on include habilitative services and and caps that limit the effectiveness of medical necessity. We have added this devices, ABP coverage must, at a the benefit. flexibility for states to define a minimum, be based on the general state Several commenters recommended minimum standard of coverage if the determination of habilitative services HHS include a set of habilitative commercial market benefits are not and devices that are included in EHBs, services specifying the minimum type of adequate. We are suggesting, but not or on a Medicaid-specific determination services to be provided and specify that requiring, definitions of rehabilitative for the particular ABP. these services are a floor. and habilitative services and devices, as While we are not prescribing a Many commenters recommended that indicated above, and will consider specific definition of habilitative habilitation be covered separate and needs for future guidance. We are services and devices for purposes of distinct from rehabilitation. For reiterating that the benefit flexibility ABP coverage of EHB, we clarify here example, the plan cannot substitute under an ABP allows states considerable that states may choose to adopt service rehabilitation for habilitation or apply latitude to define the benefit package for definitions similar to those issued by only a single visit limit to both benefits. each population and there may be the National Association of Insurance Each benefit must have separate and services that are covered in some Commissioners (NAIC), as follows: distinct limits which are applied based settings but not in other settings, or that rehabilitative services and devices are on medical necessity, not an arbitrary are covered when furnished by some defined as services and devices cap. practitioners but not others. This is

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flexibility that exists currently in the habilitative services, consistent with 45 enrollees with such services through a commercial marketplace, and is CFR 156.110(f) and 156.115(f), States section 1915(c) waiver program. extended to state Medicaid programs will determine which services are Response: The new adult eligibility under section 1937 of the Act. included as EHB in the habilitative group is not eligible for enrollment in Comment: One commenter services and devices category. States section 1915(c) waivers. However, states recommended that the coverage and may choose to offer habilitative services may also add section 1915(i) services to medical necessity determinations for and devices in no more restrictive in the ABP using Secretary-approved habilitative services and devices should terms of amount, duration, and scope of coverage, which may include some be based on clinical judgment of the treatment than is applied for habilitative services and devices. But we effectiveness of the therapy, service, or rehabilitative services and devices. do not see a reason to ‘‘deem’’ device to address the deficit. In Comment: One commenter requested compliance with the habilitative addition, HHS should make clear that the state-defined habilitative benefit services and devices EHB requirements such benefits are to cover maintenance definition, as applied to section 1937 just because a state may include some of function not just improvements, to ABP in Medicaid, should not be habilitative services and devices in assure that individuals in need have extended to QHPs on the Exchange. those ways. The state must still access to care that prevents This commenter indicated that in many determine habilitative services and deterioration of their conditions. states, Medicaid takes an expansive devices that are EHBs in accordance One commenter requested that HHS view of habilitative services, and there with this regulation. inform states that habilitative services is a risk that if applied to the Comment: A few commenters need to be medically necessary and commercial market, this could raise recommended that if HHS does not use plans must be clear on how they define costs on QHPs in the Exchange. States a national standard for Medicaid and determine medical necessity. should have the option to either habilitative service benefits, then states Response: States may require that all separately define habilitative services should be required to base their services covered under Medicaid be for Medicaid or apply the state-defined definitions on documented and medically necessary. Determining the habilitative definition for the Exchange evidence-based criteria, such as those specific coverage of habilitative services to the Medicaid programs, but not apply endorsed by a relevant national and devices will be done by the state, a broad Medicaid habilitative service academy of providers or national based on services found in the base definition to QHPs in the Exchange. disease group; and states should not benchmark plan selected by the state to Response: This regulation is focused automatically be allowed to use their define EHBs for Medicaid, and on the parameters of the habilitative Exchange habilitative services substituted as desired. If a base services and devices that are EHBs for definitions unless it independently benchmark plan does not include purposes of section 1937 ABPs under meets the criteria stated above. habilitative services, consistent with 45 the Medicaid program and, this Response: We expect that states will CFR 156.110(f) and 156.115(f), States regulation does not apply to QHPs. consider the efficacy of services, will determine which services are Comment: Many commenters evidence-based criteria, and the needs included as EHB in the habilitative recommended that states should be of the populations being served as they services and devices category. We agree allowed to define habilitative services are designing habilitative services, with the commenter that habilitative for their Medicaid program. based on the services found in the base services, generally speaking, cover Response: We are adopting the benchmark selected by the state to acquisition and maintenance of skills, position in this final rule that states will define EHBs for Medicaid, and while rehabilitative services cover have the ability to define habilitative supplemented and substituted as restoration of previously acquired skills, services and devices. If the base necessary and desired. but we are not setting forth a specific benchmark plan selected by the state to Comment: Many commenters definition of these terms at this time. define EHBs, does not include recommended that the state-defined Comment: One commenter habilitative services and devices, states habilitative services for Exchanges recommended that HHS look to state will define the habilitative services and should not apply to Medicaid. Instead, Medicaid programs as a guide for devices that will be regarded as this some commenters indicated that states defining what habilitation services EHB category and must be covered in should be required to define habilitative should be covered under the EHB. A the ABP. In so doing, states can choose services through a public process that number of commenters requested that to offer habilitative services and devices establishes minimum standards for HHS require states and plans to adopt that are at a minimum no more coverage, while taking into account the definition of habilitative services restrictive in terms of amount, duration, unique circumstances of the Medicaid put forth by the NAIC, which was and scope than rehabilitative services population, including the impact of a included in the Department’s proposed and devices. restrictive definition on access to rule defining medical and insurance Comment: One commenter requested critical services in early intervention terminology. Many commenters that HHS continue to allow states and and special education. One commenter recommend that if the NAIC definition issuers the flexibility to define believed that states should have the is not used, an alternate definition to habilitative services for the individual option to offer parity. consider is provided in Medicaid law and small group markets as proposed in Response: In terms of complying with under section 1915(c)(5)(A) of the Act. the EHB proposed rule and not be EHB requirements, the same basic Response: We appreciate these required to follow Medicaid definitions. framework applies to both ABPs and suggestions and find the definitions of Response: We reiterate that this plans in the individual and small group rehabilitative services and devices and regulation applies only to the Medicaid markets. But that basic framework habilitative services and devices program, and has no bearing on the includes considerable flexibility that extremely useful. Habilitative services provision of habilitative services in the states can exercise in the Medicaid and devices as described in the base individual and small group markets. context. While states will ultimately benchmark plan is the floor of coverage, Comment: One commenter requested determine coverage of habilitative subject to substitution flexibility. If a HHS clarify that states will be deemed services we encourage states to do so in base benchmark plan does not include to cover habilitation if they provide ABP recognition of the unique needs of the

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Medicaid population. As states work to institutional services such as nursing habilitative services benefit instead of identify coverable habilitative services, home care. As noted in the regulation, issuers, using the procedures finalized they are expected to consider input from employers do not cover the service here, is the most appropriate approach. the public in making the decisions. consistent with Medicaid requirements. Comment: One commenter believed ABPs are subject to public notice As a result, if parity is required without that habilitative services complement requirements in § 440.386. consideration of the scope of rehabilitative services and are integral to Comment: One commenter requested habilitation services offered, the result ensuring that the beneficiary receives that the final rule ensure that the state’s could be states exceeding the EHB comprehensive care that restores him/ Medicaid definition of habilitation is at standard. States should be provided the her to maximum functional levels. This least as generous as the definition used flexibility to define and provide commenter stated that both substitution for Exchange plans. coverage of habilitation services. among and parity between these Response: While we believe that the Response: Habilitative services and services could be problematic if the procedures we are adopting to devices are coverable services under the beneficiary’s medical condition requires determine habilitative services included section 1915(c) waiver program and the significantly more rehabilitative services in EHB for Medicaid will generally be waiver program does provide a than habilitative services and vice versa. at least as generous as the parallel suggested definition. Section 1915(i) Response: States may implement procedures for the individual and group also allows coverage of habilitative utilization management processes that market, we are not requiring that result. services and devices where states define allow for individuals who need We believe that the procedures for the service. We are giving states additional services beyond the limits Medicaid will lead to appropriate flexibility to define habilitative services established in the ABP to receive such coverage for Medicaid beneficiaries and devices within the standards services based on medical necessity. while recognizing the state’s role in finalized in this regulation. In addition, States could substitute rehabilitative designing Medicaid coverage. states may offer either habilitative or services for rehabilitative services and Comment: Many commenters rehabilitative services in excess of these habilitative services for habilitative recommended against HHS allowing standards. services. any of the potential flexibility, Comment: Numerous commenters Comment: A number of commenters authorized in the Exchange, for issuers believed that states should not be recommended that HHS remove the to define the habilitative benefit. allowed to define habilitative services requirement that state Medicaid Commenters were concerned that through parity with rehabilitative programs cover habilitative services, as issuers would limit the range of services services since the two service sets have this is not a separate mandated category too narrowly. totally distinct purposes and impact Response: States will retain flexibility different sets of individuals. They of EHB services. Instead, a Section 1937 to design services covered within the asserted that parity is a poor standard plan that covers either rehabilitative or rehabilitative and habilitative services because there is no certainty that the habilitative services should be deemed and devices EHB consistent with the rehabilitative services level is itself to cover items and services within the procedures set forth in this final adequate to begin with. general EHB category for rehabilitative- regulation. Response: We appreciate the habilitative services. Comment: A few commenters commenters’ concerns. We are Alternatively, a few commenters recommended HHS require states to establishing that the state may recommended that HHS clarify that establish the same definition of determine the ABP-covered benefit ABPs must cover all of the benefits habilitative services for ABP, QHPs, and beyond the benefits included in the base within categories of care that list more Exchange, due to the significant amount benchmark plan,. To the extent that the than one benefit, as is the case for of churn associated with the population base benchmark has no habilitative rehabilitative and habilitative services being served. One commenter believed services, the state may elect to include and devices. In particular, a plan should that habilitative services should have a as the EHB category habilitative services not be considered to meet the common definition, but that definition and devices coverage that is no more requirement of covering all EHBs unless should not necessarily determine what restrictive in amount, duration, and it covers, as three distinct benefits, is covered by the Exchange or Medicaid. scope than the coverage of rehabilitative rehabilitative services, habilitative Those habilitative services that are to be services and devices. We acknowledge services, and rehabilitative and covered should be separately that this standard does not guarantee habilitative devices, as opposed to established by the Exchange and by provision of any particular habilitative covering only one of the many benefits Medicaid, since this is a question of or rehabilitative service. This will be in included in this category. affordability and comprehensiveness. large part determined by the services Response: Habilitative services are Response: We recognize the offered in the plan selected by the state listed as a required benefit category of possibility for churn between Medicaid to define EHBs for Medicaid. EHB at section 1302(b)(1)(G) of the and the individual and small group Comment: One commenter requested Affordable Care Act. It is part of a markets. We believe the flexibility HHS, at a minimum, afford flexibility to category of EHBs, but is distinct from reflected in this regulation provides the issuers allowing them to either provide rehabilitative services and devices. Both basis for continuity between the parity by covering habilitative services rehabilitative and habilitative services commercial market and Medicaid. We in the same manner as rehabilitative and devices must be offered in all ABPs. are also allowing states to use provider services or report the services it decides Comment: A number of commenters qualifications from the commercial to cover to HHS. supported access to habilitative services market plans to help minimize the Response: The procedures we have and devices including autism services, possibility for provider changes if a adopted recognize that states have the durable medical equipment, orthotics, person’s plan changes. role that issuers have in the individual prosthetics, low vision aides, hearing Comment: One commenter indicated and small group market. Federal aids, augmentative communication that currently under Medicaid, Medicaid works directly with state devices that aid in speech and hearing, habilitation services are defined in governments and not issuers. Therefore, and other assistive technology and statute and provided as an alternative to we believe that having states define the supplies that are often critical to ensure

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individuals are able to function EHB plans without allowing for an deliver services. Practitioners within independently in the community. exception process. schools can become Medicaid providers Response: We appreciate the Response: States do have the if they meet the provider qualifications comment and agree that these types of flexibility to allow for exception as established by the state. In ABPs, services could assist people with living processes for utilization management of states may use provider qualifications in the community. We are not requiring the benefit; such exceptions must be for the benefit as defined for the any specific services to be offered based on medical need. commercial market, Medicaid provider within this EHB category. Comment: One commenter qualification rules for the benefit, or a Comment: A number of commenters recommended that the habilitative combination of both. requested that HHS require coverage of benefit cover the full array of health and Comment: A few commenters services without age restrictions. They ancillary service needs of children with requested information related to the cost indicated that a pediatric-only special health care needs. The of adding habilitative services. habilitative benefit is inadequate, commenter believed that this is Response: Habilitative services are not especially as the new eligibility category especially important for children aging included in the benefit package is for adults only. out of foster care, as these children are typically included in the Medicaid state Response: EHBs including at greater risk of having a chronic plan, and our limited experience does rehabilitative and habilitative services condition requiring habilitative services. not allow for extrapolation for a and devices apply to all individuals A few commenters indicated that it is nationally required service. States will who receive a benefit package in ABPs, inappropriate for any one service to initially receive 100 percent FMAP regardless of age. For the new adult satisfy the requirement for a benchmark starting January 1, 2014 to cover the cost group, only individuals who are ages 19 plan covering habilitative services. For of providing services to individuals who and 20 will qualify for EPSDT services. example, providing only Applied are considered newly eligible in the new adult group, and that funding will Comment: A few commenters Behavioral Analysis to children under decline to 90 percent FMAP in 2020. requested HHS prohibit the exclusion of the benchmark plan is inadequate to For individuals who are considered not specific conditions or diagnoses from satisfy the full requirement of coverage newly eligible in the new adult group accessing the benefit. of habilitative services. These and those who are not in the new adult Response: ABPs allow for commenters requested that the group, FMAP will be provided at the comparability to be waived, which benchmark plan utilized be as state’s regular FMAP rate. results in allowing for targeting of comprehensive in its coverage as feasible. One commenter recommended Comment: Many commenters individuals to specific benefit packages. recommended that HHS prohibit the use However, all individuals in the new defining habilitation and contrasting it with rehabilitation to help clarify the of cost-sharing requirements or adult group and other individuals the utilization management tools which state either mandates or offers voluntary distinction between the two benefits. Response: We remind readers that target the habilitation benefit and are enrollment into an ABP must receive all not applied to other EHB benefits. EHBs, including habilitative and states must not only comply with the standards finalized in this regulation, Response: We are not accepting this rehabilitative services and devices. comment because states have the Comment: A few commenters but must also include all habilitative services covered in the public employee flexibility to impose cost sharing recommended that states should define consistent with the exemptions and habilitation using EPSDT criteria. or commercial plan selected by the state to define EHBs for Medicaid, beneficiary protections set forth in Response: Section 1905(a) of the Act supplemented and substituted as sections 1916 and 1916A of the Act, does not include a service category for necessary and permitted. which we address separately in this ‘‘habilitation services’’ so it is not useful Comment: One commenter believed final rule. There is no exemption under to look to EPSDT coverage for guidance there should be no exclusion for those provisions for habilitation and EPSDT criteria do not apply under services that may be educationally- services. In determining how to exercise law to adults. For children, however, relevant, as is the current policy in the flexibility to impose cost sharing, the EPSDT benefit must provide eligible Medicaid. however, we recognize that states must individuals with any medically Response: Payment for Medicaid consider their obligations under the necessary service that is coverable services must be for services that are Americans with Disabilities Act and under a section 1905(a) service category. medical or remedial in nature as must not implement a discriminatory Consistent with the law, these specified by the particular authority benefit design. regulations extend the EPSDT benefit, from which the service is derived. Comment: A few commenters were which also includes children covered in Comment: One commenter requested disappointed that HHS has chosen not an ABP. Therefore, children in an ABP HHS provide states a description of to provide states any guidance regarding should receive any covered section maintenance programs and clarify at the habilitation benefit in ABP. 1905(a) benefits that they require based what point services are no longer Response: In the proposed rule, we on medical necessity. covered. solicited public comments on the EHB Comment: A few commenters Response: The level at which services requirements for rehabilitative and requested that HHS cover habilitation no longer have clinical value is habilitative services, including devices. services, which maintain an determined by the state through medical We received considerable numbers of individual’s functional status, as necessity criteria. comments, and considered those defined by the HHS Summary of Comments: One commenter requested comments carefully. We weighed Benefits and Coverage regulations. that HHS clarify the clinical settings in concerns about burden and cost of Response: The HHS Summary of which habilitative services may be expansive coverage against the benefits Benefits and Coverage regulations apply covered and ensure that there is a of wider access for beneficiaries to to private insurance markets, which do prohibition against ‘‘school’’ exclusions. needed care. We also considered the not include Medicaid. Response: Settings in which services treatment of these benefits in the Comment: A few commenters are furnished are largely determined by commercial market. Based on this cautioned against restricting services in the providers authorized by the state to consideration, we are issuing in this

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final regulation the policy for coverage creating a disconnect between the scope the state has not made a general of rehabilitative and habilitative of services offered under the state plan determination of the habilitative services, including devices. We hope and section 1937 coverage, in essence services that are required as this EHB that these policies provide the guidance making the section 1937 plans more category, the state must exercise the requested by commenters. generous than current Medicaid state option set forth in 45 CFR 156.115(a)(5) Comment: Many commenters plans (which goes against congressional to determine EHB for the specific ABP. requested HHS stipulate in the final intent). Under that option, habilitative services regulation an ongoing process for data Response: The Affordable Care Act and devices must be included as EHBs collection and evaluation related to ABP established habilitative services as part either in an amount, duration, and and Exchange coverage of habilitative of the EHB category ‘‘Rehabilitative and scope no more restrictive in terms of services and devices. If this data were Habilitative Services and Devices.’’ treatment and benefit limitations than compared to the model definition of EHBs are required to be offered as part rehabilitative services and devices, or habilitation, that would give parameters of ABPs and are not required in other otherwise to an extent determined by for determining the adequacy of Medicaid state plan benefits for adults. the state and reported to HHS. In other coverage for the first year of ABP and ABP benefit packages will be different words, if the base benchmark does not exchange operation. from those defined as the Medicaid state include habilitative services and Response: CMS collects data from plan. devices, ABP coverage must, at a states in a variety of ways. The data will Comment: One commenter believed minimum, be based on the general state be available to help states, CMS and that requiring habilitative coverage does determination of habilitative services others determine what services are little to ensure that appropriate services and devices that are included in EHBs, actually being provided, and it will help are available to individuals, as those or on a Medicaid-specific determination to inform us for future coverage requiring habilitative services are likely for the particular ABP. decisions. to be considered ‘‘medically frail’’, Comment: One commenter indicated exempting them from mandatory b. Pediatric Oral and Vision and EPSDT that states should be able to include as enrollment in the benchmark package. Services Medicaid state plan services any Response: Individuals in the new For Medicaid, medically necessary habilitative services included in either adult group who meet the criteria to services, including pediatric oral and its Exchange EHB benchmark or ABP. otherwise be determined to be exempt vision services, must be provided to Response: Habilitative services are for medical frailty, will have a choice eligible individuals under the age of 21 only required in the Medicaid program between ABP coverage that is defined in according to requirements of the EPSDT for individuals in an ABP. Many states accordance with the requirements of benefit. We clarified in the proposed cover habilitative services under their section 1937 of the Act, including the rule that any limitations relating to section 1915(c) waivers. States EHB requirements, or ABP coverage that pediatric services that may apply in the interested offering habilitative services is defined as the coverage available individual or small group market does in other contexts should initiate under the state’s approved Medicaid not apply to Medicaid. In this final rule, conversations with CMS. state plan. People who are not in the we made no change from the proposed Comment: One commenter believed new adult group and are eligible for rule. the habilitative benefit proposed to be voluntary enrollment may be given a Comment: Several commenters defined in the November 20, 2012 EHB choice by the state between the benefit expressed appreciation for and support proposed regulation is wholly package defined using the ABP or the of the clarifying language in the inadequate and urged HHS to pursue state’s approved Medicaid state plan. preamble that confirmed that medically promulgation of a strong, uniform An individual who has such an election necessary services provided to eligible definition of habilitative services for may obtain needed habilitation services beneficiaries under the age of 21 must ABPs, as well as those offered through if the state has elected to provide such be provided under the EPSDT program, the Exchange. coverage under the state plan under and that any limitation relating to Response: The scope of this regulation section 1915(i) of the Act. If not, such pediatric services based on benchmarks is related to the definition of individuals who need habilitative would not apply to Medicaid for habilitation services as EHBs for services may wish to voluntarily enroll children enrolled in ABPs. purposes of Medicaid ABPs under in an ABP defined under section 1937 One commenter added that the section 1937 of the Act. This regulation of the Act, if the EHB benefit package, EPSDT benefit ensures that Medicaid does not extend to the definition of inclusive of habilitative services, meets eligible children have access to a habilitation services as EHBs for their needs. complete range of medically necessary purposes of the individual and small Summary: We solicited public services, concluding that this will prove group markets. comments related to this provision in especially important for children with Comment: One commenter the proposed rule. We clarify in chronic conditions. recommended that HHS have the regulation text that the state will define A separate commenter believed that authority to amend state defined rehabilitative and habilitative services. the pediatric services category for coverage of habilitative services should Services covered by the base benchmark benchmark plans for all populations evidence show that they provide are the floor of EHB coverage, must include a comprehensive pediatric insufficient coverage for users. substituted as desired by the state. services benefit modeled after EPSDT. Response: We anticipate that states Under 45 CFR 156.110(f), if no Response: We generally agree with will provide appropriate coverage of habilitative services and devices are these commenters, that the EPSDT this service but section 1937 of the Act included in the base benchmark, states benefit is important in offering gives states a certain amount of have the option to determine generally increased access and a comprehensive flexibility to define ABPs that include the required EHB services that are in the range of medically necessary services the minimum coverage defined as EHBs. category of habilitative services and for children under the age of 21. For Comment: One commenter believed devices. If the state has done so, the children enrolled in Medicaid, all that by requiring section 1937 plans to base benchmark, and coverage under the medically necessary services in general, cover habilitative services, CMS is ABP, must reflect that determination. If including pediatric oral and vision

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services, are covered under the benchmark-equivalent health benefits Another commenter states that CMS’ Medicaid EPSDT benefit, which applies coverage for prescription drugs. We also final rule must clearly specify all the to every section 1937 ABP. As a result, indicated in the preamble that section drug access protections that apply to EHB supplementation for pediatric 1927 of the Act requirements for Medicaid ABPs. The commenter services is not necessary in Medicaid. covered outpatient drugs also apply to believes that these protections are When assuring access to EPSDT such prescription drug benefits as an essential in the Medicaid context services, a state has the option to offer EHB. As we previously discussed, we because Medicaid beneficiaries medically necessary services to eligible are clarifying in this final rule that this represent a vulnerable population that children through either benchmark and statement may have been over-inclusive, tends to have lower health status and benchmark-equivalent plan benefits since section 1927 requirements do not fewer resources to obtain needed care. without limitation or, alternatively, a apply to ABPs to the extent that they Response: States have considerable state may meet the ESPDT requirement conflict with the flexibility under flexibility in designing benefit packages by providing services in combination section 1937 of the Act for states to for ABPs, including in the process of with an eligible individual’s benchmark define the amount, duration, and scope ensuring coverage of EHBs. While this or benchmark-equivalent plan as of the benefit for covered outpatient flexibility permits states in some additional benefits. The state Medicaid drugs. We received the following instances to limit prescription drug program must assure that eligible comments: coverage based on the coverage offered individuals enrolled in ABP coverage Comment: A few commenters under other public employee or receive EPSDT services that can be expressed support of paragraph (b)(7) of commercial plans, it also includes the accessed in the most beneficial and § 440.335, which implements the ability to exceed the amount, duration, seamless manner for the population statutory requirements for benchmark and scope of prescription drugs covered being served. equivalent coverage of prescription under those plans. We also clarify that Comment: One commenter believed drugs. nothing in the commercial market that subjecting ABP benefit categories to Response: We appreciate the implementation of EHBs, including EPSDT requirement, such as commenters’ support for the coverage of prescription drugs, directly prohibits preliminary screening, would water prescription drugs as required under the utilization of monthly quantity down ABP benefit packages and serve as section 1937 of the Act. limits. In developing ABPs, states must an artificial barrier to care that children include prescription drug coverage to at Comment: A few commenters need. The commenter believed that a least reflect the EHB-benchmark plan indicated that in the current Medicaid robust pediatric vision services benefit, standards, including the requirement to program, states limit the number of as envisioned by Congress in the have procedures in place that allow an drugs and include other utilization Affordable Care Act, based on coverage enrollee to request and gain access to control measures that are harmful to typical in the commercial market, clinically appropriate drugs not should not be interrupted by imposing patients and deny them the therapies otherwise covered. We believe these a harmful screening requirement. that meet their health needs as requirements will result in coverage that Response: We disagree. The prescribed by their physician. Some is similar to the coverage otherwise commenter may have a state Medicaid programs limit patients required under regular Medicaid state misunderstanding of the EPSDT to two to four brand name drugs per plan coverage. screening requirements. States are month. Such limitations clearly do not Comment: A few commenters stated required to adopt EPSDT screenings meet patients’ needs and the commenter that they support the rules governing (that is, preventive visits) for well-child, urges CMS not to allow states to adopt coverage of prescription drugs under vision, hearing, and dental services. them for the expansion population. Medicaid (section 1927 of the Act) States may also adopt a national Patients should be able to access the applying to the ABP requiring coverage periodicity schedule such as Bright medications that they need as of nearly all of the drugs produced by Futures (the Guidelines for health of the prescribed by their physicians. If they manufacturers who participate in the American Academy of Pediatrics). are not able to access appropriate Medicaid drug rebate program. The Services are provided based on these medications, patients may become ill, breadth of coverage offered by the periodicity schedules and at other impacting healthcare spending in the Medicaid drug benefit is important to intervals as determined medically long run. meet the medication needs of people necessary. The inclusion of screening The commenters further seek with HIV who rely on a complex and requirements as part of the EPSDT clarification on what is being proposed unique drug regimen to treat HIV mandate should not in any way ‘‘water in the rule’s recommendation regarding infection and manage serious co- down’’ benefits provided under ABPs to prescription drug limits. While the rule occurring conditions, such as heart individuals under the age of 21. It proposes that the ABP has to meet the disease, serious mental illnesses and should serve to ensure that children benefits in the state-selected EHB for the hepatitis B or C. However, they have receive the necessary screenings and private market, the rule separately serious concerns regarding the any additional services and treatments appears to replace the ABPs EHB drug flexibility afforded to states to apply according to appropriate standards of benefit category with that described in quantitative limits on drug coverage, care. section 1927 of the Act. In the final rule, particularly given that these limits are Summary: No changes were made. the commenters ask for clarification on not common practice in the private CMS clarified in regulation text that this matter and specifically on whether insurance market. Allowing these types EPSDT applies to pediatric services the ABP drug benefit is trumped by of limits in ABPs threatens access to including oral and vision care as a result what is outlined in section 1927 of the lifesaving care and treatment and of comments received in this section. Act, including with respect to any undermines the letter and spirit of the limitations. Furthermore, they are Affordable Care Act’s EHB requirements c. Essential Health Benefits greatly concerned by the seemingly for newly eligible Medicaid (Prescription Drugs) (§ 440.347) open ended ability of states to impose beneficiaries. It will also have the effect In the proposed rule, we proposed to limits, and recommend that quantity of undermining the adequacy of add a new paragraph (b)(7) to include limitations not apply to the ABP. prescription drug coverage for those

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with chronic health needs. The with the ‘‘Standards Related to Essential created as a classification system to be commenters recommend that HHS Health Benefits, Actuarial Value, and used by Medicare Part D plans; apply the section 1927 requirement for Accreditation’’ proposed rule. The • The need to incorporate specific the range of covered medications, but commenter also requests that CMS protections for vulnerable populations prohibit additional authority for consider identifying classes of drugs in to ensure appropriate access to vital quantitative limits or other limits except which broad access to different drugs medications; as legally applicable based on the within the class is essential to assure • The need to expand the USP underlying ABP and EHB benchmarks. that vulnerable patients have prompt categories and classes and include more The commenters further recommend access to the right medicine for a serious detail to adequately represent the drugs that § 440.347 be amended to read: illness, and bolster the drug coverage needed by enrollees in plans subject to ‘‘(e)Prescription drugs. Prescription EHB; requirements for those drug classes • drugs will be offered at a minimum in accordingly. The inability of USP categories and accordance with the requirements of Response: As indicated above, states classes to capture all medical benefit section 1927 of the Act and have considerable discretion in the drugs, including physician- implementing regulations.’’ provision of Medicaid services administered drugs, and the need for Response: While drug rebate including the ability to define the CMS to specify that plans must offer obligations under section 1927(b) of the amount, duration, and scope of robust coverage of drugs that are included as part of a comprehensive Act are applicable to payment for prescription drug coverage under an medical benefit, including a wider range covered outpatient drugs covered ABP. In developing ABPs, states must of therapies, and should not rely on the through an ABP, the amount, duration include prescription drug coverage USP categories and classes when and scope of coverage for an ABP is consistent with the EHB-benchmark determining coverage for physician- determined under section 1937 of the plan standards. These standards are set administered therapies; Act, which authorizes benchmark or forth at 45 CFR 156.122 and include the benchmark-equivalent coverage • A requirement that new therapies requirement that health plans have be reviewed and added to plan ‘‘notwithstanding any other provisions procedures in place that allow an that would be directly contrary.’’ This formularies within 90 to 180 days enrollee to request and gain access to through a process that mirrors the being the case, we do not have the clinically appropriate drugs not covered authority to require states, when review process performed by by the health plan. We believe such independent Pharmacy and Therapeutic establishing its benefits under its ABP, requirements will result in coverage that to meet the coverage requirements of Committees in Medicare Part D to is similar to the coverage otherwise support timely access to new and section 1927 of the Act. Doing so would required under regular Medicaid state be directly contrary to flexibility with innovative medications; plan coverage. • respect to the amount, duration, and A requirement for specific appeals Comment: One commenter is scope of coverage provided under and exceptions procedures to ensure concerned with the adequacy of the section 1937 of the Act. As for the that patients have access to needed commenters’ concerns with the limits EHB prescription drug benefit, which treatments, and the application of these provided under section 1927 of the Act will apply to Medicaid beneficiaries procedures also apply to drugs that are as they apply to the Medicaid enrolled in ABPs effective January 1, covered as part of a comprehensive population, especially on disease 2014. Medicaid beneficiaries in ABPs medical benefit; and, • specific or chronic care populations, we including those low-income adults who The need for CMS to provide note that states have considerable are newly eligible for Medicaid under specific guidance about Medicaid ABPs discretion in the provision of Medicaid Affordable Care Act are entitled to regarding acceptable and unacceptable services including the ability to define coverage for EHB. The proposed rule utilization management techniques, the amount, duration, and scope of codifies this requirement and without which there is a real risk that prescription drugs covered under ABPs. incorporates the definitions and plans could apply utilization We also clarify that nothing in the standards that were specified for EHB management tools in a way that commercial market implementation of coverage in the individual and small discriminates against individuals with EHBs, including prescription drugs, group market in the EHB proposed rule more significant health care needs. prohibits the utilization of monthly that CMS published on November 26, Response: We appreciate the quantity limits. 2012, including CMS’ proposed comments submitted regarding the Comment: One commenter stated that formulary standard for the prescription application of the EHB requirements to in 2014, the Affordable Care Act drug benefit. While the final rule states ABPs, including the commenter’s requires that ABPs cover at ‘‘least that USP will be used at least through concerns with the use of the USP essential health benefits, as described in ‘‘the years 2014 and 2015 during the classification system. As stated above, section 1302(b) of Affordable Care Act’’. transitional EHB policy’’ and thus it states have considerable discretion in The commenter continues that while applies to the Medicaid ABPs during the provision of Medicaid services CMS proposes that the EHB that time, the commenter urges CMS including the ability to define the requirements described in its November reconsider the use of the USP system as amount, duration, and scope of coverage 2012 EHB proposed rule apply to ABPs, it is currently structured after 2015 under an ABP. We also clarify that the Medicaid EHB proposed rule does given that many significant concerns nothing in the commercial market not spell out the minimum prescription remain. The commenter lists the implementation of EHBs, including drug coverage requirements that will following concerns regarding the EHB prescription drugs, prohibits the use of govern ABPs. prescription drug benefit: utilization management tools. In The commenter requests CMS clarify • The inadequacy of the USP to developing ABPs, states must include that Medicaid ABPs must cover at least represent the full range of categories and prescription drug coverage to reflect the the same number of drugs in a particular classes of drugs needed by the EHB-benchmark plan standards, United States Pharmacopeia (USP) class populations covered by the EHB, including the requirements at section 45 that the state-selected benchmark plan including Medicaid beneficiaries CFR 156.122. We believe these pertinent to the ABP covers, consistent enrolled in ABPs, because the USP was requirements will result in coverage that

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is similar to the coverage otherwise Comment: A few commenters term ‘‘covered outpatient drug’’ is a well required under regular state plan believed that ABPs are required by understood term of art meaning those coverage. statute to include all outpatient drugs in drugs to which the Medicaid rebate Comment: A few commenters the Medicaid drug rebate program, as statute applies. If Congress had intended indicated that the preamble to the well as meet the requirements for the Medicaid rebate statute to apply to proposed rule says that all drugs of the prescription drugs as proposed in the Medicaid ABPs, then Congress would companies that participate in the drug EHB proposed rule for the commercial have stated this explicitly and described rebate program should be included in market. These commenters also believe the drugs covered under an ABP as the ABP; however that language is not that in the absence of prescription drug ‘‘covered outpatient drugs.’’ When included in the language of the coverage in a particular category or Congress decided to apply the rebate proposed regulation. The commenters class, the ABP benefit must include at statute to Medicaid managed care recommended that the regulatory least one drug. They also recommend organizations, Congress made its language be amended to correct that that the final rule clarify that decision clear and took the steps omission. Additionally, commenters prescription drug coverage within ABPs necessary to make its decision workable. agreed with HHS’ legal conclusion, must provide the greater of the For example, Congress explicitly revised stated at 78 FR 4631, that section 1927 statutorily required coverage described the rebate statute to provide that of the Act applies to ABPs and believe in section 1927 of the Act, or the covered outpatient drugs for which that this is a critical protection requiring required EHB coverage described in the payment was made under the state coverage of a range of drugs necessary proposed rule issued November 26, Medicaid plan includes ‘‘such drugs as to meet the needs of the Medicaid 2012. Another commenter dispensed to individuals enrolled with population. The commenter recommended that CMS require each a Medicaid managed care organization if recommends that HHS’ explicitly state ABP’s coverage of prescription drugs to the organization is responsible for this requirement in the regulation. be consistent with the state’s EHB coverage of such drugs,’’ among other Response: As noted earlier, we must standard. changes. clarify a statement in the preamble to Response: As indicated above, states By contrast, the commenters assert the proposed rule, indicating that have considerable flexibility in that Congress took an entirely different coverage requirements under section implementing the provision of Medicaid approach with Medicaid ABPs. Unlike 1927 of the Act are applicable to ABPs services through ABPs. In developing in the Medicaid MCO case, Congress under section 1937 of the Act. While ABPs, states must include prescription never mentioned Medicaid rebates in drug rebate obligations under the rebate drug coverage to reflect the EHB- the statutory provision authorizing agreement are required for drug benchmark plan standards at section 45 ABPs, never mentioned ABPs in the manufacturers under section 1927(b) of CFR 156.122 for prescription drug Medicaid rebate statute, never the Act, the amount, duration and scope coverage. We believe these requirements established any mechanism for ABPs to of drug coverage under an ABP is will result in coverage that is similar to report drug utilization data to states and determined under section 1937 of the the coverage otherwise required under for states to include this data in Act. The drug rebate obligation applies regular state plan coverage. manufacturers’ rebate invoices, and because payment is made under the Comment: A few commenters never provided that state payments to Medicaid state plan for covered indicated that the regulatory text is ABPs would be premised on the outpatient drugs as part of the ABP. The correct at part 440, but the preamble is understanding that states would collect amount, duration, and scope of coverage not, in that the rebate statute section Medicaid rebates. for an ABP are determined under 1927 of the Act does not apply to ABPs. Similarly, the commenters indicate section 1937 of the Act, which They reasoned that the benefits under that section 1937 of the Act makes no authorizes benchmark or benchmark- section 1937 of the Act are mandatory mention of covered outpatient drugs. equivalent coverage ‘‘notwithstanding benefits, and they explicitly refer to the Instead, the drug-related provisions in any other provision that would be prescription drugs of the essential section 1937 of the Act provide only directly contrary.’’ That said, to the health benefits and not to the covered that (1) benchmark-equivalent coverage extent that covered outpatient drugs are outpatient drugs of the voluntary must include ‘‘prescriptions drugs’’ within the scope of coverage, the non- Medicaid benefit to which section 1927 (among other basic services required in coverage provisions under section of the Act applies. Thus, the EHB’s benchmark-equivalent plans) and (2) 1927(d) of the Act would apply. For prescription drug coverage, which starting in 2014, all ABPs must provide example, states will continue to be requires the greater of one drug in a ‘‘at least essential health benefits as permitted to apply certain permissible class or the number of drugs in the class described in section 1302(b) of restrictions such as prior authorization. in the benchmark plan, should apply to Affordable Care Act, which benefits However, when establishing such ABPs. If it is determined that section include prescription drugs.’’ Thus in programs, states must continue to 1927 of the Act applies, then all the both of the statutory provisions adhere to the requirements that states requirements and protections of section referencing ABPs’ drug coverage, must respond within 24 hours for pre- 1927 of the Act should apply to ABPs. Congress omitted the term denoting authorization requests, except for A commenter stated that the rebate those drugs that are subject to the excluded drugs listed at section statute applies exclusively to covered Medicaid rebate statute and instead 1927(d)(2) of the Act, and that at least outpatient drugs; it requires incorporated different terms with no a 72-hour supply of a covered outpatient manufacturers to pay rebates on covered connection to the rebate statute. And prescription drug must be dispensed in outpatient drugs (when they are paid for Congress’ decision to omit ‘‘covered an emergency situation. Further, we are under a state Medicaid plan); and it outpatient drug’’ terminology is revising § 440.345 to add a new limits the restrictions that states can consistent with its decisions: (1) not to paragraph (f) that states that when states place on access to covered outpatient require to authorize reporting of ABP pay for covered outpatient drugs under drugs. The statute defines a ‘‘covered drug utilization data to states and their ABP’s prescription drug coverage, outpatient drug’’ in terms of what is manufacturers; and (2) not to address they must comply with the included in the definition and what is any implications of state rebate requirements of section 1927 of the Act. excluded. This commenter believes the collection on ABP payments. Congress’

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decision not to apply the rebate statute outpatient drugs are within the scope of all ‘‘covered outpatient drugs’’ of also is consistent with the purpose of coverage, the non-coverage provisions of manufacturers that sign a Medicaid section 1937 of the Act, which is to give section 1927 of the Act would apply. rebate agreement, subject to certain State Medicaid programs more Comment: A commenter indicated limitations on coverage that the statute flexibility and allow them to operate that they anticipate that requiring ABPs describes very specifically. The rebate more like commercial payers. to satisfy the requirements of both statute explicitly lists the limited Another commenter stated that the section 1927 of the Act and the EHB circumstances in which a State prescription drug benefit to be provided formulary standard may present Medicaid program may exclude or to Medicaid beneficiaries under section significant practical challenges for the otherwise restrict coverage of a drug 1937 of the Act is not the same benefit ABPs. The proposed rule does not manufactured by a company with a as the ‘‘prescribed drugs’’ provided explain how these two sets of Medicaid rebate agreement. under a State plan under section requirements will fit together or Response: While drug rebate 1905(a)(12) of the Act. Indeed, the whether and when the requirements of obligations under the rebate agreement coverage for prescription drugs made section 1927 of the Act will take with drug manufacturers under section available to the Medicaid expansion precedence over the EHB formulary 1927(b) of the Act are applicable to population is derived from a different standard. For example, section 1927 of covered outpatient drugs covered statutory authority than the traditional the Act requires manufacturers and the through an ABP, the amount, duration, Medicaid option to provide coverage for Secretary to enter into an agreement and scope of drug coverage under an ‘‘prescribed drugs.’’ The benefit under under which manufacturers must pay ABP are determined under section 1937 section 1905(a)(12) of the Act is optional rebates to state Medicaid agencies for of the Act alone. The drug rebate for a State, while the prescription drug utilization of the manufacturer’s obligation applies when payment is provided by an ABP is mandatory in covered outpatient drugs, in return for made for covered outpatient drugs in accord with EHB requirements the state coverage of such drugs, which accordance under the Medicaid state established by Affordable Care Act. may be restricted only within the set plan, including a state’s ABP. The Therefore, the commenter contends, and confines of section 1927(d) of the Act. amount, duration, and scope of coverage urges CMS to clarify in the final rule, The proposed EHB prescription drug for an ABP is determined under section that there is no statutory basis to apply benefit, by contrast, requires coverage of 1937 of the Act, which authorizes section 1927 of the Act to these ABPs. at least the greater of (1) one drug in benchmark or benchmark-equivalent In short, the commenters believe the every USP category and class; or (2) the coverage ‘‘notwithstanding any other statutory evidence demonstrates that same number of drugs in each category provision that would be directly Congress decided not to apply the and class as the EHB benchmark plan. contrary.’’ Medicaid rebate statute to ABPs. When Response: As we stated earlier, there a word or phrase has become a term of is no authority to require states to meet Comment: One commenter art with a specialized meaning, that requirements of section 1927 of the Act recommended that the prescription drug specialized meaning governs. Likewise, related to the amount, duration and benefit under ABPs should include all when Congress uses a term of art in one scope of covered outpatient drugs under over-the-counter and prescription statutory provision but omits it in an ABP. States have some discretion in medications approved by the FDA to another (like section 1937 of the Act), the provision of Medicaid services treat tobacco cessation. The commenter then Congress intends a different including the ability to define the continues that tobacco cessation meaning; ‘‘where Congress includes amount, duration, and scope of coverage medications are currently on the list of particular language in one section of a under an ABP. In developing ABPs, ‘‘drugs subject to restriction’’ in section statute but omits it in another . . ., it is states must include prescription drug 1927(d) of the Act, and therefore, states generally presumed that Congress acts coverage to reflect the standards used to are allowed to exclude coverage of these intentionally and purposefully in define EHBs for Medicaid. As stated drugs. disparate inclusion or exclusion.’’ earlier, we believe these requirements at Response: Effective January 1, 2014, Accordingly, applying the rebate statute 45 CFR 156.122 will result in coverage section 1927(d) of the Act requires states to ABPs would be directly contrary to that is similar to the coverage otherwise to provide coverage of non-prescription section 1937 of the Act and thus required under regular Medicaid state and prescription covered outpatient prohibited. plan coverage. drugs used to treat tobacco cessation for Response: Drug rebate obligations are Comment: A few commenters all Medicaid beneficiaries. required for drug manufacturers under indicated that to the extent that CMS Notwithstanding that requirement, we 1927(b) of the Act when payment occurs nonetheless decides to apply section note that there is no authority to require for covered outpatient drugs covered 1927 to ABPs, it is of the utmost states to meet requirements of section through an ABP. However, the amount, importance that CMS apply and 1927 of the Act related to the amount, duration, and scope of drug coverage stringently enforce both the coverage duration, and scope of covered under an ABP are determined under and access requirements of that section. outpatient drugs under an ABP. States section 1937 of the Act. That is, the drug CMS should explicitly indicate that the have considerable discretion in the rebate obligation applies because section 1927 safeguards on coverage and provision of Medicaid services payment is made under the Medicaid exclusions apply, in addition to the including the ability to define the state plan for covered outpatient drugs prescription drug benefit requirements amount, duration, and scope of coverage provided as part of the ABP prescription of the EHB proposed rule. Any under an ABP. In developing ABPs, drug benefit. The amount, duration, and requirements for payment of rebates states must include prescription drug scope of coverage for an ABP are under section 1927 of the Act without coverage to reflect the standards for determined under section 1937 of the adherence to the coverage and exclusion defining EHBs in Medicaid. As stated Act, which authorizes benchmark or limitations violates the intent and spirit earlier, we believe these requirements at benchmark-equivalent coverage of that section. 45 CFR 156.122 will result in coverage ‘‘notwithstanding any other provision Another commenter indicated that the that is similar to the coverage otherwise that would be directly contrary.’’ That Medicaid rebate statute requires states required under regular Medicaid state said, to the extent that covered that provide payment for drugs to cover plan coverage.

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Comment: A few commenters Comment: One commenter Methadone, Buprenorphine, Vivitrol, indicated that the agency says that the recommends that individuals have etc., in the EHB and that where needed states have the flexibility to ‘‘adopt prior access to the full range of available states should expand the formulary to authorization and other utilization clotting factors without limitation include all FDA approved medications control measures, as well as policies through restrictive drug formularies, for the treatment of substance use that promote use of generic drugs.’’ The which negatively impacts patient care. disorders. commenters believe there is potential Patients and physicians should make Response: CMS is not providing for conflict between the prescription the choice of which therapy is guidance regarding specific services drug coverage of an ABP supplemented appropriate. The commenter also noted offered in each of the ten essential by the states’ essential health benefit that hemophilia patients should have health benefits in this final rule. standard, and a drug benefit that is access to a range of specialty pharmacy Comment: One commenter requests consistent with the State’s Medicaid providers. Several commenters that CMS encourage state Medicaid program. The commenter urged recommend that CMS require states to programs to utilize the 340B drug clarification of the coverage standard implement beneficiary protections purchasing program provided by accompanied by protections to ensure consistent with Medicare Part D, hemophilia treatment centers or HTCs that patients can appeal utilization including consideration of specific so that individuals with hemophilia can controls that might prevent them from drugs, tiering, and utilization receive their pharmacy services from receiving necessary medications. management strategies used in each their HTC. HTCs with 340B programs One commenter recommended that formulary. integrate clinical and pharmacy services CMS monitor the implementation of Response: As we stated earlier, there to provide comprehensive high-quality traditional Medicaid and ABP PDLs and is no authority to require states to meet care to patients and closely monitor utilization management techniques, and requirements of section 1927 of the Act drug utilization, allowing for more act to stop burdensome limitations that related to the amount, duration and immediate changes in treatment and reduce access to care and could impact scope of covered outpatient drugs under better management of treatment costs. Patients benefit from lower cost patient health because of limited access an ABP. States have considerable prescriptions that reduce out-of-pocket to needed drugs. The commenter also discretion in the provision of Medicaid spending and accumulation of costs recommends requiring that decisions services including the ability to define towards caps on health insurance regarding PDLs take into account the amount, duration, and scope of expenditures and ongoing education evidence-based clinical practice coverage under an ABP. In developing and support to ensure that they guidelines, and not just of drugs; and ABPs, states must include prescription appropriately assess their treatment that CMS require that states only be drug coverage to reflect the standards for defining EHBs in Medicaid. As we needs. Medicaid programs will benefit permitted to classify a drug as non- have noted in prior responses, we from better management of overall preferred when there are genuine believe these requirements will result in treatment costs through close therapeutic alternatives classified as coverage that is similar to the coverage monitoring of bleeds and factor use to preferred. otherwise required under regular reduce complications. Response: Prescription drug coverage Medicaid state plan coverage. Response: We appreciate the under an ABP is still subject to the Comment: One commenter stated that comments regarding the 340B program provisions related to drug rebates, as section 2001(c) of Affordable Care Act and coverage of drugs for hemophilia; well as the non-coverage provisions modified the benefit provisions of however, the State’s utilization of the under section 1927(d) of the Act. section 1937 of the Act. Among other 340B drug purchasing program is Therefore, states will continue to be things, section 2001(c) of the Affordable outside the scope of this rule. permitted to apply certain permissible Care Act added mental health benefits Comment: CMS should establish clear restrictions such as prior authorization. and prescription drug coverage to the requirements to assure that utilization However, when establishing such list of benefits that must be included in data for populations eligible to receive programs, states must continue to benchmark equivalent coverage; and Medicaid rebates is maintained adhere to the requirements that states directed that ABPs that include separately from data from other lines of must respond within 24 hours for pre- medical/surgical benefits and mental business. That is, the final regulation authorization requests, except for health and/or substance use disorder must provide clear rules to assure that excluded drugs listed at section benefits comply with the Mental Health plans maintain data on prescription 1927(d)(2) of the Act, and that at least Parity and Addiction Equity Act of drug claims appropriately and do not a 72-hour supply of a covered outpatient 2008. mix data from populations eligible for prescription drug must be dispensed in This being the case, the commenter Medicaid rebates with data for other an emergency situation. encourages CMS to clarify and enrollees not eligible for Medicaid Furthermore, a state Medicaid strengthen the guidance on drug rebates. Because many plans may offer agency’s Pharmacy and Therapeutics formularies in the current parity products in the exchanges as well as (P&T) Committee typically makes regulations which make it difficult to participate in Medicaid managed care decisions on inclusion of preferred determine whether a formulary satisfies (under either section 1903(m) of the Act, drugs in a therapeutic class when the law’s parity standards. as well as Medicaid ABPs) the potential establishing a state’s PDL. Specifically, Response: While we appreciate the for confusion is high and clear rules are the P&T Committee reviews evidence- commenter’s concern, the Interim Final needed to assure that utilization for based information, along with review of Regulation regarding the Mental Health rebate-eligible patients is maintained comparative clinical trials to make such Parity and Addiction Equity Act of 2008 separately from data for other lines of decisions regarding a state’s PDL. A PDL is not the subject of this final rule. business. is permitted under section 1927 of the Comment: One commenter suggested Response: If the state administers its Act, as long as it is under a prior that CMS provide guidance to states on ABP via a Medicaid MCO, the state will authorization program that meets the medication assisted treatment of need to ensure the MCO distinguishes requirements of section 1927(d)(5) of the substance abuse disorder. Specifically, these claims from its other lines of Act. states should be required to cover business for the purpose of claiming

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Medicaid rebates consistent with the that this current policy continues to implementing EHB requirements for the current requirement for such claims apply. Due to statutory requirements, individual and small group markets. In under section 1927 of the Act. CMS states may not disregard any provisions the final regulations issued February 25, expects to issue subregulatory guidance of title XIX and are therefore required to 2013 at 78 FR 12835, the provision of on collecting manufacturer rebates for assure that all populations receiving EHB was defined at 45 CFR ABPs. Manufacturers are not required ABPs, including the new adult 156.115(a)(4) to ‘‘include preventive under section 1927 of the Act to pay expansion group, have access to health services described in [45 CFR] rebates absent a Medicaid payment for transportation necessary to obtain § 147.130’’. That cross referenced the drugs, which would not be present Medicaid covered services. provision describes the requirement for in the case of drugs dispensed to Summary: No changes will be made to coverage of preventive services without Medicaid beneficiaries that are enrolled the proposed regulation as a result of cost sharing. As explained in the in qualified health plans where the only comments received in this section. preamble to the proposed regulations, at Medicaid payment was premium 5. Preventive Services as an EHB 77 FR 70644, 70651 (Nov. 26, 2012), the assistance for the beneficiary. intent was to include in the EHB Summary: Based upon the comments The EHB Final rule specified that, to coverage obligation the prohibition on requesting clarification as to whether or provide EHB, a plan must provide cost sharing for preventive health not section 1927 of the Act applies to coverage of preventive services. This services. Thus, while Medicaid cost prescription drug coverage provided requires plans to cover a broad range of sharing provisions at sections 1916 and under a state’s ABP, we will be adding preventive services including ‘‘A’’ or 1916A of the Act apply generally to paragraph (f) to § 440.345 to require that ‘‘B’’ services recommended by the preventive services provided in ABPs, when states pay for covered outpatient United States Preventive Services Task cost sharing may not be applied to drugs under their ABP’s prescription Force; Advisory Committee for preventive services that are within the drug coverage, states must comply with Immunization Practices recommended definition of EHBs (described in 45 CFR the requirements under section 1927 of vaccines; preventive care and screening 147.130). An ABP may include the Act. of infants, children and adults preventive services beyond the floor of recommend by HRSA’s Bright Futures 4. All Other Title XIX Provisions Apply coverage required as EHBs, and cost program, and additional preventive sharing may be applied to such We clarified in the proposed rule that services for women recommended by preventive services at state option to the all other Title XIX of the Act provisions the Institute of Medicine. We proposed extent permissible under sections 1916 apply unless, as spelled out in section that Title XIX premium and cost sharing and 1916A of the Act. 1937 of the Act, a state can satisfactorily provisions apply to preventive services Comment: One commenter requested demonstrate that implementing such for adults, but not for children. clarification on whether the full range of other provisions would be directly Comment: Many commenters United States Preventive Services Task contrary to their ability to implement commended HHS for including in ABPs Force (USPSTF) ‘‘A’’ and ‘‘B’’ services is ABPs under section 1937 of the Act. the full range of preventive services specific to benchmark benefits offered to Comment: We received one comment required in the EHB, including all of the individuals that are newly eligible. requesting that CMS elaborate on what services specified in section 2713 of the Response: These services, along with is meant by the preamble language that PHS Act. The commenters believed this IOM-recommended women’s preventive all other provisions under title XIX of is a critical provision for vulnerable services, ACIP-recommended vaccines, the Act apply, and whether states are populations and will help achieve the and HRSA’s Bright Futures required to cover the current mandatory Affordable Care Act objective of shifting recommendations, comprise the Medicaid benefits, and ensure non- health care emphasis from expensive preventive services EHB category that emergency transportation, when using interventions to cost-effective will be provided to all individuals in an an ABP for the new adult expansion prevention. The commenters requested ABP, including those in the new adult group. that HHS explicitly state this group. In addition, coverage of USPSTF Response: The Medicaid benchmark requirement (currently in the preamble ‘‘A’’ and ‘‘B’’ preventive services under and benchmark-equivalent coverage was at 78 FR 4631) in the regulation itself. section 4106 of the Affordable Care Act first authorized by the DRA, which Response: The language in the applies, at state option, to preventive included language stating that preamble to the proposed rule, services furnished under the regular ‘‘notwithstanding any other provision of originating in section 2713 of the PHS state plan. States implementing the title XIX’’ states can offer medical Act, was included as a reference to the preventive services EHB in their ABP assistance to certain Medicaid requirement to cover preventive services without cost sharing will be eligible for beneficiaries through benchmark or as part of providing EHB, which has the additional 1 percentage point of benchmark-equivalent benefit packages. been implemented by regulation FMAP (for newly eligible individuals, As a result of CHIPRA changes to the codified at 45 CFR 147.130. We do not this increased FMAP will be available DRA, CMS regulations were revised to believe this requires further clarification once Federal reimbursement of services implement this change in law. CHIPRA in this final rule. drops below 100 percent). language provides clearly that a state’s Comment: A number of commenters Comment: A few commenters were benchmark or benchmark-equivalent asked CMS to clarify its preamble concerned that other preventive programs may vary only from statutory language, ‘‘Title XIX premium and cost screenings recommended by the CDC requirements explicitly waived in sharing provisions apply to preventive are not included in the proposed rule. section 1937 of the Act (statewideness services.’’ Specifically, CMS should The commenters recommended the and comparability), unless states can clarify whether it intends this to apply inclusion of all CDC hepatitis B and C demonstrate that other provisions not to the ABPs for the new expansion screening recommendations as required identified in section 1937 of the Act population and/or to current state components of Medicaid’s ABPs. would be directly contrary to their Medicaid plan services. Response: CMS recognizes the ability to implement ABP. As such, in Response: We agree that this issue importance of CDC recommendations the proposed rule, we offered clarifying needs to be clarified, particularly in related to preventive services. The language in the preamble to reiterate light of the issuance of the final rules proposed rule was not meant to be an

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exhaustive list of all recommendations Comment: A few commenters are required to be implemented made by government agencies such as requested that HHS provide the according to the effective date of the the USPSTF. States have the option to following guidance: submitted SPA. If states want an adopt CDC recommendations as long as • Clarify in the language of the final effective date of January 1, 2014 for the they are in line with EHB preventive rule that Medicaid ABP must cover all entire ABP including these preventive service statutory and regulatory section 2713 services. services, then a SPA will need to be guidance. • Clarify that section 2713 coverage submitted by the end of the first Comment: A few commenters requirements apply even where there is calendar quarter of 2014. States are requested that HHS clearly define which overlap with EHB categories. expected to keep abreast of changes to tobacco cessation treatments are • Create standards to ensure that the USPSTF-recommended services to required to be covered as a preventive section 2713 preventive service ensure provision of a current array of service under EHB. The commenters coverage offers meaningful incentives to services. believed this definition should be providers. Comment: One commenter indicated comprehensive, and include—and • Encourage states to align traditional that, to the extent that HHS does not require—all tobacco cessation Medicaid coverage with the section specify the number of covered visits to medications approved by the FDA as 2713 preventive services requirement. registered dietician specialists for well as individual, group and phone Response: We appreciate the medical nutrition therapy, national counseling. The commenters believed it commenters’ request to include further practice guidelines should determine should be based on and reference the descriptions within the final rule. The appropriate coverage. most recent version of the Public Health rule, as written, requires states to Response: We encourage states to Service Guideline Treating Tobacco Use provide a robust set of preventive consult and rely on national practice and Dependence, to ensure that when services that align with § 147.130. The guidelines, as they design their benefit and if the guideline is updated the Affordable Care Act established § 4106 packages. benefit will be revised as appropriate. effective January 1, 2013 within regular Comment: One commenter requested Response: We appreciate the Medicaid coverage, which includes a that while HHS may be reluctant to commenter’s recommendations. subset of the services implemented in explicitly require coverage of obesity Tobacco cessation programs are § 2713 of the Public Health Service Act treatment, HHS should clarify whether important preventive services. However, (PHSA). A State Medicaid Director management of obesity and metabolic states have been given latitude on how Letter on § 4106 was released on disorders are chronic disease to furnish this service within the February 1, 2013 (http:// management services and are therefore bounds of statute, regulation, and sub- www.medicaid.gov/Federal-Policy- covered services under the ‘‘Preventive regulatory guidance. Tobacco cessation Guidance/downloads/SMD-13-002.pdf). and Wellness Services and Chronic for pregnant women is defined in Comment: One commenter requested Disease Management’’ category of the section 4107 of Affordable Care Act and clarification regarding the interval after EHB package. One commenter believed is located at section 1905(a)(4)(D) of the which a preventive service rated with that beneficiaries affected by severe Act. We also issued a letter to State an A or B by the USPSTF must be obesity should have access to bariatric Medicaid Directors dated June 24, 2011 included in EHBs for Medicaid plans. surgery with comprehensive pre- and that clarified policy related to this The commenter encouraged HHS to post-surgery nutrition evaluation and provision. The only tobacco cessation establish an interval of no later than the counseling to ensure the efficacy and services required to be furnished in the 1-year minimum specified in section cost effectiveness of the bariatric surgery EHB package are those recommended by 2713(b)(1) of the Public Health Service benefit over the long term. the entities designated in section 2713 Act, irrespective of any other timetable Response: ‘‘A’’ or ‘‘B’’ services of the Public Health Service Act. HHS choose for updating the EHBs more recommended by the United States Comment: Many commenters broadly over time. Preventive Services Task Force must be requested greater definition of the Response: Section 2713(b)(1) and (2) incorporated in the EHB. Current preventive services that states are of the Public Health Service Act set USPSTF guidelines provide for the required to cover to meet the EHB forth the interval between the date on screening and counseling for obesity in requirement. The commenters found it which a recommendation described in both children and adults. Aside from difficult to determine what preventive subsection (a)(1) or (a)(2) or a guideline the services specified at section 2713 of health services are covered and what the under subsection (a)(3) is issued and the the Public Health Service Act, we are scope and limits of the coverage may be. plan year for which of the requirements not mandating the provision of specific Response: The definition of described in subsection (a) is effective services through the EHB package. We preventive services as an EHB includes for the service described in such agree that bariatric surgery, complete a broad range of preventive services recommendation or guideline. We with appropriate counseling, can be a including: ‘‘A’’ or ‘‘B’’ services believe that such an interval is valuable service, and it will covered in recommended by the United States appropriate for applicable preventive the ABP if it is included in EHB Preventive Services Task Force; services included in the ABP. definitions of the public employee or Advisory Committee for Immunization Comment: One commenter requested commercial plan selected by the state to Practices (ACIP) recommended specificity around the process by which define EHBs for Medicaid, vaccines; preventive care and screening USPSTF recommendations will be supplemented and substituted as for infants, children and adults incorporated into EHBs over time and necessary and permitted. States may recommended by HRSA’s Bright Futures the process for determining the also choose to add this service to their program/project; and additional frequency and intensity of USPSTF- ABP. preventive services for women recommended behavioral interventions. Comment: One commenter asked HHS recommended by Institute of Medicine Response: A broad range of preventive to clarify whether a state that chooses to (IOM). Further definition was not services including all ‘‘A’’ or ‘‘B’’ use its current state plan as the ABP provided as these standards were services recommended by the United would need to add services to the state established by experts in the field of States Preventive Services Task Force plan for ABP recipients if not all prevention. must be incorporated in the EHB and preventive services are included. The

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commenter also asked whether states are adopting their suggested policies in 6. Other Changes To Simplify, would need to amend the state plan and light of the provisions of the recently Modernize, and Clarify Medicaid provide these services for all Medicaid issued EHB regulations for the Benchmark Requirements and Coverage recipients of the state plan services. individual and group markets at 45 CFR Requirements Response: The regular state plan does 156.115(a)(4). As stated above, states We proposed to make certain changes not need to be amended to reflect the may not impose cost sharing for to the regulations to promote breadth and depth of required preventive services included in ABPs simplification and clarification where preventive service coverage in an ABP. that are within the scope of EHBs, as needed, and provide some additional States will have to comply with the defined at 45 CFR 147.130, but may flexibilities to states regarding benefit definition of preventive services for the impose cost sharing consistent with options. We received the following EHB category within the ABP. States sections 1916 and 1916A of the Act on comments: using Secretary-approved coverage to preventive services that go beyond that implement a benefit package similar to scope. This is because the definition of a. Diagnostic, Screening, Preventive, their Medicaid state plan would need to preventive services for purposes of the and Rehabilitative Services (Preventive ensure provision of all EHB preventive EHBs precludes cost sharing, and Services) (§ 440.130) services through the ABP, even if such Medicaid ABPs must include EHBs. We We proposed to conform our services are not available under the state clarify that the broader prohibitions on regulatory definition of preventive plan. A state plan amendment will be cost sharing for preventive services at services at § 440.130(c) with the statute required to implement an ABP for the section 2713 of the PHS Act apply only relating to the issue of who can be new adult group and for any other to group health plans and health providers of preventive services. Our categorically needy eligibility groups insurance issuers providing group or current regulation states that preventive that a state may wish to enroll in an individual health insurance coverage, services must be provided by a ABP. Comment: A number of commenters and do not apply to Medicaid. For physician or other licensed practitioner. recommended that HHS apply the PHS preventive health services beyond the This is not in alignment with the Act 2713 cost-sharing prohibition for scope of EHBs, we note that cost sharing statutory provision at section preventive services under section 2713 is not allowed for preventive services 1905(a)(13) of the Act that defines of the PHS Act to the same preventive provided to children under sections ‘‘services . . . recommended by a services covered by ABPs. The 1916 and 1916A(b)(ii) of the Act. We physician or other licensed practitioner commenters believed these protections agree with commenters that this of healing arts within the scope of their are essential to provide meaningful preclusion of cost sharing for preventive practice under state law.’’ We proposed coverage to vulnerable population and service EHBs is consistent with the to change the rule to make clear that avoid the unfair outcome of greater cost- policies set forth in section 4106 of the physicians or other licensed sharing for poorer individuals. The Affordable Care Act, which added practitioners may recommend these commenters believed cost sharing on section 1905(b)(5) to the Act, giving services. In our proposed rule, we preventive services should be states an increase in the federal medical inadvertently used punctuation that prohibited based on the authority of assistance percentage for preventive would have had the effect of eliminating section 2713 of the PHS Act. One services if the state did not impose cost the other three prongs of the preventive commenter believed that cost-sharing sharing on such services. services definition, and we are restoring for preventive services is prohibited Comment: A number of commenters those prongs in this final rule. under the definition of EHB in believe that cost sharing should not be Comment: Many commenters regulations at 45 CFR 156.115, which applied to the EPSDT population. commended HHS for conforming the state that the EHB include ‘‘preventive regulatory definition relating to who can Response: While we discuss cost provide preventive services at section health services described in [45 CFR] sharing issues at greater length in § 147.30.’’ The commenter explained 1905(a)(13) of the Act that defines discussing the streamlined cost sharing that this section lists the services ‘‘services . . . recommended by a regulations being issued in this final included in the definition of preventive physician or other licensed practitioner rule, for EPSDT for individuals enrolled health services and states that insurers of healing arts within the scope of their in ABPs, we note that sections 1916 and ‘‘may not impose any cost-sharing practice under State law.’’ Many 1916A(b)(ii) of the Act preclude cost requirements (such as copayment, commenters believed this change will sharing for individuals under age 18 coinsurance, or deductible) for those improve access to preventive services, who are mandatorily eligible, and items or services.’’ The commenter expand access to evidence based preclude cost sharing for preventive believed the definition of preventive practices, and provide greater services (such as well baby and well services in the EHB is unique in that it partnership between providers and incorporated a prohibition on cost- child care and immunizations) provided advocates. The commenters urged CMS sharing in the definition of the benefit. to children under 18 years of age to preserve this important provision in The commenter believed that by regardless of family income. Section the final rule. requiring EHB in ABPs, Congress 1916(b)(2)(a) of the Act further states Response: We agree that the amended intended to carry that prohibition on that cost sharing cannot be imposed regulatory definition of who can provide cost-sharing into Medicaid’s ABPs. A under the plan for services furnished to preventive services will result in number of commenters believed that individuals under 18 years of age (and, improved access to preventive services prohibiting cost sharing for preventive at the option of the State, individuals and facilitate partnership between services is consistent with the provision under 21, 20, or 19 years of age, or any providers and advocates. This provision giving states a percentage point increase reasonable category of individuals 18 has been codified in the final rule. in their FMAP under section 4106 of the years of age or over). These provisions Comment: A number of commenters Affordable Care Act. also apply to ABPs. believed that the amended regulatory Response: We appreciate the concerns Summary: No changes will be made to definition will be especially important commenters raised regarding cost the proposed regulation as a result of to low-income people who sharing for preventive services and we comments received in this section. disproportionately access care through

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community-based and support services interpretation of the coverage of specify the options, and specific billing and may experience significant stigma preventive services under regular codes, for covered preventive services and lower trust levels with other Medicaid under section 1905(a)(13) of using the state plan amendment process. providers. the Act. This regulatory change will Comment: One commenter urged HHS One commenter believed current primarily impact the provision of to retain the current regulatory Medicaid regulations surrounding preventive services under the regular definition which established that the § 440.130(c) have significantly limited state Medicaid plan. Section 4106 of the allowable providers of preventive the available care and treatment for Affordable Care Act, ‘Improving Access services are physicians or other licensed Medicaid and CHIP-enrolled children to Preventive Services for Eligible practitioners. The commenter disagreed who suffer from chronic diseases. Adults in Medicaid,’ broadens the that the provider requirements for Response: The amended definition section 1905(a)(13) preventive services preventive services under the may result in greater access for benefit by providing a 1 percentage Affordable Care Act should be aligned individuals who suffer from chronic point FMAP increase on clinical with Medicaid provider requirements disease as the pool of providers could preventive services that are assigned a for the optional benefit category as increase significantly. grade of A or B by the USPSTF. established under section 1905(a)(13) of Comment: A few commenters Comment: A number of commenters the Act. The commenter stated that the commended HHS for making reference believed the new definition could have benefits are distinctly different and have to this regulatory change in a February a significant fiscal impact on states’ different purposes, particularly for 1, 2013 letter to State Medicaid Director. Medicaid programs because, as a part of children up to the age 21. The letter stated that if the proposed EPSDT, the expanded scope of services Response: We disagree with this regulatory change is finalized, then must be offered to recipients under age position. Both section 1905(a)(13) of the preventive services recommended by of 21. Act and Affordable Care Act provide for USPSTF or ACIP, and provided by Response: While we acknowledge that a more robust set of preventive services practitioners other than physicians or this change will result in additional than the current regulations, in allowing other licensed practitioners, are eligible providers being authorized to provide a broader pool of providers to deliver for the 1 percentage point FMAP preventive services, it accurately reflects such services. In making this change in increase established under the the statutory language for the preventive the final rule, we are aligning our Affordable Care Act. services benefit. In addition, broadening regulation with the statutory coverage Response: We attempt to provide as the scope of providers who can provide provision. States will continue to have much notice as possible related to rule preventive services in the Medicaid some flexibility to determine the scope making and appreciate the commenter’s program may reduce, rather than of covered preventive services in their support. increase, program expenditures by state by submitting a SPA to do so. Comment: One commenter believed making available services in the most Comment: Many commenters were the proposed language, ‘‘(c) Preventive efficient and effective settings. concerned that this broad language services means services recommended Providing broader access to these types would allow for unlimited services as by a physician or other licensed of providers and benefits may assist recommended by health care providers practitioner of the healing arts acting individuals with improved health. and other providers of the healing arts. within the scope of authorized practice Comment: A number of commenters These commenters requested that this under state law’’, was overly broad. requested clarification on preventive be clarified to impose reasonable limits Response: The regulation is consistent services. The commenters believed that on services. with statutory language in section the definition provided (§ 440.130) is Response: Under existing rules, states 1905(a)(13) of the Act. The final rule broad and will be difficult for states to can establish limitations on amount, increases the number of providers able operationalize without more detail. The duration, and scope, on the optional to furnish services. We are not changing commenters requested a more precise preventive services provided the regulation text at § 440.130(c)(1) through definition that includes the current resulting benefit is sufficient to meet the (c)(3). procedural terminology codes for each purpose of the benefit. CMS reviews Comment: One commenter believed preventive service and that HHS work each state plan amendment submitted that the proposed new definition in the with states to develop preventive by states to determine the sufficiency of rule represents a far broader view of the definitions. Without such guidance the benefit. term ‘‘preventive services’’ than states and the federal government could Comment: One commenter Congress contemplated in Affordable end up inappropriately paying for air recommended closer integration of Care Act. For purposes of describing conditioners, ineffective weight loss community prevention and lifestyle what services are included in EHB, programs, or similar services which are changes into the Medicare and Medicaid ‘‘preventive services’’ are already simply not appropriate. programs, as an important opportunity extensively described at § 147.130. The Response: States still have the ability to both effectively and often less proposed revision in the definition of to restrict preventive services to direct expensively treat and prevent chronic ‘‘preventive services’’ at § 440.130 patient care that is medically necessary disease, such as heart disease and would not primarily affect the scope of and is for the purpose of preventing diabetes. preventive services required to be disease, disability and other health Response: We agree that greater offered as EHB in the state benchmark conditions or their progression, coordination between Medicare and plans. Rather, the amendment would prolonging life and promoting physical Medicaid will provide efficiencies and greatly expand the scope of the and mental health and efficiency. The health outcomes for individuals with preventive services benefit that may be commenters may have been confused chronic disease as well as other offered as an optional service under because we inadvertently proposed to conditions. Medicaid continues to build standard state MA plans. eliminate these other prongs of the closer and more integrated community Response: This change is not based on preventive services definition, which preventive services with Medicare. an interpretation of ‘‘preventive we preserve in this final rule. States also Comment: One commenter believed services’’ as it is used in the Affordable have some options in determining that Registered Dieticians should be Care Act for purposes of EHB, but an coverage of preventive services, and can designated as the recognized providers

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of nutrition services, including medical commenters also commended HHS for demonstrations. The commenters nutrition therapy and nutrition requiring states to provide public notice requested that any SPAs, including counseling because of RD’s regarding how they must comply with those establishing ABPs, should be demonstrated competency and the requirement that children have subject to the same transparency and effectiveness. This commenter stated access to EPSDT. public input procedures and reporting that nutrition counseling is medically Many commenters believed that the requirement modeled upon those necessary for chronic disease states in proposed public notice requirements at governing section 1115 demonstrations which dietary adjustment has a § 440.386 are problematic and HHS to help ensure meaningful participation therapeutic role, when it is prescribed should not use them as a model for all by the public, and that HHS by a physician and furnished by SPAs. Some commenters believed understands the issues raised at the qualified provider. proposed § 440.386 repeats the language state level when making the SPA Response: We believe that Registered of § 440.305(d) requiring a ‘‘reasonable approval decision. Dieticians have an important role in opportunity’’ for public comment, but Response: In revising § 440.386 to furnishing nutrition services. All then limits the public comment period revert to our existing policy, we believe preventive services should be furnished to just two weeks for certain ABPs that we have provided a minimum floor by qualified providers within their which the state Medicaid agency that allows sufficient time for scope of practice. determines provide less coverage or stakeholder feedback and state review. Comment: One commenter urged HHS higher cost sharing than existing Comment: Numerous commenters to clarify that § 440.130 of the proposed benchmark plans, and other requested that at a minimum, SPAs that regulation does not dictate who can commenters believed that two weeks is materially change a state Medicaid provide preventive services; it merely an inadequate amount of time for program should be subject to increased dictates what providers can recommend meaningful stakeholder consideration transparency and stakeholder input them, consistent with the totality of the and input. requirements. statute. Many commenters believed HHS Response: States will be required to Response: The proposed regulation should require an advance notice and follow existing public notice does not dictate who can provide comment period of no less than 30 days requirements, which requires that the preventive services; it defines who can as this aligns with other comment state must have provided the public recommend such services. States will periods (such as the state comment with advance notice of the State plan have discretion to determine which period for section 1115 waivers) and is amendment and reasonable opportunity providers will provide the service using particularly important because of the to comment prior to the submission of the state plan amendment process. time and effort required to conduct the the SPA. Summary: No changes to the benefit-by-benefit comparisons between Comment: A few commenters proposed regulation will be made as a non-aligned Medicaid state plans, ABP recommended that states should be result of comments received in this proposals and EHBs which will be required to provide detailed information section. necessary to provide meaningful input. on the ABP options under Response: We have considered all of b. Public Notice (§ 440.386) consideration. the comments concerning the Response: The state is required to The proposed rule added a new requirement for public notice and agree provide information regarding the ABP provision to allow states greater with the commenters that two weeks is through the public notice process. flexibility when required to publish not sufficient to allow for a meaningful Comment: A number of commenters public notice associated with an ABP timeframe in which public comments requested that HHS include specific state plan amendment (SPA). We can be solicited and considered. We are requirements for adequate public proposed modifying the public notice therefore revising § 440.386 to revert to posting of the proposal, including that requirement for ABPs to require that our existing ABP public notice policy it be posted on an internet Web site, as such notice be given prior to currently found at § 440.305(d). We well as a clear description of the process implementing a SPA when the new ABP would also like to clarify that the public and timeline for comment submission. provides individuals with a benefit notice requirements at § 440.386 are Response: We believe that states package equal to or enhanced beyond applicable only to section 1937 ABPs. should have the flexibility to determine the state’s approved state plan, or adds Comment: A number of commenters how best to provide public notice to the additional services to an existing ABP. requested HHS require a mandatory 15- populations in their state. We proposed the requirement to publish day period (sometimes referred to as a Comment: One commenter believed public notice no less than two weeks ‘‘cool down’’ period) for states to review that notice and stakeholder engagement prior to submitting a SPA that comments received and incorporate requirements should explicitly include establishes an ABP that provides suggestions into the final ABP HIV/AIDS programs within health coverage that is less than the coverage submission. departments. by a state’s approved state plan or A few commenters believed that Response: We believe that all includes cost sharing of any type. Based § 440.386 creates a two tiered process stakeholder groups, including HIV/ on public comment, we are negating whereby the state’s own evaluation of AIDS, will be served by the public what we proposed, as we do not believe an ABP determines whether it is subject notice policy. that 2 weeks is a sufficient time period. to public notice and comment. The Comment: One commenter noted that We will be reverting back to our existing commenters believed this kind of there were a number of different sources policy of requiring the states to provide agency determination defeats the very of information for public notice ‘‘a reasonable opportunity to comment’’ purpose of transparency and (including 59 FR 49249 (September 27, on all ABP SPAs prior to their stakeholder input. 1994); § 447.205; and new transparency submission to CMS. Many commenters believed that there requirements for waiver and waiver Comment: Many commenters is no compliance provision to help renewals (see State Health Official supported requiring states to give public ensure meaningful participation by the (SHO) Letter #12–001)) and HHS could notice before implementation of a SPA public, unlike the reporting requirement achieve efficiencies by streamlining that established an ABP. The of § 431.412(viii) for section 1115 notice requirements.

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Response: While there are various Response: All approved SPAs are Summary: CMS will delete methods for providing public notice public documents. If the commenter § 440.305(d), which was the section across programs, we believe that each would like to comment on a particular describing public notice requirements, serves its own purpose for that program. SPA they may contact their specific as a new § 440.386 has been added for The public notice regulations under state. public notice. We have reverted to our § 440.386 provide the most efficient and Comment: Many commenters existing public notice requirements effective policy for ABPs. recommended HHS amend § 430.12 by based on public comment on this Comment: One commenter proposed adding new paragraph (d) or deleting section of the rule. that HHS further define ‘‘substantial’’, § 440.386 (a) and (b) and replacing them c. Exempt Individuals (Modifying which triggers the ‘‘notice and with language that would require a 30 Definition of Medically Frail) comment’’ requirement. The commenter day public comment period and a 15 (§ 440.315) requested that HHS adopt a universal day review period for the state and definition of ‘‘substantial’’ so that there outlined the detail to be included in the The proposed rule updated the is no confusion of the word’s meaning. public notice. These commenters also definition of the ‘‘medically frail’’ Response: ‘‘Substantial’’ is used in the included requirements for publication category of individuals exempted from ABP public notice requirements. It of public notice and information to be mandatory enrollment, and solicited means that eligibility, enrollment, included in the SPA. comment about whether to add SUD to benefits, cost sharing, payment Response: We appreciate the the definition. The final rule adds methodologies, or delivery systems have commenters’ thorough language individuals with chronic SUDs to the changed significantly to affect recommendations. However, we believe definition of ‘‘medically frail’’, based on beneficiaries. that the current public notice policy the overwhelming support in public sufficiently balances the need for comments. Comment: One commenter believed Comment: Many commenters strongly transparency while preventing the that requiring public notice for a SPA supported CMS’s definition of exempt impediment of the approval of SPAs in when an ABP provides a benefit individuals and clarification of a timely manner. package equal to or enhanced beyond a medically frail. In supporting the Comment: One commenter requested state’s approved state plan was definition of medically, many that HHS monitor the public puzzling. The commenter believed it commenters also thanked the Secretary information on Medicaid programs and added yet another public notice for including in the definition of State-Based Exchange, provide and requirement with questionable return, medically frail, individuals with serious consider issuing guidance on how to particularly when this occurs prior to or disabling mental illness, (including communicate benefit packages to implementation. The commenter agreed children with serious emotional enrollees and plan members in a clear that prior public notice should be disturbances), and individuals with and effective way, incorporating low required when providing a lesser benefit physical, intellectual or developmental literacy-level principles. The package than the approved State Plan, disabilities that significantly impair commenter suggested that HHS should adding cost sharing or reducing benefits. their ability to perform one or more consider requiring states to undergo a Response: We believe, for the purpose activities of daily living; many public stakeholder review process for of transparency, ABPs should be commenters agreed that individuals these materials. disseminated to the public. We believe with a disability determination based on it is important that all beneficiaries are Response: We thank the commenter Social Security criteria should be made aware of changes being made to for these recommendations and will exempted from mandatory enrollment ABPs. take them under further review however in an ABP. Comment: One commenter requested they are beyond the scope of this One commenter stated that medically that when a SPA is submitted providing regulation. frail are an identifiable population with less coverage the public should have at Comment: One commenter requested unique care and cost characteristics and least 30 days to submit comments and that HHS require all state plan this definition provides an opportunity the agency should provide a summary of amendments be made public and for these individuals through practices the comments it receives and how the subject to comment. that may not be included in the comments were addressed when it Response: While we agree it is a good products offered through state submits the SPA to CMS for approval. practice for states to place SPAs online; exchanges. Response: Based on comments related requiring states to do so is beyond the Response: We are pleased with the to this section of the regulation, we will scope of this regulation. overwhelming support for the clarified be continuing with the existing ABP Comment: One commenter asked if definition of ‘‘medically frail’’ displayed public notice requirements. Requiring HHS was going to require additional in the majority of comments. the state to provide a summary of the public notice requirements on anything Comment: Many of the commenters comments it receives and how the that is related to cost-sharing. urged CMS to include individuals with comments were addressed when it Response: Cost sharing of any type substance use disorders in the definition submits the SPA to CMS for approval requires public notice per § 440.386. of medically frail because individuals could be too onerous to operationalize Comment: One commenter believed with substance use disorders (SUD) depending on the magnitude of there was a technical error made in the have similar health needs as those with comments received. CMS reserves the Part 440-services. The commenter noted the other complex conditions included right to request, when appropriate, that the general provisions section in the definition, and ABP coverage may specific information on public § 440.305 to § 440.386 is not mentioned be less likely to provide needed services comments. in the description of the changes to and supports typically provided by Comment: A few commenters either § 440.305 or § 440.386. Medicaid. requested that HHS publically release Response: CMS will take this Many commenters also pointed out all ABPs selected and allow an opportunity to delete § 440.305(d) as a that individuals with SUD cannot be opportunity for public comment to new § 440.386 has been added for considered disabled under Social ensure plan adequacy. public notice. Security law if SUD is a contributing

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factor material to the determination that possibly long term services and Response: We are retaining the term the individual is disabled, regardless of supports. medically frail in our regulations the severity of the SUD. Particular Considering the overwhelming because that term is specified in section concern was raised about benchmark support for including SUD in the 1937 of the Act and we believe it would coverage in states that may choose the definition of medically frail, we have be confusing to use a different term for weakest available benchmark plan modified § 440.315(f) to include as the exemption. option in an effort to limit perceived medically frail, individuals with Comment: One commenter stated that financial risk for the state, or to avoid chronic SUD. While we recognize that CMS should avoid defining any new political risk. Concern was also raised substance use is among the EHBs, we categories of medically frail as the that beneficiaries living in states believe that individuals with this concept of medically frail as outlined in offering fewer benefits ‘‘suffer’’ from condition could be medically frail and the proposed rule is incomplete and placement in clinically inappropriate should have the choice to elect unworkable, and more time and thought levels of care resulting in poor outcomes voluntary enrollment in an ABP or needs to be put into this before moving and higher federal costs. receive full state plan benefits (for forward with final rules. The One commenter wrote that SUD individuals in the new adult group, commenter believes there are both should be included in the definition of through an ABP that consists of full operational and implementation medically frail because scientific state plan benefits). challenges to the new concept of research indicates that addiction is a Comment: One commenter wrote that medically frail contained in the chronic brain disorder with intrinsic while the definition of ‘‘medically frail’’ proposed rule and since there is no clear behavioral and social components, appropriately clarifies that individuals definition of medically frail, or guidance similar to other forms of mental illness. with serious mental illnesses and on how a state would go about making In supporting clarification of the children with serious emotional that determination, if the rules were definition of medically frail, a disturbances are included among implemented as written, the likely ‘‘individuals with disabling mental commenter wrote that the definition result would be a significant disruption disorders’’ it inappropriately excludes should include all those with disabling of the eligibility process and a large people with psychiatric disabilities from conditions because the reference plans number of appeals. another listed group—‘‘individuals with Response: Section 440.315 provides that may serve as the model for benefits a physical, intellectual or states with a minimum standard for in ABPs are employer-sponsored developmental disability that exempting specified categories of insurance plans and may not be significantly impairs their ability to individuals from mandatory enrollment adequate to serve the needs of those perform one or more activities of daily in an ABP. We do not expect these who are too medically frail to work. living.’’ People with psychiatric exemptions to mandatory enrollment to Another commenter wrote that it disabilities should continue to be be disruptive to the eligibility process as supported clarifying the definition of included in that group. Particularly due eligibility determination occurs first as medically frail by including all those to the lack of clarity about what may a separate process. States will not need with disabling conditions. Medicaid count as a ‘‘serious mental illness,’’ it is to determine whether a beneficiary should provide more comprehensive important to ensure that people with qualifies as medically frail upfront but benefits for individuals and this mental illness have the same will need to have a process for language will allow it to do so since opportunity as people with other identifying individuals who cannot be employer sponsored plans often disabilities to qualify for exemption on mandatorily enrolled into an ABP. inadequately cover substance use the grounds that their disability Comment: We received many disorders, therefore the commenter significantly impairs their ability to comments requesting that CMS provide supports adding SUD to the definition perform one or more daily living further clarification regarding the of medically frail. activities. operationalization and coverage Alternatively, a few commenters Response: We acknowledge that implications of the proposed revision to recommended that CMS not require that individuals with serious mental illness the definition of medically frail, as well individuals with SUD be considered tend to have significant co-morbid as clarifying how the revised definition exempt from mandatory ABP conditions that are going to require a will impact implementation. enrollment. This commenter wrote that different array of mental health and One commenter indicated that states because states must design their ABPs to medical services, and long term services have limited experience with ABP include a comprehensive array of and supports that may not be available coverage under section 1937 of the Act, mental and behavioral health services, through an ABP. However, we do not and it is unclear how exemption from inclusive of substance use treatment at believe it is necessary to explicitly mandatory enrollment in an ABP for parity with physical health services, it specify that individuals with psychiatric individuals defined as medically frail seems unnecessary and overly disorders also qualify for ‘‘medically (and other categories of exempt prescriptive to mandate the exemption frail’’ due to deficiencies in activities of individuals) would be operationalized of individuals with SUDs. daily living. Individuals only need to on a broader scale. Further, it may be Response: Since publication, in 2010, meet one criterion within this definition operationally challenging to identify the of the Final Rule: State Flexibility for to qualify for the exemption to range of individuals included in the Medicaid Benefit Packages, numerous mandatory enrollment. Section proposed definition as medically frail, stakeholders have raised concern that 440.315(f) provides states with a prior to eligibility determination and individuals with SUD may not be minimum standard for identifying plan enrollment, particularly for appropriate for enrollment in an ABP individuals who are medically frail and individuals with SUDs. because ABPs may not provide the same states have the flexibility to expand this Several commenters requested CMS to level of care provided by the standard definition. provide clear, objective standards for Medicaid State plan. Individuals with a Comment: A commenter wrote that defining medically frail, such as the substance use disorder may have the term medically frail should be criteria used to determine eligibility for chronic health conditions and need an replaced with individuals with Supplemental Security Income. One expanded array of behavioral health and disabilities. comment also expressed concern that

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any approach to identifying individuals individuals with serious mental to qualify and allow states to set defined who could be exempt from mandatory illnesses and disabilities may not realize criteria. enrollment in an ABP not stigmatize that they may qualify as exempt if they Response: To ensure appropriate individuals or create unintended do not receive clear notification service protection for individuals with barriers to seeking treatment. Several concerning (1) The possibility that they disabilities and special medical needs, commenters wrote that the definition of may be exempt, (2) the process for we have included a basic definition of medically frail is vague and will be determining whether they are exempt, medically frail that we anticipate will difficult for states to operationalize. and (3) how to opt out of enrollment in ensure that vulnerable individuals with Another wrote that the impact of the an ABP if they are exempt. The final special medical needs are not medically frail definition will be rule should require this type of notice mandatorily enrolled in an ABP that significantly mitigated if CMS clarifies and process. may not provide appropriate medical that a state’s existing Medicaid benefit Response: CMS acknowledges that treatment for their individual medical package will be deemed to meet the many states will not have prior condition. Section 440.315(f) provides ABP standards under the Secretary- experience with implementation of an states with a minimum standard for approved coverage option. ABP, or with identifying individuals defining medically frail populations. One commenter expressed concern who are exempt from mandatory Comment: Several commenters stated that the definition of medically frail is enrollment or who meet the criteria for that the underlying goal of the so broad that there could be confusion, exemption. We anticipate that for exemption from mandatory enrollment inconsistency, and costly implications existing eligible individuals the state, if of vulnerable populations is to protect to having such a broad set of individuals it chooses, will be able to screen access to needed services. There may be eligible for exemption and beneficiaries it intends to enroll to instances where amount, duration and recommended that CMS should clearly identify exempt individuals by scope limitations are more restrictive and carefully define the set of eligibility category and through the use under the Medicaid state plan rather individuals who would be exempt and of historic medical encounter data. than under the ABP, highlighting the For newly enrolled individuals, who not include individuals with chemical need for beneficiaries to receive easily are eligible based on income rather than dependency in the definition. understandable information that allows A number of commenters encouraged disability, the state will not initially them to compare coverage options. HHS to develop a systemic plan for how have information concerning their Response: CMS thanks the the medically frail that are enrolled into current health status or historic commenters’ for acknowledging the an ABP, based on the streamlined encounter data. Therefore, the underlying purpose for exempting application collecting minimal enrollment process could be important information about disability or function, to identifying if an individual meets the certain populations from mandatory will be identified for exemption and criteria of the statutory exemptions. One enrollment in an ABP and concurs with stated HHS must develop requirements appropriate screening option includes this comment. Beneficiaries need to and supports for states to identify beneficiaries identifying themselves as make individualized determinations of exemption eligibility. meeting the exemption criteria. We the benefit package (either the ABP or Several commenters expressed encourage states to implement a process the regular state plan) that best meets concern that the process of ensuring that to screen for exempt individuals using their needs. all exempt individuals are identified this minimum standard for identifying Comment: Several commenters and enrolled in the benefit plan that individuals who are medically frail. requested CMS provide further guidance best service their health care needs Proposed regulations that were not on the enrollment and selection process (either an ABP or traditional Medicaid) finalized as part of this rule at for medically frail beneficiaries as this will be very burdensome or difficult for § 435.917(b) and (c) set forth the will be critical for those who qualify to states and asked that CMS provide information that must be provided to an be able to select the benefit plan that further guidance on how this can be individual regarding benefits and best meets their health care needs. The accomplished. Several of these services and provide that the commenter wants to assure that, commenters stated that ABPs are not information must be sufficient to enable depending on the circumstances, well aligned with traditional Medicaid the individual to make an informed medically frail individuals will not be and urged CMS to provide further choice. Sample beneficiary notices will forced into a plan that provides fewer guidance to states on methods and be provided to the states by CMS, benefits than the traditional Medicaid strategies for identifying exempted incorporating questions posed to plan or the ABP. individuals through the streamlined beneficiaries to aide in the self- Response: The purpose of the criteria application process and enrolling them identification process. While the for the exempt categories is to assure in the appropriate coverage. individual is being provided with this that individuals with special medical Another commenter envisioned information through options counseling, needs will be enrolled in a coverage situations where it may be beneficial for the individual could be initially plan that best provides necessary a medically frail individual to have enrolled in benchmark or benchmark- services. The design and access to an ABP rather than traditional equivalent coverage that is subject to implementation of a process to Medicaid and urged CMS to design section 1937 requirements. determine medical frailty will likely be processes that ensure that individuals Comment: One commenter wrote that specific to each state. However, states have the ability to make an informed the phrase ‘‘disabling mental disorders’’ will have to follow proposed regulations choice about their Medicaid benefit relies on non-measurable terms. The that were not finalized as part of this options. commenter believes that specific rule at § 435.917(b) and (c) in that Another commenter voiced concern disorders, including SUDs, should be sufficient information must be provided that the proposed rule does not require added if they meet a defined disability to an individual about benefits and a process to ensure that individuals are test. CMS should provide states with the services to enable the individual to appropriately identified as potentially flexibility to define medically frail or make an informed choice. exempt when they apply for coverage. provide states with general guidelines Comment: One commenter requested This commenter pointed out that that an individual would have to meet that CMS allow states to define the

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exempt medically frail population using disability determination, based on Comment: A number of commenters objective measurable criteria. Social Security criteria, or in states that expressed concern how individuals who Response: Section 440.315 provides apply more restrictive criteria than the are exempt will be identified and states with a minimum set of criteria for Supplemental Security Income (SSI) requested further guidance on exempting specified categories of program, as the state plan criteria. enrollment and selection process for individuals from mandatory enrollment Sufficient information must be provided medically frail so that those exempt can in an ABP or for individuals in the new to an individual about benefits and select the plan that best meets their adult group, a choice between services to enable the individual to needs. Several commenters benchmark coverage that is either make an informed choice according to recommended adding a requirement coverage defined in the ABP or proposed regulations that were not that the notice provided to individuals benchmark coverage that is the state’s finalized as part of this rule at who have been found eligible for the regular approved Medicaid state plan. § 435.917(b) and (c). expansion group include detailed Comment: One commenter Section 440.315(f) provides states information regarding how one can recommended that the definition of with a minimum standard for qualify for an exemption and the ‘‘medically frail’’ include individuals identifying individuals who are services and supports that would be that meet the Medicaid Health Home medically frail and states have the available to a person who is exempt eligibility requirements in section 2703 flexibility to expand this definition. from mandatory enrollment in an ABP, of the Affordable Care Act. Comment: One commenter wrote that, and should include information Response: We believe that many by including in the final rule such a regarding how to request and receive an enrollees in health homes, as they are broad description of medically frail, exemption. A commenter suggested that individuals with chronic conditions that CMS could substantially increase the this requirement should be added to are serious and complex, will be number of individuals who would be § 435.917. Another stated that those covered by the existing definition of exempt from mandatory enrollment in who may be exempt will need clear, medically frail. But not all health home section 1937 benefit plans. The consumer friendly information and enrollees have that level of medical commenter asserted that this would decision support to help them need, and we have determined that the allow the states less flexibility in understand their choices. suggested revision would not serve the Another commenter voiced concern limited purposes of the exemption. creating plans to best meet the needs of these individuals. The commenter wrote that the proposed rule does not require Comment: One commenter requested a process to ensure that individuals are that the definition of medically frail that this is particularly true if individuals with SUDs were to be appropriately identified as potentially include all people with disabilities, exempt when they apply for coverage. included in the definition and strongly because this definition is one of the Individuals with serious mental recommended not including people most essential provisions among all of illnesses and disabilities may not realize with SUD in the medically frail category the proposed rules, and because persons that they may qualify as exempt if they as mental health and SUD services are with disabilities would be imperiled as do not receive clear notification required benefits under the EHB a result of mandatory enrollment in an concerning (1) The possibility that they benefits package. The commenter also ABP modeled after a commercial plan. may be exempt, (2) the process for questioned the reasoning behind One commenter stated that inclusion determining whether they are exempt, including people with SUD in the of individuals with SSI appears to and (3) how to opt out of enrollment in definition of medically frail. broaden the definition of medically an ABP if they are exempt. The final fragile for which there is currently no Response: We do not agree that the rule should require this type of notice standard definition and historically definition of medically frail is too and process. states have been able to define. As a expansive and will unduly limit state A commenter expressed concern that result, determinations for SSI will likely flexibility. Nor do we think that the proposed rule does not issue differ as other considerations are inclusion of individuals with SUDs will requirements outlining the process included in the determination. be problematic. We recognize that a states should use to identify people who Response: In defining medically frail, broader definition of medically frail are exempt and this is particularly § 440.315 (f) covers a wide range of individuals will mean that such pertinent given the ongoing confusion populations that will be determined to individuals will only elect to enroll in about whether or not states will be able be eligible for voluntary enrollment, or an ABP if the benefits are designed to to claim enhanced federal match for in the case of individuals determined meet their needs at least as well as Medicaid expansions individuals who eligible for the new adult group, eligible regular state plan coverage. are exempt from ABP enrollment. The to choose to receive benchmark benefits Comment: One commenter wrote that commenter fears states will incur high as defined in the ABP or benchmark if newly eligible individuals meet the administrative costs managing different benefits that are the state’s approved criteria for exemption and are exempt federal match rates for different Medicaid state plan, assuring that these from section 1937 of the Act, the Medicaid expansion individuals, individuals will receive care that is Federal government needs to clarify if creating an incentive to develop appropriate to their medical needs. As the enhanced funding for this group processes that implicitly or explicitly proposed, § 440.315(f) specifically would be available for all services discourage exempt individuals from includes individuals with disabling provided to those individuals. taking advantage of their right to enroll mental disorders (including children Response: Yes, enhanced FMAP is in traditional Medicaid. with serious emotional disturbances and available for all services provided to a One commenter voiced concern that adults with serious mental illness), newly eligible individual, whether that including in the definition of medically individuals with serious and complex person chooses the ABP based on a frail individuals with disabling mental medical conditions, individuals with a benchmark or benchmark equivalent disorders, individuals with serious and physical, intellectual or developmental package that includes the EHBs in complex medical conditions, disability that significantly impairs their compliance with section 1937 of the individuals with physical and ability to perform one or more activities Act, or chooses an ABP equal to the intellectual or developmental of daily living, and individuals with a state’s approved regular state plan. disabilities that significantly impair

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their ability to perform one or more serious and complex conditions should determination process for all newly activities of daily living, or individuals be exempted from mandatory eligible adults for states that implement with a disability determination based on enrollment in an ABP. Many an ABP that is different from the Social Security criteria does not appear commenters strongly recommended that standard benefit. This is a concern for to be couched entirely within SSA HHS also include in the definition of one state as it becomes an disability criteria and that some medically frail or special medical needs, administration burden for the consumer individuals with substance use individuals with chronic health and the state system with considerable disorders who are not otherwise conditions because individuals with fiscal implications and proposes a considered ‘‘disabled’’ under Medicaid chronic illness should not be forced into common benefit for adult populations in may be viewed as medically frail and an ABP package that will not meet their Medicaid that would avoid the frailty exempt for ABP. Therefore, individuals predictable needs, as this may lead to determination and exemption process. with SUDs would be included in a higher long term costs associated with Response: We acknowledge the higher-level, comprehensive Medicaid poorly managed chronic conditions. writer’s concerns, and are not requiring benefit package, thereby increasing costs One commenter indicated it was any specific processes for implementing to the state without the benefit of the assumed that chronic kidney disease the exemptions criteria for the new higher federal match under the and end stage renal disease were adult group. We provided a minimum Medicaid expansion to newly eligible considered to be chronic diseases and standard for identification of adults. another commenter indicated that individuals who are medically frail and Response: We intend that, as individuals with Cystic Fibrosis fall proposed regulations that were not amended, § 440.315 may expand the squarely within the medically frail finalized as part of this rule at number of individuals who will qualify definition. § 435.917(b) and (c) regarding benefits as exempt beyond the scope of those Another commenter wrote that it was option counseling should be followed. who are otherwise considered disabled assumed that long term cancer survivors Individuals may receive benchmark or to include other individuals whose managing complex treatment or a benchmark-equivalent coverage subject medical needs mean that they are complicated set of late and long-term to 1937 requirements during the options medically frail. We also agree that effects would fit the description of counseling period to insure coverage exempt individuals will need clear, complex medical conditions and during this time. consumer friendly information and therefore could choose the most Comment: Two commenters wrote decision support to help them appropriate benefit plan. that some states have Medicaid and understand their choices. For Medicaid Some commenters also stated that other public health care programs that beneficiaries who are not in the new being forced into a health plan that does have developed special initiatives adult group, existing requirements at not meet the needs of a person with designed to meet the needs of enrollees § 440.320 requires the state to provide chronic illness may lead to higher long- who have substance use disorders. They each individual considering voluntary term costs associated with poorly indicated that these initiatives may enrollment in an ABP a comparison of managed chronic conditions. include provision of care management the ABP option versus the State plan One of the commenters urged CMS to series, discouraging drug-seeking option before the individual chooses to specifically include in the definition of behavior by requiring care to be provide enroll. The comparison must also medically frail individuals with chronic by a specified doctor and hospital, etc. include information on the cost-sharing viral hepatitis. The commenters asserted that obligations of beneficiaries. CMS has Response: The exemption categories exempting these individuals from proposed requirements that were not established by statute and the proposed mandatory ABP enrollment would make finalized as part of this rule at clarification in § 440.315 are intended to it far more difficult for Medicaid § 435.917(b) and (c) that an individual provide states with a minimum standard Programs to meet these individuals’ must receive information based on for exempting vulnerable populations. health care needs. While the writers eligibility regarding benefits and We agree with the commenters that agree with the characterization of a services that are available to them. illnesses such as HIV/AIDS, viral substance use disorder as ‘‘medically Information must be sufficient for the hepatitis, cancer and end stage renal frail’’, and thereby exempting them from individual to make an informed choice. disease are all serious chronic medical mandatory enrollment in an ABP, it Proposed regulations that were not conditions. It would not be possible for would make it more difficult for finalized as part of this rule at CMS to include an exhaustive list of Medicaid Programs to meet these § 435.917(b) and (c) will apply to all conditions that should qualify as individuals’ care needs. Medicaid beneficiaries including adults medically frail, but we believe that the Response: We appreciate the in the new eligibility group. Individuals criteria as currently drafted is broad commenters’ concern but do not agree in the new adult group who otherwise enough to include individuals for whom that exempting individuals with chronic meet criteria for exemption from a choice of service package is most SUD from mandatory ABP enrollment mandatory enrollment may be enrolled appropriate. would make it more difficult for in benchmark or benchmark-equivalent Comment: Several commenters Medicaid programs to meet the coverage subject to section 1937 suggested that benchmark exempt individuals’ health care needs. Section requirements during the options populations are vulnerable and best 1937 of the Act provides states with the counseling period to insure coverage serviced by traditional Medicaid. flexibility to redesign current Medicaid during this time. Response: We expect the exemptions benefit coverage to provide unique Comment: Several commenters stated process or the process designed for programs for targeted populations and that CMS should further clarify which individuals in the new adult group will encourages states to be creative in the medical conditions are considered provide these individuals with an design of its coverage packages. The ‘‘serious and complex’’ and urged CMS informed choice of the benefit package exemption of individuals with chronic to specify that chronic conditions such that best meets their needs. SUD is not an impediment to providing as HIV/AIDS and viral hepatitis, which Comment: A commenter wrote that quality care that meets the specific may have co-morbidities, are serious the current exemption definition would needs of this population. Conversely, and complex and individuals with create the need for a new frailty the flexibility provided by ABPs

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encourages states to design the conditions for exemption would benchmark options and the EHB comprehensive benefit packages that receive ABP coverage that is not subject benchmark options set forth in 45 CFR would encourage voluntary enrollment. to the requirements of section 1937 of part 156. Comment: One commenter wrote that the Act. There is nothing in the Many commenters believed that the states should be able to employ Affordable Care Act that would proposed language correctly offered traditional Medicaid disability preclude us from clarifying and states the option to use the Secretary- assessments in evaluating medically amplifying the term ‘‘medically frail’’ to approved option in section 1937 of the frail exemption and limit receipt of long include populations that have high Act to extend comprehensive Medicaid term care services and supports to those medical needs resulting from disabling coverage to the new adult expansion undergoing asset testing. To ensure long mental disorders, substance use group and that extending full Medicaid term stability and a fiscally sound disorders, serious and complex medical benefits to this population, expansion, the commenter requested conditions, or disabilities. We are supplemented as needed to comply with sufficient flexibility to limit receipt of clarifying in this final rule that the the EHBs, mental health parity and non-EHB services including long term exemptions to benchmark or other protections in the law, is the best care services, to the non-expansion benchmark-equivalent coverage do not approach for meeting the complex population via state plan amendment or directly apply to the new adult health needs of the low-income adults section 1915(c) waiver and population, but if an individual in the who will gain Medicaid eligibility under recommended revision to the medically new adult population meets the criteria the expansion. frail exemption to align with the for exemption, then that individual has Response: The proposed provisions disability assessments already in use a choice of an ABP based on benchmark for defining Secretary-approved within Medicaid. or benchmark-equivalent coverage coverage sought to balance statutory Response: We disagree with this including EHBs, or an ABP defined as requirements for establishing a commenter. We believe the current the state’s approved Medicaid regular minimum coverage standard through construct of the medically frail state plan, which is not subject to EHB ABP with the flexibility that states may exemption category is in keeping with requirements. Please see more detailed need when considering the appropriate legislative construct response above for additional range of ABP coverage relative to the Comment: A commenter wrote that information related to this provision. medical needs of the population being the proposed revision to the definition Summary: We changed the proposed served. States may also substitute of medically frail seems to run against regulation language at § 440.315(f) by benefits using the state’s approved the Affordable Care Act’s benefit design adding ‘‘chronic substance use Medicaid state plan benefits as long as for the expansion population, that is, disorders’’ to the definition of the the benefits are in the same EHB coverage tied to section 1937 of the Act medically frail exemption category. category and they are actuarially and incorporation of an EHB standard equivalent. We appreciate the from the individual and small group d. Benchmark Health Benefits Coverage commenters’ support. markets, which excludes coverage from (Adding Benefits to Secretary-Approved Comment: Some commenters were long-term care and supports. The Coverage) (§ 440.330) not clear on which state plan benefits commenter asserted that Affordable In the proposed rule, we amended may be included and, thus, urged HHS Care Act congressional goals to contain § 440.330(d) by broadening the benefits to clarify that state plan benefits enacted the costs of the Medicaid expansion available as Secretary-approved under Title XIX are available for may be jeopardized if states are faced coverage from section 1905(a) benefits inclusion through the Secretary- with widespread eligibility for long term to benefits of the type that are available approved process irrespective of care services without the traditional under 1 or more of the standard whether they have otherwise been program integrity tools used to filter benchmark coverage packages or state implemented in a particular state such services based on objective need. plan benefits described in sections Medicaid program. As an example, The commenter further asserted that 1905(a), 1915(i), 1915(j), 1915(k) or 1945 those commenters noted that a state that existing ABP rules already exempt a of the Act, or any other Medicaid state may conceivably want to design a broad range of vulnerable individuals as plan benefits enacted under Title XIX, Medicaid benchmark targeting compared to traditional disability or benefits available under base vulnerable populations, such as assessment and that within what is benchmark plans described in individuals with dementia, and include likely to be a large exempted class, these § 156.100. a particularly relevant home support beneficiaries will access benefits service that is not an otherwise available otherwise excluded from the EHB e. Secretary-Approved Health Benefits service in the state’s Medicaid program. standard, namely institutional or long Coverage and § 440.330(d) and State Response: We wish to clarify for term care through the state plan, at Plan Requirements for Providing commenters that any benefits described sizable cost to states and the federal Additional Services (Adding Benefits to in sections 1905(a), 1915(i), 1915(j), government. Of particular concern to Additional Coverage) (§ 440.335) 1915(j) or 1945 of the Act, and any the commenter is the application of Comment: Many commenters offered benefits included in a selected personal care services to a large exempt general support for the flexibility benchmark coverage option may be segment of the new adult group and allowed in the proposed rule to include included in an ABP whether or not these long-term care benefits would be a broader range of selected benefits those benefits are offered through a accessed in the streamlined MAGI through a Secretary-approved coverage particular Medicaid program. enrollment where asset evaluation package. Comment: Many commenters would be prohibited. Some commenters noted that the requested that, in addition to the Response: The Affordable Care Act ability of states to select coverage provisions that Secretary-approved did not change the categories of corresponding to their full traditional coverage must meet the needs of the individuals exempted from mandatory Medicaid benefit as their ABP, which target population, HHS revise language enrollment, and added the provision at would be presented under the Secretary- to require that the final Secretary- section 1902(k)(1) of the Act, which approved coverage option, offers a clear approved benefits package be at least contemplates that individuals who meet distinction between the section 1937 actuarially equivalent to one of the first

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three benchmark options, indicating benchmark-equivalent plans and for avoiding or delaying hospitalization or that this would ensure that states use revising the language to include home institutionalization. the Secretary-approved option to and community-based services available Comment: One commenter indicated provide a benefit that is innovative and under state plan options among these recognition that section 1915(i) of the comprehensive, and not solely to potential additional benefits. Act has proven to be a particularly provide a benefit that is lesser. Many other commenters applauded critical tool available to states to expand Many of the same commenters HHS’s inclusion of various options for home and community based services recommend amending § 440.330(d) to LTSS and care coordination support. and supports to cover a broad array of read as follows: Any other health Commenters generally offered strong services that enable individuals with benefits coverage that the Secretary support and commended the decision to mental illnesses to succeed in their own determines, upon application by a State, enable states the flexibility necessary to homes. provides appropriate coverage to meet align ABPs with state-plan options for the needs of the population provided home and community-based services, Response: We are in agreement with that coverage, and is at least actuarially self-directed personal assistance the commenter that section 1915(i) of equivalent to one of the benchmark services and attendant services, and the Act can serve as a critical tool options in paragraphs (a), (b), or (c). other state Medicaid plan benefits available to states to expand an array of Secretarial coverage may include described in section 1915(i), (j), (k) and services that enable individuals with benefits of the type that are available section 1945 of the Act. chronic condition to succeed under 1 or more of the standard One commenter indicated that the independently. For this reason, we will benchmark coverage packages defined flexibility to offer such services may finalize regulations to include section in § 440.330(a) through (c) of this provide states further opportunity to 1915(i) of the Act as a viable state plan chapter, State plan benefits described in offer home and community-based option that states may consider for sections 1905(a), 1915(i), 1915(j), services to particular populations since inclusion when selecting an ABP. 1915(k), and 1945 of the Act (whether the proposed rule retains the section Comment: A few commenters actually covered in the state plan or 1937 waiver of comparability that requested clarification from CMS that not), any other Medicaid State plan allows states to choose target states may include section 1915(c) of the benefits enacted under title XIX, or populations for receipt of specialized Act and other waiver-based services in benefits available under base benchmark benefit packages. The commenter their ABPs. Commenters stated concern plans described in § 156.100. offered an example of a state that could that states may need flexibility to Response: For commenters requesting design benefit packages that help include additional services, such as that we require an actuarial equivalence support community living, including personal care and other services that study for Secretary-approved coverage employment for persons with enable Medicaid beneficiaries to remain against one of the three benchmark disabilities. in their homes to their ABPs because options at § 440.330(a) through (c), the One commenter was concerned that section 1915(c) of the Act was not statute defines Secretary-approved states may not take advantage of this referenced in § 440.360. flexibility, and suggested that CMS coverage as one of the minimum Similarly, many state Medicaid standards for benchmark coverage, and consider issuing additional guidance to agencies stated that the regulatory as such, the benchmark options in states regarding the ability to cover sections should expressly specify that § 440.330(a) through (d) should serve as services critical to chronic care states may provide ABP enrollees with a reference for states considering the management for the new adult access to section 1915(c) programs. The benchmark-equivalent coverage option eligibility group, such as the new health commenters indicated belief that section offered in other regulatory provisions at home benefit. 1915(c) services are ‘‘state plan benefits § 440.335. Section 1937 of the Act does Similarly, another commenter enacted under Title XIX’’ given that not expressly mandate an actuarial requested that CMS clarify how section 1915(c) is found in Title XIX study of Secretary-approved coverage authorities at sections 1915(i) and 1945 and offers services that a state plan may Therefore, we are adopting § 440.330(d) will be used given that individuals that as proposed, and we believe that our would most likely benefit from these include as ‘‘medical assistance under clarification here will serve to clarify authorities will be exempt from such a plan.’’ The commenters also that a state plan benefit need not be enrollment: requested that CMS confirm their offered through the regular state Response: CMS is providing states reading of §§ 440.330, 440.360, allowing Medicaid program for its inclusion in with additional options to craft benefit states the option to provide enrollees benchmark coverage, or benchmark- packages that most appropriately meet with section 1915(c) waiver services equivalent coverage. the needs of the population being either as part of Secretary-approved Comment: Many commenters served. Benefits that can now be ABP or as ‘‘additional services’’ indicated support of the intent to revise included as Secretary-approved available to non-expansion enrollees. § 440.335(c)(1) to similarly align policy coverage may in fact assist people who Response: Section 1915(c) of the Act for benchmark-equivalent coverage as it do not yet qualify as medically frail. For is not a state plan benefit, and therefore, does for Secretary-approved coverage instance, if someone needs assistance is not consistent with our general and, thus, allow addition of benefits with medication administration, they principle that Secretary-approved or through the benchmark-equivalent may not yet meet the definition of additional coverage consists of coverage coverage process. Commenters believed medically frail, but they may benefit under one of the benchmark coverage that there are no legal impediments to significantly from the service and in fact options or regular state plan benefits. this approach and urged HHS to finalize avoid progression toward that Because the same services provided the revision. exemption group or meeting the under section 1915(c) of the Act may be Similarly, other commenters associated criteria. We are in support of provided under section 1915(i) of the commended the Secretary for melding regular medical/surgical Act, which can be offered in an ABP, we continuing to allow states the option for benefits with home- and community- do not see any reason to add section coverage of additional benefits in excess based services that support people 1915(c) benefits as an exception to this of the minimum required coverage for living the community and potentially general principle.

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Summary: No changes to the is minimally required in the benchmark match otherwise available for these proposed regulation were made as a to any or all populations in ABPs, populations is available for the result of these comments. including the expansion population. additional benefits when they are Similarly, another commenter urged approved by the Secretary. f. Benchmark-Equivalent Health CMS to allow states to be as expansive Similarly, other commenters Benefits Coverage and § 440.360 State as they want to be in offering health care requested that CMS clarify and confirm Plan Requirements for Providing services to all beneficiaries of ABPs, that the interpretation of this provision Additional Services (Adding Benefits to including the newly eligible Medicaid within the proposed rule is that if a state Additional Coverage) (§ 440.335) expansion population, beyond what is wanted to provide wrap-around services In the proposed rule, we amended minimally required within each state’s for a particular population that some of § 440.335(c) and § 440.360 by ABP. the ‘‘newly eligible’’ population may fall broadening the benefits available as Other commenters noted that states under, it does not appear that would be additional coverage from section 1905(a) may identify deficiencies and gaps in allowed unless the state creates a benefits to benefits of the type that are the commercial benchmark plan options Secretary-approved plan that available under 1 or more of the that fall outside parity, non- incorporates the benefits into the standard benchmark coverage packages discrimination, EHB and other underlying plan itself. or state plan benefits described in requirements. In this situation, One commenter indicated that it sections 1905(a), 1915(i), 1915(j), commenters believed that a state should would be helpful for CMS to clarify that 1915(k) or 1945 of the Act, or any other be able to add benefits easily for its adding additional benefits is possible Medicaid state plan benefits enacted expansion population and CMS should for individuals in the newly eligible under Title XIX, or benefits available provide states with all available group, and that the prohibition on under base benchmark plans described flexibility to do so. additional coverage for the expansion in § 156.100. Response: Section 1902(k)(1) of the group at § 440.360 only applies to Comment: Many commenters believed Act is very clear that individuals benefits that have not been included in that the proposed rule would prohibit eligible through the new adult the benchmark package selected by the states from providing wrap-around or expansion group are limited to state. The commenter also suggested other additional benefits to newly- benchmark or benchmark-equivalent that both benchmark-equivalent eligible adults, but would allow states to coverage. In addition, there is a payment coverage and Secretary-approved provide additional benefits for other exclusion under section 1903(i)(26) of coverage provide the state flexibility to populations in ABPs. the Act for FFP in any additional include benefits that can be covered Many commenters shared the belief coverage. ‘‘Additional services’’ through a Medicaid state plan or a base that the Affordable Care Act does not authorized under section 1937 fall benchmark option available to the state. appear to prohibit states from providing outside benchmark and benchmark- Response: We reassert the statutory additional services to the newly-eligible equivalent coverage. But we are construct that does not allow the new populations and that CMS should allow addressing this concern by allowing adult group to received ‘‘additional’’ states flexibility to provide additional states increased flexibility under this services. However, the broadening of services to the newly eligible population final rule to include broader benefits Secretary-approved coverage to include without having to go through the and services that are appropriate for the the same options for services additional process required for population being covered and that are accomplishes the goal of allowing Secretary-approved coverage. Those similar to the benefit types listed in individuals in the new adult group commenters believed that if CMS § 440.360, through Secretary-approved access to that same robust benefit determines that the law prohibits states coverage or benchmark-equivalent package. We reiterate that services from providing additional benefits to coverage. provided under an ABP do not have to the newly-eligible population, it should Comment: Many commenters be offered under the regular state plan. allow states the ability to simply add indicated strong support for HHS’ Comment: Several commenters these benefits using a streamlined proposed policy and commended the recognized that the Secretary’s process under the Secretary-approved Department for clarifying the authority clarification that additional benefits option or through another mechanism. for states to provide a wide range of may include those available under base Several commenters urged CMS to benefits in developing Secretary- benchmark plans (described in clarify through the final rule that states approved coverage. In continuing, those § 156.100), in additional to standard may provide additional benefits to ABPs commenters noted that many consumer benchmark coverage packages or for those eligible through section stakeholders have misunderstood the standard state plan benefits. Those 1902(a)(10)(A)(i)(VIII) of the Act through allowance for inclusion of benefits commenters were concerned about the Secretary-approved coverage option, under Secretary-approved coverage due flexibility for states to model ABPs after so as to not implicate the restriction on to the general prohibition on adding any base benchmark, noting that not additional coverage for the new adult services to Medicaid benchmarks and every base benchmark plan option may group contained through § 440.360. requested that the Department clarify provide appropriate benefit levels for Those commenters believed that the that benefits can be added, but only the Medicaid population. proposed language is misleading and through the Secretary-approved process. One commenter familiar with the could be interpreted that the expansion Other commenters urged CMS to needs of underserved and poor population is not able to receive consolidate these sections and clarify populations with chronic conditions additional benefits in any that, despite the prohibition on adding was appreciative that the EHB rules circumstances, noting that the intent of services to Medicaid benchmarks, states builds upon protections already offered the proposed rule is that the expansion have the flexibility to offer additional through existing rules that allow states group is limited to benchmark ABP and richer benefits to all those enrolled to enroll certain populations in coverage. in ABPs, including the expansion group, Medicaid benchmark plans, and grants A number of commenters requested by choosing the Secretary-approved states significant flexibility through that CMS allow states the flexibility to coverage option. Those commenters also regulations at § 440.360 to develop a provide additional benefits beyond what requested clarification that the federal more comprehensive benefits package

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that will better meet the needs of people services. Such required services are Individuals who are enrolled in with HIV and others with chronic required as part of § 440.365 and a state Medicaid when entering a public conditions. must assure to CMS that they are institution should have their eligibility Response: As mentioned in previous providing these services, which is suspended, rather than terminated, as responses, we believe the statute different than adding additional services they remain eligible. This also ensures requires states to balance the described at § 440.360. FQHCs are ease of reinstitution of coverage post- appropriateness of the ABP package considered Essential Community release. Additionally, if an individual is when considering the population being Providers in the commercial market, not already enrolled in Medicaid, states covered. Therefore, we believe our and we anticipate these entities playing are encouraged to enroll eligible regulations encourage states to consider a critical role in Medicaid ABPs as well. individuals prior to their release so that other options if their analysis reveals When these providers are part of the the individual can receive Medicaid that the base benchmark options elected ABP provider network, reimbursement covered services in a timely manner do not provide an appropriate level of to them must adhere to statutory upon discharge. benefits relative to the population being requirements. Comment: A commenter requested covered. Summary: Minor grammatical edits to additional guidance as to what type of Comment: A few commenters wished the proposed regulation were made as a information CMS will need to approve to emphasize that section 1937 of the result of these comments. an ABP state plan amendment and how Act requires states to provide FQHC CMS will determine if mental health g. Other Comments Received services to beneficiaries who receive parity has been met. ABP coverage in the same manner as We received various other comments Response: We will be issuing a CMS previously stated and conveyed in that did not relate specifically to template for states to use to submit the agency’s April 30, 2010 final rule. provisions proposed in the proposed ABPs as a state plan amendment. At this The commenters emphasized that for rule. time, mental health parity will be situations where no FQHCs are available Comment: One commenter stated that determined to be met with an assurance to section 1902(a)(10)(A)(i)(VII) of the to realize the opportunity presented by by the state. We will be developing Act enrollees under their managed care the Affordable Care Act, it is essential more specific policy related to this topic plan, then the state must provide the that individuals who are admitted to jail in the near future. beneficiary enrolled in ABP coverage and are eligible for Medicaid be enrolled Comment: One commenter requested with FQHC services on a per-visit basis in Medicaid either during incarceration CMS clarify what Medicaid category the as required by section 1902(bb) of the or immediately upon release to the EHBs are applicable. The commenter Act. Alternatively, if a managed care community. By law federal Medicaid wondered whether EHBs only apply to entity is able to provide FQHC services matching funds are not available for the the expansion population and ABPs or to any beneficiary receiving ABP costs of needed items and services for does it also apply to individuals who coverage, payments for such services individuals who are enrolled in are currently eligible for Medicaid. The must be made on a cost-related Medicaid while they are inmates, unless commenter questioned whether, for prospective payment system basis, with they are admitted to a medical example, current Medicaid benefits state supplemental payments provided institution for treatment during the would need to be adjusted to include where the PPS payment would exceed period of incarceration. Nonetheless, the habilitative services. the amount provided under the suspension of benefits does not affect Response: EHBs apply only to section managed care contract. the Medicaid eligibility of inmates or 1937 of the Act and were not extended Commenters indicated concern that their ability to enroll in the program if into regular Medicaid. Therefore, because § 440.360 is silent on states’ eligible. regular Medicaid state plan benefits will obligation to provide FQHC and RHC Response: Paragraph (A) following not include the EHBs. services as part of benchmark or section 1905(a)(29) of the Act and Summary: No changes to the benchmark-equivalent coverage, the implementing regulations at § 435.1009, proposed regulation were made as a proposed regulation fails to distinguish exclude from the definition of medical result of these comments. clearly between required and assistance care or services for any ‘‘additional benefits’’ for the section individual who is an inmate of a public 7. Summary 1937 package and that the omission of institution, except as an inpatient in a ABPs are intended to offer states FQHC services from the list creates the medical institution. We read this flexibility in designing benefit packages impression that these services are not a exclusion to apply generally to medical for the Medicaid population that are required benefit within section 1937 assistance, whether provided through benchmarked to public employee or coverage. the regular coverage plan or through an commercial plans. To ensure coverage Several commenters recommended ABP. Thus, while we agree with the of the kinds of services that will also be that CMS clarify the FQHC services commenter that incarcerated assured for those purchasing coverage in requirement by: (a) Consolidating individuals may be eligible for the individual and small group market, § 440.365 into § 440.345; or (b) Medicaid, they would not be entitled to the law also requires that ABPs cover independently reference § 440.365 in benefits inconsistent with the exclusion. the ten EHBs specified by law. § 440.360 by having the first sentence of We note that this is consistent with the Recognizing that states face regulatory provision § 440.360 read, ‘‘In exclusion of incarcerated individuals challenges in administering both their addition to the requirements of from eligibility to enroll in coverage state plan benefits and ABPs, we have § 440.345 and § 440.365.’’ through the Exchange. It is also sought to provide as much flexibility in Response: We agree with the consistent with the responsibility under aligning those packages as possible. commenters that regulations at the Eighth Amendment of the United That said, we appreciate that it may be § 440.365 continue to require that the States Constitution of governmental difficult at this point to make changes state must provide that individuals entities to provide necessary medical to the ABP that take effect by January 1, enrolled in an ABP have access, through care to individuals who they are holding 2014. In light of this challenge, we will that coverage or otherwise, to rural as inmates, which effectively creates a partner with states to work as quickly as health clinic services and FQHC liable third party for such care. possible to come into full compliance

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with these provisions. We do not intend States also select a section 1937 1. Definitions (§ 155.20) to pursue compliance actions on these coverage option. If the section 1937 In § 155.20, we proposed technical issues to the extent that states are coverage option and the plan initially corrections to the definitions of working toward but have not completed selected as the base benchmark for EHBs ‘‘advance payments of the premium tax a transition to the new ABPs on January are the same, the state will meet all credit’’ and ‘‘application filer,’’ and 1, 2014. To establish its base benchmark requirements by specifying as the final added a definition of ‘‘catastrophic for EHBs for Medicaid, the state can ABP the final base benchmark, as plan’’ by referencing the appropriate select the same or a different plan than supplemented and subject to statutory provision within the the base benchmark used for the permissible substitution, and further Affordable Care Act. We did not receive Exchanges. Once having selected the supplemented to the extent necessary to specific comments on these technical base benchmark plan for EHBs, the state ensure coverage required under section corrections, and are thus finalizing them maps the benefits to EHB categories, and 1937 of the Act, including EPSDT as proposed. then can engage in supplementation services, family planning services, and and/or substitution: FQHC and RHC services. Summary of Regulatory Changes • Through supplementation at 45 If the section 1937 coverage option We are finalizing the provisions CFR 156.110, the state must add EHBs and the selected base benchmark plan proposed in § 155.20 of the proposed to a base benchmark plan that is missing are different (including when the state rule with a technical correction to the a required category of EHBs. States can elects Secretary approved coverage definition of advance payments of the supply the missing EHBs from other option or benchmark equivalent premium tax credit, which we clarify base benchmark plans. coverage), states have to take the refers to the payment of the tax credit • Through substitution at 45 CFR following steps to construct their final authorized by 26 U.S.C. 36B and its 156.115(b), the state can replace one or ABP: implementing regulations. more of the benefits within each • If any other benefits are available in category of EHB, as long as it maps 2. Approval of a State Exchange the section 1937 coverage option, add appropriately to the category and the (§ 155.105) that benefit. services are actuarially equivalent to the • For any benefits in common from In § 155.105, we proposed a technical services that are being substituted. State correction to replace the reference to Medicaid programs can use this process the section 1937 public employee or commercial market plan options, but section 36B of the Code to the to substitute Medicaid state plan applicable Treasury regulation. We did benefits for public employee or with one having more robust qualities related to amount, duration, or scope, not receive specific comments on this commercial plan benefits, for example, section, and are thus finalizing the as long as applicable requirements are the benefit with the more robust coverage. provision as proposed. met. States must provide notification to • CMS that they have engaged in For any benefits in common from Summary of Regulatory Changes the section 1937 Secretary-approved substitution and have an actuarial We are finalizing the provisions certification and analysis available for coverage option, but with one having more robust qualities related to amount, proposed in § 155.105 of the proposed inspection. rule without modification. States must assure, as they evaluate duration, or scope, determine whether their base benchmark for EHBs and take to apply the benefit with the more 3. Functions of an Exchange (§ 155.200) these steps that they also properly robust coverage. In § 155.200, we proposed to clarify account for special Medicaid Alternatively, a state can first that the Exchange must also perform the considerations discussed in this rule. determine their ultimate goal in creating minimum functions described in When states pay for covered outpatient their benefit package (for example, subpart F concerning appeals. The only drugs under the ABP prescription drug wanting to create an ABP that mirrors comments we received supported this benefit, they must comply with the the state’s regular Medicaid state plan clarification. requirements under section 1927 of the benefit package as much as possible), Act. Habilitative services and devices and develop their ABP starting first with Summary of Regulatory Changes are defined by what is in the state the selection of their 1937 coverage We intend to finalize the clarification selected base benchmark plan, option. This would entail comparing the to paragraph (a) at a future date when substituted as desired. If not defined in state plan benefit package with the base subpart F is finalized, and so thus the base benchmark, the state will benchmark benefit package, maintain the previous language from the define the benefit. For example, states supplementing the state plan benefit Exchange final rule. may offer coverage of habilitative with EHBs as necessary, and applying services and devices that is no more permissible substitution of benefits 4. Authorized Representatives restrictive in terms of amount, duration, consistent with 45 CFR 156.115(b) to (§ 155.227) and scope than the rehabilitative better align with state plan benefits. We proposed to add § 155.227, services and devices covered under the establishing minimum requirements for C. Exchanges: Eligibility and Enrollment applicable benchmark plan. We expect the designation of authorized that the services will be clinically Throughout this proposed rule, we representatives who may act on an appropriate to meet the needs of proposed technical corrections to applicant’s or enrollee’s behalf in the individuals based on medical necessity. regulation sections in part 155 to individual and small group markets. We Pediatric oral and vision care must replace references to section 36B of the noted in the preamble that the proposed follow requirements of the EPSDT Code with the corresponding sections to rule for authorized representatives for benefit. the Department of Treasury’s final rule, Exchanges closely tracks the proposed The final base benchmark plan for Health Insurance Premium Tax Credit rule for authorized representatives for EHBs for Medicaid, after completion of (26 CFR 1.36B–0 et seq.), published in Medicaid. these steps, provides the floor for the May 23, 2012 Federal Register (77 In paragraph (a), we proposed that the Medicaid coverage to individuals in the FR 30377). We are finalizing these Exchange must permit applicants and ABP. technical corrections as proposed. enrollees in the individual and small

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group markets to designate an enrollee to change or withdraw an commenters also suggested that such a individual person or organization to act authorization at any time. We also noted material change or revocation should on that applicant or enrollee’s behalf. the authorized representative also may result in revocation of the authorized We also proposed that an applicant or withdraw his or her representation by representative’s authority to act on enrollee may have such a representative notifying the Exchange and the behalf of the consumer for Exchange through operation of state law, subject applicant or enrollee. purposes. to applicable privacy and security In paragraph (e), we proposed that an Response: We have clarified in requirements. We also proposed that the authorized representative acting as § 155.227(d)(2) of the final rule that an Exchange must not restrict the option to either a staff member or volunteer of an authorized representative must notify designate an authorized representative organization and the organization itself the Exchange and the applicant or to only certain groups of applicants or must sign an agreement meeting the enrollee on whose behalf he or she is enrollees. We noted that the Exchange requirements proposed in regards to acting when the authorized should ensure that the authorized Exchange certified application representative no longer has legal representative agrees to maintain, or be counselors. We noted that while the authority to act on behalf of the legally bound to maintain, the protections afforded by such an applicant or enrollee. confidentiality of any information agreement are important when an Comment: Several commenters asked regarding the applicant or enrollee authorized representative is a member HHS to clarify which legal provided by the Exchange, and that or volunteer of an organization, we documentation may serve in the place of authorized representatives should believe that they are not logical in cases an affirmative representation to adhere to applicable authentication and where an authorized representative is designate an authorized representative. data security standards. Additionally, not acting on behalf of an organization. Other commenters recommended we proposed that the Exchange should We sought comments on applying the clarifying that a power of attorney may ensure that the authorized protections in paragraph (e) to be used for such a purpose only if it representative is responsible for authorized representatives more authorizes the holder to act in the types fulfilling all responsibilities broadly. of activities permitted under encompassed within the scope of the In paragraph (f), we proposed that the § 155.227(c). One commenter authorized representation, as described Exchange require authorized recommended that legal documentation in this section, to the same extent as the representatives to comply with any to act as an authorized representative be person he or she represents. applicable state and federal laws required, as opposed to optional, to In paragraph (b), we proposed the concerning conflicts of interest and protect vulnerable applicants or situations when the Exchange must confidentiality of information. enrollees. Another commenter permit an applicant or enrollee to In paragraph (g), we proposed that the recommended adding language that designate an authorized representative. designation of an authorized authorizes the Exchange to dictate the We also proposed that the single, representative must be in writing, form or manner of the authorization. A streamlined application described in including a signature, or through few commenters also expressed § 155.405 will provide applicants the another legally binding format, and be concerns about the proposed opportunity to designate an authorized accepted through all of the modalities requirement that the designation of an representative and will collect the described in § 155.405(c) of this part. authorized representative be in writing information necessary for such We received the following comments including a signature or other legally representative to enter into any concerning the proposed authorized binding format. associated agreements with the representative provisions. Response: In paragraph (a)(2), we Exchange as part of the application Comment: Several commenters outline the form and manner of how an process. We noted that applicants and recommended that the Exchange be applicant or enrollee may designate enrollees who do not designate an required to make clear the powers and another person as his or her authorized authorized representative on their duties authorized representatives may representative, specifying that this applications will subsequently be able have with respect to the Exchange, as designation should be in a legally to do so through electronic, paper well as all other requirements of binding format. We also provide formats, and other modalities, as § 155.227, in a manner that is easily examples of legal documentation that described in § 155.405(c)(2). We also understandable by both the authorized could be used to designate an noted that legal documentation of representative and applicant or enrollee. authorized representative in lieu of a authority to act on behalf of an Response: In the final rule, we added signed document, including, but not applicant or enrollee under state law, a provision to paragraph (a) specifying limited to, a court order establishing such as a court order establishing legal that the Exchange must provide legal guardianship or a power of guardianship or a power of attorney, information regarding the powers and attorney. While we do not require that may serve in the place of the applicant duties that an authorized representative legal documentation be provided before or enrollee’s designation. may have with respect to Exchange the Exchange may recognize an In paragraph (c), we proposed that the activities to both the applicant or individual as an authorized Exchange must permit an applicant or enrollee and the authorized representative, we anticipate that enrollee to authorize a representative representative. Exchanges will have procedures in to—(1) Sign the application on the Comment: Several commenters place to ensure that applicants and individual’s behalf; (2) submit an suggested that an authorized enrollees have control over whom they update or respond to a redetermination representative should have an designate as an authorized for the individual; (3) receive copies of affirmative duty to notify the Exchange representative. For example, Exchanges the individual’s notices and other and the applicant or enrollee on whose have flexibility to require that the communications from the Exchange; behalf he or she is acting of any designation should occur through a and (4) act on behalf of the individual revocation or material change in the signed agreement or legally binding in all other matters with the Exchange. authorized representative’s legal document. In general, an Exchange In paragraph (d), we proposed that the authority to act on behalf of the could accept any document that is valid Exchange must permit an applicant or applicant or enrollee. These for designating an authorized

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representative in the state, and that applicable state and federal laws federal regulation under ERISA, the permits the holder to perform the regarding conflicts of interest. Code, and the Taft-Hartley Act, but not activities specified in § 155.227(c), in Comment: Several commenters to state insurance regulation. The place of an affirmative representation to recommended that an applicant or commenter noted that the relationships designate an authorized representative. enrollee should be able to authorize between plans and plan participants We emphasize that to be used in this their representative to engage in fewer and beneficiaries established under the manner, documentation has to give the than all of the activities described in the Taft-Hartley Act should continue to be authority needed to be an authorized proposed rule. recognized in regulations implementing representative for the activities specified Response: In the final rule, we the Affordable Care Act. in § 155.227(c). maintain language specifying that an Response: We expect that authorized Comment: A few commenters Exchange must allow applicants and representatives will be used primarily inquired about the relationship between enrollees to authorize a representative to by applicants and enrollees who are an authorized representative designated perform the full range of activities listed unable to represent themselves or who through the Exchange and a QHP issuer, in the rule. We also add language to are seriously challenged in representing and recommended that an applicant or § 155.227(c) clarifying that the Exchange themselves in their relationship with enrollee be required to complete a may (but need not) permit consumers to the Exchange. Accordingly, authorized separate authorization form to designate authorize fewer than all of the listed representatives’ agreements are between a representative to act on his or her activities, so long as the Exchange is an applicant or enrollee and his or her behalf in interactions with the QHP able to track the specific permissions for authorized representative regarding issuer. Commenters expressed an each authorized representative. We note representation before the Exchange. understanding that QHP issuers would that for plan years beginning before Comment: One commenter sought be responsible for developing and January 1, 2015, the FFE will not have clarification on whether staff or executing the authorized representative the operational capacity to support the volunteers of organizations must be forms that govern interactions between authorization of representatives to trained and certified as Exchange the enrollee and the issuer. perform less than the full range of certified application counselors under Response: Subject to applicable law, activities listed in the rule. proposed § 155.225(b) to serve as we believe that the authorized Comment: Several commenters urged authorized representatives. representative designated by an that the provision in proposed Response: The rule does not require applicant or enrollee through the § 155.227(d) that the applicant or authorized representatives to be trained Exchange process should also be able to enrollee notify both the Exchange and and certified as certified application serve in the same capacity with the QHP the representative that the counselors. The role of an authorized issuer, and that streamlining this representative is no longer authorized to representative is distinct from the role process is important to minimize the act on his or her behalf be removed. of a certified application counselor. burden on applicants or enrollees who Other commenters suggested that the Specifically, certified application need authorized representation. applicant or enrollee should notify only counselors, for which standards will be Therefore, we would urge QHP issuers the Exchange. finalized in a future regulation, provide to allow an Exchange authorized Response: In the final rule, we clarify guidance and assistance to applicants representative to serve in the same that the responsibility for notifying a and enrollees who will interact with the capacity with the QHP issuer. We note representative whose authorization has Exchange on their own behalf, while that the companion guide 2 that will be been discontinued by an applicant or authorized representatives are used by all Exchanges for sending enrollee falls only on the Exchange. commonly used by applicants or enrollment data to QHP issuers has Comment: One commenter expressed enrollees who are unable to represent fields that may accommodate this support for a policy that would permit themselves, and have the legal authority information. the Exchange to terminate a designation to actually sign for an applicant or Comment: Some commenters after a given period of time to be enrollee and make other decisions on suggested that HHS develop some determined by the Exchange. This his or her behalf. conflict of interest standards to ensure commenter noted that this aligns with Comment: Several commenters that consumers are protected when the 5-year limit on authorizations from suggested that requiring organizations to interacting with entities that may enrollees to allow Exchanges to request enter into agreements and follow a set benefit from becoming an authorized tax information for conducting annual of standards as proposed in § 155.227(e) representative. Other commenters redeterminations in accordance with will lead to disruptions in the suggested banning all organizations § 155.335(k). availability of assistance and lead to real from becoming authorized Response: In the final rule, we have harm to persons who need assistance. representatives, because some entities added a provision specifying that Other commenters expressed concerns may benefit from becoming an authorized representatives will notify that every authorized representative authorized representative. the Exchange if they are no longer would have to be certified. Response: We appreciate the authorized to act in that capacity. As Response: In light of the commenters’ comments and plan to monitor long as a person has the authority to act concerns, and the protections for organizations acting as authorized as an authorized representative, there is consumers that already apply to all representatives over time to determine no need to terminate or reauthorize that Exchange authorized representatives, whether more specificity is needed. relationship after a set amount of time. we have not finalized the proposed Additionally, § 155.227(e) of the final An applicant or enrollee may also requirement that organizations and staff rule clarifies that authorized modify the authorization at any time. and volunteers of organizations sign a representatives must comply with Comment: A commenter suggested separate agreement. We recognize that that compliance agreements for authorized representatives are given 2 Standard Companion Guide Transaction authorized representatives should be significant authority, and accordingly, Information, (March 22, 2013). Available at: available directly from HHS, instead of we need to ensure that the privacy and http://www.cms.gov/CCIIO/Resources/Regulations- and-Guidance/Downloads/companion-guide-for-ffe- Exchanges, for entities such as multi- security of applicants’ and enrollees’ enrollment-transaction-v15.pdf. employer plans that are subject to personal data are protected. We note

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that all authorized representatives, not redesignate his or her authorized describing individual persons acting as just organizations and those working for representative. an authorized representative. organizations, will be subject to the Response: If the application is We added paragraph (a)(5) to specify privacy and security standards transferred to the state Medicaid agency, that the Exchange must provide established and implemented by the the authorized representative information about the powers and Exchange consistent with 45 CFR designation would be transferred as duties of an authorized representative 155.260 through agreements, as is well. both to the applicant or enrollee and to required by 45 CFR 155.260(b)(2). This Comment: One commenter inquired the authorized representative. We will be further clarified in subregulatory about whether the Exchange will be redesignated proposed paragraphs (c)(1) guidance. Since all authorized deemed liable for any breaches of through (c)(4) as (c)(1)(i) through representatives will be subject to confidentiality that are beyond the (c)(1)(iv), and added a new paragraph privacy and security standards, in this control of the Exchange. A commenter (c)(2), which allows an Exchange to also requested that HHS modify final rule, we removed the requirement permit an applicant or enrollee to language to make it clear that it is the for organizations and staff and authorize a representative to perform legal duty of the authorized volunteers of organizations to sign a fewer than all of the activities described representative to maintain separate agreement. in paragraph (c)(1) of this section, We have also not finalized the confidentiality in daily practice. Response: We appreciate this provided that the Exchange tracks the provision in the proposed rule that specific permissions of each authorized would have subjected authorized comment and recognize that this issue applies more broadly. There are representative. Additionally, we representatives who are staff and removed paragraph (d)(1), and volunteers of organizations, and their potentially some instances in which a redesignated proposed paragraphs (d)(2) organizations, to the proposed standards person that provides application and (d)(3) as paragraphs (d)(1) and for Exchange certified application assistance, including an authorized (d)(2). We modified the language in counselors. This proposal was representative, could negligently redesignated paragraph (d)(1) to explain motivated in large part by a concern that disclose an applicant’s or enrollee’s that the Exchange, not the applicant or staff and volunteers of such information under circumstances that enrollee, will notify the authorized organizations might be likely to have the Exchange could not have prevented. representative when an applicant or conflicts of interest. This concern, We note that authorized representatives enrollee notifies the Exchange that he or however, is addressed by § 155.227(e), will need to comply with the same she is no longer represented by his or which clarifies that authorized privacy and security standards that the representatives must comply with Exchange adopts consistent with her previously authorized applicable state and federal laws § 155.260, or with more stringent representative. We further modified regarding conflicts of interest. standards, pursuant to § 155.260(b). redesignated paragraph (d)(2) to clarify Comment: One commenter suggested Additionally, paragraph (e) of the final that an authorized representative will requiring legal documentation when an rule requires authorized representatives notify the Exchange and the applicant or applicant or enrollee changes or to comply with applicable state and enrollee on whose behalf he or she is withdraws his or her authorization. federal laws concerning conflicts of acting when the authorized Response: Applicants and enrollees interest and confidentiality of representative no longer has legal will not always have legal documents to information. authority to act on behalf of the applicant or enrollee. We also deleted substantiate discontinuing an Summary of Regulatory Changes authorization. When an applicant or paragraph (e) and redesignated enrollee appoints a new authorized We are finalizing the provisions paragraphs (f) and (g) as (e) and (f), representative, including to replace an proposed in § 155.227 of the proposed respectively. We also made the existing authorized representative, he or rule, with a few modifications. For following technical corrections. We she should follow the same process as clarity and consistency with the made a technical correction in an applicant or enrollee who appoints terminology defined in § 155.20, and to paragraph (a)(1) to specify that an authorized representative for the first make it clear that we intend authorized authorized representatives are permitted time. representatives to provide assistance to assist individuals apply for eligibility Comment: Another commenter both in the SHOP Exchanges and in the determinations or redeterminations for recommended that an enrollee should individual market Exchanges, we exemptions from the shared not be able to designate an authorized replaced the terms ‘‘individual’’ and/or responsibility payment under subpart G representative if he or she failed to do ‘‘employee’’ with the terms ‘‘applicant’’ of this part. We made technical so during the application process. and/or ‘‘enrollee’’ to describe the people corrections in paragraphs (a)(2) and (g) Response: We see no need to limit an helped by authorized representatives. to clarify that the designation of an applicant or enrollee’s ability to To further indicate that we intend authorized representative must be in a designate an authorized representative authorized representatives to provide written document signed by the solely to the application process, assistance both in the SHOP and in the applicant or enrollee instead of saying it particularly as some enrollees may individual market Exchanges, we clarify must be in writing, including a develop a need for an authorized in § 155.227(a) that an applicant or signature. We also added the word representative after submitting an enrollee can designate an authorized ‘‘must’’ to paragraphs (a)(3), (a)(4), and application, choosing a plan, and representative in the individual or small (f) to clarify that the activities described maintaining coverage for many years. group market Exchange and have added in those paragraphs are required Comment: Several commenters sought ‘‘subpart H’’ to the regulation text to Exchange functions. We made a clarification about whether an applicant account for the functions that an technical correction in paragraph (d) to or enrollee who applies through the authorized representative may perform move the words ‘‘the applicant or Exchange with the assistance of an in a SHOP. To avoid confusion with the enrollee notifies’’ to the paragraph they authorized representative and is defined term ‘‘qualified individual,’’ we modify. Finally, we made a technical subsequently transferred to the state use the term ‘‘person’’ instead of correction in paragraph (f), to clarify Medicaid agency would need to ‘‘individual’’ in the final rule when what is meant by legally binding format

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by adding ‘‘as described in timeframe by which action needs to be provided in plain language and in a § 155.227(a)(2).’’ taken, while another commenter manner accessible to limited English emphasized that notices should contain proficient individuals. We expect 5. General Standards for Exchange information about where individualized Exchanges to make consumers aware of Notices (§ 155.230) and unbiased counseling is available for the reconciliation process applicable to In § 155.230, we proposed to make a the individual. Lastly, a few advance payments of the premium tax technical correction in paragraph (a) to commenters suggested that we add credit as a part of the initial Exchange clarify that the general standards for ‘‘laws or regulations’’ to § 155.230(a)(3). educational materials, as well as at the notices apply to all notices sent by the Response: In response to comments time that an individual selects a QHP. Exchange to individuals or employers. received, we clarify that while the HHS is working with states to identify We also proposed to revise paragraph standards under § 155.230 generally do all key messages that should be (a) by redesignating paragraph (a)(1) as apply to notices sent by the individual communicated to individuals through paragraph (a)(4) and redesignating market Exchange to both individuals notices and other Exchange processes, paragraph (a)(2) as paragraph (a)(5). We and employers, HHS does not expect and will take these comments into proposed to revise redesignated (a)(2) to that the Exchange will have the consideration for implementation. change ‘‘; and’’ to ‘‘.’’ We proposed to information necessary to provide an Comment: Commenters generally add new paragraph (a)(1) to indicate employer with a choice to receive the expressed support for the electronic that any notice required to be sent by notice specified in § 155.310(h) notice standards proposed under the Exchange to individuals or regarding eligibility for advance § 155.230(d), while some expressed employers must be written and include payments of the premium tax credit concerns or suggestions related to the an explanation of the action that is electronically, as we do not expect that proposed standards. Commenters raised reflected in the notice, including the individuals will provide email a variety of concerns about how effective date of the action, and we information for employers on the consumers who elect to receive proposed to add new paragraph (a)(2) to application. Accordingly, we expect that electronic notices may not actually require the notice to include any factual notices sent from the Exchange to receive them, including as a result of findings relevant to the action. We employers will likely be provided by not checking email regularly. One proposed to revise paragraph (a)(3) to standard mail, at least in the early years commenter urged that Exchanges should clarify that the notice must include the of program implementation. We will be required to change the enrollee’s citation to, or identification of, the continue to work with employers delivery method for notices if the relevant regulations that support the regarding how best to implement Exchange finds that electronic notices action. We note that the contents of notices from the Exchange to employers are not being opened. One commenter notices are subject to privacy and in an efficient manner. suggested that written notifications security provisions in § 155.260, We intend to consider the suggestions should cease only after clear and including the limitations on disclosure regarding notice content in the unambiguous expression from an of information. development of model notices, and enrollee that they no longer wish to Furthermore, we proposed to add encourage Exchanges to do the same in receive paper notifications, and that the paragraph (d) to allow the Exchange to developing notices they will use. We Exchange should be required to track provide notices either through standard expect that notices will include clear whether electronic notices are delivered mail, or if an individual or employer information about next steps and and opened by an enrollee. Another elects, electronically, provided that timeframe by which action needs to be commenter recommended that standards for use of electronic notices taken. We acknowledge the value of individuals be allowed to decide which are met as set forth in § 435.918, which including contact information for both notices they receive electronically or by contains a parallel provision. We did customer service and consumer mail. One commenter suggested that not propose that the standards assistance resources in notices. We electronic notices should be in addition specifically described under proposed recognize that including a list of all to, rather than replace, mailed paper paragraph (d) would apply to the SHOP, available consumer assistance resources notices. Lastly, one commenter and sought comment regarding this will make the notice longer, and so note recommended modifying the notice issue. We received the following that this is an area in which Exchanges provision so that if an individual elects comments concerning the proposed have flexibility. We also note that to receive electronic notices, the provisions for standards for Exchange applicable federal regulations are and Exchange also always would send a notices: will remain available through public mailed notice in addition to the Comment: Several commenters Web sites. electronic notice when the Exchange is supported our proposal to clarify that Comment: Several commenters taking an adverse action or when the the general standards for notices under reinforced their support for the use of consumer is required to take an § 155.230 apply to notices sent by the plain language to help notify enrollees additional action to maintain his or her Exchange to both individuals and of their rights and to properly explain eligibility for enrollment in a QHP, employers, and they supported the health coverage options that may be advance payments of the premium tax changes and additions proposed under available to consumers. One commenter credit, or cost-sharing reductions. paragraph (a). Many commenters recommended the notice include clear Response: We do not expect that the indicated that the Exchange should be information about how to get help if the Exchange will track and monitor when required to include contact information individual does not understand the an individual opens emails and for both customer service and consumer notice, as well as clear information that electronic notices. As described in the assistance resources in notices, and an individual does not have to take the electronic notice standards under commenters indicated that HHS should premium tax credit in advance. § 435.918, which are incorporated by make copies of the applicable statute or Response: All notices specified under reference under § 155.230(d), applicants regulation available upon request by 45 CFR parts 155 and 156 are required will receive paper notices by mail until consumers. One commenter stated the to meet the accessibility standards they affirmatively elect to receive notice needs to include a clear described under § 155.205(c), which electronic notices. We expect Exchanges explanation of any next steps and the specify that information must be to remain consistent in their overall

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approach to distributing notices, as employee when a notice has been (b)(5) are met for the employer or required under § 155.230(d). Individuals posted; and (4) If an electronic employee. will be able to control how they receive communication is undeliverable, send 6. Definitions and General Standards for notices. Additionally, under the notice by regular mail within three Eligibility Determinations (§ 155.300) § 435.918(b)(6), an individual will be business days of the date of the failed able to request any notice posted in the electronic communication. In § 155.300, we proposed technical individual’s electronic account to be Comment: Several commenters asked corrections in paragraph (a) to the sent through regular mail. Furthermore, for clarification regarding how definitions of ‘‘minimum value,’’ nothing precludes the Exchange from electronic notice standards apply to ‘‘modified adjusted gross income,’’ and providing an individual with the choice QHP issuers, and they suggested that ‘‘qualifying coverage in an eligible to receive some types of notices QHP issuers also be allowed to offer employer-sponsored plan,’’ and also electronically and others through enrollees the option of receiving removed the definition of ‘‘adoption regular mail (for example, notices electronic notices. Some commenters taxpayer identification number.’’ We are concerning adverse actions). recommended that the Exchange adopt finalizing the technical corrections as Accordingly, we are finalizing this electronic notice standards for QHP proposed, with an additional technical provision as proposed, with one issuers similar to those applicable to the correction to specify the appropriate modification to allow the individual individual market Exchange. One definition of minimum value. market Exchange to choose to delay the commenter recommended that the Comment: Several commenters implementation of the process described single, streamlined application include recommended that HHS should not in 42 CFR 435.918(b)(1) regarding an option for applicants to elect to cross-reference in § 155.300 to the sending a mailed confirmation of the receive notices from the QHP issuer affordability standard for eligible choice to receive electronic notices, electronically, in addition to the employer-sponsored coverage in the given the time available for election to receive notices from the Department of the Treasury’s premium implementation. Exchange electronically. One tax credit regulation, 26 CFR 1.36B–0 et Comment: Some commenters commenter requested that a provision seq., as the Department of the Treasury supported the exclusion of the SHOP be added permitting managed care regulation is based on individual rather Exchange from the electronic notice organizations to provide electronic than family coverage. standards under § 155.230(d), while notices. Response: The Department of the others expressed support for the SHOP Response: The provisions related to Treasury maintains the legal authority being able to send all notices electronic notice standards under part to interpret and implement the electronically. Many commenters urged 155 of the proposed rule apply to the eligibility standards for the premium tax that employers in the SHOP should individual market and SHOP Exchange. credit, including those related to have a choice regarding to how they We acknowledge the importance of QHP affordability and minimum value of receive notices, and some expressed issuers being able to send, and enrollees coverage in an eligible employer- concern about employers not having a being able to choose to receive, sponsored plan, because those are based choice. One commenter recommended electronic notices, and we clarify that on provisions of the Code. The proposed that the SHOP be allowed to choose nothing in this regulation precludes technical corrections do not revise the between offering both written and QHP issuers from offering their policy regarding the Exchange’s electronic notices, to allow qualified enrollees the option to receive notices determination of the affordability of employers and employees to select electronically. We understand that most eligible employer-sponsored coverage, which method they prefer; or to only QHP issuers already make electronic but simply update the cross-reference to offer paper notices. The commenter notices available as an option to their align with the Department of the noted that allowing states to adopt an current enrollees, and we are supportive Treasury’s implementing regulation. As electronic-only approach for notice of QHP issuers continuing to make this such, we are finalizing the technical delivery might be problematic for some option available to enrollees when they corrections as proposed. employers. Another commenter are participating in the Exchange. Summary of Regulatory Changes indicated that the proposed rule is not Summary of Regulatory Changes clear about what the default format We are finalizing the provisions would be for notices sent by the SHOP. We are finalizing the provisions proposed in § 155.300 of the proposed Response: Based on the comments proposed in § 155.230 of the proposed rule with a technical correction to received and because we believe it is rule with a few modifications. We specify the appropriate definition of important for employers to be able to renumber proposed paragraph (d) as minimum value. choose how they receive notices, we are paragraph (d)(1) and modify it to specify modifying the proposed rule to allow an the electronic notice standards for an 7. Options for Conducting Eligibility employer or employee in any SHOP to individual market Exchange, while also Determinations (§ 155.302(a) and (b), elect to receive electronic notices, adding paragraph (d)(2) to establish the and (d)) provided that the standards for electronic notice standards for a SHOP. In § 155.302, we promulgated electronic notices in § 435.918(b)(2), We also add language to allow the provisions as interim final with request (b)(3), (b)(4), and (b)(5) are met for the individual market Exchange to choose for comments in the Exchange final rule employer or employee. Accordingly, the to delay the implementation of the (77 FR 18310, at 18451–52). We SHOP must: (1) Permit the employer or process described in 42 CFR proposed to modify some of the employee to change such election, at 435.918(b)(1) regarding sending a provisions in § 155.302 in the proposed any time, and inform the employer or mailed confirmation of the choice to rule (78 FR 4594, 4635). employee of this right; (2) Post notices receive electronic notices. We provide In paragraph (a) of the interim final to the employer or employee’s in paragraph (d)(2) that an employer or rule, we provided that the Exchange electronic account within one business employee in any SHOP may elect to may fulfill its minimum functions under day of notice generation; (3) Send an receive electronic notices, provided that this subpart by either executing all email or other electronic the requirements for electronic notices eligibility functions, directly or through communication alerting the employer or in § 435.918(b)(2), (b)(3), (b)(4), and contracting arrangements described in

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§ 155.110(a), or through a combination to withdraw his or her application for an assessment and transmitted it to the of this approach and one or both of the Medicaid and CHIP or request a full state Medicaid or CHIP agency, and the approaches identified in paragraphs (b) determination of eligibility for Medicaid Exchange is providing advance and (c), which apply when other entities and CHIP from the applicable state payments of premium tax credits make eligibility determinations for agencies. To the extent that an applicant pending an eligibility determination for insurance affordability programs. We withdraws his or her application for Medicaid and CHIP, the Exchange will proposed a revision to the interim final Medicaid and CHIP, the applicant receive a notification of the final rule in paragraph (a)(1) to specify that would not receive a formal approval or determination of eligibility for Medicaid Medicaid and CHIP eligibility denial for Medicaid and CHIP. and CHIP made by the receiving agency. determinations made by the Exchange We proposed a revision to the interim This approach helps avoid duplicative may only be made by a government final rule in paragraph (b)(4)(i)(A) to requests for information from applicants agency that maintains personnel specify that, if an applicant who is not and verification of information. standards on a merit basis. assessed as potentially eligible for We proposed a revision to the interim In paragraph (b) of the interim final Medicaid or CHIP by the Exchange final rule in paragraph (b)(5) to specify rule, we provided that the Exchange withdraws his or her application for that the Exchange also will adhere to the may conduct an assessment of eligibility Medicaid or CHIP, and then appeals his appeals decision for Medicaid or CHIP for Medicaid and CHIP rather than an or her eligibility determination for eligibility determinations made by the eligibility determination for Medicaid advance payments of the premium tax state Medicaid or CHIP agency or and CHIP, provided that the Exchange credit or cost-sharing reductions and is appeals entity for such agency. make such an assessment based on the found potentially eligible for Medicaid In paragraph (d) of the interim final applicable Medicaid and CHIP MAGI- or CHIP, the Medicaid or CHIP rule, we provided the standards to based income standards and citizenship application is not considered which the Exchange must adhere when and immigration status, using withdrawn. The purpose of this revision assessments of eligibility for Medicaid verification rules and procedures is to reinstate the Medicaid and CHIP and CHIP based on MAGI and eligibility consistent with Medicaid and CHIP application date, which is used in determinations for advance payments of regulations, without regard to how such determining the effective date of the premium tax credit and cost-sharing standards are implemented by the state coverage under Medicaid and CHIP. reductions are made in accordance with Medicaid and CHIP agencies. We provided in paragraph (b)(4)(i)(B) paragraphs (b) and (c); such standards In paragraph (b)(2) of the interim final that the Exchange must notify and include that all eligibility processes are rule, we provided that notices and other provide an applicant who is assessed as streamlined and coordinated across activities that must be conducted in not potentially eligible for Medicaid and applicable agencies, that such connection with an eligibility CHIP with the opportunity to request a arrangement does not increase determination for Medicaid or CHIP full determination of eligibility for administrative costs and burden on would be conducted by the Exchange Medicaid and CHIP by the applicable applicants, enrollees, beneficiaries, or consistent with the standards identified state Medicaid and CHIP agencies. For application filers, or increase delay, and in this subpart or by the applicable state an applicant who requests a full that applicable requirements under part Medicaid or state CHIP agency Medicaid and CHIP determination, we 155 and section 6103 of the Code are consistent with applicable law. provided that the Exchange must met. In paragraph (b)(3) of the interim final transmit all information provided as Comment: Several commenters raised rule, we provided that if the Exchange part of the application, update, or concerns regarding § 155.302(a) as assesses an applicant potentially eligible renewal that initiated the assessment, promulgated in the interim final rule, as for Medicaid or CHIP, the Exchange and any information obtained or they believed it could permit non-public would transmit such the applicant’s verified by the Exchange to the state agencies to conduct eligibility information to the State Medicaid or Medicaid and CHIP agency. We determinations for Medicaid and CHIP, CHIP agency for a formal determination provided that the Exchange must which they worried would have a of eligibility for such insurance consider such an applicant as ineligible negative impact on consumer assistance, affordability program. We explained in for Medicaid or CHIP for purposes of timeliness, accuracy, and the potential the preamble to the interim final rule determining eligibility for advance for conflicts of interest. Some that the Exchange would consider the payments of the premium tax credit and commenters wanted to ensure that applicant ineligible for Medicaid or cost-sharing reductions until the state agreements between state Medicaid CHIP for purposes of eligibility for Medicaid or CHIP agency notifies the agencies and private entities related to advance payments of the premium tax Exchange that the applicant has been the eligibility determination process credit and cost-sharing reductions until determined eligible for Medicaid or would be relayed to HHS for the state Medicaid or CHIP agency CHIP. appropriate review. Several commenters notified the Exchange that the applicant We provided in paragraph (b)(5) that, recommended clear language to specify was eligible for Medicaid or CHIP. under an assessment model discussed that a private Exchange is not permitted In paragraph (b)(4) of the interim final above, the Exchange must adhere to the to make final determinations regarding rule, we proposed that if the Exchange eligibility determination for Medicaid or an applicant’s eligibility for Medicaid assesses an applicant not potentially CHIP made by the Medicaid or CHIP and CHIP. One commenter wanted HHS eligible for Medicaid or CHIP based on agency. We provided in paragraph (b)(6) to strengthen the conflict of interest the applicable Medicaid and CHIP that the Exchange and the applicable language and specify that the Exchange MAGI-based income standards, the state Medicaid and CHIP agencies must may not contract out eligibility Exchange must consider such an enter into an agreement specifying their determinations for advance payments of applicant as ineligible for Medicaid or respective responsibilities in connection the premium tax credit and cost-sharing CHIP for purposes of determining with eligibility determinations for reductions due to such determinations eligibility for advance payments of the Medicaid and CHIP, which requirement being inherently governmental. premium tax credit and cost-sharing complements the standards in Response: We appreciate these reductions, and notify the applicant and § 435.1200(d). In accordance with these comments regarding the interim final provide him or her with the opportunity standards, when the Exchange performs rule, as well as comments received

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regarding the proposed revisions to eligibility determination, to protect determinations for Medicaid based on paragraph (a)(1) of the interim final rule applicants. Furthermore, commenters factors other than MAGI. that would specify that any contracting urged HHS to establish a process for Comment: Some commenters arrangement for eligibility monitoring and enforcing the standards, requested that HHS provide greater determinations for Medicaid and CHIP as well as educating the public, specificity throughout § 155.302(b) to is subject to the standards in 42 CFR regarding the division of eligibility indicate that contracting agreements, 431.10(c)(2). In response to these responsibilities between the Exchange verifications rules and standards, comments, we are finalizing and relevant Medicaid and CHIP notices, and other activities discussed § 155.302(a) with the proposed revision agencies. Commenters stated that if such must adhere to the specific standards of to paragraph (a)(1), with a minor monitoring uncovers noncompliance §§ 155.302(d) and 155.345(g), and 42 clarification to specify that the reference with performance standards or other CFR part 431, subpart E. to 42 CFR 431.10(c)(2) is specific to requirements, HHS should require the Response: As noted earlier, contracting arrangements for eligibility Exchanges and state Medicaid and CHIP § 155.302(b) only applies in place of the determinations for Medicaid and CHIP. agencies to submit corrective action standards elsewhere in subpart D that Specifically, this means that an plans. specify that the Exchange will make Exchange contractor may make Response: We appreciate the eligibility determinations for Medicaid eligibility determinations for Medicaid suggestions from commenters, and note and CHIP based on MAGI, rather than and CHIP if it is a government agency that many of these recommendations are assessments; it does not conflict with or public authority that maintains already included in the interim final standards provided elsewhere in personnel standards on a merit basis. rule. We intend to monitor the subpart D that address other We note that 42 CFR 431.10(d) specifies efficiency of how states implement components of the eligibility process that agreements regarding the delegation assessment or determination models to that are unaffected by whether the of eligibility determinations by state determine whether to propose revisions Exchange is making assessments or Medicaid agencies must be available to in future years. We believe that the determinations of eligibility for the Secretary, upon request. Exchanges existing language in § 155.302(b) is Medicaid and CHIP. As such, Exchanges are permitted to contract eligibility augmented by § 155.345(g) and 42 CFR are still guided by other provisions in determinations for advance payments of 435.1200, which specify that the subpart D, such as § 155.345(g). the premium tax credit and cost-sharing Exchange and the state Medicaid and Provisions in 42 CFR part 431 concern reductions in accordance with CHIP agencies must have the capacity to standards for Medicaid agencies, which § 155.110(a). manage electronic accounts, and also continue to apply to Medicaid agencies that the Exchange will notify the in accordance with that part Comment: Many commenters transferring Medicaid or CHIP agency notwithstanding the role of the expressed concerns about the potential regarding the receipt of an electronic Exchange for Medicaid eligibility. bifurcation of the eligibility process account as well as of its final eligibility Finally, § 155.302(a)(2) already under § 155.302(b) for Medicaid, CHIP, determination. Accordingly, we do not specifically states that use of the option and advance payments of the premium modify this provision further to address in § 155.302(b) is subject to § 155.302(d), tax credit and cost-sharing reductions in these comments. Although we do not so we do not believe that it is necessary terms of its impact on various establish a formal process for to add further references to § 155.302(d). stakeholders. Commenters urged that monitoring and taking enforcement Comment: Some commenters HHS maintain the ‘‘no wrong door’’ action for noncompliance with these supported the increased level of approach envisioned by the Affordable standards in the regulation text, HHS flexibility for the Exchange to make Care Act to ensure that an individual is will continue to evaluate the need for assessments of eligibility for Medicaid appropriately screened for all relevant such processes during the and CHIP based on MAGI, rather than insurance affordability programs. As implementation of these regulations. determinations. However, these such, some commenters requested that Comment: Several commenters commenters expressed concerns about by 2016, HHS revisit the decision to suggested that states should adopt relying on applicants who are not allow states to implement eligibility procedures that would allow Exchanges assessed as potentially eligible for systems in the manner as described in to assess eligibility for Medicaid based Medicaid or CHIP based on MAGI to the interim final rule, while also on factors other than MAGI, and self-identify as potentially eligible based evaluating whether more Exchanges potentially also allowing the Exchange on non-MAGI standards or proactively move from making assessments to to assess eligibility for other programs, request a full determination from the determinations during the intervening including the Supplemental Nutritional state Medicaid and CHIP agencies, as time period. Commenters recommended Assistance Program. Some commenters opposed to placing greater burden on that, if HHS retains this provision, HHS urged HHS to require Exchanges to the Exchange to take additional steps to should specify that states must develop appropriate screening standards proactively identify applicants who demonstrate they have the capacity to to identify vulnerable populations that might be Medicaid eligible based on manage electronic accounts and might be eligible for certain programs on non-MAGI standards. One commenter applicant information in so as not to a basis other than MAGI. also asked HHS to clarify that in cases increase the burden on individuals and Response: This comment is outside where an Exchange conducts an families by requesting duplicate the scope of § 155.302(b) of the interim assessment of Medicaid eligibility; the information or increase the final rule, as this provision only assessment must include an assessment administrative costs for state Medicaid concerns the use of MAGI of Medicaid eligibility on bases other and CHIP agencies related to file determinations, while § 155.345(b) than MAGI. These commenters transfers or unnecessarily duplicative concerns the duties of the Exchange for suggested that HHS encourage states to verification processes. Some Medicaid eligibility based on factors utilize a process whereby individuals commenters wanted HHS to require the other than MAGI. We note that who enroll in a QHP, but are Exchange to notify the transferring Exchanges are not precluded from subsequently determined eligible for program that it had received the entering into agreements with Medicaid Medicaid, are able to transition into the electronic account and report its final and CHIP agencies to make eligibility same carrier’s Medicaid product if the

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QHP also operates a Medicaid health commenters also wanted HHS to One commenter suggested HHS develop plan. provide guidance with a view toward a universal model for tracking children Response: We appreciate the concerns minimizing the situations in which an as they move from one coverage type to regarding how to create a streamlined individual will enroll in a QHP through another, which Exchanges should be process that is minimally burdensome the Exchange pending the outcome of a required to implement. on individuals and families, and results Medicaid or CHIP eligibility Response: Section 155.302(b)(1) in accurate eligibility determinations. determination and then be subsequently specifies that an assessment will be Under § 155.345(b) and (c), the determined eligible for Medicaid or made based on, ‘‘the applicable Exchange will evaluate applications for CHIP. Medicaid and CHIP MAGI-based income applicants who are not eligible for Response: We agree that a high degree standards and citizenship and Medicaid based on MAGI for possible of coordination is needed to manage an immigration status, using verification Medicaid eligibility based on factors assessment model, and believe that the rules consistent with 42 CFR parts 435 other than MAGI, and must provide an language in § 155.302(b) and (d), as well and 457, without regard to how such opportunity for applicants and enrollees as § 155.345, prescribes an appropriate standards are implemented by the State to request a full determination of set of standards. We recognize the Medicaid and CHIP agencies.’’ We Medicaid eligibility based on factors challenges that may occur related to maintain this language in this final rule, other than MAGI. If the Exchange individuals who enroll in a QHP which ensures that the Exchange will evaluates an applicant as potentially pending the outcome of a Medicaid or use standard Medicaid rules and eligible for Medicaid based on factors CHIP eligibility determination, but we procedures in making an eligibility other than MAGI, or the applicant or believe that these are outweighed by the assessment. We appreciate the enrollee requests a full determination of benefits associated with providing commenter’s recommendations related Medicaid eligibility, § 155.345(d) eligible individuals with health to presumptive eligibility, but note that specifies that the Exchange will transmit coverage pending the completion of an HHS’ approach in establishing an the applicant’s information to the state eligibility determination for Medicaid or assessment model was premised on Medicaid agency for a full CHIP, and we note that enrolling in a having the Medicaid or CHIP agency determination. The Exchange has the QHP through the Exchange during such make all eligibility determinations that same responsibilities regarding a period is the individual’s choice. With result in the provision of benefits under eligibility for Medicaid based on factors that, we expect that as states implement Medicaid or CHIP. Accordingly, we do other than MAGI under the assessment their Exchanges and as eligibility not specify that the Exchange will make and the determination models, which systems for the Exchange, Medicaid, presumptive determinations under an we believe is appropriate because the and CHIP mature, the need for multiple assessment model. HHS will continue to single, streamlined application that will entities to take part in processing an work with Exchanges and Medicaid and be used by the Exchange does not application will lessen, and the time CHIP agencies to ensure that vulnerable request all the information necessary to needed to complete the entire eligibility populations, such as children and conduct a full determination of process will also decrease, which will pregnant women, receive the correct Medicaid eligibility based on factors reduce the need for interim coverage. eligibility determinations for insurance other than MAGI. Rather, it includes an Comment: One commenter worried affordability programs in a timely opportunity for an application filer to that the remainder of subpart D fashion. indicate that an applicant has concerning the eligibility process was Comment: Some commenters limitations in daily activities or lives in not updated to reflect § 155.302(b). recommended that the interim final rule a medical facility or nursing home, Response: We note that § 155.302(b) be amended to eliminate or strictly limit which are factors that are considered in provides that the Exchange may conduct differences between the procedures determining eligibility for Medicaid an assessment of MAGI-based eligibility used by Exchanges in assessing based on factors other than MAGI. If for Medicaid and CHIP, rather than a eligibility for Medicaid and CHIP, and answered affirmatively, the Exchange determination of eligibility for Medicaid those used by state Medicaid and CHIP will trigger a referral to the applicable and CHIP, in accordance with the agencies in determining eligibility, with state Medicaid agency such that the specified standards, ‘‘[n]otwithstanding HHS permitting Federally-facilitated state Medicaid agency can determine the requirements of this subpart[.]’’ In Exchanges and State Partnership the applicant’s eligibility for Medicaid, view of this language, we did not update Exchanges to have slightly more including based on factors other than other provisions in subpart D to reflect flexibility for differences than State- MAGI. Further, we note that the § 155.302(b). We note that § 155.302(b) based Exchanges. assessment of eligibility for Medicaid does not supersede other provisions, Response: We agree that the based on MAGI is designed to be a such as those in § 155.345, that set differences between the procedures robust evaluation, and we expect that additional standards for Exchanges in used by Exchanges and their partner the number of applicants who will coordinating with Medicaid and CHIP Medicaid and CHIP agencies in receive an assessment that is agencies. conducting eligibility determinations inconsistent with the final Comment: Some commenters worried should be limited, and believe that determination will be limited. We note that the Exchange assessment provision § 155.302(b)(1) already accomplishes that while comments related to HHS would allow the Exchange the assess this to a significant extent. We reiterate encouraging a process to help eligibility without applying Medicaid that an assessment under § 155.302(b) individuals transition between QHPs rules and procedures. Commenters will be robust and will involve the and Medicaid products of the same recommended that, under an assessment execution of detailed MAGI-based carrier is outside the scope of this model, the Exchange should provide eligibility rules and verification regulation, Exchanges maintain the presumptive eligibility for Medicaid, procedures. Further, we believe that flexibility to pursue such an option. which they believed was particularly there is little reason for the use of an Comment: Some commenters noted important for children and pregnant assessment model in a state that the need for high levels of coordination women, while the application is operates a state-based Exchange, given between the Exchange and state transferred to the Medicaid and CHIP the availability of shared information Medicaid and CHIP agencies. A few agencies and a determination is made. technology services and the status of the

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state-based Exchange as a state, rather specified in § 155.345(a), the agreement Exchange will assess information than a federal, entity. We intend to under § 155.302(b)(6) will be made provided on an application by an continue to work closely with states to available to HHS upon request. To the applicant who is not eligible for ensure that systems and processes are extent that the Secretary requests and Medicaid based on MAGI to determine appropriately integrated, with the goal obtains a copy of an agreement under whether he or she is potentially eligible of reducing administrative costs, burden § 155.302(b)(6), the public can request for Medicaid based on factors other than on consumers, and the time needed to the agreement through the Freedom of MAGI. We clarify that this provision complete the eligibility process. Information Act, 5 U.S.C. 552. The applies in an Exchange that is Comment: Several commenters public may also obtain copies of these implementing the option under recommended that HHS set a specific agreements under applicable state § 155.302(b), such that if the Exchange timeliness standard regarding the freedom of information laws. We believe does not assess an applicant as electronic transmission of the that there are ample opportunities for potentially eligible for Medicaid based application along with all relevant public input for Exchange operations, on MAGI, it will then examine the information collected from either the particularly given that the standards application to determine whether to application or available electronic data that will govern the content of these transfer the applicant to the state sources from the Exchange to the state agreements are specified in this Medicaid agency for consideration of Medicaid or CHIP agency to ensure that regulation. We also note again that Medicaid eligibility based on other eligibility determinations are provided § 155.302(b) does not supersede other factors. without undue delay. Some commenters provisions, such as those in § 155.345, Comment: Commenters recommended requested that HHS specify that an that set additional standards for that the provision at Exchange must complete an eligibility Exchanges in coordinating with § 155.302(b)(4)(i)(A), allowing an determination in no more than 30 days Medicaid and CHIP agencies. individual the opportunity to withdraw (with up to 60 days for evaluations Comment: One commenter wanted to his or her Medicaid and CHIP based on factors other than MAGI under ensure that HHS would review and application, be eliminated or modified § 155.345(b)) and complete the transfer approve all state Medicaid verification to allow only individuals above a of an individual’s electronic file, where plans. certain income threshold to withdraw required, within one business day; some Response: This comment is outside of their Medicaid and CHIP applications. commenters also urged greater the scope of this regulation. We note, Others commenters were concerned that alignment between Exchange and however, that as described in 42 CFR language notifying an individual of his Medicaid timeliness and other 435.945(j), state Medicaid verification or her opportunity to withdraw would performance standards. plans must be available to the Secretary be confusing and lead to individuals Response: In § 155.302(b)(3) and of HHS upon request, thereby enabling being dissuaded from pursuing a (b)(4)(ii)(A), we specify that information appropriate oversight of verification Medicaid or CHIP eligibility will be transferred promptly, and standards. determination. without undue delay. Further, in Comment: One commenter sought Response: When an applicant requests § 155.310(e)(1), we specify that the clarification as to whether an Exchange an eligibility determination for Exchange will make an eligibility could choose to perform neither an insurance affordability programs, the determination promptly, and without assessment nor a determination for single, streamlined application is an undue delay. We believe that this is an Medicaid and CHIP. application for Medicaid and CHIP (as appropriate approach to initial Response: We clarify that the well as for eligibility for enrollment in timeliness standards, given the fact that Exchange must make either a QHP through the Exchange, and this is an entirely new program, and we determinations or assessments for related insurance affordability intend to work closely with states to Medicaid and CHIP based on MAGI for programs), so it needs to end in either monitor and improve the timeliness of applications that include a request for a final determination of eligibility for all aspects of the eligibility and an eligibility determination for Medicaid or CHIP (approval or denial), enrollment process. Further, we note insurance affordability programs. or a withdrawal of the application as it that we agree with the commenter’s However, we note that the Exchange is relates to Medicaid and CHIP. When a suggestion regarding the alignment of permitted to contract with an eligible state Medicaid or CHIP agency elects to performance standards, and intend to contracting entity, including the state have the Exchange make assessments of issue future guidance on this topic. Medicaid agency, to conduct eligibility Medicaid or CHIP eligibility, rather than Comment: Several commenters determinations for Medicaid and CHIP, determinations, the Exchange is unable suggested that HHS modify consistent with § 155.302(a). to provide a final determination of § 155.302(b)(6) related to the standards Comment: Several commenters Medicaid or CHIP eligibility, including for agreements entered into between the recommended that an applicant who a denial of Medicaid or CHIP eligibility. Exchange and state Medicaid and CHIP appears to be eligible for Medicaid Accordingly, withdrawal allows the agencies to provide greater specificity based on factors other than MAGI be assessment model to function such that regarding eligibility determinations, flagged by the Exchange early in the an applicant does not require a formal, transfer procedures, notice and appeals process, and if the Exchange does not final denial of Medicaid and CHIP from processes, and consumer assistance. assess such an applicant as potentially the state Medicaid or CHIP agency to Additionally, these commenters asked eligible for Medicaid or CHIP based on gain eligibility for advance payments of that the agreements be made readily MAGI, the applicant should not have to the premium tax credit and cost-sharing available to the public in addition to request a full eligibility determination reductions, if otherwise eligible. This HHS, while also providing a period for from the state agency under approach provides significant public review and comments on the § 155.302(b)(4)(i)(B) to receive an efficiencies for consumers by not agreements prior to their approval by eligibility determination for Medicaid requiring multiple eligibility HHS. based on factors other than MAGI. determinations, as well as for Exchanges Response: We finalize § 155.302(b)(6) Response: As noted above, and Medicaid and CHIP agencies. Given from the interim final rule with a § 155.302(b) does not supersede that the proposed approach preserves clarification that, like the agreements § 155.345(b), which specifies that the the application date for purposes of

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Medicaid and CHIP in the event of an applicant is found potentially eligible standards for eligibility for enrollment appeal, we note that the only for Medicaid or CHIP. A few in a QHP when an individual attests to implication of withdrawing an commenters requested that any being temporarily absent from the application in this context is that the subsequent review finding potential service area of the Exchange but intends applicant can no longer request a eligibility for Medicaid or CHIP be to return to the service area of the determination from the state Medicaid sufficient to nullify the withdrawal. Exchange and otherwise meets the or CHIP agency based on the withdrawn Response: We are finalizing proposed residency standards, unless another application, and would instead need to language requiring the application to Exchange verifies that the individual submit another application to be not be considered withdrawn if, upon meets the residency standard in that considered for those programs (other appeal, the applicant is found Exchange. We also proposed technical than on appeal). potentially eligible for Medicaid or corrections within paragraph (f) to We acknowledge commenters’ CHIP. The additional suggestions to replace the references to section 36B of concerns regarding the potential for amend this provision would expand the the Code to the application Treasury confusion when an applicant is given scope of the provision beyond its regulations. the opportunity to withdraw his or her intended scope. Further, it would be We proposed to amend paragraph Medicaid and CHIP application. To impossible to administer the (f)(3) to clarify the availability of reduce the potential for consumer commenters’ suggestion to nullify a advance payments of the premium tax confusion and administrative burden on withdrawal when any future review credit and cost-sharing reductions to the consumer and the Exchange finds potential eligibility for Medicaid applicants enrolled in a QHP, that is not associated with this requirement, we or CHIP eligibility, beyond the a catastrophic plan, through the offer the following option in parameters established in this rule, Exchange. We did not receive specific implementing this provision. Upon since subsequent eligibility comments on this amendment, and we notifying an applicant that the Exchange determinations and redeterminations are thus finalizing the provision as has assessed him or her as not will not necessarily be connected to the proposed. potentially eligible for Medicaid or withdrawn application. We also proposed to add paragraph CHIP, the Exchange will provide an Comment: Commenters supported the (h) to codify the eligibility standards for opportunity for the applicant to request additional proposed language in enrollment through the Exchange in a a determination of Medicaid or CHIP § 155.302(b)(5) requiring the Exchange QHP that is a catastrophic plan, which eligibility from the state Medicaid or to adhere to State Medicaid or CHIP are based on age or having in effect a CHIP agency. Rather than expressly agency appeals decisions. certificate of exemption from the shared asking the applicant if he or she wants Response: We are finalizing the responsibility payment under section to withdraw the application for proposed language with a modification 5000A of the Code in specific categories. purposes of Medicaid or CHIP eligibility such that the Exchange appeals entity, We proposed that all Exchanges must (instead of requesting a determination in addition to the Exchange, will adhere conduct eligibility determinations for a from the state agencies), the Exchange to the eligibility determination or QHP that is a catastrophic plan within may consider the application appeals decision for Medicaid or CHIP the Exchange. withdrawn for purposes of Medicaid made by the Medicaid or CHIP agency, Comment: Commenters generally and CHIP eligibility if the applicant or the appeals entity for such agency. offered support for the provision at does not affirmatively request a § 155.305(a)(3)(v) specifying that the Summary of Regulatory Changes determination from the state Medicaid Exchange not deny or terminate an or CHIP agency within a time period We are finalizing the provisions individual’s eligibility for enrollment in specified in the notice to the applicant, proposed in § 155.302(a) with one a QHP through the Exchange if he or she provided that the notice that clarification that any contracting meets the residency standards described communicates the opportunity to arrangement for eligibility in paragraph (a)(3) but for a temporary request a determination from the state determinations for Medicaid and CHIP absence from the service area of the Medicaid or CHIP agency and the time is subject to the standards in Exchange. A few commenters limit for doing so also specifies that the § 431.10(c)(2). We are finalizing the recommended deleting the phrase that Exchange will take this approach to provision proposed in § 155.302(b)(5) allowed the Exchange to deny or withdrawal. This will allow an with a slight technical modification to terminate eligibility if another Exchange appropriate disposition for each add ‘‘Exchange appeals entity.’’ We are verifies that the individual meets the application, as it relates to Medicaid finalizing § 155.302(b)(6) of the interim residency standard of such Exchange; and CHIP, and will help alleviate any final rule issued at 77 FR 18310, 18451– others suggested rephrasing the confusion associated with the 52 with a modification to specify that provision to allow an individual to opportunity to expressly withdraw an the agreement under § 155.302(b)(6) maintain residency in the Exchange application, without creating any must be made available to HHS upon service area unless he or she is enrolled adverse impacts for consumers. request. We are finalizing the provisions in another Exchange. Commenters Comment: A few commenters proposed in paragraph (d) of the recommending revisions disagreed with requested language that explicitly proposed rule without modification. We how this language would limit an preserves the date of application when are otherwise finalizing the other applicant’s ability to establish an applicant withdraws his or her provisions of the interim final rule with residency, under the rules described in Medicaid or CHIP application. the exception of § 155.302(c), which we § 155.305(a)(3), in more than one Response: Provisions related to are not finalizing at this time. We are Exchange. preserving the date of the Medicaid or leaving the text of § 155.302(c) as an Response: We are finalizing the CHIP application are contained in this interim final rule as published at 77 FR provision without the proposed clause final rule at 42 CFR 435.907(h). 18310, 18451–52. ‘‘unless another Exchange verifies that Comment: Commenters supported the the individual meets the residency inclusion of language that requires the 8. Eligibility Standards (§ 155.305) standard of such Exchange.’’ As application to not be considered In § 155.305, we proposed to add commenters pointed out, under some withdrawn if, upon appeal, the paragraph (a)(3)(v) regarding residency circumstances, certain individuals may

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establish residency for purposes of plans inside and outside the Exchange, could use to enroll in catastrophic plans Exchange enrollment in multiple as some expressed support for what they outside the Exchange (at least Exchange service areas simultaneously interpreted as HHS limiting enrollment temporarily), and suggested that issuers (for example, under for catastrophic coverage to enrollment of catastrophic plans outside the § 155.305(a)(3)(iv)(B), if a parent expects through the Exchange in QHPs that are Exchange should be permitted to rely to claim a child who lives in another catastrophic plans and urged flexibility solely on an attestation by the applicant state on the parent’s tax return, the child for an Exchange to decide not to that he or she is eligible to enroll in a may enroll in a QHP through the conduct eligibility determinations for catastrophic plan. Exchange either in the child’s state of catastrophic plans, while other Response: This provision does not residence, or the parent’s state of commenters requested that the concern catastrophic plans offered residence). Accordingly, while Exchange conduct eligibility outside of the Exchange. As discussed generally, applicants will establish determinations for QHPs that are in the Market Reforms final rule at 78 residency in the Exchange service area catastrophic plans for enrollment both FR 13423, the statutory provisions in which they intend to reside, since through and not through the Exchange. related to eligibility for catastrophic there are exceptions to this general Commenters also urged HHS to clarify plans apply to such coverage offered principle, this clause limiting residency that an applicant still must be both inside and outside an Exchange. to one Exchange service area is determined eligible for a QHP to enroll We maintain that approach and clarify unnecessary. in a catastrophic plan through the that nothing in this proposal modifies Comment: In response to the Exchange. Commenters wanted to the Market Reforms final rule related to provision proposed at § 155.305(a)(3)(v), ensure that the Exchange would provide the eligibility standards for a some commenters expressed concern clear information to applicants catastrophic plan. Similarly, the about operational challenges specific to considering purchasing different QHPs, eligibility standards for catastrophic providing and coordinating coverage including by describing the significance plans generally are specified at while individuals are temporarily of enrolling in a catastrophic plan for § 156.155(a)(5), which provides that a residing outside the Exchange service applicants who are also determined catastrophic plan can only cover an area. A few commenters asked that we eligible for advance payments of the individual who has either not attained further define the term ‘‘temporary’’ to premium tax credit. the age of 30 prior to the first day of the ensure that the term is used consistently Response: We note that paragraph (h) plan or policy year, or has received a across Exchanges, and to help reduce only concerns eligibility for enrollment certificate of exemption in specified consumer confusion and administrative through the Exchange in a QHP that is categories. While we specify that the inefficiencies. a catastrophic plan. The Exchange will Exchange will only conduct Response: We acknowledge that not be conducting eligibility determinations of eligibility for coordinating care for applicants while determinations for enrollment outside enrollment through the Exchange in a they are temporarily absent from the the Exchange, including in a QHP that is a catastrophic plan, in HHS’ service area of the Exchange through catastrophic plan. In finalizing this Exemptions and Miscellaneous which they enroll in a QHP may present provision, we are modifying the Minimum Essential Coverage proposed challenges for QHP issuers. However, provision from its proposed form to rule, at 78 FR 7368, we propose that the we believe this challenge is outweighed clarify that an individual must be Exchange will determine eligibility for by the importance of maintaining determined eligible for enrollment in a exemptions from the shared continuity of coverage while an QHP through the Exchange in responsibility payment, and will individual is temporarily absent from a accordance with § 155.305(a) in provide a notice and an exemption particular Exchange service area. addition to meeting the specific certificate number to any individual Additionally, in paragraph (a)(3)(v), we eligibility standards for enrollment in a determined eligible for such an specify that ‘‘temporarily absent’’ means catastrophic QHP through the Exchange. exemption. If that provision is finalized the applicant must intend to return to We believe that maintaining the as proposed, an issuer of a catastrophic the Exchange service area when the provision specifying that the Exchange plan offered outside the Exchange could purpose of the absence has been will determine eligibility for a QHP that request a copy of this notice from an accomplished, so we do not believe that is a catastrophic plan through the applicant to validate his or her further definition is required in Exchange preserves flexibility for young eligibility for enrollment in the regulation. To ensure that applicants adults and people for whom coverage catastrophic plan. understand the implications of applying would otherwise be unaffordable to Comment: Some commenters for coverage through a particular have access to health coverage, and thus requested that the Exchange’s eligibility Exchange, we encourage Exchanges to confirm that Exchanges will conduct standards for enrollment through the notify applicants that they may want to determinations of eligibility for Exchange in a QHP that is a catastrophic apply for coverage through the enrollment in a QHP that is a plan align with preamble language in Exchange where they meet the catastrophic plan through the Exchange. the Market Reforms proposed rule at 77 residency requirements and wish to We expect that Exchanges will fully FR 70601 such that an enrollee who most frequently access benefits. inform qualified individuals regarding turns 30 in the middle of a coverage Furthermore, this provision should the implications of enrolling in a QHP year would remain enrolled in the not be construed to impose any that is a catastrophic plan through the catastrophic plan for the duration of the additional requirements on QHP issuers Exchange as they consider various plan year. One commenter also sought related to maintaining networks outside health coverage options, particularly as clarification that for coverage obtained the Exchange service area or it affects their eligibility for insurance through the Exchange, the first day of coordinating care for applicants affordability programs. the plan year will always be the first of temporarily absent from the Exchange Comment: Some commenters wanted the year. service area. us to clarify that Exchanges would grant Response: The eligibility standards Comment: Commenters were divided certificates of exemption to all related to age described in this regarding the Exchange’s role in applicants eligible for enrollment in a provision follow the approach discussed determining eligibility for catastrophic catastrophic plan, which applicants within the Market Reforms proposed

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rule at 77 FR 70601. As such, we clarify enrollees. We proposed to remove the Moreover, enrollees are required to that an enrollee turning 30 in the previous paragraph (i)(2), which report changes that may affect their middle of a coverage year could remain addressed situations in which a eligibility based on the standards in enrolled in a QHP that is a catastrophic qualified individual did not select a § 155.305 throughout the year, and thus plan through the Exchange for that plan before the date on which his or her no additional burden is being placed on particular coverage year as long as he or eligibility would have been qualified individuals. Lastly, one she was not 30 prior to beginning of the redetermined as a part of the annual alternative to this proposal would be to plan year. We note that redetermination process. Due to the require qualified individuals who do § 147.104(b)(1)(ii) clarifies that in the proposed change to § 155.335(a), this not enroll in coverage when initially individual market, the coverage paragraph would no longer be determined eligible to file a new effective dates must align with § 155.410 necessary. We received the following application, which would be more regarding initial open enrollment, and comments concerning the proposed burdensome than the approach in as such, for coverage obtained in the provisions: § 155.310(j). Accordingly, we are individual market through the Comment: One commenter expressed finalizing § 155.310(j) as proposed, with Exchange, the first day of the plan year support for the proposal to implement a a slight technical correction for clarity will always be the first day of the certification process consisting of to note that this paragraph only refers to calendar year. methods adopted by the Secretary of an applicant who is determined eligible Treasury as part of the determination of for enrollment in a QHP through the Summary of Regulatory Changes potential employer liability under Exchange. We are finalizing the provisions section 4980H of the Code, as described proposed in § 155.305 of the proposed in proposed § 155.310(i). In addition, Summary of Regulatory Changes rule with two slight modifications: to several commenters expressed concern We are finalizing the provisions remove the clause ‘‘unless another over the disclosure of applicant proposed in § 155.310 of the proposed Exchange verifies that the individual information to the employer for use in rule with a technical correction to meets the residency standard of such the certification process. Commenters specify that paragraph (j) only refers to Exchange’’ in paragraph (a)(3)(v), and to were concerned that disclosing names an applicant who is determined eligible revise paragraph (h)(1) to clarify an in this context could have a chilling for enrollment in a QHP through the applicant must be eligible for effect on employees who wish to seek Exchange . enrollment in a QHP through the Exchange coverage, making it less likely 10. Verification Process Related to Exchange to be determined eligible for that individuals would enroll. Eligibility for Enrollment in a QHP enrollment through the Exchange in a Response: For purposes of the Through the Exchange (§ 155.315) QHP that is a catastrophic plan. certification program proposed and finalized in § 155.310(i), we believe that In § 155.315, we proposed a technical 9. Eligibility Process (§ 155.310) only the minimum personally correction in paragraph (b)(2) to clarify In § 155.310, we proposed to add identifiable information necessary the procedures for an Exchange when paragraph (i) regarding a certification should be released to an employer. the Social Security Administration program under the Secretary’s program Additional information regarding the indicates an individual is deceased. for determining eligibility for advance certification program is found in the We proposed to clarify the payments of the premium tax credit and regulations associated with § 4980H of circumstances that trigger the cost-sharing reductions in accordance the Code. inconsistency process described in with section 1411(a) of the Affordable Comment: Commenters recommended paragraph (f)(1) and (2), such as when Care Act. We noted that this removing the provision specifying that required electronic data is not contained certification program would be distinct the Exchange will have an applicant within the electronic data source, and from the notice to employers required attest to the accuracy of the information when sources of required data are not by section 1411(e)(4)(B)(iii) of the on file for him or her when he or she reasonably expected to be available Affordable Care Act and paragraph (h) was previously determined eligible for within two days of the initial attempt to of § 155.310. We proposed that the enrollment in a QHP through the reach the data source. We also proposed certification to the employer would Exchange, did not select a QHP during to amend paragraph (f)(4) to clarify that consist of methods adopted by the his or her enrollment period, or was during the clerical error resolution Secretary of Treasury as part of the ineligible for an enrollment period, and period provided in paragraph (f)(1), as determination of potential employer then seeks a new enrollment period well as during the period provided in liability under section 4980H of the prior to his or her annual paragraph (f)(2)(ii), the Exchange Code. We clarified that the certification redetermination. Commenters proceeds with the eligibility program would address not only characterized this as an undue burden determination and provides eligibility individuals on whose behalf advance on qualified individuals, since enrollees for enrollment in a QHP and advance payments of the premium tax credit and are not required to make the same payments of the premium tax credit and cost-sharing reductions are provided, attestation about their eligibility criteria cost-sharing reductions, as applicable, but also individuals claiming the remaining constant. during such period, to the extent the premium tax credit only on their tax Response: This provision was largely applicant is otherwise qualified and returns. We solicited comments on this carried over from the Exchange final meets the standards specified in proposal. rule, with modifications to address paragraph (f)(4). We proposed to amend previous changes proposed in § 155.335. It is We proposed to add paragraph (j) language from paragraphs (i) and (i)(1), important for the Exchanges to ensure concerning the verification process and combine those paragraphs in new all eligibility criteria are satisfied with related to eligibility for enrollment paragraph (j), to align with proposed accurate information, before through the Exchange in a QHP that is revisions in § 155.335, which specified determining eligibility for benefits, a catastrophic plan. We proposed that that the Exchange will redetermine some of which the enrollee could be the Exchange may either accept the eligibility on an annual basis for all liable to repay if eligibility information applicant’s attestation of age without qualified individuals, not only is not accurate at the time of enrollment. further verification or examine available

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electronic data sources that have been source. Commenters recommended that related to enrollment in an eligible approved by HHS for this purpose. To if verification cannot occur promptly, or employer-sponsored plan and eligibility verify an applicant’s exemption from in ‘‘real time,’’ the inconsistency period for qualifying coverage in an eligible the shared responsibility payment, we should be triggered immediately, along employer-sponsored plan, the Exchange proposed that this would be with the provision of eligibility based will move forward with a sampling accomplished either through use of the on an applicant’s attestation. Some process. Exchange’s records, or through commenters mentioned specifically that Second, we clarify that § 155.320(c)(3) verification of paper documentation if an inability to verify citizenship and (family size and income for purposes of the certificate was issued by a different immigration status through electronic eligibility for advance payments of the Exchange. In terms of the inconsistency data should lead to the immediate premium tax credit and cost-sharing process described in paragraph (f) of trigger of the inconsistency period, to reductions) already specifies procedures this section, we noted that applicant align with Medicaid regulations. to address situations in which electronic would not be determined eligible for Commenters supported timelines data sources with information about enrollment through the Exchange in a according to which the Exchange should current, MAGI-based income are QHP that is a catastrophic plan until be required to contact the application unavailable. We believe that these verification of necessary information filer for documentation or additional procedures should continue to govern can be completed. We received information when data sources are these situations. comments that addressed both the unavailable. Some commenters We acknowledge commenters’ eligibility standards and verification supported the requirement of a 2-day concerns about providing eligibility process related to QHPs that are period prior to requesting information determinations in a timely fashion when catastrophic plans offered through the from the application filer, and some electronic data sources are delayed in Exchange, and have addressed those recommended extending it to 5 days. responding or do not respond. The comments above the preamble to Commenters also recommended that the proposed language at § 155.315(f) § 155.305(h). As such, we are finalizing Exchange continue to attempt data minimizes the administrative and this paragraph as proposed. matches after notifying the application consumer burden associated with Comment: Several commenters filer so the entire burden is not requesting documentation and supported our proposed technical immediately shifted to the application providing coverage for a short period of correction in paragraph (b)(2) regarding filer. time (when electronic data sources may situations in which the Social Security Response: Since the publication of the quickly become available and indicate Administration indicates that an proposed rule, we have confirmed that eligibility for a different insurance individual is deceased. Others data from IRS, SSA, and DHS should be affordability program), with the need to recommended allowing additional time, available every day. Accordingly, we are provide prompt eligibility and many commenters suggested modifying the proposed provision to determinations. Accordingly, when providing an additional 90 days when finalize the rule to reduce the waiting electronic data from IRS, SSA, or DHS an applicant has demonstrated a good period reduced from 2 days to 1 day. is necessary but unavailable, and it is faith effort to resolve the issue. Some Further, we also add new paragraph reasonably expected that the necessary commenters sought clarification on the (f)(6) to clarify the applicability of electronic data source will be available availability of appeal rights regarding § 155.315(f). within 1 day, the Exchange will wait 1 inconsistencies with Social Security First, in paragraph (f)(6), we specify day before making an eligibility Administration data, specifically, that that the Exchange will not apply determination, so as to not generate an whether individuals had the right to such a waiting period when electronic eligibility determination that may be appeal during the 90-day period or data to support the verifications shown to be invalid less than 24 hours whether they must wait until after a specified in § 155.315(d) (residency), or later. This approach also avoids the final determination has been made. § 155.320(b) (minimum essential need to request documentation when an Response: As noted in § 155.315(f)(3), coverage, other than minimum essential electronic data match will make the the Exchange has the authority to coverage in an eligible employer- documentation request unnecessary less extend the inconsistency period within sponsored plan) is required but it is not than 24 hours later. If it is not § 155.315(f)(2)(ii) based on a good faith reasonably expected that electronic data reasonably expected that the necessary effort on the part of the applicant. We sources will be available within 1 day electronic data source will be available note that an applicant will not be able of the initial request to the data source; within 1 day, or it is reasonably to appeal an eligibility decision until he instead, the Exchange will accept the expected that the necessary electronic or she receives a notice containing an applicant’s attestation regarding the data source will be available within 1 approval or denial of eligibility. Further factor of eligibility for which the day, but this expectation proves details regarding appeals will be unavailable data source is relevant. incorrect, then the Exchange will provided in subsequent rulemaking. We While the data matching described in determine the applicant’s eligibility continue to work with the Social this subpart for these factors of using his or her attestation regarding the Security Administration and other eligibility is important, we do not factor of eligibility for which the federal agencies to determine the role of believe that it should hold up an electronic data source is unavailable, other federal agencies in the appeals eligibility determination or cause the and will follow the remaining process. Accordingly, we are finalizing eligibility process to default to paper procedures in § 155.315(f) to attempt to the provision as proposed. documentation when electronic data complete the verification. We believe Comment: Some commenters sources are unavailable. We also note this approach is responsive to disagreed with the proposal at that the use of electronic data as a commenters’ concerns and satisfies the § 155.315(f) that specifies that the primary method of verification of need to reduce administrative burden Exchange must trigger the inconsistency residency is an option for Exchanges. In and the burden on application filers period when electronic data is required addition, we clarify that while still ensuring accurate eligibility but it is not reasonably expected that § 155.320(d)(3)(iii) specifies that when determinations. We also note that the data sources will be available within 2 the Exchange does not have information Exchange has the flexibility to continue days of the initial request to the data from data sources for the verifications checking whether such data sources

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have become available leading up to the when verifying projected annual members of his or her household, as triggering of the inconsistency period household income. We did not receive defined in 26 CFR 1.36B–1(d), from any and during such inconsistency period. specific comments regarding the electronic data sources that are available proposed changes to paragraph (c)(3), to the Exchange and have been Summary of Regulatory Changes and are thus finalizing the changes as approved by HHS for this purpose, We are finalizing the provisions proposed. based on evidence showing that such proposed in § 155.315 of the proposed We proposed to clarify when data sources are sufficiently current, rule, with a few modifications. We are additional verification is necessary as accurate, and minimize administrative modifying paragraph (f) to provide that part of the process to verify an expected burden. if key electronic data sources are increase in projected annual household We proposed that data regarding unavailable and not reasonably income when compared to annual employment would not be used to expected to be available within 1 day, income data. We proposed to add identify inconsistencies that need to be the Exchange will make an eligibility language regarding the circumstances resolved to maintain eligibility, and determination based on an applicant’s under which annualized current income would instead only be used to attestation and trigger the inconsistency data will be sufficient to support an determine whether an individual should period in paragraph (f). The proposed expected decrease in projected annual be part of the pool of individuals from language specified a 2-day period. We household income. We also proposed to which a sample is taken for review. We also added a new paragraph (f)(6) to replace references to section 36B of the solicited comment on whether data clarify that the Exchange will accept an Code with references to the applicable regarding employment should only be applicant’s attestation regarding three Treasury regulation. used as a point of information for specific factors of eligibility when We proposed to consolidate applicants to help prompt accurate electronic data is required but it is not paragraphs (d) and (e), currently entitled attestations, and not as a point of reasonably expected that data sources ‘‘Verification related to enrollment in an comparison for the purposes of will be available within 1 day of the eligible employer-sponsored plan’’ and identifying inconsistencies as part of the initial request to the data source. We are ‘‘Verification related to eligibility for verification described in this paragraph, also modifying paragraph(f)(5) of this qualifying coverage in an eligible since these data sources do not directly section by deleting paragraph (f)(5)(ii) employer-sponsored plan,’’ respectively, address enrollment in an eligible and combining paragraph (f)(5)(i) with into new paragraph (d). The standards employer-sponsored plan or eligibility paragraph (f)(5), because the language proposed in paragraph (d) set forth the for qualifying coverage in an eligible that previously appeared in paragraph rules for verifying enrollment in an employer-sponsored plan. We also (f)(5)(ii) regarding effective dates eligible employer-sponsored plan and solicited comment on the feasibility of conflicted with the requirements under eligibility for qualifying coverage in an making the necessary systems § 155.330(f). Lastly, we modify the eligible employer-sponsored plan. We connections by October 1, 2013, and language in paragraph (j) related to the proposed that the Exchange must verify whether alternative approaches should verification of eligibility for enrollment whether an applicant reasonably be considered for the first year of through the Exchange in a QHP that is expects to be enrolled in an eligible operations. a catastrophic plan for purposes of employer-sponsored plan or is eligible To verify enrollment in an eligible clarity. for qualifying coverage in an eligible employer-sponsored plan and eligibility employer-sponsored plan for the benefit for qualifying coverage in an eligible 11. Verifications Related to Eligibility year for which coverage is requested. As employer-sponsored plan, we proposed for Insurance Affordability Programs a result of the proposed consolidation of that the Exchange follow the (§ 155.320) paragraphs (d) and (e), we proposed to inconsistency process specified in In § 155.320, we proposed to amend redesignate paragraph (f) as paragraph § 155.315(f) if an applicant’s attestation and make technical corrections in (e). is not reasonably compatible with paragraph (c)(1), in accordance with the In paragraph (d)(2), we proposed the information from a data source legislative change made by Public Law data sources the Exchange will use to authorized by HHS, data regarding 112–56 concerning the treatment of verify access to employer-sponsored federal employment, data from SHOP, Social Security benefits related to coverage, which include (1) Data about or other information provided by the MAGI, to incorporate Social Security enrollment in an eligible employer- application filer or in the records of the benefits when verifying projected sponsored plan and eligibility for Exchange. Further, if the Exchange does annual household income. We also qualifying coverage in an eligible not have any of the information from a proposed to remove language employer-sponsored plan from any data source authorized by HHS, from concerning an adoption taxpayer electronic data sources that are available data regarding federal employment, or identification number, and to replace to the Exchange and which have been from data from the SHOP for an references to section 36B of the Code approved by HHS for this purpose based applicant, and either does not have any with the applicable Treasury regulation. on evidence showing that such data available electronic data regarding the We received comments supporting these sources are sufficiently current, employment of an applicant and the revisions without further suggestions, accurate, and minimize administrative members of his or her household or an and are thus finalizing the amendments burden; (2) data regarding enrollment in applicant’s attestation is not reasonably and technical corrections as proposed. an eligible employer-sponsored plan or compatible with any available data We proposed to amend and make eligibility for qualifying coverage in an regarding the employment of an technical corrections in paragraph (c)(3) eligible employer-sponsored plan based applicant and the members of his or her to specify that the Exchange verify that on federal employment obtained by household, we proposed that the neither advance payments of the transmitting identifying information Exchange would place the applicant premium tax credit nor cost-sharing specified by HHS to HHS; (3) data from into a pool of applicants from which it reductions are already provided on the SHOP that operates in the state in would select a statistically-significant behalf of an individual, and align with which the Exchange is operating; and sample of applicants, from whose the revised policy that the Exchange (4) any available data regarding the employers the Exchange would request incorporate Social Security benefits employment of an applicant and the information regarding enrollment in an

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eligible employer-sponsored plan and employer-sponsored plan for the benefit there are ways these procedures can eligibility for qualifying coverage in an year for which coverage is requested. further minimize burden on the eligible employer-sponsored plan. We discussed one alternative Exchange, employers, and consumers. We solicited comments on whether approach, under which the Exchange We also highlighted steps we are handling inconsistencies with any would request documentation from taking to help consumers with available data regarding the consumers who were selected as part of providing information related to access employment of an applicant and the the sample, instead of attempting to to employer-sponsored coverage on the members of his or her household contact their employers. We chose not application. We suggested the use of a through the sampling process, rather to propose this approach since the voluntary pre-enrollment template to than through the procedures specified application will already solicit all assist applicants in gathering the in § 155.315(f), is a suitable approach. necessary information from consumers, information about access to coverage We requested comments on a so it is unclear what would be gained through an eligible employer-sponsored methodology by which an Exchange through a second information request to plan as required by the Exchange to could generate a statistically significant consumers. We solicited comment on determine eligibility for advance sample of applicants and whether there this alternative and other alternatives to payments of the premium tax credit and are ways to focus the sample on implement this process while cost-sharing reductions. We sought individuals who are most likely to have minimizing burden on consumers, comments on the use of this pre- access to affordable, minimum value employers, and Exchanges. We also enrollment template and ways it could coverage. sought comment on ways the Exchange be used to assist consumers with In clause (d)(3)(iii)(A), we proposed can most efficiently interact with providing the necessary information to that the Exchange would provide notice employers, including other entities that complete the verification described in to an applicant who is selected as part employers may rely upon to support paragraph (d) while minimizing burden of the sample indicating that the this process, such as third-party on employers. Exchange would be contacting any administrators. Lastly, in paragraph (d)(4), we also employer identified on the application In clause (d)(3)(iii)(E), we proposed proposed that the Exchange may rely on for the applicant and the members of his that if the Exchange receives any HHS to conduct this verification. We or her household, as defined in 26 CFR information from an employer relevant proposed that under this option, the 1.36B–1(d), to verify whether the to the applicant’s enrollment in an Exchange would send applicant applicant is enrolled in an eligible eligible employer-sponsored plan or information to HHS; HHS would take on employer-sponsored plan or is eligible eligibility for qualifying coverage in an all verification activities specified in for qualifying coverage in an eligible eligible employer-sponsored plan as a regulation, including data matching employer-sponsored plan for the benefit result of the sample-based review, the with the Office of Personnel year for which coverage is requested. Exchange would determine the Management (OPM), SHOP, available We sought comment on ways the applicant’s eligibility based on such employment data, and the sample-based Exchange may communicate this information and in accordance with the review; and the Exchange would sampling process to consumers with the effective dates specified in § 155.330(f) integrate the result into its eligibility intention of minimizing confusion. of this subpart and, if such information process and send the individual and We proposed that the Exchange changes the applicant’s eligibility employer notices described in would proceed with all other elements determination, notify the applicant and § 155.310(g) and (h) of this part. Further, of the eligibility determination using the his or her employer or employers of we proposed that under such an applicant’s attestation while the sample- such determination in accordance with arrangement, the Exchange and HHS based review is occurring, and provide the notice requirements specified in would enter into an agreement eligibility for enrollment in a QHP § 155.310(g) and (h) of this part. specifying their respective through the Exchange to the extent that We also proposed that if, after a responsibilities in connection with the an applicant is otherwise qualified. period of 90 days from the date on verifications described in paragraph (d); Consistent with § 155.315(f), we which the notice specified in clause other activities required in connection proposed that during the sample-based (d)(3)(iii)(A) is sent to the applicant, the with the verifications described are review, the Exchange would ensure that Exchange is unable to obtain the performed by the Exchange in advance payments of the premium tax necessary information from an accordance with the standards credit and cost-sharing reductions are employer, the Exchange will determine identified in this subpart or by HHS in provided on behalf of an applicant who the applicant’s eligibility based on his accordance with the agreement; and the is otherwise qualified for such payments or her attestation regarding that Exchange provides all relevant and reductions, as described in under employer. We solicited comment on this application information to HHS through § 155.305 of this subpart, if the tax filer proposal to not provide an additional a secure, electronic interface, promptly attests to the Exchange that he or she notice to the applicant and his or her and without undue delay. We solicited understands that any advance payments employer when the applicant’s comments on this proposed option. of the premium tax credit paid on his or eligibility does not change as a result of Comment: In reference to the her behalf are subject to reconciliation. the sample-based review and whether it proposed language at When an applicant is selected for the is preferable to include an additional § 155.320(c)(3)(vi)(C), which specifies sample-based review, we proposed in notice to the applicant and employer at that the Exchange will request clause (d)(3)(iii)(D) that the Exchange the end of the 90-day period. additional information regarding make reasonable attempts to contact any In clause (d)(3)(iii)(G), we proposed projected annual household income employer identified on the application that to carry out the sampling process when an application filer’s attestation is for the applicant and the members of his described above, the Exchange must in excess of annual income data, but or her household, as defined in 26 CFR only disclose an individual’s below annualized current income data 1.36B–1(d), to verify whether the information to an employer to the extent by a ‘‘significant amount,’’ commenters applicant is enrolled in an eligible necessary for the employer to identify recommended that the phrase employer-sponsored plan or is eligible the employee. We solicited comments ‘‘significant amount’’ be replaced with a for qualifying coverage in an eligible on this proposed approach and whether percent threshold. Some commenters

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recommended a threshold of 20 percent, attestation of annual household income. we note that, under § 155.320(c)(3)(iii), specifically. If such data is not available or does not an attestation that reflects an increase Response: To preserve the Exchange’s support the attestation, clause compared to the tax data would flexibility to determine what may (c)(3)(vi)(C) specifies that the Exchange generally be accepted without further constitute a significant amount, we are must follow the procedures specified in verification (for purposes of eligibility finalizing this provision as proposed. § 155.315(f)(1) through (4), which for advance payments of the premium Comment: Commenters recommended includes requesting documentation to tax credit and cost-sharing reductions); replacing the standard ‘‘not reasonably verify the attestation of project annual therefore, if an applicant attests to a compatible’’ with the term household income. The attestation is projected annual household income that ‘‘significantly and materially not supported by the data when the would qualify him or her for advance incompatible,’’ defined further by attestation is more than 10 percent payments of the premium tax credit or commenters as ‘‘making an important below the annual income as computed cost-sharing reductions but MAGI-based change to the outcome.’’ Such using data sources. For the first year of income sources indicate that income is commenters suggested only using the operations, we will exercise lower than the applicant’s attestation, process described in § 155.315(f) if an enforcement discretion under this even if such data indicates Medicaid or attestation is significantly and provision such that each Exchange will CHIP eligibility, the attestation would materially incompatible with other have the option, only when the be accepted without further verification. information. Further, commenters attestation under (c)(3)(ii)(B) is greater We note that this scenario assumes that suggested easing verification rules for than ten percent below the annual the applicant has not attested to individuals who comply with household income computed in projected annual household income that information requests, including accordance with clause (c)(3)(ii)(A) and would be consistent with eligibility for attestations, and for whom required data MAGI-based income data from the Medicaid or CHIP under the applicable is not available. sources specified in paragraph (c)(1)(ii) MAGI standard. Response: In § 155.300(d) of the is unavailable to request a reasonable Comment: One commenter expressed Exchange final rule, we include in the explanation for the discrepancy from support for continuing to examine ways definition of ‘‘reasonably compatible’’ the applicant, and if such explanation is in which employer reporting under the that the ‘‘difference or discrepancy does insufficient, follow the procedures Affordable Care Act can be streamlined not impact the eligibility of the specified in § 155.315(f)(1) through (4) both in timeframe and in the number of applicant, including the amount of for a statistically significant sample of elements to prevent inefficient or advance payments of the premium tax the population that would otherwise be duplicative reporting. credits or category of cost-sharing.’’ This subject to such procedures under clause Response: We agree with the definition allows for Exchange (c)(3)(vi)(D). For those individuals who commenter. As stated in the proposed flexibility in verifying application are not part of this sample, the Exchange rule, the Administration will continue information, and where appropriate, the may accept the attestation of projected to consider ways to streamline reporting final rule provides for a more annual household income without under the Affordable Care Act. prescriptive reasonable compatibility further verification for purposes of the Comment: One commenter standard, in reference to specific Exchange’s eligibility determination. We recommended that applicants should verifications. We believe it is an ideal expect that any Exchange that exercises first attest to whether or not they have approach to provide flexibility in the this option will monitor the process any offer of coverage. The commenter case of many verifications, but for areas closely and adjust the targeting and size suggested it is unnecessary to verify in which the outcome of the eligibility of the sampled population as needed to enrollment in or eligibility for determination is sensitive to small ensure an effective verification process. qualifying coverage in an eligible changes, provide a more specific We note that we believe this exercise of employer-sponsored plan for everyone approach. Therefore, we finalize the enforcement discretion concerning the who applies for insurance affordability reasonable compatibility standards used Exchange’s obligations to verify income programs. Another commenter in § 155.320(c), with some changes information in these specific recommended that the Exchange only described herein, and without changing circumstances is made in the context of ask for general information about the overall definition of ‘‘reasonable all information—including the actual employee contributions to the compatibility,’’ defined in § 155.300(d), household income amounts for 2014— employer-sponsored plan, eligibility for which is used throughout Exchange and being available at the end of the year for the plan, and whether the plan provides Medicaid regulations. the reconciliation performed under minimum value rather than specifically For income verification, for the first section 36B(f) of the Code. identifying to the employer the year of operations, we are providing Comment: We received comments particular employee who has requested Exchanges with temporarily expanded that asked if, following the 90-day premium tax credits. discretion to accept an attestation of inconsistency period under § 155.315(f), Response: We appreciate the projected annual household income when invoked under clause (c)(3)(vi)(C) commenter’s suggestion regarding ways without further verification, as of this section, the applicant has not to expedite the application process, and described below. Under current responded and data sources indicate are working to consider similar regulations, when data described in that the applicant is eligible for suggestions received based on the paragraph (c)(1)(i) of this section is Medicaid or CHIP, the Exchange should public comment period for the single, available for the tax household but the notify the applicant and offer to enroll streamlined application. To this end, we attested annual household income is him or her in Medicaid or CHIP, in have designed the employer-sponsored more than 10 percent below the annual states where the Exchange can make coverage section of the single, income computed in accordance with that determination, or transmit the file streamlined application to ask a clause (c)(3)(ii)(A) of this section, the to the Medicaid or CHIP agency if the threshold question of whether the Exchange must use annualized data Exchange cannot make that individual has an offer of coverage from the MAGI-based income sources, determination. through a job, including an offer specified in paragraph (c)(1)(ii), to the Response: This recommendation is through a spouse or parent’s job and extent it is available, to verify the not specific to § 155.320(c)(3). However, then if the answer is ‘‘no,’’ allow the

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individual to skip the remaining paragraph (d)(2)(iv) and modifying note that employers have the option of employer-sponsored coverage questions paragraph (d)(3)(iii) to remove the combining the employer coverage tool on the application. We will also collect provision specifying that the Exchange with the notice specified under section employer contact information as will obtain employment data. We clarify 18B of the Fair Labor Standards Act, as necessary to send the employer notice that notwithstanding this deletion, added by section 1512 of the Affordable described in § 155.310(h). The paper Exchanges may use employment data as Care Act found at this link, http:// application for enrollment in a QHP a tool to assist consumers in providing www.dol.gov/ebsa/pdf/ through the Exchange and insurance accurate attestations to the Exchange FLSAwithplans.pdf. As noted in the affordability programs can be found at: regarding employer-sponsored coverage. proposed rule, we also anticipate that http://www.cciio.cms.gov/resources/ Lastly, we are currently working with employers will find additional ways to other/Files/AttachmentC_042913.pdf. our federal partners at the Office of provide this information to their Comment: We received several Personnel Management to develop a employees, including posting this pre- comments regarding available data service through the hub to verify data populated tool on a company Web site, sources proposed in § 155.320(d)(2). regarding federal employment as is or making this information available Some commenters suggested that HHS necessary to implement proposed during benefit fairs, and we are work on developing an employer- 155.320(d)(2)(ii). We expect to release a supportive of additional efforts by sponsored coverage data source that detailed technical description of this employers to disseminate this would be available to states at a service in the near future. information efficiently. The employer significantly reduced cost. Comment: We received several coverage tool can be found at: http:// One commenter specifically comments on the pre-enrollment cciio.cms.gov/resources/other/Files/ recommended that data sources that template developed to assist consumers AttachmentC_042913.pdf. reflect information regarding with collecting information related to Comment: Several commenters employment be used as a point of eligibility for qualifying coverage in an generally supported the sampling information for applicants only, and not eligible employer-sponsored plan. Many approach proposed in as a basis for identifying an commenters expressed support for the § 155.320(d)(3)(iii) and noted that inconsistency that must be resolved to voluntary template and efforts to contacting the employer directly is the maintain eligibility. The commenter facilitate employers reporting such most accurate and efficient way to verify suggested that relying on employment information to Exchanges. One information regarding access to data to support the verification of commenter suggested that employers qualifying employer-sponsored enrollment in an eligible employer- pre-populate the form and distribute it coverage. One commenter specifically sponsored plan and eligibility for online to employees without being supported the proposed approach to qualifying coverage in an eligible specifically requested to do so by rely on the Exchange to reach out to employer-sponsored plan may create a individual employees. Another employers for information about barrier to coverage and unduly delay commenter expressed concern over employer-sponsored coverage rather enrollment of eligible applicants. asking employees to gather information than relying on individuals to get the One commenter requested that data from employers, suggesting that it could information from their employer. regarding federal employment as pose problems and force employees not Some commenters expressed concern specified in § 155.320(d)(2)(ii) be made to seek Exchange coverage. over the sampling approach, suggesting available through the federal data A few commenters suggested ways to the process was burdensome for services hub and requested that HHS implement the template including employers and Exchanges. Commenters release a technical description of the providing the template on the date of urged HHS to develop sampling service as soon as possible. hire or in conjunction with other procedures that are as unobtrusive as Response: As one commenter noted, information about employer-sponsored possible and do not create confusion for HHS conducted an extensive search of coverage provided by the employer to an individual or an individual’s available data sources and found that no employees. One commenter suggested employer. One commenter urged the comprehensive data source will be large employers have an incentive to Administration to encourage States to available by October 1, 2013. Current report this information to employees to use uniform processes in conjunction legislative and operational barriers avoid having employees request with HHS. One commenter prohibit HHS from requiring employers information from them on an individual recommended that final regulations to report information directly to basis. Another commenter suggested specify timelines and specific Exchanges or requiring Exchanges to that the template would need to allow information required for employer obtain employer data from the Internal employers to report multiple premium responses under § 155.320(d)(3)(iii). Revenue Service. The proposed rule contributions and/or plan actuarial Another commenter also recommended included an interim solution to support values. that final regulations permit employers this verification until a more robust Response: We developed the pre- to designate third-party administrators verification process can be developed. enrollment template, which is a tool to to respond and act on their behalf for We remain committed to working with help an individual complete the the sample-based review. any interested parties on solutions that questions related to employer-sponsored Some noted that contacts to make employer reporting more efficient. coverage on the single, streamlined employers create risks for employees We agree with the comment above application, based on extensive input who may have a very weak position or suggesting that employment data not be from employers and other stakeholders. status with employers. Some used as the basis for generating While the use of the template is commenters suggested that employees inconsistencies or identifying voluntary, we believe it will facilitate should be able to opt out of having the individuals for inclusion in the sample- the collection of related employer- Exchange contact their employer. One based review, since it is not specific to sponsored coverage information from commenter suggested that any employer-sponsored coverage. employers, and in doing so, streamline verification process adopted by HHS Accordingly, we do not believe that it is the application process, and increase should not invite retaliation against necessary to specify the use of the accuracy of eligibility employees in any way. Another employment data, and so are removing determinations. To this end, we also commenter suggested that the notice to

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employers in § 155.310(h) communicate § 155.320(d)(3)(iii) would prevent the Exchange will proceed with an that employers are explicitly prohibited Exchange from receiving accurate applicant’s eligibility determination from retaliating against employees and information for some individuals and during the sampling process and ensure provide accessible information about increase the potential for a tax liability that advance payments of the premium how employees may pursue a complaint for the tax filer at tax filing. The opt-out tax credit and cost-sharing reductions or seek redress, including the time limit process would also compromise the are provided on behalf of an applicant for filing a complaint. randomness, and potentially the who is otherwise qualified for such Response: We believe the sampling statistical validity of the sample. payments and reductions. This process approach proposed in Accordingly, we do not adopt this is intended to ensure that eligibility § 155.320(d)(3)(iii) is the best interim suggestion. determinations are not delayed due to approach for effectively completing this Comment: We received several the Exchange not being able to contact verification while minimizing burden comments strongly supporting the an employer. Under our authority under on Exchanges and employers. As noted approach in § 155.320(d)(3)(iii)(C), section 1411(a) and (d) of the Affordable in the proposed rule, we believe that reflecting the statutory requirement in Care Act and after consideration of a employers are in the best position to section 1411(e)(4) of the Affordable Care shorter timeframe, we came to the provide information regarding the Act, allowing an individual to receive conclusion that 90 days is consistent employer-sponsored coverage that they advance payments of the premium tax with other similar processes, such as the offer to their employees. We maintain credits and cost-sharing reductions inconsistency period specified in the approach of relying on Exchanges to during the 90-day sampling period if the § 155.315(f), and will also allow an reach out to a select number of individual is otherwise qualified. One appropriate opportunity for receiving a employers to verify applicant commenter supported the recognition response from employers. information with some minor that applicants should be made aware Comment: Commenters supported the clarifications. that any advance payments of the option to allow an Exchange to fulfill We also appreciate the concerns premium tax credit could be subject to the requirements of this verification by raised related to burden on Exchanges reconciliation. We also received relying on HHS to perform it. One and employers. We intend for comments in support of the provision in commenter noted that this option is Exchanges to contact employers in a § 155.320(d)(3)(iii)(F) allowing the particularly helpful as no acceptable standardized manner and only ask for Exchange to use an applicant’s data sources will be available in their information that is necessary for attestation if no information is received state by October 1, 2013. One verifying access to qualifying employer- from the employer. Another commenter commenter was pleased with this sponsored coverage. We do not include noted that the burden of resolving provision, noting that it welcomed a timing standard for employers to inconsistencies should fall first on the efforts to reduce administrative and cost respond to Exchange inquiries; however Exchanges and only reach individuals burdens involved with Exchange we expect that employers will respond when the Exchanges have exhausted all eligibility determination processes. One to Exchange inquiries in a timely available means to resolve the commenter expressed the need for more manner. With that stated, as proposed inconsistency. information from HHS specifying the and finalized in § 155.320(d)(3)(iii)(F), Response: We believe it is important steps it will take to complete this after a period of 90 days, the Exchange for the eligibility determination process verification, and detail on the particular will conclude the sample-based review. to be consistent in how and when the information HHS anticipates it will Regarding the recommendation that Exchange requests supporting need. One commenter suggested a final regulations permit employers to documentation throughout the provision be included in the agreement designate third-party administrators to eligibility determination process and to between HHS and the Exchange to hold respond and act on their behalf for this avoid unnecessary delay in eligibility applicants harmless if a glitch in verification, we note that this rule determinations. We agree with communication occurs. The commenter finalizes standards related to Exchanges commenters regarding the importance of also suggested that consumers should and therefore standards regarding collecting an attestation from a tax filer not be required to submit duplicative activities of employers are outside the regarding his or her understanding of information. One commenter asked that scope of this regulation. However, we reconciliation prior to making advance HHS consider expanding its employer- believe that this would be a feasible payments of the premium tax credit, sponsored plan enrollment and approach, as long as it is consistent with and therefore maintain this in the final eligibility verification process to include any other authorities that may govern rule. Additionally, we are finalizing our the sending of notices to individuals the delegation of employer proposal to rely on an applicant’s and employers described in § 155.310(g) responsibilities to other entities. attestation if the Exchange is unable to and (h), which occurs after an eligibility We also acknowledge the comment obtain the necessary information from determination is made. expressing the concern that contacting an employer. Response: After reviewing and employers might create risks for Comment: One commenter was considering the appropriate public employees who may have a very weak concerned that the timeframe for comments and completing a technical position or status with employers. employers to provide information analysis, we have concluded that the Section 18C of the Fair Labor Standards (within 90 days of notice regarding the service described in the proposed rule is Act, as added by section 1558 of the Exchange’s intent to verify the not feasible for implementation for the Affordable Care Act, provides applicant’s enrollment in an eligible first year of operations. This service protections for employees that prohibit employer-sponsored plan or eligibility would involve a large amount of discrimination because the employee for qualifying coverage through an systems development on both the state has received advance payments of the eligible employer-sponsored plan) is too and federal side, which cannot occur in premium tax credit or cost-sharing long and recommended shortening this time for October 1, 2013. As such, in the reductions, and for other specified period to 30 days. final rule, we maintain the proposed reasons. Response: In proposed section language, with a clarification that the Allowing an individual to opt out of § 155.320(d)(3)(iii), which we maintain option to rely on HHS to perform this the sampling process under in the final rule, we provide that an verification is effective for eligibility

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determinations that are effective on or we are finalizing this provision as to conduct a minimum number of after January 1, 2015—meaning that the proposed. follow up reviews. Exchange will be able to rely on HHS to Comment: We solicited comment Response: We recognize that some perform this function as part of the regarding the feasibility of making the Exchanges may have access to eligibility determination system under necessary systems connections to additional data sources that could be section 1411 of the Affordable Care Act support the verification of enrollment in useful for these purposes. We note that beginning with open enrollment for the an eligible employer-sponsored plan proposed § 155.320(d)(2)(i), which we 2015 plan year. and eligibility for qualifying coverage in are finalizing as proposed, allows the To provide relief to state-based an eligible employer-sponsored plan by use of electronic data sources that are Exchanges that were planning to rely on October 1, 2013, and whether approved by HHS, which could include this service, we note that we are also alternative approaches should be state-based or state-developed data delaying the date by which an Exchange considered for the first year of sources. We encourage states to work must implement the sample-based operations. Several commenters with HHS to incorporate these data review. For eligibility determinations expressed general support of the sources and other existing processes for insurance affordability programs that approach to verifying access to into the Exchange verification process. are effective before January 1, 2015, we qualifying employer-sponsored Comment: We received several added paragraph (d)(3)(iv) to specify coverage. However, one commenter comments on standards related to that if the Exchange does not have any expressed concern over the complexity notices proposed throughout § 155.320. of the information specified in of the verification procedures and Commenters suggested that any notices § 155.320(d)(2)(i) through (d)(2)(iii) for questioned whether Exchanges will be be clearly written in plain language at an applicant, the Exchange may accept able to implement these processes an appropriate reading level for the applicant’s attestation regarding consistently by October 1, 2013. A small employees with limited education and enrollment in an eligible employer- number of commenters recommended LEP individuals. One commenter sponsored plan and eligibility for that HHS consider limiting verification recommended that notice of applicants’ qualifying coverage in an eligible to those situations in which it is appeal rights be provided to applicants employer-sponsored plan for the benefit essential to comply with the Affordable if information from an employer results year for which coverage is requested Care Act. One commenter agreed with in a change to their eligibility status. without further verification, instead of the recommendation that the proposed Specifically regarding the notice following the procedure in strategy for verification should be described in § 155.320(d)(3)(iii), one § 155.320(d)(3)(iii). temporary and that it should be commenter suggested the notice clearly While we believe it is important for revisited in 2016 when more data specify that the employee was selected Exchanges to implement the procedure become available. as part of a purely random sample, in § 155.320(d)(3)(iii) to support Response: We appreciate feedback rather than due to any indication of program integrity and minimize from commenters on the proposed misinformation or inappropriate action financial risks on behalf of the tax filer approach. We acknowledge the timing on the part of the employee. at reconciliation, we acknowledge that concerns with implementing the Additionally, one commenter supported some Exchanges may not have the policies in the proposed rule for October HHS developing notices and otherwise resources and operational capability to 1, 2013 and will continue to work with educating employers to help employers conduct the sampling process in the Exchanges to develop interim solutions understand their potential tax liabilities. first year. We note that the FFE will within the general construct of these Finally, one commenter urged Exchange implement the verification process as regulations and related guidance. We personnel, Navigators, certified specified in § 155.320(d). believe that the proposed approach is application counselors and all consumer For October 1, 2013, we expect that minimally burdensome, particularly assistance personnel to be trained on Exchanges will use OPM data provided based on the approval of use of a these verification procedures. by HHS and available through the hub sample-based review provided in Response: All notices described in and SHOP data available through the § 155.320(d)(3)(iii) instead of an this part are subject to the general SHOP that corresponds to the inconsistency process, and another notices standards under § 155.230, individual market Exchange to identify approach would necessitate manual which include standards related content inconsistencies with attested review for a larger number of provided in the notice, including notice information, and follow the process individuals. Accordingly, in the final of appeal rights, and that the notices established in § 155.315(f) to resolve any rule, we maintain the provisions must conform to accessibility and such inconsistencies. We plan to proposed in § 155.320(d) with readability standards. We agree that continue working closely with continued anticipation that the strategy information regarding this verification Exchanges, and may propose regulatory will evolve as additional data and data will be important for Navigators and amendments as necessary, to implement sources become available and as more other entities helping consumers apply an increasingly effective verification information is gained when the sample- for coverage and intend to include process over time. based review is implemented. information about this verification We also note that we considered Comment: One commenter process related in training materials and whether the distribution of notices recommended that HHS allow other guidance documents produced by could be part of a future service Exchanges the flexibility to define the HHS. performed by HHS. The eligibility factors that would trigger the sample- Comment: One commenter raised notices cited by the commenter involve based review and how to conduct the concerns over the potential for information beyond what is involved necessary investigations. Another confusion that could result from with this verification service, including commenter proposed that Exchanges unnecessary notifications to employers individual eligibility results, and the should have flexibility to use whatever by Exchanges, for example, when commenter’s proposal therefore would information they have at their disposal employers receive the notice specified add significant complexity to an to identify individuals who are likely to in § 155.310(h) regarding potential tax already-complex service. Accordingly, have employer-sponsored coverage and liability under § 4980H of the Code even

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though the employer may not in fact random sample of applicants for whom where the Exchange identifies updated have any tax liability. the Exchange does not have any of the information regarding income, family Response: The proposed rule did not information specified in paragraphs size, or family composition, except modify the requirements related to the (d)(2)(i) through (d)(2)(iii). Based on information regarding death, we employer notice as described in comments suggesting that employment clarified that the enrollee-reported § 155.310(h) and therefore the comment data only be used to prompt applicants information would be subject to is outside of the scope of this rule. to encourage accurate attestations, we verification. Comment: One commenter removed paragraph (d)(2)(iv). We also solicited comments about recommended that the verification Additionally, we clarified paragraph adding a provision to specify that process and information supplied (d)(4) to specify that the ability for the Exchanges would include language in should be considered confidential, and Exchange to satisfy the provisions of the eligibility determination notice after recommended that the final rule include paragraph (d) by relying on HHS is a redetermination resulting in a change language clarifying this and prohibiting effective for eligibility determinations in an enrollee’s level of cost-sharing the sharing of this information with for advance payments of the premium reductions to also describe the specific anyone not directly required to verify tax credit and cost-sharing reductions changes to an enrollee’s deductible, co- the information. The commenter that are effective on or after January 1, pays, coinsurance, and other forms of specified that the employer 2015, and to clarify that the division of cost-sharing reductions if they remained representative verifying the information responsibilities under this option is enrolled in the same QHP. at request of the Exchange should be subject to guidance issued by the We proposed to amend paragraph (f) prohibited from sharing the Exchange’s Secretary. To accommodate this change, to incorporate changes as a result of request for the information with any we added paragraph (d)(3)(iv) to clarify eligibility appeals decisions, as well as person not directly responsible for that for eligibility determinations for changes that affect only enrollment or providing the information. advance payments of the premium tax premiums, but do not affect eligibility. Response: We agree with the credit and cost-sharing reductions that The proposed changes to paragraph (f) suggestion that information supplied are effective before January 1, 2015, if were designed to align eligibility during the verification process the Exchange does not have any of the effective dates and enrollment effective described in § 155.320(d)(3)(iii) should information specified in paragraphs dates with one another, and to be protected and not disclosed to (d)(2)(i) through (d)(2)(iii) for an accommodate the limited situations in unauthorized parties. When an applicant, the Exchange may accept an which retroactive eligibility may be Exchange reaches out to an employer to applicant’s attestation regarding necessary. confirm whether an applicant is enrollment in an eligible employer- In paragraph (f)(1), we proposed that enrolled in an eligible employer- sponsored plan and eligibility for changes resulting from a sponsored plan or eligible for qualifying qualifying coverage in an eligible redetermination, from an appeal coverage in an eligible employer- employer-sponsored plan for the benefit decision, or affecting enrollment or sponsored plan, we do not intend for year for which coverage is requested, premiums only, be implemented on the the Exchange staff to disclose the without further verification under first day of the month following notice employee’s household income or any paragraph (d)(3)(iii) of this section. of the change. In paragraph (f)(2), we other taxpayer information, except the Additionally, we deleted paragraph proposed that the Exchange may employee’s name or other identifying (d)(4)(iv) to remove the agreement determine a reasonable point in a information. The employer would need associated with having HHS conduct month, no earlier than the 15th, after to identify the employee to provide the this verification. Finally, we removed which a change will not be effective Exchange with information about the paragraph (e) and redesignated until the first day of the month after the plan options available to the employee. paragraph (f) as paragraph (e). As a month specified in paragraph (f)(1). The Exchange would rely on result of the consolidation of former In paragraph (f)(3), we proposed that information provided by the employee paragraphs (d) and (e) in paragraph (d) the Exchange must implement changes or employer when communicating with of this final rule, we also make a resulting in a decreased amount of the employer, so that only the technical correction to § 155.615(f)(2)(i) advance payments of the premium tax appropriate employer representatives to modify the cross-reference in that credit or cost-sharing reductions that are consulted during the sample-based provision to reference § 155.320(d). occur after the 15th of the month, on the review. We also note that like all first day of the month after the month information created, collected, used, or 12. Eligibility Redetermination During a specified in paragraph (f)(1). In disclosed by the Exchange, information Benefit Year (§ 155.330) paragraph (f)(4), we proposed that the regarding employer-sponsored coverage In § 155.330, we proposed to amend Exchange must implement changes that is subject to the privacy and security paragraph (d)(1) to clarify that the result in an increased level of cost- protections established in § 155.260. Exchange would only conduct periodic sharing reductions that occur after the examination of data sources to identify 15th of the month, on the first day of the Summary of Regulatory Changes eligibility determinations for Medicare, month after the month specified in We are finalizing the provisions Medicaid, CHIP, or the BHP, for paragraph (f)(1). Changes that result in proposed in § 155.320(c) without enrollees on whose behalf advance an increased amount of advance modification. We are finalizing the payments of the premium tax credit or payments of the premium tax credit provisions proposed in § 155.320(d), cost-sharing reductions are being would be implemented under with a few modifications. In paragraph provided. We also proposed revising paragraphs (f)(1) and (f)(2). (d)(2)(iii), we clarify that the Exchange paragraph (e) to specify how the In paragraph (f)(5), we proposed that must obtain any available data from the Exchange would proceed when data the Exchange implement a change SHOP that corresponds to the state in matching indicates that an individual is associated with birth, adoption, which the Exchange is operating. In deceased, such that the Exchange would placement for adoption, marriage, or paragraph (d)(3)(iii), we modify modify eligibility status to account for loss of minimum essential coverage, on language to specify that the Exchange the data after 30 days without a the coverage effective dates described in must select a statistically significant response to the notice sent. In situations § 155.420(b)(2)(i) and (ii). In paragraph

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(f)(6), we proposed that the Exchange out-of-pocket limit). Since regulations implemented as of the first of the may implement a change associated do not specify that the Exchange will following month. with the events described in provide detailed, plan-specific Response: The 15th-of-the-month § 155.420(d)(4), (d)(5), and (d)(9) on an information on cost-sharing reductions cutoff specified in § 155.330(f)(3) effective date that is based on the after initial plan selection, we will not concerning changes that result in a specific circumstances of each situation. require that it be provided by the decreased amount of advance payments In redesignated paragraph (f)(7), we Exchange when a change occurs. Rather, of the premium tax credit and changes proposed to maintain the existing we expect that QHPs will make this in levels of eligibility for cost-sharing language of what was originally information available. We will also not reductions aims to prevent consumers paragraph (f)(3). specify that the Exchange will describe from incurring financial liabilities that Comment: Commenters expressed the specific changes that could occur in may result from such changes in general support for HHS’ proposal different plans, which could require as eligibility, which could also be very regarding when the Exchange many variations as there are plans. problematic for QHP issuers to determines through periodic data Exchanges maintain the flexibility to implement. However, as noted above, matching that an individual is deceased. provide more detail. HHS provided Exchanges have flexibility to set a One commenter sought clarification general guidance regarding the reasonable cut-off date for implementing about whether the Exchange could implementation of cost-sharing changes that result in an increased level terminate coverage retroactively to the reductions in subpart E of the final of advance payments of the premium date of death to align with non-group Payment Notice at 78 FR 15410, 15474 tax credit, such that they could always market standards. et. seq. be implemented on the first day of the Response: In response to comments, Comment: Commenters generally following month, Accordingly, we are we clarify in finalizing § 155.430(d) that supported the effective dates we finalizing this provision as proposed. the Exchange will terminate coverage proposed in § 155.330(f). Several Comment: Some commenters sought retroactively to the date of death. This commenters urged HHS to prioritize reassurance that Exchanges would revision is discussed in more detail in continuity of coverage in defining remain the system of record—the final the response to comments regarding that effective dates. Other commenters authority on applicants’ and enrollees’ provision below. cautioned against requiring eligibility eligibility for enrollment through the Comment: Multiple commenters effective dates that would necessitate Exchange and receipt of advance expressed strong support for including a the return or repayment of claims, payments of the premium tax credit and provision in the final rule such that premiums, advance payments of the cost-sharing reductions—and that all Exchange would include language premium tax credit, or cost-sharing changes would be communicated to regarding a change in an enrollee’s level reduction payments. QHP issuers. Some commenters also of cost-sharing reductions as a result of Response: We appreciate the requested flexibility for issuers to a redetermination in the eligibility importance of continuity of coverage, as communicate changes to enrollees, determination notice sent to the well as the importance of clarity for consistent with current practices. enrollee. Several commenters requested consumers. As such, we are finalizing Response: Exchanges are intended to that the notice also include information the provisions proposed in § 155.330(f), be the final authority on applicants’ and about the enrollee’s eligibility for a with two modifications for clarity. First, enrollees’ eligibility for enrollment in a special enrollment period as well as the we consolidate the provisions formerly QHP through the Exchange, advance deadline to make a decision to select a proposed in § 155.330(f)(3) and payments of the premium tax credit, new plan if they so desired. § 155.330(f)(4) into a single provision and cost-sharing reductions (subject to Commenters also recommended that the covering decreases in advance payments applicable appeals). As specified in notice include the potentially negative of the premium tax credit and changes § 155.310(g) and § 155.400(b)(1), financial impact of changing QHPs. One in cost-sharing reductions. Second, we Exchanges will communicate commenter requested additional remove the requirement formerly information about all eligibility and guidance regarding the implementation proposed in § 155.330(f)(7), because the enrollment changes to both enrollees of cost-sharing reductions generally, and termination of coverage requirement in and their health insurance issuers in a another stated that it could not comply § 155.430(d)(3) renders § 155.330(f)(7) timely fashion. We also encourage QHP with such a proposed change in duplicative. issuers to communicate transparently Exchange design at this stage. Comment: Commenters requested that with enrollees regarding changes to Response: We clarify that HHS require transparency and plain their coverage, including how changes § 155.230(a)(1) specifies that the language in communicating effective in an enrollee’s eligibility for cost- Exchange will provide language in the dates to consumers, given the sharing reductions may affect the eligibility determination notice to the complexity of changing benefits, enrollee’s out-of-pocked costs related to enrollee explaining the action reflected programs, and coverage. coverage, provided that such in the notice, which in this case Response: We agree that transparency communications are not confusing for includes the fact that an enrollee has and plain language are of the upmost consumers. been determined eligible for a new cost- importance, and urge states and QHP Comment: Commenters supported our sharing reduction level, his or her issuers to share successful proposal in paragraph (f)(4) of this eligibility for a special enrollment communication strategies among one section to align enrollment effective period, the requisite deadlines, and the another. We note that § 155.230(b) dates with eligibility effective dates, but possible ramifications if an enrollee specifies that all notices will be in plain sought clarification on eligibility decides to change QHPs (for example, language. HHS will also share model effective dates for individuals who opt deductible resetting, whereby an notice language for Exchanges to adapt not to select a new plan upon individual who had accrued expenses to their specific needs. experiencing one of the special towards the deductible cap for his or her Comment: Some commenters enrollment period triggering events previous QHP would have to start again questioned why advance payments of described in § 155.420(b)(2). from $0 in making cost-sharing the premium tax credit and cost-sharing Response: We clarify that the payments towards the deductible and reductions could not always be eligibility effective dates in

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§ 155.330(f)(4) apply only in situations We proposed to make technical 14. Administration of Advance in which an individual uses the special corrections to paragraph (l) to specify Payments of the Premium Tax Credit enrollment period to select a plan upon that, if the Exchange does not have and Cost-Sharing Reductions (§ 155.340) experiencing one of the triggering events authorization to use a qualified In § 155.340, we proposed technical described in § 155.420(b)(2). Eligibility individual’s tax information, the corrections in paragraphs (b) and (c) to for individuals who experience a change Exchange will redetermine the qualified replace the reference to section 36B of related to marriage, birth, adoption, individual’s eligibility only for the Code to the applicable Treasury placement in foster care, or loss of enrollment in a QHP through the regulation. We did not receive specific minimum essential coverage, and who Exchange. comments on this section, and are thus opt to maintain their existing QHP, finalizing the provision as proposed. follows the effective dates otherwise We proposed to add new paragraph specified within § 155.330(f). (m), which would provide that, if a Summary of Regulatory Changes qualified individual does not select a We are finalizing the technical Summary of Regulatory Changes QHP before the redetermination corrections proposed in § 155.340 of the described in this section, and is not We are finalizing the provisions proposed rule to specify the appropriate proposed in § 155.330, with some enrolled in a QHP through the Exchange definition of minimum value. modifications. First, we clarified that at any time during the benefit year for the effective dates in paragraph (f)(1)(ii) which such redetermination is made, 15. Coordination With Medicaid, CHIP, are based on the date specified in the the Exchange must not automatically the Basic Health Program, and the Pre- appeal decision, and removed cross- conduct a subsequent redetermination existing Condition Insurance Plan references to appeals provisions in of his or her eligibility for a future (§ 155.345) paragraph (f)(1)(ii), as we are not benefit year. In § 155.345, we proposed to make a finalizing provisions related to Comment: Commenters supported technical correction to paragraph (a) to eligibility appeals at this time. However, HHS’ proposal to allow all qualified clarify that the agreements that the we maintain the substance of the individuals to be redetermined for Exchange enters into with the agencies provision, and intend to replace the eligibility for enrollment in a QHP administering Medicaid, CHIP, and the cross-references when we finalize through the Exchange, regardless of BHP, if applicable, must include a clear subpart F. Second, we consolidated the whether they have enrolled in a QHP delineation of the responsibilities of provisions formerly proposed in through the Exchange during the each ‘‘agency’’ as opposed to each § 155.330(f)(3) and § 155.330(f)(4) into a coverage year. Several commenters ‘‘program.’’ We proposed to amend single requirement in paragraph (f)(3) paragraph (a)(2) to specify that the recommended omitting § 155.335(m), for decreases in advance payments of agreement the Exchange enters into with the special rule, to allow states to the premium tax credit and changes in other agencies administering insurance continue redeterminations for non- cost-sharing reductions. Third, we affordability programs addresses the modified newly designated (f)(4) to enrolled qualified individuals, for at responsibilities of each agency to ensure clarify that the Exchange will least 3 more years. prompt determinations of eligibility and implement a change associated with the Response: We continue to believe that enrollment in the appropriate program events described in § 155.420(b)(2)(i) one redetermination for a qualified without undue delay, based on the date and (ii) of this part on the effective dates individual who does not select a QHP the application is submitted to, or described in § 155.420(b)(2)(i) and (ii) of represents an appropriate balance redetermination is initiated by, the this part respectively, instead of on the between providing consumers with a Exchange or another agency first day of the following month. Fourth, streamlined ability to obtain coverage administering an insurance affordability we removed the requirement formerly and the burden on the Exchange program. We proposed to change the proposed in § 155.330(f)(7), because the associated with redeterminations and on ordering of agencies listed for purposes termination of coverage requirement in consumers who are not interested in of clarity. We also proposed to § 155.430(d)(3) renders § 155.330(f)(7) enrolling. We intend to monitor take-up redesignate paragraph (a)(3) as duplicative. rates within the FFE and encourage paragraph (a)(4), and add a new 13. Annual Eligibility Redetermination state-based Exchanges to do the same, as paragraph (a)(3) to ensure that, as of (§ 155.335) this data will inform whether changes to January 1, 2015, the agreement this policy might be appropriate in the delineates responsibilities for the In § 155.335, we proposed to amend future. Accordingly, we are finalizing provision of a combined eligibility paragraphs (a), (b), (c), (e), (f), (g), (h), this provision as proposed. notice, as defined in § 435.4, to (k), and (l) of this section to specify that individuals and members of the same subject to the limitations specified in Summary of Regulatory Changes household, to the extent feasible, for paragraph (l) and new paragraph (m), enrollment in a QHP through the the Exchange will conduct an annual We are finalizing the provisions Exchange and for all insurance eligibility redetermination for all proposed in § 155.335 of the proposed affordability programs. Section qualified individuals, not only those rule without modification, except we 155.345(a)(3)(i) proposed that prior to who are enrolled in a QHP. Our reserve paragraphs (c)(1) and (c)(2) as January 1, 2015, the notice include proposal was to replace the word we continue to evaluate the appropriate coordinated content, as defined in ‘‘enrollee’’ with the term ‘‘qualified information that will be included in the § 435.4, while § 155.345(a)(3)(ii) and individual’’ in these paragraphs. annual redetermination notice, and (g)(7) addressed the implementation of a We proposed to amend paragraph (b) modify paragraph (c)(3) such that the combined eligibility notice requirement to include data regarding Social previous reference to paragraph (c)(1), as of January 1, 2015. Security benefits as defined under 26 which is now reserved, instead refers to We proposed a phased-in approach CFR 1.36B–1(e)(2)(ii). This reflects the paragraph (b), which accurately refers to for the provision of a combined revision we proposed to make in the updated information being retrieved eligibility notice in cases where the § 155.320(c)(1)(i)(A). by the Exchange. Exchange is performing assessments of

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eligibility for Medicaid and CHIP based the individual is not eligible. We are One commenter opposed the on MAGI. reserving paragraphs (a)(3) and (g)(7), requirement for agencies administering We noted that, based on the regarding coordinated content and insurance affordability programs to operational readiness of the Exchange combined notices, respectively, which provide coordinated content in notices and other agencies administering we intend to finalize at a later date with before January 1, 2014, and specifically insurance affordability programs, the parallel Medicaid provisions. The recommended that at initial annual combined eligibility notices may be Federally-facilitated Exchange will open enrollment each agency should be implemented earlier that January 1, provide coordinated content in notices responsible for issuing its own 2015, but that in states where the FFE for October 1, 2013. We will take these eligibility determination notice based on is conducting assessments rather than recommendations into consideration as the eligibility determination completed final determinations of eligibility, the we develop model eligibility for the program or programs that agency FFE will only be able to provide an determination notices. We are not administers, without regard for the other eligibility notice that includes specifying that agreements between insurance affordability programs. Many coordinated content prior to January 1, Medicaid and CHIP agencies and other commenters, however, expressed 2015 (and not combined eligibility Exchanges be approved by HHS, as we support for a coordinated eligibility notices) for eligibility determinations think that the standards included in notice prior to the implementation of a made by the FFE. regulation represent an appropriate combined eligibility notice. Another We proposed to make a technical level of federal oversight at this time. commenter believed that the state is best correction in paragraph (f) to cite to the However, we will work with Exchanges suited to determine which agency applicable Treasury regulation instead to monitor operations over time, and should provide the notice of eligibility of Section 36B of the Code. reevaluate this decision as needed. determination, and opposed to the We proposed a series of technical Comment: Many commenters requirement under § 155.345(a)(3)(ii) corrections throughout paragraphs (f) expressed support for combined that the combined eligibility notice be and (g) to clarify various provisions and eligibility notices. Some commenters provided by the agency that makes the to redesignate paragraphs as necessary expressed general support of the phased last determination of eligibility. One to accommodate the changes described in approach for combined eligibility commenter noted that HHS should in the proposed rule. We proposed to notices, but strongly recommended consider additional situations where a add paragraph (g)(7) to require minimizing the delay in the combined eligibility notice is feasible, combined eligibility notices effective implementation of combined notices so but not beneficial to the applicant(s). January 1, 2015. that it only affects the initial annual Another commenter suggested that HHS Comment: We received comments open enrollment period. Commenters consider additional flexibility for recommending that notices be suggested that the requirement for a notices to be sent immediately for consolidated and coordinated for all combined eligibility notice should be consumers who receive a final eligibility family members applying together even effective for redetermination notices and determination, and include an when individuals are eligible for eligibility notices for the open explanation in the notice about the different programs, at the very least for enrollment period beginning on October status of any other determinations that the initial eligibility determination 15, 2014. Some commenters were are in progress for other applicants in notice. Commenters suggested that all supportive of the January 1, 2015 the household. notices need to clearly state by name all implementation date of combined Many commenters stated that HHS individuals to whom the notice applies, eligibility notices, while others should ensure that the combined especially when notices are regarding recommended a January 1, 2016 eligibility notice includes complete termination. Some commenters implementation date. One commenter information about Medicaid appeal indicated that the notice with recommended that the effective date be rights. Other commenters stated that the coordinated content should clearly set as January 1, 2014, and that HHS combined eligibility notice should inform an individual what he or she is allow those states that cannot update include a statement that the individual or may be eligible for, and should never their technology in time for January might be eligible for additional benefits begin with the ineligibility information. 2014 to seek approval from HHS for and more affordable coverage through Commenters suggested that all delaying implementation, rather than a Medicaid, and specify how the agreements between the Exchange and nationwide delay in implementation. individual can be screened for Medicaid the agencies administering Medicaid Many commenters asked HHS to eligibility. and CHIP be approved by HHS and be reiterate that the phased-in approach Response: In the proposed rule, HHS made publicly available, including on a does not diminish the principles of the noted two situations in which the public Web site. Some commenters Affordable Care Act to promote combined eligibility notice would not stated that the public should be given an coordination between the Exchange, be advantageous for consumers, and opportunity to provide input on the Medicaid, and CHIP, beginning in HHS sought comment on additional agreements and any changes that are October 2013. situations in which the combined made to the agreements. Response: We appreciate commenters’ eligibility notice would not be Response: We are finalizing this suggestions. We intend to finalize this advantageous. As one commenter section as proposed, with minor provision at a future date with the suggested, HHS explained one situation modifications to reserve two provisions parallel Medicaid provision, and so in which a combined eligibility notice is for finalization at a future date. We have reserved paragraph (g)(7) for the not appropriate is where multiple anticipate that initial eligibility purposes of this rule. The Federally- family members apply together, and determination notices will be facilitated Exchange will provide some members receive a final eligibility consolidated for family members who coordinated content in notices for determination while other members apply together. Additionally, we expect October 1, 2013. need to be transferred to a different that information about the program for Comment: Several commenters noted agency for a final determination to be which an individual is eligible, if any, that state flexibility is important in made for other insurance affordability will be displayed in notices before determining when to issue combined or programs. We will work closely with information about programs for which separate, coordinated eligibility notices. states to determine when the issuance of

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a combined eligibility notice is not 17. Enrollment of Qualified Individuals described therein apply both to appropriate, including situations in Into QHP’s (§ 155.400) qualified individuals first enrolling in a which it is not advantageous for the last In § 155.400, we proposed to add QHP through the Exchange through a agency that makes a determination of paragraph (b)(3) to clarify the special enrollment period, as well as to eligibility based on MAGI to issue a requirement that the Exchange send current enrollees. As the effective dates combined eligibility notice. updated eligibility and enrollment regarding advance payments of the Furthermore, we clarify that while the information for all enrollment-related premium tax credit and cost-sharing Exchange will make determinations or transactions to HHS promptly and reductions are now addressed in assessments of MAGI-based eligibility without undue delay. This added § 155.330(f), we proposed removing for Medicaid and CHIP in accordance further specificity to the existing such language in paragraph (b)(2)(i). We with § 155.305(c) and (d), and requirement that the Exchange send also solicited comments as to whether § 155.302(b), the Exchange is not eligibility and enrollment information to we should expand the special effective required to complete the Medicaid and HHS under paragraph (b)(1) of this dates in paragraph (b)(2)(i) concerning CHIP enrollment process for eligible section. After considering several birth, adoption, or placement of individuals. comments in response to this proposal, adoption to cover children placed in We expect that combined eligibility we are finalizing the provision as foster care as well, which would also notices will include a description of proposed. necessitate a corresponding change to appeal rights in accordance with Comment: Commenters were the triggering events described within § 155.230(a)(5), including Medicaid supportive of the proposal that the paragraph (d)(2) that specifically appeal rights, as well as information Exchange would send updated address that special enrollment period. about how an individual can request a information for all enrollment-related We proposed to add paragraph full eligibility determination from the transactions to HHS promptly and (b)(2)(iii) regarding the effective dates state Medicaid or CHIP agency. And, as without undue delay. One commenter for a special enrollment period under noted above, we intend to finalize sought clarification about cancellations, paragraphs (d)(4), (d)(5), and (d)(9) to paragraphs (a)(3) and (g)(7) at a future and wanted to ensure that QHP issuers align with a similar provision proposed in § 155.330(f). This would ensure that date alongside parallel Medicaid did not violate the Affordable Care Act’s the Exchange could tailor an effective provisions, and we are reserving these ban on discrimination in coverage of date based on the circumstances paragraphs for the purposes of this final benefits related to preexisting surrounding an error by the Exchange, rule. conditions. Another commenter inquired about whether the specific a contract violation by the QHP issuer, Summary of Regulatory Changes issuer reporting requirements associated or other ‘‘exceptional circumstances’’. To align the effective dates under this We are finalizing the provisions with this provision may vary according to the different Exchange models. section with the effective dates for proposed in § 155.345 of the proposed eligibility as proposed in § 155.330(f), rule with a few minor modifications. We Response: We note that the cancellations by QHP issuers referred to we proposed to add paragraph (b)(4) to reserve §§ 155.345(a)(3) and (g)(7) for ensure that the Exchange adhere the finalization at a later date. Pursuant to in the preamble to this provision in the proposed rule could occur for various modified effective dates related to the discussion in the preamble advance payments of the premium tax associated with 42 CFR 431.10(c) and reasons, such as when an individual voluntarily cancels his or her health credit and cost-sharing reductions (d), we add new paragraph (h) to clarify proposed in § 155.330(f). As such, we that the Exchange and the Exchange insurance selection before the coverage effective date. In terms of issuer proposed to remove language in appeals entity must adhere to the paragraphs (b)(2) and (b)(3) that eligibility determination or appeals reporting requirements, each Exchange maintains flexibility to determine its previously addressed this issue. decision for Medicaid or CHIP made by We also proposed to amend paragraph the State Medicaid or CHIP agency, or own issuer reporting requirements relative to enrollment transactions, (d) to specify which triggering events the appeals entity for such agency, will allow a qualified individual or which is consistent regardless of consistent with the law and applicable regulations. This provision specifically enrollee, or his or her dependent to whether the Exchange is making qualify for a special enrollment period. eligibility determinations or addresses only the requirement that the Exchanges report updated eligibility and This was designed to permit all assessments for Medicaid and CHIP. enrollment information to HHS. members of a household, in certain Accordingly, we redesignate previous situations, to enroll in or change QHP’s paragraphs (h) and (i) as paragraphs (i) Summary of Regulatory Changes together in response to an event and (j). We are finalizing the provisions experienced by one member of the 16. Special Eligibility Standards and proposed in § 155.400 of the proposed household, and we proposed technical Process for Indians (§ 155.350) rule without modification. corrections throughout paragraph (d) to ensure that the revised language allows In § 155.350, we proposed to make a 18. Special Enrollment Periods for the dependent to qualify for a special technical correction in paragraph (a)(1) (§ 155.420) enrollment period as well, subject to to replace the reference to section 36B In § 155.420, we proposed to clarify whether the QHP covers the dependent. of the Code with a reference to the the scope of the special enrollment While we did not modify the scope of applicable Treasury regulation. We did periods throughout this section and add each triggering event described within not receive specific comments on this paragraph (a)(2) clarifying that our usage paragraph (d), we solicited comments section, and are thus finalizing the of ‘‘dependent’’ refers to any individual regarding whether we should permit provision as proposed. who is or who may become eligible for such movement of related individuals Summary of Regulatory Changes coverage under the terms of a QHP for other special enrollment periods. because of a relationship to a qualified We proposed to add language We are finalizing the provisions individual enrollee. specifying that the triggering event in proposed in § 155.350 of the proposed We proposed to amend paragraph (b) the case of a QHP decertification is the rule without modification. to specify that the effective dates date of the notice of decertification,

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whereas the triggering event in all other in plans together as well as the potential household on whose behalf advance cases associated with a qualified drawbacks of failing to do so. However, payments of the premium tax credit are individual or his or her dependent several comments also raised concerns provided or who are enrolled in the losing minimum essential coverage is that this proposed definition was too same QHP. When a family member who the date the individual or dependent plan-specific and would ultimately lead experiences any of the triggering events loses eligibility for minimum essential to greater confusion among families in in paragraph (d) of this section, that coverage. terms of eligibility for special includes dependents in addition to We also proposed to amend enrollment periods. Other commenters qualified individuals or enrollees, paragraphs (d)(6)(i) and (ii) to specify sought flexibility for the definition of selects a QHP as part of a special that the Exchange will provide a special ‘‘dependent’’ to correspond with state enrollment period, the Exchange will enrollment period for an enrollee or his law, as opposed to a potentially permit all members of the tax household or her dependent enrolled in the same narrower definition set by a QHP issuer. to enroll together assuming they are all QHP who is determined newly eligible Response: We believe that clarifying eligible to enroll in the particular QHP. or newly ineligible for advance that the meaning of ‘‘dependent’’ aligns If a specific family member experiences payments of the premium tax credit or with 26 CFR 54.9801–2, the regulation a triggering event, but fails to select a who experiences a change in eligibility implementing section 9801(f) of the QHP within the relevant special for cost-sharing reductions. We also Code, throughout this section, including enrollment period, his or her dependent modified the language within paragraph for the special enrollment periods not does not have the ability to choose a (d)(6)(iii) to allow a qualified individual specified in section 9801(f) of the Code, different QHP during this period or his or her dependent who is enrolled helps to promote efficient operations separately. Furthermore, in response to in qualifying coverage in an eligible and uniform standards to guide QHP comments, we clarify that the special employer-sponsored plan and who are issuers and Exchanges. Furthermore, enrollment period in paragraph (d)(3) of determined newly eligible for advance this will ensure that state laws regarding this section, related to citizenship or payments of the premium tax credit to the definition of ‘‘dependent’’ will be immigration status, will apply to both qualify for this special enrollment maintained within the Exchange, as this the individual who is newly qualified as period prior to when he or she will does not contradict state laws, but rather well as his or her dependents, if eligible cease to be eligible for qualifying corresponds with state laws that already for coverage under a QHP. We note that coverage in an eligible employer- require issuers cover certain the special enrollment period described sponsored plan, provided that eligibility dependents. We intend to provide the in paragraph (d)(3) only applies to an for advance payments of the premium appropriate information through the individual who was not previously a tax credit and cost-sharing reductions eligibility determination notice to an citizen, national, or lawfully present, as are not available for an individual who individual and their family members to opposed to an individual switching is enrolled in an eligible employer- adequately inform them of all of their between one of these statuses. sponsored plan. Allowing these options when determined eligible for a Comment: In response to HHS’ qualified individuals or dependents to special enrollment period. solicitation for comments regarding be determined eligible for this special Comment: Some commenters modifying the special effective dates in enrollment period up to 60 days prior to supported our proposal to expand paragraph (b)(2), which correspond the end of his or her employer- certain special enrollment periods to directly to the triggering events sponsored coverage protects them from dependents to allow family members to described within paragraph (d)(2), many potential gaps in coverage. enroll in a new QHP together in commenters urged HHS to include the Finally, we proposed to add a new response to an event experience by one placement of a foster child as a paragraph (d)(10) to provide a special member of the tax household, while triggering event within the special enrollment period for a qualified others sought clarification or an enrollment period. Several commenters individual or his or her dependent that expansion of this approach to other also raised concerns about our proposed is enrolled in an eligible employer- triggering events. Commenters requested modifications to the triggering event for sponsored plan that does not provide clarification as to whether the proposed the special enrollment period described qualifying coverage, and is allowed to rules sought to limit the applicability of in paragraph (d)(6), related to being terminate his or her existing coverage. special enrollment periods to newly eligible or ineligible for advance The Exchange would allow such an dependents enrolled in the same QHP payments of the premium tax credit, or individual to access this special with an enrollee, or to members of the a change in eligibility for cost-sharing enrollment period up to 60 days prior to tax household who may be receiving a reductions. Some commenters opposed the end of his or her coverage in an portion of the advance payments of the our proposal that only enrollees would eligible employer-sponsored plan, to premium tax credit, as well as if be eligible for this special enrollment protect them from potential gaps in paragraph (d)(2) limited the special period if newly eligible or ineligible for coverage. enrollment period to only the qualified advance payments of the premium tax Comment: Several commenters individual and the ‘‘new’’ dependent. credit instead of qualified individuals at supported our clarification in paragraph Other commenters recommended that any point during the coverage year, and (a) aligning the definition of the special enrollment period in recommended that we not finalize this ‘‘dependent’’ to refer to those family paragraph (d)(3) related to citizenship or proposal in favor of retaining the members that would be eligible to enroll immigration status should apply both to language adopted in the Exchange final in coverage under a QHP, and the individual who is newly qualified rule. commended HHS for allowing along with eligible dependents. Response: We appreciate the dependents to change QHPs or enroll in Response: As noted above regarding comments regarding placement in foster a new QHP together with their family the definition of ‘‘dependent’’, family care as it related to special effective members for certain special enrollment members eligible to enroll in a QHP are dates, and will add language in periods when eligible. Some determined eligible for a special paragraph (b)(2) to include the commenters wanted to ensure that enrollment period when specified in placement of a foster child as one of the family members would be adequately paragraph (d) of this section. This is not triggering events listed therein, as well informed about the benefits of enrolling limited to only those members of a tax as make the corresponding change

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regarding the special enrollment period employer-sponsored plan, into catastrophic plan to change QHPs prior in paragraph (d)(2). We note, however, paragraph (d)(6) and modifying it to to the birth of a newborn. Several that due to the availability of Medicaid clarify that consistent with the commenters requested that HHS clarify to foster children, it is unclear how eligibility standards for advance that certain triggering events would frequently this special enrollment payments of the premium tax credit, the qualify as a special enrollment period period will be used. Due to ongoing special enrollment period is available under ‘‘exceptional circumstances’’ considerations regarding the risk pool, for an individual who is enrolled in any described in paragraph (d)(9) of this we are finalizing our proposed eligible employer-sponsored plan, and section, such as provider religious modifications to paragraph (d)(6) to is not eligible for qualifying coverage in objections to covering certain health specify that this special enrollment an eligible employer-sponsored plan. services to women. period only applies to those individuals For example, this modification ensures Response: We believe that the current who are already enrolled in a QHP that an individual who is enrolled in special enrollment periods previously through the Exchange. family coverage but for whom the proposed appropriately account for Comment: Multiple commenters lowest-cost self-only plan is changes in circumstances that expressed general support for the unaffordable in accordance with the necessitate when individuals would modifications we proposed to special Code can access this special enrollment need to select a new or different QHP enrollment periods throughout period, as intended in the proposed and balance these needs with paragraph (d), including our proposal to regulation. We will maintain the considerations regarding the risk pool. allow a prospective special enrollment prospective ability for an enrollee to In addition, we note that § 147.104(b)(2) period for qualified individuals enrolled select a QHP up to 60 days before their specifies that in 2014, an Exchange must in eligible employer-sponsored coverage eligible employer-sponsored coverage provide a special enrollment period for to prevent gaps in coverage. In regards ends or their employer allows him or individuals enrolled in non-calendar to the proposed revision to paragraph her to drop coverage if the lowest-cost year individual health insurance (d)(6)(iii) related to employer-sponsored self-only plan offer is non-qualifying. policies beginning on the date that is 30 coverage, some commenters suggested We note that the Exchange cannot days prior to the date the policy year that the triggering event should not be provide an individual with advance ends in 2014. limited to when an individual is payments of the premium tax credit Furthermore, a state may establish enrolled in employer-sponsored while he or she is enrolled in eligible additional special enrollment periods to coverage, but should also cover non- employer-sponsored coverage, as supplement those described in this enrolled individuals whose offer of specified in 26 CFR 1.36B–2(a)(2). section as long as they are more employer-sponsored coverage does not Comment: A few commenters raised consumer protective than those meet the affordability or minimum concerns regarding the notice that contained in this section and otherwise value standards. Other commenters individuals would receive if determined comply with applicable laws and wanted HHS to allow a qualified eligible for a special enrollment period, regulations. individual to be determined eligible for and wanted to ensure that the notice HHS intends to issue further guidance advance payments of the premium tax would prevent confusion by providing related to how Exchanges will credit within the window of their clear guidance to individuals by helping determine the triggering events that special enrollment period, but prior to them understand the premiums they constitute ‘‘exceptional circumstances’’ when their employer-sponsored would be responsible for, and to help under paragraph (d)(9) of this section. coverage ended. them enroll in a QHP in a timely For the issue raised regarding provider Response: We believe that individuals fashion. religious objections, we believe that with an affordable offer of employer- Response: The Exchange will not have there are other remedies available to sponsored coverage that meets information regarding actual premiums consumers who encounter such minimum value should be encouraged at the time of an initial eligibility situations. to enroll in a plan with their employer. determination notice, since an Comment: One commenter sought If after enrolling, their lowest-cost self- individual will not have selected a plan clarification that the special enrollment only plan option changes during the at that point. HHS also developed model periods only apply to the individual coverage year such that it no longer notices, released alongside this final market as opposed to the small group meets the affordability and minimum rule, that reflect how an Exchange market. value standards, and an individual should clearly communicate an Response: We confirm that the reports this to the Exchange, the individual’s eligibility for an SEP and language in § 155.420 regarding special Exchange will accordingly determine the instructions for how he or she can enrollment periods only applies in its them eligible for a special enrollment enroll in a QHP. entirety to the individual market. period under paragraph (d)(6). As such, Comment: Several commenters also Separate provisions pertain to the small this provision creates incentives for urged HHS to specify additional group market as discussed at individuals to enroll in affordable triggering events for special enrollment § 155.725(a)(3), which excludes employer-sponsored coverage, while periods. Some commenters § 155.420(d)(3) and (d)(6). also minimizing potential gaps in recommended additional triggering Comment: Some commenters raised coverage if a change in coverage occurs events described in Medicare Part D, concerns regarding our proposals within during the year such that an applicant unaffordable rate increases, and this section that pertain to effective would be newly eligible for advance misinformation provided to an dates. Commenters requested payments of the premium tax credit if individual regarding minimum essential clarification on whether the effective their employer terminates coverage or coverage or advance payments of the dates related to errors by the Exchange changes their plan options. In addition, premium tax credit or cost-sharing or contract violations by QHP issuers we are consolidating proposed reductions. One commenter wanted would involve setting retroactive paragraph (d)(10), which provided a HHS to include any change in family enrollment dates. Some commenters special enrollment period to an size as a triggering event, raising suggested that the Exchange provide individual who was enrolled in non- particular concerns about pregnancy to flexibility to individuals related to qualifying coverage in an eligible allow a woman enrolled in a retroactivity for errors as some

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individuals may not want the Exchange enrolled in an eligible employer- Comment: One commenter to implement an earlier effective date. If sponsored plan, but are not eligible for recommended amending § 155.430(d) to allowing for retroactivity, commenters qualifying coverage in an eligible specify that changes in eligibility, urged that the Exchange’s flexibility employer-sponsored plan. Accordingly, including terminations, must adhere to related to errors or contract violations we delete paragraph (d)(10). the effective dates specified in should only be provided to correct the § 155.330(f), to ensure alignment of 19. Termination of Coverage (§ 155.430) unfair outcome. Commenters asked that processes. the effective date be set for the In § 155.430, we proposed to amend Response: We agree with the individual on what it would have been paragraph (b)(1) to clarify that it commenter, and have modified the without the error, and requested that the specifically refers to enrollee-initiated termination effective dates in Exchange only set the effective date terminations. We proposed to add § 155.430(d)(3) to cross-reference according to paragraph (b)(1) of this paragraph (b)(1)(i) to account for § 155.330(f). section if the date on which the circumstances in which, through Comment: Commenters sought determination would have been periodic data matching, an Exchange clarification of why an enrollee who is effective without the error cannot be finds an enrollee eligible for other eligible for other minimum essential ascertained. Several commenters also minimum essential coverage, thus coverage would elect to remain enrolled raised concerns about HHS’ proposal to resulting in the enrollee’s ineligibility in a QHP without advance payments of remove the language about effective for advance payments of the premium the premium tax credit. dates for advance payments of the tax credit. We also proposed in Response: While 26 CFR 1.36B–2 premium tax credit and cost-sharing paragraph (b)(1)(ii), that at the time of specifies that premium tax credits are reductions within this section. Some plan selection, the Exchange would not available to support enrollment in a commenters worried about an Exchange provide a qualified individual with the QHP through the Exchange for an instituting earlier effective dates under opportunity to choose to remain individual who is eligible for other paragraph (b)(3) of this section, enrolled in a QHP if the Exchange minimum essential coverage, such an particularly the FFE in 2014. identifies that he or she has become individual is free to remain enrolled in Response: Outside of a technical eligible for other minimum essential a QHP through the Exchange, without correction within paragraph (b)(3) of coverage, and the enrollee does not advance payments of the premium tax this section, we did not propose any request a termination in accordance credit and cost-sharing reductions, if he changes to the provision related to the with paragraph (b)(1)(i). or she remains eligible for enrollment in Exchange instituting earlier effective We proposed to amend paragraph a QHP through the Exchange. It is dates if all participating QHP issuers (d)(1) to specify that changes in advance possible that an individual would want agree to effectuate coverage in a shorter payments of the premium tax credit and to maintain enrollment without advance timeframe. We believe that there are cost-sharing reductions, including payments of the premium tax credit and sufficient regulatory safeguards for QHP terminations, adhere to the effective cost-sharing reductions for continuity of issuers in 2014 if they inform the dates specified in § 155.330(f). coverage reasons. As we proposed in Exchange that they are not prepared to Comment: Several commenters 155.430(b)(2)(ii), the Exchange must institute earlier effective dates. In terms cautioned against requiring retroactive provide an opportunity at the time of of the Exchange’s flexibility related to termination effective dates that would QHP selection for an individual to retroactive eligibility and enrollment in necessitate the return or repayment of choose to remain enrolled in a QHP if cases of errors or contract violations, we claims, premiums, advance payments of he or she has become eligible for other note that the outcome is still contingent the premium tax credit, or cost-sharing minimum essential coverage. If the on an individual selecting a QHP when reduction payments. However, other individual does not choose to remain determined eligible for a special commenters urged HHS to modify enrolled in a QHP upon such a change, enrollment period. This preserves the termination effective dates in the Exchange would initiate termination ability for an individual to choose to § 155.430(d) such that for qualified upon completion of the redetermination enroll on a particular date, or to choose individuals who gained, or were going process specified in § 155.330. not to enroll. to gain other coverage, the termination Comment: Commenters recommended effective dates would be the day before that in addition to the opportunity at Summary of Regulatory Changes the other coverage begins, regardless of plan selection, enrollees should be We are finalizing the provisions when the enrollee notifies the Exchange given a second opportunity to elect to proposed in § 155.420 of the proposed of his or her other coverage. remain enrolled in a QHP without rule with the following modifications. Response: We appreciate the advance payments of the premium tax First, in paragraphs (b)(2)(i) and (d)(2), comments concerning this provision, credit and cost-sharing reductions when we expand the special enrollment and have modified the termination the Exchange finds the enrollee is period and special effective dates for effective date at § 155.430(d)(2)(iii) for eligible for other minimum essential birth, adoption, and placement for enrollee-requested terminations such coverage through a periodic data match. adoption to also include placement in that QHP issuers and Exchanges may Response: Exchanges are free to foster care. Second, in paragraph (d)(3), only terminate coverage effective on or provide additional opportunities for we clarify that the special enrollment after the date on which the enrollee individuals to request termination, or to period for an individual who was not a requests termination, and not request to remain enrolled in a QHP citizen, national, or lawfully present retroactively. We have also clarified in without advance payments of the non-citizen and gains such status also § 155.430(d)(2)(iv) that the last day of premium tax credit or cost-sharing applies to his or her dependents, if coverage in a QHP for an enrollee who reductions, upon losing eligibility for eligible under the Exchange eligibility is determined eligible for Medicaid, such benefits. In paragraph (b)(1)(ii), we rules. Third, we modify paragraph (d)(6) CHIP or the BHP is the day before the have clarified that the opportunity to incorporate the special enrollment individual is determined eligible for provided at the time of plan selection is period proposed in paragraph (d)(10), such coverage, rather than retroactive to effective both in cases of periodic data with modifications to reflect that it the Medicaid or CHIP eligibility matching as well as when an enrollee accommodates individuals who are effective date. reports gaining eligibility for other

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minimum essential coverage that would termination effective date when the Response: We maintain the make him or her ineligible for advance QHP initiates a termination. streamlined and consolidated structure payments of the premium tax credit and in the final regulation, which we believe cost-sharing reductions. Summary of Regulatory Changes is consistent with the flexibilities and Comment: A commenter raised a We are finalizing the provisions limitations provided in both sections concern that the proposed revision to proposed in § 155.430 of the proposed 1916 and 1916A of the Act. We believe the termination provision in rule, with the following modifications: that consolidation will simplify the § 155.430(b)(2) broadly permits an We modified paragraph (b)(1)(ii) to rules for beneficiaries, providers, and individual whose coverage was already specify that the opportunity provided by states, and will also simplify the state effectuated during the initial open the Exchange at the time of plan plan amendment (SPA) process. States enrollment period to notify the selection for an individual to choose to will continue to be required to submit Exchange or QHP issuer of his or her remain enrolled in a QHP if he or she a SPA to impose new or revised cost termination of coverage, and switch becomes eligible for other minimum sharing or premiums, and CMS will review such SPAs to ensure compliance QHPs. essential coverage applies both to with the regulations and statute. Response: Individuals are free to situations in which eligibility for other Comment: Two commenters terminate enrollment in a QHP through minimum essential coverage is the Exchange at any time. Individuals recommended that rather than remove identified via a periodic data match, as current § 447.58 and reserve it, this who wish to begin other coverage in a well as situations in which the QHP through the Exchange must be provision should be used to implement individual reports the change to the the long-standing statutory provision within an open or special enrollment Exchange. We modified the termination period to do so. Each Exchange has the that the cost sharing provisions of effective date provision at paragraph sections 1916 and 1916A of the Act flexibility to decide whether to allow (d)(2)(iii), for enrollee-requested enrollees for whom coverage has been cannot be waived unless a state meets terminations, such that QHP issuers and the criteria required under section effectuated to change QHPs during any Exchanges may only terminate remaining time in an open or special 1916(f) of the Act. prospectively, not retroactively. We Response: The terms of section enrollment period. For October 1, 2013, modified paragraph (d)(2)(iv), which 1916(f) of the Act, relating to the the FFE will not permit an enrollee to concerns terminations for enrollees who requirements states must meet for the change QHPs in such a situation. As are determined eligible for Medicaid, Secretary to approve a waiver of the cost noted above, such an individual may CHIP or the BHP, such that the last day sharing provisions of sections 1916 and qualify for a new special enrollment of coverage is the day before the 1916A of the Act are clear. We do not period as specified in 45 CFR 155.420. individual is determined eligible for believe it is necessary at this time to Comment: One commenter noticed such coverage, rather than retroactive to issue regulations setting forth the that the proposed provisions did not the Medicaid or CHIP eligibility Secretary’s substantive authority under clarify whether the Exchange would be effective date. We also modified the section 1115 of the Act, and such an permitted to terminate coverage termination effective dates in paragraph action would be outside of the scope of retroactively to the date of death. The (d)(3) to cross-reference § 155.330(f). We this rulemaking. We note that we issued commenter recommended that the added paragraph (d)(7) to clarify that in procedural regulations at 77 FR 11678 Exchanges have the flexibility to align the case of termination due to death, the (Feb. 27, 2012) governing demonstration with non-group market standards, and last day of coverage is the date of death. applications in accordance with section allow for retroactive terminations when In addition, we are finalizing an 1115(d) of the Act (as added by section the Exchange obtains updated amendment to § 156.270(b) to align the 10201(i) of the Affordable Care Act). information regarding a death. coverage termination requirements for Comment: One commenter stated that Response: We agree with the Exchanges and QHP issuers. given the statutory constraints commenter, and have added paragraph implemented in the regulations, states § 155.430(d)(7) to clarify that in the case D. Medicaid Premiums and Cost should be given additional flexibility of termination due to death, the last day Sharing through the use of a standard waiver of coverage is the date of death, which 1. Responses to General Comments template applicable to newly eligible means that coverage could be (§ 447.51 through § 447.57) adults. One commenter stated that for terminated retroactively. MAGI-based eligibility groups, states Comment: A commenter noticed that Comment: Many commenters should be able to impose premiums and there were conflicting provisions supported the streamlined and cost sharing on individuals with income regarding terminations at § 155.430 and consolidated approach to the revised over 100 percent of the FPL that is § 156.270(b). Section 156.270(b) cost sharing rules. One commenter equivalent to what those individuals specifies that QHP issuers must notify believed that removing the distinction would be subject to if they were both the Exchange and enrollees of the between the requirements of enrolled in the Exchange. effective date and reason for termination sections1916 and 1916A of the Act was Response: Section 1916A of the Act at least 30 days prior to the last day of confusing and lost some of the and these regulations provide coverage, and § 155.430(d) specifies that differences in the statutory provisions. considerable flexibility for states to in some cases, QHP issuers may The commenter was also concerned that impose cost sharing on individuals with effectuate termination in fewer than 30 under the revised rules, states will no income over 100 percent of the FPL, days. longer have to explicitly invoke the use including the ability to target cost Response: We have modified of alternative (section 1916A of the Act) sharing, charge higher amounts, and § 156.270(b) in this final rule to align cost sharing through the state plan make the cost sharing enforceable. But the coverage termination standards for amendment process. One commenter the statute provides for cost sharing Exchanges and QHP issuers. We have stated that CMS should not provide protections for the Medicaid population also clarified that QHP issuers will more specific requirements in the that are not the same as the protections promptly notify both enrollees and the regulations to give states more for individuals enrolled in coverage Exchange of the termination reason and flexibility. through the Exchange. To waive the

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Medicaid cost sharing requirements and Response: We are finalizing the definition of ‘‘inpatient’’ has the same go beyond the flexibilities provided in definition as proposed in § 447.51. The meaning as in § 440.2. We believe this section 1916A of the Act for individuals revisions suggested by the commenters is in the best interest of beneficiaries covered under the state plan, the regarding the alternative non-emergency with chronic conditions who may have Secretary must find that the provider being available and accessible frequent visits to the hospital or other requirements of section 1916(f) of the and being able to provide for the institution for treatment of the same Act have been met. We do not believe diagnosis or treatment of a non- condition, and is consistent with the that a template for waiving the cost emergency condition are implicit in the limitations on cost sharing established sharing requirements in accordance requirements that must be met at in the statute. We also add a definition with section 1916(f) of the Act is needed § 447.54(d) before the imposition of cost of ‘‘outpatient services’’ for purposes of at this time. Except for certain specified sharing for non-emergency use of the cost sharing to mean any service or eligibility groups, sections 1916 and ED. However, we have revised the supply not meeting the definition of an 1916A of the Act limit premiums definition of non-emergency services for inpatient stay. This definition will imposed under the state plan on those clarity; this revision is not a substantive include cost sharing for any services with income over 150 percent of the change. outside an institutional setting, not FPL. Comment: Several commenters otherwise exempt by statute or Comment: One commenter noted that recommended that we remove the term regulations, excluding drugs and non- it appears we left in place §§ 447.66 ‘‘coinsurance’’ from the definition of emergency use of the hospital through 447.82 of the current cost sharing at § 447.51, since few states emergency department which are regulations and suggested that CMS charge coinsurance and the statute does defined separately. We note that these remove these sections. not use the term. They discussed that definitions are applicable only to cost Response: This was a drafting error eliminating the term ‘‘coinsurance’’ sharing and do not constitute any would further the goal of simplification. and we have removed those sections in change in definition specific to the Response: We agree that very few the final rule. Those sections reflected provision of benefits or services. states elect the option to charge Comment: One commenter requested alternative premiums and cost sharing coinsurance, but it is still an option CMS provide additional information to requirements under section 1916A of available to states under the statute, states regarding how the proposed the Act that have been integrated into which allows for other ‘‘similar definition of cost sharing will affect the new streamlined cost sharing charges.’’ Therefore we are maintaining offset to expenses that states can report regulations that reflect both sections the term ‘‘coinsurance’’ in the definition for Medicaid FFP (§ 447.51). 1916 and 1916A of the Act. of cost sharing in the final rule. With the Response: Nothing in the definition of 2. Definitions (§ 447.51) streamlining of the regulations in this ‘‘cost sharing’’ at § 447.51 changes the final rule, states that do elect to charge rule related to FFP. Per § 447.56(e), We proposed to add a definition for coinsurance must ensure it does not which is unchanged from current rules, premiums, which includes enrollment exceed the limits defined in § 447.52– no FFP is available for any premiums or fees and other similar charges. We also 54. cost sharing that should have been paid proposed to add a definition for cost Comment: We solicited comments on by the beneficiary, except for amounts sharing to encompass deductibles, whether we should add definitions of that the agency pays as bad debts of copayments, coinsurance, and other ‘‘inpatient stay’’ and ‘‘outpatient providers who are paid in accordance similar charges. Because each of these services’’ to take into account situations with Medicare reasonable cost charges would be included within cost in which an individual is discharged principles. sharing, we proposed to remove and soon thereafter returns to an Comment: One commenter separate requirements related to inpatient facility for continued recommended revising the definition of deductibles, copayments, and treatment of the same condition. One a premium at § 447.51 to exclude coinsurance; instead all cost sharing commenter supported the inclusion of a enrollment fees because premiums are would be subject to a single set of rules. definition of ‘‘inpatient stay’’ and generally applied on an annual or We also proposed new definitions for recommended that we adopt the periodic basis whereas enrollment fees purposes of the premium and cost approach taken in Medicare to define a are generally a onetime payment. The sharing regulations for preferred drugs, ‘‘benefit period’’ and prohibit a second commenter recommends that states emergency and non-emergency services, copay for any inpatient stay within the should have the flexibility to require an and alternative non-emergency service same benefit period. Some commenters enrollment fee in addition to premiums. providers, since the cost sharing rules also supported the addition of a Response: The statute defines a vary for these items and services. We definition of ‘‘outpatient services’’ premium to include any enrollment fee received the following comments giving states broad flexibility to or similar charge, and therefore the concerning the proposed definitions: determine which services may be limitations on total premium charges Comment: Several commenters subject to cost sharing. No commenters include both premiums and enrollment recommended that we revise the opposed adding definitions of these fees. As the Secretary does not have the definition of alternative non-emergency terms. authority to change this requirement, we service provider at § 447.54 to mean ‘‘a Response: We are adding a definition are finalizing the definition of Medicaid-participating provider, such of ‘‘inpatient stay’’ in the final rule at premiums as proposed. States do have as a physician’s office, health care § 447.51 to mean the services received the flexibility to impose both a monthly clinic, community health center, during a continuous period of inpatient premium and an initial enrollment fee hospital outpatient department, or days in either a single medical within the limitations for premiums similar provider that is actually institution or multiple medical described in this rule. available and accessible and can institutions, and also to include a return provide clinically appropriate services to an inpatient institution after a brief 3. Update to Maximum Nominal Cost for the diagnosis or treatment of a non- period when the return is for treatment Sharing (§ 447.52) emergency condition in a timely of a condition that was present in the We proposed to implement sections manner.’’ initial period. We also add that the 1916(a)(3) and (b)(3) of the Act relating

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to nominal cost sharing, and to revise income at or below 100 percent of the states may target cost sharing the maximum amount of nominal cost FPL, those with income above 100 and specifically to those eligibility groups sharing for outpatient services. For at or below 150 percent of the FPL, and who may be enrolled in managed care, beneficiaries with incomes at or below those with income above 150 percent of but the targeting must be based on the 100 percent of the FPL, cost sharing for the FPL. We do not have the authority eligibility group and not solely on the outpatient services may not exceed to revise the income thresholds set out basis of enrollment in managed care. nominal. For those with income above in statute or to preclude states from However, states may charge different co- 100 percent of the FPL, cost sharing can imposing cost sharing on individuals pays to incentivize the use of certain either be limited to nominal or may with income under 133 percent of the care models—for example lower co-pays extend up to 10 or 20 percent of the cost FPL consistent with the limitations in to encourage use of primary care of the service, depending on the income sections 1916 and 1916A of the Act, as medical homes or other patient-centered of the beneficiary. Currently, maximum implemented in these regulations. States coordinated care models—to the extent allowable nominal cost sharing is tied to do not, of course, have to implement that those models provide a different what the agency pays for the service, not cost sharing to the extent authorized by service from those offered at a more to exceed $3.90 for services for which the statute, and most do not do so. We traditional medical provider, and the the state pays more than $50. Because note that in § 447.51 of the final rule we particular model of care is broadly this can be confusing and burdensome add a definition of Federal poverty level available to beneficiaries. This is for states, providers, and beneficiaries, (FPL) to use the acronym throughout the permissible because the state is we proposed to allow instead a flat $4 regulation. No substantive change is differentiating co-payments based on maximum allowable charge for intended. the service provided, and because all outpatient services. This is a modest Comment: Several commenters stated individuals have the choice to receive $0.10 increase from the current that cost sharing is unnecessary in the such services, comparability is met. maximum, and as we noted as a basis context of managed care because the Comment: Some commenters for the proposed rule, the majority of point of managed care is to manage recommended that CMS should restore state services are reimbursed at more utilization and ensure care is provided the use of the term ‘‘nominal,’’ as that than $50. The proposed changes are in the most appropriate settings. The term is used in the existing regulations. discussed in more detail in the January commenters argue that managed care They argue that the Act specifically 22, 2013 Medicaid Eligibility Expansion already achieves the goals that states are limits cost sharing to ‘‘nominal’’ proposed rule (78 FR 4658 and 4659). attempting to achieve through cost amounts and directs the Secretary to We received the following comments sharing and that cost sharing interferes determine what constitutes a ‘‘nominal’’ concerning the proposed update to the with the medical management amount each year to ensure that cost maximum nominal cost sharing effectuated through managed care sharing amounts are not onerous for provisions: programs. Another commenter believed beneficiaries. Comment: Many commenters wanted the rules did not provide enough Response: The streamlining proposed CMS to eliminate cost sharing for flexibility in the managed care context. does not negate the requirements at Medicaid beneficiaries altogether One commenter requested that CMS section 1916 of the Act that cost sharing because of the extensive research clarify that Medicaid agencies can for certain populations be nominal in showing that cost sharing on low- permit managed care organizations to amount. Section 1916 of the Act gives income populations creates barriers to not impose cost sharing on enrollees. the Secretary authority to define accessing needed care, with particular Response: While managed care can nominal cost sharing, which we do at consequence for those with special play a role in ensuring more appropriate proposed §§ 447.52, 447.53 and 447.54. health care needs. One commenter utilization of health care services, the The amounts described in these sections recommended that CMS revise the cost statute does not limit the imposition of are the maximum that can be imposed sharing regulations to align with the cost sharing to fee-for-service delivery on individuals with income at or below lowest eligibility threshold for Medicaid systems. In general, states may not 100 percent of the FPL, since these based on modified adjusted gross establish different cost sharing individuals may not be subject to the income created by the Affordable Care requirements for beneficiaries served by higher cost sharing allowable under Act (for example, 133 percent of the a fee-for-service versus a managed care section 1916A of the Act. The proposed FPL) and create two tiers of cost delivery system unless all beneficiaries amounts will be updated annually based sharing—one for those with income at have the same opportunity to participate on the CPI–U, starting October 1, 2015. or below 133 percent of the FPL and one in fee-for-service versus managed care As mentioned, in streamlining the for those with income above 133 percent and to enjoy the benefits of lower cost regulations implementing sections 1916 of the FPL. One other commenter sharing imposed under one service and 1916A of the Act, we did not use recommended that individuals with delivery mechanism versus the other. the term ‘‘nominal’’ in the regulatory income below 133 percent of the FPL Section 4708(b) of the Balanced Budget text, but the amounts permitted were set should be exempt from cost sharing. Act of 1997 specifically removed the based on the determination that they Response: We recognize the studies statutory cost sharing exemption for were nominal amounts. indicating that cost sharing may impact enrollees in managed care organizations. Comment: Many commenters agreed beneficiaries’ access to needed and Managed care organizations may choose with severing the tie between maximum prescribed services, given the low not to impose state plan cost sharing on cost sharing amounts and what the incomes of most of those who are their members, but the state must still agency pays for the service but believed enrolled in Medicaid. However, the consider the amount of cost sharing that a flat $4 maximum amount statute authorizes states to impose cost under the state plan in determining the proposed at § 447.52 was too sharing, subject to certain limitations. actuarial soundness of the capitated burdensome for Medicaid beneficiaries Additionally, the Affordable Care Act payment to the managed care with income at or below 100 percent of did not modify the cost sharing organization. Section 1916A of the Act the FPL. Many commenters provisions of sections 1916 and 1916A allows states to target cost sharing to recommended that CMS should set of the Act. Section 1916A of the Act specified eligibility groups, as described maximum cost sharing amounts based distinguishes between individuals with at § 447.52(d) of this final rule, and on the income and health status of the

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beneficiaries and recommended using under section 1916 of the Act to impose sharing charges for an inpatient stay, for Medicare as a model, which establishes nominal cost sharing on individuals individuals with income at or below 100 two tiers for Part D copayments for with income at or below 100 percent of percent the FPL, to $75. This $75 limit individuals with income at or below 100 the FPL, such cost sharing must also be will encompass most hospital cost percent of the FPL and individuals with applied to individuals with income sharing established by state Medicaid incomes over 100 percent of the FPL, above 100 percent of the FPL. Section programs today and will align with the and recommend the Medicaid cost 1916 of the Act does not allow for ratio of cost sharing for inpatient versus sharing maximum should be limited to targeted cost sharing on different groups outpatient services with similar charges $2.10 for those at or below 100 percent of individuals, so any cost sharing provided under private insurance plans. of the FPL which is the approximate established under this authority is To provide a transition period for the average of the FY 2013 maximum applicable to all non-exempt small number of states with existing copayment amounts. individuals. The 10 and 20 percent inpatient cost sharing exceeding $75, we Response: Sections 1916 and 1916A maximums established for individuals are adding a new paragraph at of the Act allow for different levels of with income over 100 percent of the § 447.52(b)(2). Under paragraph (b)(2), cost sharing for individuals with income FPL are specific to cost sharing states with inpatient cost sharing that at or below 100 percent of the FPL established under the authority of exceeds $75, as of July 15, 2013, must versus those with income over 100 section 1916A of the Act. This authority submit a plan to CMS that provides for percent of the FPL, similar to the two- specifically allows for cost sharing of up reducing inpatient cost sharing to $75 tiered structure established for Medicare to 10 percent of the cost of the service by July 1, 2017. We redesignate the Part D which the commenters for individuals above 100 and at or succeeding paragraphs, accordingly. recommend. Section 1916A of the Act below 150 percent of the FPL and 20 Comment: We solicited comments on further differentiates maximum cost percent for individuals with income whether we should define nominal cost sharing levels for those with income above 150 percent of the FPL, with sharing differently for community-based above 100 or at or below 150 percent of slightly different maximums for drugs long term services and supports (LTSS) the FPL and those with income over 150 and non-emergency use of the due to the frequency with which these percent of the FPL. Current regulations emergency department. For a specific services are provided and utilized by already allow states to charge all non- outpatient service, a state may establish beneficiaries. Many commenters exempt beneficiaries up to $3.90 for nominal cost sharing under the supported a separate approach to LTSS many services, and as described authority of section 1916 of the Act for because they are concerned about the previously, we believe the $4 maximum all non-exempt individuals covered financial burden that an individual charge is comparable, particularly given under the state plan in an amount not needing these services could face if a that the next update to this nominal to exceed $4 (as adjusted for inflation), state were allowed to charge up to $4 for amount has been postponed under this and the state may also establish targeted each service and most recommended rule until October 1, 2015. We also note cost sharing for specified individuals that such services be exempted from that while this is the maximum level at under section 1916A of the Act for that cost sharing. Commenters were also which states may set their cost sharing same outpatient service, in an amount concerned that allowing cost sharing for obligations, they may establish lower not to exceed 10 percent of the cost of LTSS would discourage individuals levels of cost sharing. the service. In such a case, the cost from utilizing LTSS and leave many to We note that under current sharing imposed under the section 1916 opt for institutional care, which is more regulations at § 447.56, states have the authority may not exceed 10 percent of costly for states in the long run. Some option to establish different cost sharing the cost of the service if that amount is commenters recommended that charges for individuals at different less than the maximum nominal amount consideration be given to limiting the income levels. We inadvertently omitted allowed for individuals with income number of copayments permitted per this section from the proposed rule and under 100 percent of the FPL, because week, month, or other specified are restoring this option in the final rule the state must ensure that lower income timeframe for those with significant at § 447.52(g). We specify in the final individuals are charged less than service needs, including adults with rule that if the state imposes cost individuals with higher income, as serious mental illness. One commenter sharing charges that vary by income, it described at § 447.52(g). opposed establishing different limits for must ensure that lower income Comment: We solicited comments on community-based long term services individuals have lesser cost sharing the best approach to cost sharing for an and supports as it would be than higher income individuals. inpatient stay for individuals with administratively burdensome for states. Comment: One commenter expressed income at or below 100 percent of the This commenter also pointed out that concern that the simplified $4 FPL. We indicated we were considering no specific mention is made in the maximum for individuals with income a maximum cost sharing amount less regulations to long-term care at or below 100 percent of the FPL than what is allowed in current community-based services provided would create a disparity with the regulation. Most commenters believed under sections 1915(c), 1915(d), 1915(i), percentage-based maximum cost sharing that the current regulations allowing or 1915(k) of the Act. The commenter for individuals with income above 100 cost sharing of up to 50 percent of what suggested that perhaps these defined percent of the FPL. the agency pays for the first day of packages are the more appropriate Response: It was not our intent to inpatient care was too great a burden for starting place if separate cost-sharing establish a cost sharing system under individuals at this income level. A few rules for these services are considered, which lower income beneficiaries could commenters recommended a maximum but we need to take into account the fact be subjected to higher cost sharing than copayment of $10, one commenter that some individuals already contribute their higher income counterparts. Our recommended $100, and many to the cost of these services in intent was to define maximum nominal recommended that the cost sharing for accordance with the post-eligibility cost sharing, as described under inpatient care should be the same as for treatment of income rules under part sections 1916(a)(3) and (b)(3) of the Act, outpatient services and be limited to $4. 435 subpart H. as $4 for outpatient services. If a state Response: We are revising the Response: We agree with commenters seeks to use the authority provided regulations to limit maximum cost that additional protections for non-

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exempt individuals receiving greatest protections for beneficiaries, to this requirement, as follows. First, community-based LTSS are appropriate consistent with statutory provisions, states may vary the cost sharing to ensure that receiving care in the while still maintaining states’ flexibility obligation by income level, reflected at community, rather than in an to establish appropriate cost sharing § 447.52(g) of the final rule, such that institution, remains a financially viable mechanisms for their programs. individuals with family income below a option for such individuals, but the Comment: One commenter believed certain threshold could be subject to statute does not authorize the Secretary that proposed § 447.52(b)(2), which lower cost sharing than those at higher to require an exemption. We note that relates to maximum allowable cost income levels. A state could, for few states now impose cost sharing on sharing when the state does not have example, decide not to impose cost LTSS. We encourage all states to fee-for-service payment rates, is sharing on individuals with incomes consider the significant consequences of confusing and could be read to only below 50 percent of the FPL, and to imposing cost sharing on such services, apply to those with income at or below impose a $1 copayment on individuals and remind states that they are required 100 percent of the FPL. with income above 50 percent of the to comply with the Americans with Response: We agree and have revised FPL. We note that states should have Disabilities Act and Section 504 of the the paragraph, redesignated in this final adequate processes in place to ensure Rehabilitation Act as interpreted in the rule as § 447.52(b)(3), to be clear that, providers and beneficiaries are aware of Olmstead v. L.C. and E.W (‘‘Olmstead’’) ‘‘in states that do not have fee-for- who can be charged what cost sharing to ensure they are not placing service payment rates, any cost sharing so it is appropriately applied. Second, individuals at risk of imposed on individuals at any income reflected at § 447.52(d), as redesignated institutionalization. While we are not level may not exceed the maximum in the final rule, states may establish directing an exemption for LTSS, we amount established for individuals with different levels of cost sharing for agree with commenters that additional income at or below 100 percent of the targeted groups of individuals with protections are necessary for individuals FPL.’’ The same clarification to the income above 100 percent of the FPL. In with high service needs, and we are regulation text is made at § 447.53(c). this final rule, we clarify that for cost Comment: Some commenters revising the proposed aggregate limit for sharing imposed for non-preferred drugs recommended that the Secretary premiums and cost sharing to protect all and non-emergency services furnished provide states the flexibility to beneficiaries with high medical needs. in an ED, states may target to specified determine the cost sharing methodology As discussed further under § 447.56, the individuals with income below 100 that best aligns with their delivery 5 percent aggregate limit applies to all percent of the FPL as well as those system and provider categories, for individuals regardless of income. In above, as discussed below. Thus, states example allowing flat co-payments and addition, if premiums and cost sharing could impose different cost sharing on premiums, co-payments based on a could exceed 5 percent of family individuals eligible in the new Adult percentage of what the agency pays for income, states are required to have a group, or any other eligibility group, the service, or premiums calculated as mechanism to track such premiums and with income greater than 100 percent of a percentage of family income. the FPL than that imposed on other cost sharing in a manner that does not Response: The regulations at rely on beneficiaries. To provide beneficiaries. proposed §§ 447.52, 447.53 and 447.54 Comment: One commenter stated that protections to individuals with high establish maximum limits on the cost service needs and ensure their cost proposed § 447.52(f), which lists the sharing that states can impose. While information that must be included in sharing does not exceed the aggregate we are no longer requiring that the the state plan for each cost sharing limit, we encourage states to consider maximum cost sharing amounts be charge imposed, is revised from the prospectively ending a beneficiary’s cost based on what the agency pays for the current regulations at§ 447.53(d) but sharing obligation at a specified time of service, nothing in the regulations that we did not provide a rationale for the applicable month or quarter given preclude states from setting their cost the revisions. the frequency of utilization and the sharing amounts on such basis provided Response: We consolidated the state predictability of services provided that the amounts charged do not exceed plan requirements currently contained under an approved plan of care, for maximum permissible levels. Similarly, in §§ 447.53(d) and 447.68 into one new example. We note that such an approach provided that the specific limits set out section, redesignated as § 447.52(i) in must take into account the cost sharing in the statute and codified in the the final regulation. The state plan for items or services that may be regulations—including the aggregate requirements for tracking beneficiary received outside the plan of care, such limit not to exceed 5 percent of family cost sharing related to the aggregate as drugs for example, which would also income—are respected, states have the limit are contained in § 447.56(f)(2) of contribute to the 5 percent aggregate flexibility under § 447.55 to structure this final rule. In consolidating the state limit. premiums in the manner suggested, plan requirements for cost sharing We considered different options for a although, as noted, statutory authority under the authority of both sections separate definition of nominal cost to impose premiums is limited. 1916 and 1916A of the Act, we sought sharing specific to LTSS but have Comment: We received several generally to maintain the current determined the most effective way to comments suggesting we clarify that requirements, while removing any ensure ongoing affordability of care for states can apply different levels of cost unnecessary regulatory provisions. For beneficiaries who are frequent and sharing for their current Medicaid example, we removed the requirement regular consumers of care, including but populations as compared to adults who that states describe the basis for not limited to those who need LTSS, is will become eligible under the adult determining the charge, because these to ensure that there is an effective group. regulations no longer require states to aggregate cap on cost sharing. Aggregate Response: In general, any cost sharing base their cost sharing charges on what out of pocket limits are a common established under the state plan must the agency pays for the service and this practice in the commercial market and apply to all beneficiaries who are not provision was no longer necessary. We we believe the extension of the specifically exempted per the note that we are making minor technical aggregate limit is consistent with requirements at § 447.56(a) to ensure changes to paragraph § 447.52(i)(4) to industry practice and will provide the comparability. There are two exceptions improve the structure of the paragraph

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and delete extraneous language. No provider-enforceable cost sharing to ensures that all beneficiaries have substantive changes are intended. non-exempt individuals with income access to such providers. Comment: One commenter over 100 percent of the FPL and thereby Comment: One commenter recommended that CMS require that assure the provision of services to lower recommended that we include in the state plans identify whether a cost income individuals who may not be final rule, language currently at § 447.60 sharing charge is being imposed under able to afford the charge. These that was omitted from the proposed the authority of section 1916 or section provisions of sections 1916 and 1916A rule, which requires that any cost 1916A of the Act. of the Act cannot be waived unless the sharing charges imposed by managed Response: With the streamlining of state meets the requirements of section care organization on Medicaid enrollees the regulations we do not believe it is 1916(f) of the Act. be in accordance with the requirements necessary for states to specify what Comment: One commenter set forth in the regulations. authority they are relying on to impose recommended that the table at Response: We agree with the cost sharing. In their state plan, the § 447.52(b) be clarified to clearly specify commenter. The omission of this states seeking to impose or continue that the amounts are maximum amounts provision was not intentional and we cost sharing will need to detail who will to correspond with the language in have included this requirement in the be subject to cost sharing, for what § 447.52(b). final rule at § 447.52(h). service, how much, and whether Response: We agree with the Comment: One commenter believed providers may deny services for lack of commenter and have made the revision that if deductibles are an option for a payment. We will review state plan to §§ 447.52(b), 447.53(b) and 447.54(b). state, they should be administered at an amendments to ensure compliance with Comment: One commenter asked if individual level on an annual basis sections 1916 and 1916A of the Act and cost sharing must be imposed or if it is because the commenter believes these regulations. an allowable activity. Comment: One commenter requested monthly and/or family-level deductibles that we clarify that the regulation Response: States are not required to are complex, confusing, and not the authorizes states to allow providers to impose cost sharing, it is an option. standard generally used by health plans deny services for nonpayment of cost Some states do not impose cost sharing. especially when combined with other sharing, but does not confer authority Furthermore, if a state does impose cost cost sharing. on states to require providers to do so. sharing, it has the option to charge less Response: Deductibles are permitted One commenter recommended that we than the maximum amounts. Many at an individual level under the statute include a provision that providers are states do so today. and these regulations. Any deductible not prevented from reducing or waiving Comment: One commenter requested imposed by a state must be within the the application of a cost sharing clarification as to whether § 447.52(e) maximum amounts established in requirement on a case-by-case basis. (relating to the prohibition against §§ 447.52–54, and subject to the Response: The requirements at multiple charges) includes premiums. aggregate limit described in § 447.56(f) §§ 447.52(e)(1) and (e)(2), as Response: § 447.52(e) has been of this final rule. redesignated as § 447.52(f) in this final redesignated in this final rule, are clear 4. Higher Cost Sharing Permitted for that, while states may allow providers to rule and pertains to cost sharing only, which is defined in § 447.51 to include Individuals With Incomes Above 100 deny services to individuals with Percent of the FPL (§ 447.52) income above 100 percent of the FPL any copayment, coinsurance, deductible who have failed to pay cost sharing or similar charge. Premiums are not We proposed to consolidate the charges, states are not required to permit encompassed in this definition, and current multiple cost sharing rules providers to do so (and providers may states may impose both a premium and implementing sections 1916 and 1916A only deny services if the state opts to cost sharing on a given individual of the Act, respectively, into one set of permit them to do so). Further, subject to the applicable conditions on streamlined cost sharing regulations for § 447.52(e)(3) is clear that even if the such charges. both statutory authorities at proposed state exercises this option, providers are Comment: One commenter § 447.52. Under section 1916 of the Act, not prohibited from nonetheless electing recommended revising the rule to allow states may impose nominal cost sharing to provide the service to individuals states to waive or reduce cost-sharing on individuals not exempted by the who do not pay their cost sharing for outpatient services delivered by statute. Under section 1916A of the Act, obligations. This is not at state option— designated high-value providers or in statute states may impose cost sharing at it is a provider option—and we do not high-value care settings, even if those higher than nominal levels for believe it is necessary to be included in services may otherwise be subject to nonexempt individuals with incomes the state plan. cost-sharing. One commenter requested above 100 percent of the FPL. For Comment: A few commenters clarification that the cost sharing rules individuals with income above 100 and suggested that the regulations authorize may not be applied to different types of at or below 150 percent of the FPL, states to allow providers to deny practitioners based on their licensure section 1916A of the Act permits cost services for non-payment of cost sharing and that cost sharing within a category sharing for nonexempt services up to 10 charges in more situations, including for of services is not used to discriminate percent of the cost paid by the state for those with income at or below 100 against health care practitioners acting such services. (Different rules, discussed percent of the FPL. The commenters within their state-defined licensure. below, pertain to cost sharing for drugs believe that such provider enforcement, Response: Nothing in the regulations and emergency department services). particularly in the context of prevents a state from determining which For individuals with income above 150 nonemergency use of the emergency services are subject to cost sharing and percent of the FPL, such cost sharing room, would be appropriate. the amount charged, or by what type of may not exceed 20 percent of the cost Response: We are unable to extend provider the service is delivered. As paid by the state. We received the the scope of the regulations beyond the suggested by the commenter, states following comments concerning the statutory authority provided in sections could differentiate cost sharing for proposed provision for higher cost 1916 and 1916A of the Act, both of services provided by a designated high sharing permitted for individuals with which only allow states to impose value provider as long as the state incomes above 100 percent of the FPL:

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Comment: A few commenters were that states deduct a beneficiary’s cost use a flat fee as long as it does not concerned that we proposed to permit sharing obligation from the payment to exceed the maximum level permitted. In cost sharing for children. providers is not new policy. It is determining the cost sharing for a Response: We did not propose new contained in current regulations at particular service, states also can use the policy in the proposed rule related to §§ 447.57 and 447.82, redesignated at average payment made for the service cost sharing for children. Section 1916A § 447.56(c) in this final rule. FQHC across providers or units of the service of the Act permits states to impose cost services are not specified as exempt to develop a consistent cost sharing sharing on certain children by from cost sharing under sections 1916 or amount within the maximum amount exempting children covered under 1916A of the Act and we do not believe allowed by statute and regulation. mandatory eligibility categories. This that the Secretary has authority to Comment: One commenter asked for statutory option, implemented at mandate that states nonetheless exempt clarification regarding the definitions of § 447.70 of the current regulations, is such services from cost sharing based on income that states should use in setting retained in this rulemaking at FQHCs’ section 330 obligations. States, cost sharing charges, other than to say § 447.56(a)(1)(i) through (VI). We however, do have the flexibility to that the definitions of household revised the description of children who exempt particular services (including income in § 435.603 should be used in are exempt from premiums and cost FQHC services) from cost sharing and/ determining the aggregate limit on cost- sharing at § 447.56(a)(1)(i)(iii) to reflect or to adjust the amount of cost sharing sharing. The commenter sought further the consolidation of different statutory imposed, consistent with the clarification on the meaning of ‘‘family eligibility groups for children under a regulations. income’’ and suggested that states be single regulatory section at § 435.118 of Comment: Some commenters required to describe their methodology the March 2012 final rule. We also made recommended permitting flat-dollar in their state plan for approval by the a technical change to the description of copayments for all income groups, Secretary as reasonable. children exempt from premiums and which they think would be easiest for Response: In the interest of cost sharing under § 447.56(a)(1)(i)(iv) to enrollees and providers to understand streamlining the requirements and reflect the changes in the types of and for Medicaid plans to administer. reducing administrative burden, we are assistance available under Title IV–E of One commenter requested that we not requiring states to include, in their the Act. These are not substantive clarify how a limit based on 10 percent state plans, the methodology for changes and are intended solely to assist of the cost the agency pays for the determining income specific to states in appropriately identifying those service for individuals with family premiums and cost sharing. For children who may be charged premiums income above 100 percent but at or individuals whose financial eligibility is and cost sharing and exempting those below 150 percent of the FPL and 20 determined based on modified adjusted who may not, as described in the percent of the cost the agency pays for gross income (MAGI), ‘‘family income’’ statute. the service for individuals with income for the purposes of imposing premiums Comment: One commenter over 150 percent of the FPL, would or cost sharing or for defining the recommended that CMS specify health apply to FQHC services reimbursed aggregate limit means ‘‘household centers’ statutory responsibility related under the prospective payment system income’’ using MAGI-based methods, as to the grants provided under section 330 (PPS). The commenter is concerned that set forth in § 435.603. For individuals of the Public Health Services Act because the amount of reimbursement who are exempt from MAGI under (PHSA) to provide services regardless of under the PPS varies by health center, section 1902(e)(14)(D) of the Act, ability to pay and clarify that states may the maximum allowable cost sharing implemented at § 435.603(j) of the not impose on health centers any obligation for a particular service or regulations, we are still examining obligations that conflict with these visit would differ from health center to options related to income requirements. The same commenter also health center, and that this would be determinations. recommended that CMS add an administratively burdensome for states, Comment: One commenter stated that exception at § 447.56(c)(3), entitling managed care plans, and providers; we do not have the authority to allow FQHCs to full Medicaid payment in inequitable for beneficiaries; and could targeted cost sharing because it would situations in which they are required to impede access to FQHC services. The violate comparability and recommended collect cost sharing that would directly commenter recommends that we revise that we delete proposed § 447.52(c), conflict with the section 330 the rule to provide that the maximum relating to ‘‘targeted cost sharing.’’ requirements to waive a portion of the cost sharing for all individuals for Another commenter stated that Medicaid cost sharing, and at FQHC services reimbursed under the additional targeting and variation of cost § 447.56(e)(1) to authorize FFP for cost PPS rate be the same as the maximum sharing within groups would add sharing amounts waived by an FQHC. rate for individuals with income at or unnecessary complexity and should not At a minimum, the commenter below 100 percent of the FPL. be used. recommends that CMS and HRSA issue Response: Section 1916A of the Act Response: We are retaining the option joint guidance to minimize the tension sets the maximum allowable cost for states to target cost sharing to between the Medicaid and section 330 sharing for individuals with income specified groups of individuals. of the PHSA regulations concerning over 100 percent and at or below 150 Comparability is required for cost patient payment obligations for services percent of the FPL at 10 percent of what sharing imposed under section 1916 of provided by FQHCs. the agency pays for the service and for the Act. However, section 1916A(a)(1) of Response: The obligations of FQHCs individuals with income over 150 the Act provides that, ‘‘a State, at its related to their section 330 grants, as percent of the FPL, at 20 percent of what option and through a state plan well as reimbursement to FQHCs, are the agency pays. We do not have the amendment, may impose premiums and beyond the scope of this regulation. authority to change the maximum cost sharing for any group of individuals This regulation does not require that amount to a flat fee. We note that these (as specified by the State) and for any FQHCs bill patients for cost sharing, but percentages represent the maximum type of services . . . and may vary such it does require that the payment to the allowable charges. States have the premiums and cost sharing among such provider take into account the cost flexibility to establish lesser cost sharing groups or types, consistent with the sharing obligation. This requirement amounts for any service, and they may limitations established under this

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section.’’ This provision is codified in on whichever non-exempt service they agency does not differentiate between current regulations at § 447.62(a). choose for individuals at any income preferred and non-preferred, is a de Therefore, at redesignated § 447.52(d) of level subject to limitations in the facto preferred status. The commenter the final rule states may apply targeted regulations, and are not required to was concerned that this could result in cost sharing on specified groups of impose cost sharing on all non-exempt lower cost sharing for more expensive individuals; such cost sharing is limited services in the state plan. For the brand name drugs that are not identified to individuals with income over 100 recommendation regarding lower by the state as non-preferred. One percent of the FPL, per the requirements income versus higher income commenter was opposed to the of section 1916A of the Act. We have individuals, as noted above, we added definition of preferred drugs at revised § 447.52(d), adding paragraphs § 447.52(g) to specify that if a state proposed § 447.51 to include all drugs if (1) and (2) to clarify that for cost sharing imposes income-related charges, it may the agency does not differentiate imposed for non-preferred drugs and not impose a higher charge for lower- between preferred and non-preferred non-emergency services furnished in an income individuals than is charged for drugs. ED, the state may target to individuals higher-income individuals. Response: Section 1916A of the Act below 100 percent of the FPL as well as allows states to have different cost 5. Cost Sharing for Drugs (§ 447.53) those above, as allowed by section sharing levels for preferred and non- 1916A of the Act. We proposed to establish a single preferred drugs, but does not speak to Comment: We solicited comments on provision governing cost sharing for generic versus brand name drugs. States whether the regulations should specify drugs which would apply to nonexempt may use a variety of methods to ways in which states may target individuals at all income levels. To determine preferred and non-preferred different defined groups of individuals provide additional flexibility to states, drugs including whether the drug is a (with income over 100 percent of the and to further encourage the use of brand or generic. States also maintain FPL) for differential cost sharing under preferred drugs, we proposed to define other cost control measures, such as proposed § 447.52(c). One commenter ‘‘nominal cost sharing’’ as no more than mandatory generic substitution policies. suggested that the regulation should $8 for non-preferred drugs and $4 for The definition of preferred drugs, which make it clear that targeting must be preferred drugs for individuals with includes all drugs if the agency does not reasonable, that individuals with lower income at or below 150 percent of the differentiate between preferred and non- incomes may not be charged more than FPL. For individuals with family preferred drugs, is consistent with those with higher incomes, and that income above 150 percent of the FPL, section 1916A(c) of the Act and current targeting may not discriminate based on per section 1916A(c) of the Act, a higher regulations at § 447.70(a). gender, physical or mental disability, cost sharing charge may be established Comment: Several commenters age, race, ethnicity, or any other for non-preferred drugs, not to exceed disagreed with the proposed policy to protected classification. Another 20 percent of the cost the agency pays allow cost sharing for up to $4 for commenter requested that the Secretary for the drug. While states may not preferred drugs and $8 for non-preferred include criteria that must be considered impose cost sharing on exempt drugs. They described research showing by states in targeting cost sharing to individuals for preferred drugs, states that even low prescription drug particular types of beneficiaries. may elect to impose cost sharing for copayments may cause very low income Response: Section 1916A of the Act non-preferred drugs on individuals who people to defer filling prescriptions. The gives states authority to target premiums are otherwise exempt up to the nominal commenters argue that Medicaid and cost sharing to any group of cost sharing amount. Cost sharing for a beneficiaries cannot be incentivized to individuals with income above 100 non-preferred drug must be limited to select a preferred drug, as is percent of the FPL (for cost sharing the amount imposed for a preferred drug accomplished with some success among imposed for non-preferred drugs or non- if the individual’s prescribing provider middle class consumers; instead, with emergency use of the emergency determines that the preferred drug for such high cost sharing differentials, department, states can target to treatment of the same condition either Medicaid enrollees will go without the individuals at all income levels as will be less effective for the individual ‘‘non-preferred’’ drug even if it is discussed above), and to vary such or will have adverse effects for the medically necessary and would work far premiums and cost sharing among the individual or both. Under the proposed more effectively than a preferred drug. groups. In examining all the possible rule, states would have the flexibility to These commenters recommend that ways in which targeting could be apply differential cost sharing for CMS define nominal drug cost sharing applied, we believe targeting based on preferred versus non-preferred drugs. in relation to the income and health eligibility group or income level are the For example, a state may charge $1 for status of the Medicaid population and only targeting methods consistent with preferred and $5 for non-preferred drugs amend the table at § 447.53(b) to section 1916A of the Act, which will not or $0 for preferred and $8 for non- establish maximum cost sharing as lead to discriminatory practices. Thus, preferred drugs. We received the follows: individuals with family income states can choose to impose premiums following comments concerning the at or below 150 percent of the FPL— or cost sharing on individuals with proposed cost sharing for drugs Preferred drugs: $1.10, Non-preferred income above 100 percent of the FPL in provisions: drugs: $3.30; individuals with family particular eligibility groups and to vary Comment: A few commenters income exceeding 150 percent of the them by income level within the group. suggested we take an approach that FPL—Preferred drugs: $1.10; Non- States may not target solely on the basis distinguishes between formulary generic preferred drugs: $4.20. Two other of delivery system—managed care, fee- and formulary brand drugs (instead of commenters expressed concern with the for-service, and primary care case preferred and non-preferred). One $8 copay for non-preferred drugs if management—but may target eligibility commenter noted that this approach states have latitude to classify most or groups covered through a specific may be more helpful in the managed all of the brand-name drugs in a service delivery system like managed care context. One commenter requested therapeutic class as non-preferred. One care. States may not target based on clarification as to whether the commenter stated the proposed increase disease-type or chronic condition. We requirement that all drugs be considered in cost sharing is unnecessary because note that states can impose cost sharing preferred for cost sharing purposes if the states already have many tools to

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control prescription drug costs and have so if Congress intended to allow the payment of such cost sharing. high utilization of generic drugs. Other same for non-preferred drugs, Congress Alternatively, the commenter requested commenters appreciated the flexibility would have provided such an option in that CMS mandate states to develop a proposed for cost sharing. One the statute. mechanism whereby participating commenter welcomed the increased Response: Section 1916 of the Act pharmacies can submit unpaid cost maximum cost sharing, and one gives the Secretary the authority to sharing amount to the state for payment. commenter stated that allowing states to define nominal cost sharing. There is One commenter recommended that HHS charge higher cost sharing for non- nothing in the statute which requires a require states to implement cost sharing preferred drugs, when effective, lower- single definition of what is considered provisions for prescription drugs and to cost alternatives are available, is a to be nominal. Moreover, the general permit providers to withhold reasonable policy. cost differential between preferred and medication (whether preferred or non- Response: We agree that cost sharing non-preferred drugs merits a different preferred) from beneficiaries for failure is just one of many tools that states may nominal maximum for each type, to pay cost sharing. use to manage drug utilization, and therefore we believe it is appropriate to Response: The imposition of states may determine that higher cost establish a $4 nominal maximum for premiums or cost sharing is an option sharing does not enhance their efforts to preferred drugs and an $8 nominal permitted states under sections 1916 promote the use of preferred drugs. maximum for non-preferred drugs. and 1919A of the Act and cannot be However, we also agree that it is a tool Comment: One commenter expressed mandated by the Secretary. The statute permitted under the statute. In the final concern for vulnerable populations that stipulates that providers, including rule we are maintaining the option for require certain classes of drugs, such as pharmacies, may not deny services to states to impose cost sharing of up to $4 HIV antiretroviral drugs, and individuals with income at or below 100 for preferred drugs and $8 for non- recommended they be available at the percent of the FPL due to inability to preferred drugs for all individuals, ‘‘preferred’’ drug cost-sharing level. pay their cost sharing obligation. States including those with income at or below Response: States have the discretion have the option to allow providers to 150 percent of the FPL, and for those to designate which covered drugs deny services to individuals with with income above 150 percent of the within each class of drugs will be income over 100 percent of the FPL if FPL, to continue to establish higher considered preferred or non-preferred. they do not pay required cost sharing. non-preferred drug cost sharing of up to Beneficiaries must always have access If a state opts to allow providers to deny 20 percent of the cost of the drug. As to necessary drugs at the preferred drug services if the individual does not pay described at § 447.53(e), as revised in rate because a given drug cannot be the cost sharing, this must be indicated the final rule, if a prescriber finds that considered non-preferred unless the in their state plan. Regardless of the non-preferred drug is medically state has an equivalent drug available at whether an individual pays the cost necessary, the state must have a process the preferred rate. In addition, sharing, states must deduct the payment in place to limit cost sharing for that § 447.53(e), as revised in this final rule, made to the provider by the amount of drug to the amount for preferred drugs. requires states to provide a non- the individual’s cost sharing obligation Comment: One commenter suggested preferred drug at the preferred drug cost in accordance with § 447.56(c) of this that the final rule require a cap on cost sharing level, if the prescribing provider final rule. We do not have the statutory sharing for non-preferred drugs as a determines that the preferred drug authority to alter these requirements in necessary protection for this vulnerable would be less effective or have adverse the manner being suggested by the population. effects on the individual. commenters. Response: The 5 percent aggregate Comment: A few commenters Comment: One commenter requested limit on cost sharing in the current recommended that we convert the non- clarification as to whether states have regulation and included in this final preferred prescription drug copayment the option to impose cost sharing for regulation at § 447.56(f) applies to all to a flat dollar amount for individuals non-preferred drugs on individuals cost sharing, including that for non- with incomes over 150 percent of the otherwise exempt from cost sharing. preferred drugs. States have the option FPL instead of basing cost sharing on One commenter recommended that to establish additional cost sharing what the agency pays for the drug. states should have the option to impose limits for particular services, such as Response: As discussed above, section cost sharing on exempt individuals for drugs at § 447.56(f)(5) of the final rule, 1916A of the Act sets the maximum certain classes of prescription drugs that but we do not have the authority to allowable non-preferred drug cost the state identifies as elective or mandate a cost sharing cap specific to sharing level for individuals with controversial, such as narcotics. non-preferred drugs. income over 150 percent of the FPL at Response: Section 1916A of the Act Comment: A few commenters stated 20 percent of what the agency pays for allows states to impose cost sharing for that CMS was circumventing the the drug. CMS does not have the non-preferred drugs on otherwise statutory requirements of section 1916A authority to change the maximum exempt individuals, provided that such of the Act by setting two different amount allowed to a flat fee, but states cost sharing does not exceed a nominal maximum ‘‘nominal’’ amounts for may construct their charges as flat fees amount. At § 447.53(b) of the final rule, preferred and non-preferred drugs as long as such fees are within the we have defined nominal cost sharing because the Act requires that cost maximums established by law. for preferred drugs as no more than $4 sharing for all drugs imposed on Comment: One commenter supported and for non-preferred drugs at no more individuals with income under 150 the proposed increase of allowable cost than $8. We are revising § 447.53(d) in percent of the FPL must not exceed the sharing for non-preferred drugs when the final rule to clarify that cost sharing ‘‘nominal’’ cost sharing as otherwise Medicaid recipients and not Medicaid for non-preferred drugs imposed on determined under section 1916 of the pharmacy providers bear responsibility otherwise exempt populations cannot Act. Additionally, the commenter notes for the higher cost sharing. The exceed the nominal amount defined in that section 1916A of the Act explicitly commenter requested that, when § 447.53(b) in accordance with section allows states to charge up to twice the enhanced cost sharing for prescription 1916A(c) of the Act. While states may nominal amount for non-emergency care drugs is implemented, we mandate impose cost sharing on some drugs and furnished in an emergency department, states to condition services on the not other drugs, all cost sharing must be

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consistent with the requirements of access to needed medications so in must use to allow for cost sharing at the § 447.53(b) and, if there are no drugs addition to cost considerations, a preferred drug level in accordance with identified as non-preferred drugs in a preferred drug list should be based on the section 1927 of the Act. We will class, cost sharing for drugs in that class clinical criteria that considers the monitor state implementation and cannot exceed the nominal amounts for efficacy of the drug to others in that determine whether additional guidance preferred drugs. Identification of class. is necessary. ‘‘elective’’ or ‘‘controversial’’ drugs is Comment: Several commenters were 6. Cost Sharing for Emergency beyond the scope of this regulation. concerned that allowing states to Comment: A few commenters stated impose cost sharing of up to 20 percent Department (ED) Services (§ 447.54) that the proposed cost-effectiveness of what the agency pays for a non- Sections 1916(a)(3) and 1916(b)(3) of standard for determining which drugs preferred drug, for individuals with the Act, allow states to obtain a waiver are non-preferred is inappropriate and income over 150 percent of the FPL, to impose cost sharing for non- does not include the anti-discrimination would be overly burdensome for emergency use of the ED that does not protections contained in the Affordable individuals with chronic conditions. exceed twice the nominal amount for Care Act. The commenter believed that Response: Section 1916A(2)(B) of the other outpatient services. Section this standard would threaten access to Act provides for the flexibility to 1916A(e)(2)(A) of the Act also allows needed treatment and would result in impose cost sharing at these levels for cost sharing for individuals with income broad, one-size-fits-all policies that do individuals with incomes above 150 above 100 percent of the FPL and at or not reflect important differences in percent of the FPL. We did not propose below 150 percent the FPL in an amount individual beneficiary needs and to change this flexibility, which is not to exceed twice the nominal amount circumstances. One commenter codified at § 447.74 of the current as determined by the Secretary. We recommended that the definition of regulations, and is moved to § 447.53 in proposed to consolidate current preferred drugs not be restricted to low- this final rule. The Secretary does not regulations at § 447.54(b) and § 447.72 cost or exclusively generic agents, and have the authority to change or reduce related to non-emergency use of the ED should encourage the inclusion of high- the percentage of the cost of the item or into proposed § 447.54. To facilitate value brand agents, especially when a service that is the maximum allowable states’ ability to utilize flexibility generic equivalent is not available. The cost sharing because the statute is clear. provided in existing regulations, for all commenter believed that preferred and We note that such cost sharing is subject individuals with income at or below 150 non-preferred drugs should be chosen to the aggregate limit codified at percent of the FPL, we proposed to based on clinical value, not solely on § 447.56(f) of this final rule. allow cost sharing of no more than $8, the basis of acquisition price. One Comment: Several commenters which represents twice nominal, for commenter recommended that the suggested that we revise § 447.53(e) to non-emergency use of the ED without definition of preferred and non- provide more detailed requirements for requiring a waiver. The proposed preferred drugs be determined based on the process states must have in place to changes are discussed in more detail in clinical assessment of the individual. allow for cost sharing at the preferred the January 22, 2013 Medicaid One commenter recommended that the drug level, in the case of a non-preferred Eligibility Expansion proposed rule (78 definition of preferred drugs be drug that the prescribing provider has FR 4659 and 4660). We received the expanded to include the generic determined would be less effective or following comments concerning the equivalent of brand named drugs. may adversely affect the individual. The proposed provision for cost sharing Response: The definition of preferred commenters stated that any process specific to non-emergency use of the ED: drugs for cost sharing purposes at should take into account the electronic Comment: Many commenters opposed § 447.51 does not prescribe the type of claims processing used by pharmacies the policy to allow up to $8 for non- drugs that the state designates as and pharmacists and should be easy for emergency use of the ED because it preferred or non-preferred, and the prescriber to invoke. Several might cause individuals with incomes at requiring the inclusion of certain drugs commenters also recommended that or below 150 percent of the FPL to on a state’s preferred drug list is beyond states be required to describe their forego necessary services, including the scope of this regulation. However process in the state plan and provider potentially lifesaving services, and we do not believe that preferred drug manuals. One commenter believed that because many Medicaid beneficiaries go programs limit individuals’ access to this requirement undermined the intent to the ED because they lack access to necessary drugs. These regulations of the regulations to encourage the use regular sources of primary care. require that states establish a process of less expensive preferred drugs Foregoing necessary services may result through which a beneficiary can access because for a state to actually cover a in adverse health outcomes requiring a non-preferred drug, which his or her non-preferred drug, the prescriber more expensive care later. Many provider has determined to be medically already has to receive prior- commenters recommended that the necessary for the beneficiary, with cost authorization, meaning most, if not all maximum allowable cost sharing should sharing limited to the amount non-preferred drugs would have to be be set at $3.30 for individuals with applicable to preferred drugs. We provided at the lower cost sharing family income at or below 100 percent believe that this policy would not amount. of the FPL, $6.30 for individuals with violate any non-discrimination Response: States must have a process family income from 101–150 percent of standards since all beneficiaries are in place for providing prior the FPL and $12.00 for individuals with subject to the Medicaid requirements of authorization of medically necessary family income above 150 percent of the the preferred drug list, which direct that drugs that meets the existing FPL. Several other commenters it be developed in a manner that does requirements at section 1927(d)(5) of the recommended that the maximum not discriminate against any particular Act, therefore we are not prescribing allowable cost sharing amount for non- class of individual, or type of disability additional requirements in this emergency use of the ED be limited to or disease. In addition, as previously regulation or requiring states to describe $4 to align with what is proposed for noted in guidance (SMDL #04–006, the process in their state plan. However, other services. Several commenters September 9, 2004), states need to we are revising the final rule to add the recommended that CMS allow states the assure that patients continue to have word ‘‘timely’’ to the process states flexibility to impose cost sharing for

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non-emergency use of the ED that alternative provider must be available Comment: Many commenters exceeds $8, to decrease inappropriate with lesser cost sharing or no cost recommended that states that impose use of the ED. One commenter sharing only if the individual is cost sharing for non-emergency services recommended that up to three times the otherwise exempt from cost sharing. We provided in an ED be required to permit outpatient services copayment (rather note that for individuals with income at newly-enrolled individuals to make at than two) should be allowed in states or below 100 percent of the FPL the least one non-emergency ED visit before that are working to expand access to state may not allow a provider— requiring them to pay this cost-sharing alternative options for care. Many including a hospital ED—to deny obligation. commenters recommended that for services in the event that an individual Response: States have the option to individuals with family income at or is unable to pay the cost sharing. establish such a policy under current below 100 percent of the FPL, we revise We note that in the final rule we are regulations and the new rule as the regulations to allow cost sharing for deleting § 431.57 of this subchapter finalized, but we do not think it non-emergency use of the ED, only relating to the waiver of cost sharing appropriate to require it. when no cost sharing (rather than lesser requirements for states to impose cost Comment: Some commenters cost sharing) is imposed to receive such sharing for non-emergency services suggested that we designate care through an outpatient department furnished in an ED. This language is underserved areas and/or certain or other alternative health care provider redundant with § 447.54(b) of the final periods of time in which insufficient in the geographic area of the hospital ED rule, which allows states may impose access warrants exemption from cost involved. cost sharing up to twice the nominal sharing for non-emergency use of the amount for such services through the ED. Response: We believe it is important state plan. In addition to this technical Response: Per § 447.54(d), before for states to have options to incentivize change, we updated the citations to the imposing cost sharing for non- care in the most appropriate settings cost sharing regulations at §§ 435.121, emergency use of the ED, the hospital and to encourage individuals to develop 435.831, 436.831, 438.108, 440.250, must provide the individual with a a regular source of care, to the extent 447.15, 447.20, and 457.540. name of and location of an available and that beneficiaries are assured timely Comment: One commenter accessible provider and provide a access to needed care. One option to recommended that CMS make public referral to coordinate scheduling. If achieve this is through cost sharing the amount of documented Medicaid geographical or other circumstances initiatives, therefore, we are finalizing savings in states that have imposed cost prevent the hospital from meeting this § 447.54(b) as proposed, however we sharing for non-emergency use of the requirement, the cost sharing may not note that we have made some minor ED. be imposed. technical changes in the final rule to Response: We are not revising the rule Comment: Several commenters asked spell out the term emergency to require states to document savings. that we refrain from adding more department instead of using the However, we will examine available specificity or requirements in the acronym ED and to refer to non- options for sharing best practices and regulation itself, for example imposing emergency services instead of treatment. other data available from states with further requirements or pre-conditions The technical changes are for successful ED diversion programs. on a state’s authority to impose cost clarification only and are not intended Comment: Several commenters noted sharing for non-emergency services to be substantive. The $8 maximum for a drafting error at § 447.54(c), which provided in an ED, which they believed non-emergency use of the ED is twice they believe should be revised to read: would limit the ability of states to the nominal amount for outpatient ‘‘. . . not to exceed the maximum account for variation across states. A services, which is the maximum amount established in paragraph (b) of few commenters were concerned that allowable cost sharing permitted under this section. . .’’ The commenters also we had added a new requirement in sections 1916 and 1916A of the Act for believed we made an error in stipulating that hospitals ensure that an individuals with income at or below 150 § 447.54(d), which they think should alternative provider is available to percent of the FPL. The statute does not read ‘‘. . . to impose cost sharing under provide needed services with lesser or limit the amount states can impose for paragraph (a), (b) or (c) of this section no cost sharing. They were concerned non-emergency use of the ED on of non-emergency. . . .’’ the use of the term ‘‘ensure’’ in individuals with income over 150 Response: We agree that there was a proposed § 447.54(d)(2)(ii) would percent of the FPL (other than through drafting error in paragraph (c) and have require hospitals to ‘‘ensure’’ something the aggregate cap of 5 percent of family corrected the provision in this final rule. beyond their control, presenting income), and we do not have the However, paragraph (d) was written as unnecessary administrative burden for authority to limit such cost sharing intended, and is finalized as proposed. state administrators and hospitals. Many through regulation. Section 1916 of the Paragraphs (a) and (c) provide the commenters stated that CMS should Act requires that there be an accessible authority to impose cost sharing, while remove the requirements at proposed alternative provider to provide the paragraph (b) describes the maximum § 447.54(d)(2)(iii) that ED staff provide a services, but does not require that there allowable amounts. referral and coordinate scheduling with be no cost sharing for such services and Comment: One commenter an available and accessible alternative section 1916A of the Act requires there recommended that cost sharing for non- non-emergency services provider, be lesser cost sharing for services emergency use of the ED should be because it is administratively provided by the alternative provider, or permitted for any visit to the ED that burdensome and takes time and no cost sharing if the cost sharing is does not result an inpatient stay. resources away from patient care. In being applied to an otherwise exempt Response: Sections 1916 and 1916A addition, they argue that compliance is individual. To streamline the of the Act prohibit cost sharing for infeasible given hospitals’ limited requirements to make it emergency services. As there are many access to current, accurate information administratively feasible for states to emergency conditions and services that on the availability of appointments with meet this requirement, we are do not result in an inpatient stay, the other providers. The commenters maintaining the proposed policy in the commenters’ suggested policy would believed that these requirements will final rule that services provided by an violate the statute. make it difficult for states to take up the

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option afforded under the statute and confirm that the alternative non- uniform definition of timeliness that is that it would be less costly for an ED to emergency services provider is ‘‘actually appropriate for all situations, we are not provide treatment for the non- available and accessible’’ as required by defining ‘‘timely manner’’ in the emergency conditions than to statute, it is important that scheduling regulation. In meeting a general coordinate a referral. One commenter be done onsite, with the beneficiary timeliness standard, however, states stated that the requirement to provide a present, to the maximum extent should direct hospitals to consider the referral is unnecessary because in many possible. We recognize that this may not medical needs of the individual to state managed care programs, every be possible during certain hours of the assess (1) whether care is needed right enrollee has a primary care provider and night, in which case follow-up away or if a short delay in treatment 24-hour call-in lines are available, scheduling may be necessary. Hospitals would be sufficient, and (2) any enabling hospitals providing the care to can and should take advantage of the particular challenges the person may contact either the enrollee’s primary existence of a call line and assigned face in accessing follow-up care, such as care provider or the 24-hour call-in line primary care providers in satisfying the leave from employment, child care, or as an alternative to following the steps coordination requirements in the statute ability to receive language assistance listed in § 447.54(d). Another and regulations, and states should services or accessible care for people commenter stated that the language in assure, before imposing such cost with disabilities. States will need to proposed § 447.54(d)(2)(iii) differs from sharing, that procedures are in place work with the hospitals, non-emergency the requirement at current that can facilitate hospitals’ ability to providers, and managed care § 447.80(b)(2)(iii), and that the revised carry out these responsibilities, organizations participating in their language would impose additional including outside of regular business Medicaid programs to design a referral burdens on states’ ability to effectively hours. network and system that fulfills the implement cost sharing. The commenter Comment: One commenter requested statutory requirements prior to imposing noted that current § 447.80(b)(2)(iii) clarification of the referral requirement, cost sharing amounts for non-emergency requires hospitals to provide ‘‘a referral including whether a patient should have services provided by a hospital ED. The to coordinate scheduling of treatment by a scheduled appointment, or just the intent of this provision is to provide an an available and accessible alternative information necessary to make an additional tool to ensure that care is non-emergency services provider,’’ appointment, with an alternative provided in a timely and appropriate while proposed § 447.54(d)(2)(iii) provider when he or she leaves the manner to drive better quality at lower requires hospitals to ‘‘coordinate hospital; whether community clinics or costs. It is not to be implemented in a scheduling and provide a referral for FQHCs may serve as alternative, non- way that results in people not getting treatment by this provider.’’ emergency providers for referral from the care they need. Response: We did not intend to add the ED; and the appropriate process for Comment: One commenter believed additional requirements for hospitals completing a referral when physician that we omitted from proposed related to cost sharing for non- offices are closed. One commenter § 447.54(d) some of the statutory emergency use of the ED. Rather, our requested that we define ‘‘timely requirements that hospitals must meet intent was to clarify the existing manner’’ in proposed § 447.54(d)(2)(ii). before collecting cost sharing for non- language. To eliminate any confusion, Response: The regulations are not emergency use of the ED, including the we are replacing the word ‘‘ensure’’ prescriptive on the exact process to be obligation to inform the recipient that with ‘‘determine’’ in § 447.54(d)(2)(iii), used by hospitals. States have flexibility as redesignated in the final regulation. to establish processes to meet the he or she does not have an emergency This is consistent with the statutory coordination goals in the statute and medical condition and the requirement requirement that before collecting cost regulations in a manner that best to notify the recipient of the applicable sharing for non-emergency use of the accommodates their systems and cost sharing for treatment of a non- ED, hospitals must provide individuals provider networks. The extent to which emergency condition in the ED. with the name and location of an a state relies on managed care or Response: We did not omit any of the available and accessible provider that establishes patient centered medical statutory requirements in the proposed can provide the service with lesser or no homes, for example, may impact how a rule. The requirement that the hospital cost sharing. States share in this state would meet the requirements in inform individuals whether or not they responsibility, of course, and will need the regulation. As noted above, need emergency services, and of the cost to work with hospitals to ensure that whenever possible, hospitals should sharing obligation to receive services in hospitals are able to determine whether attempt to schedule the appointment the ED is implicit in the requirements such care is available and accessible. while the patient is present, but if that that the assessment be performed and The goal underlying the policy is to is not feasible, the hospital would need that the hospital provide the individual ensure that the right care is provided at to follow up to ensure that an with the name and location of an the right time in an appropriate setting. alternative provider is ‘‘actually available and accessible alternative The language in proposed available and accessible’’ in a timely provider that can provide services with § 447.54(d)(2)(iii), redesignated at manner, as required by statute. lesser or no cost sharing. We do not see § 447.54(d)(2)(iv) of this final rule, was Section 1916A (e)(4)(B) of the Act a need to state as much explicitly in the intended to clarify the referral describes an alternative non-emergency text of the regulation. However, for requirement, which is in current services provider as one ‘‘that can clarity, we have added a new paragraph regulation at § 447.80(b)(2), and which provide clinically appropriate services (i) at § 447.54(d)(2) requiring hospitals reflects statutory language. We did not for the diagnosis or treatment of a to ‘‘inform the individual of the amount intend to change the substance of the condition contemporaneously with the of his or her cost sharing obligation for rule. However, to avoid any confusion provision of the non-emergency services non-emergency services provided in the we are revising § 447.54(d)(2)(iv) to that would be provided in an emergency emergency department.’’ Proposed reinstate the language from the current department.’’ Any Medicaid §§ 447.54(d)(2)(i) through (iii) are rule that hospitals must provide a participating providers, including redesignated in this final rule as referral to coordinate scheduling for clinics that can do so, are acceptable. §§ 447.54(d)(2)(ii) through (iv), treatment by an alternative provider. To Because we do not think that there is a respectively.

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Comment: A few commenters ED. At proposed § 447.52(b)(3), finalized Response: ‘‘Non-emergency’’ services recommended that the Secretary ensure in this rulemaking at § 447.52(c), any are defined at § 447.51, which cross that the safeguards at § 447.54(d) are cost sharing imposed for any service references to the current definition of observed by states that impose cost may not equal or exceed the amount the emergency services at § 438.114. This sharing for non-emergency use of the agency pays for the service; such cost definition relies on a prudent layperson ED. sharing is also limited by the 5 percent standard, in that a medical condition Response: We will ensure through the aggregate limit described at § 447.56(f). manifests itself by acute symptoms of state plan amendment process that the Comment: Several commenters stated sufficient severity that a prudent requirements of § 447.54(d) are met, and that the rule does not provide a clear layperson that possesses an average expect to oversee implementation to the methodology for determining ‘‘non- knowledge of health and medicine extent feasible. emergency’’ status. One commenter could deduce that they need emergency Comment: One commenter highlighted the preamble discussion in medical attention. We agree that it is recommended that the final rule include the proposed regulation about the difficult to implement a system to requirements for oversight and reporting difficulty in determining whether a differentiate non-emergency from to ensure that higher cost-sharing is not service is needed to address an emergency services for cost sharing imposed without verification of the emergency situation based on Current purposes in a way that ensures availability of alternative providers able Procedural Terminology (CPT) codes beneficiary protections consistent with to furnish non-emergency care. In alone, and the lack of guidance on other the prudent layperson standard. We addition, the commenter recommended standards that could be used, and continue to believe that the use of enhanced requirements for verification requested that CMS more clearly define diagnosis and procedure codes alone is in rural and other areas with a shortage ‘‘non-emergency’’ or provide states not an appropriate process for of primary care physicians and determining non-emergency services, as specialists that will see Medicaid latitude to define as needed. Another commenter shared our concerns about doing so would not adequately protect patients that there is available and beneficiaries legitimately seeking ED accessible care by an alternative CPT codes and noted that, while the imposition of non-emergency ED cost services based on the prudent layperson provider. A few commenters standard, for whom a CPT code assigned sharing is not administratively feasible recommended that, at a minimum, the after care is provided may indicate a without some type list, any protocols ED should be required to specify what non-emergency condition. We sought must also avoid violation of the the particular patient’s cost-sharing comments on feasible methodologies for emergency screening requirements obligation will be, including in the case states and hospitals to use to make this under the Emergency Medical of a patient with income above 150 distinction, but did not receive any Treatment and Active Labor Act percent of the FPL, that the patient may recommendations. Therefore, we are not (EMTALA). One commenter stated that be responsible for 100 percent of the making any revisions in the final rule to the EMTALA requirements are charges. The commenter also believed prescribe how states can and should sufficient to determine which that, prior to an emergency room distinguish between ‘‘emergency’’ and providing non-emergency care to a individuals should be subject to cost ‘‘non-emergency’’ conditions for cost Medicaid beneficiary the hospital sharing for non-emergency use of the sharing purposes. We remain open to should be required to obtain written ED, and that states should not have to states’ proposals for distinguishing consent from the individual to receive describe the processes in the state plan. between ‘‘emergency’’ and ‘‘non- the non-emergency care in the ED and Another commenter expressed concern emergency’’ conditions and will review to take responsibility for any cost- about beneficiaries’ general ability to such proposals through the state plan sharing obligation for such care. distinguish between ‘‘emergency’’ and amendment process. As successful Response: The statute, codified at ‘‘non-emergency’’ symptoms. The models emerge we will develop further § 447.54(d) in this rulemaking, sets forth commenter was concerned that guidance. clear requirements that states must adequate protections be in place to Comment: One commenter asked if effectuate to establish cost sharing for ensure that beneficiaries are not would be reasonable to have the non-emergency use of the ED, including punished for seeking emergency care Medicaid agency reimburse hospitals for a requirement that hospitals provide when doing so is appropriate under a the medical screening that they must information on available and accessible prudent layperson standard. Another conduct. Another commenter asked if a providers who can provide the needed commenter agreed that in distinguishing hospital could be reimbursed for non-emergency services with lesser or between ‘‘emergency’’ and ‘‘non- providing a referral and giving advice no cost sharing. States must ensure that emergency’’ conditions, hospitals must on other appropriate providers. hospitals are able to meet these use the prudent layperson definition, Response: To the extent the provider requirements, whether in a rural, not a discharge diagnosis. One properly bills the Medicaid agency for suburban, or urban setting. We ensure commenter stated clinical reviews of ER an assessment or evaluation conducted that states are in compliance with the claims to look at presenting conditions on a Medicaid beneficiary, the provider statute and regulations through the state such as chest pain seem would be would be entitled to payment for the plan amendment process and will administratively burdensome, and could service as provided for in the state’s consider whether further reporting is delay treatment, referral, or payment to Medicaid State plan. States may also necessary for oversight purposes. For providers. Other commenters requested establish payment specifically for the cost sharing for individuals with income that we either clearly define ‘‘non- medical screening exam required by above 150 percent of the FPL, we note emergency’’ services or provide states EMTALA and/or for coordination of that the statute does not require states with the latitude to define them as referrals to alternative non-emergency to make such patients responsible for needed, and several commenters asked services providers. 100 percent of the charges for non- us to maintain the maximum level of Comment: One commenter suggested emergency use of the ED, but also does flexibility in the rule to facilitate that CMS allow hospitals to charge the not limit the cost sharing that states can appropriate and feasible maximum allowable cost-sharing impose on individuals in this income implementation of non-emergency ED amount for non-emergent care, and then bracket for non-emergency use of the cost sharing. refund the beneficiary if needed. The

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commenter expressed concern that in an ED, and that hospitals trying to limitations on prepayment; paragraph hospitals will not be able to impose cost decrease non-emergency ED use will (b)(2) describes the options for sharing on beneficiaries after they have inadvertently run afoul of either terminating an individual for failure to left the ED. EMTALA or their state’s emergency pay, paragraph (b)(3) describes the Response: The statute requires that access rules. The commenter statutory requirements noted by the before providing and imposing cost recommended that some form of safe commenter for individuals receiving sharing for non-emergency services in harbor be established for hospitals medical assistance under TWWIIA, and an ED, the hospital must inform the trying, in good faith, to encourage the paragraph (b)(4) describes the state’s beneficiary of the cost sharing obligation most appropriate use of resources for option to waive premiums for any tied to those services and provide the non-emergency care. individual or family. In addition to name and location of an available, Response: We agree that there are these clarifications, we revised the accessible, alternative provider that can many strategies which states can and description of pregnant women who provide the services with no or lesser have implemented to address the may be charged premiums at cost sharing. This allows the beneficiary problem of non-emergency use of § 447.55(a)(1) to reflect the to forgo treatment in the ED if they do hospital EDs. However, whether or not consolidation of different statutory not have the ability to pay the cost cost sharing is the most effective way to eligibility groups for pregnant women sharing. If the individual decides to stay address non-emergency use of the ED, it under a single regulatory section at and receive the services at the ED, the is an option provided to states in the § 435.116 of the March 2012 final rule. hospital can impose the cost sharing statute. We are available to work with This is not a substantive change and is while the person is still present. all states in exploring the full range of intended solely to assist states in Comment: One commenter stated that options to reduce non-emergency use of appropriately identifying those for hospitals, the collection of Medicaid the ED, and to share best practices beneficiaries who may be charged cost-sharing amounts for non-emergency which emerge. premiums, as described in the statute. care in ED settings can prove difficult, 7. Premiums (§ 447.55) As noted above, we made a similar leading to lack of payment and increases revision to the description of children in bad debt. We proposed one simplified, who are exempt from premiums and Response: The statute allows states to consolidated section of the regulations cost sharing at § 447.56(a)(1)(i) through impose cost sharing for non-emergency to implement the options authorized (iii) of this final rule. care in an ED and sets out the under sections 1916 and 1916A of the Comment: Several commenters requirements that hospitals must meet Act relating to the imposition of recommended that § 447.55 be revised to collect such cost sharing. We do not premiums on individuals with family to clarify that premiums can only be have the authority to take away this income above 150 percent of the FPL, imposed on medically needy option or ignore the statutory and describe the options to impose individuals after their spend-down requirements and will work with states premiums for specific populations. The amount is met and they are receiving and the hospital community to share proposed changes are discussed in more Medicaid; they cannot be included as best practices and potentially issue detail in the January 22, 2013 Medicaid part of the spend down. further guidance. Eligibility Expansion proposed rule (78 Response: An individual cannot be Comment: One commenter requested FR 4660). We received the following subject to a premium unless he or she clarification as to whether urgent care comments concerning the proposed is eligible for Medicaid. States may not centers are subject to the guidelines for premiums provisions: impose a premium until the month in cost sharing for non-emergency use of Comment: Several commenters which the individual has met his or her the ED. recommended that we revise proposed spend-down and becomes eligible. Response: No, this rule only pertains § 447.55(a)(2) to clarify that states are Comment: Several commenters to non-emergency services furnished in allowed to impose premiums on recommended that the regulations an ED. qualified disabled and working require a process for waiving premiums Comment: A few commenters individuals if the individual’s income in cases of undue hardship; and that the supported what they believed was a exceeds 150 percent of FPL. The process adopted by a state should be set new option regarding cost sharing for commenters also noted that proposed forth in the state plan and reflected in non-emergency services provided in the § 447.55(c) does not reflect statutory state law and other public documents. ED to beneficiaries who are otherwise requirements in section 1916 of the Act One commenter asked for CMS to exempt from cost sharing. that limit aggregate premium expenses provide examples of ‘‘hardship.’’ Response: This is not a new option. for individuals provided medical Response: The decision to waive This is a statutory option described at assistance under section premiums due to hardship is a matter of section 1916A(e)(2)(B) of the Act and 1902(a)(10)(A)(ii)(XV) or state policy. Such policies do not codified in current regulations at 1902(a)(10)(A)(ii)(XVI) of the Act and require prior authorization from the § 447.70(b). the Ticket to Work and Work Incentives Secretary. Therefore we are not revising Comment: One commenter stated that Improvement Act of 1999 (TWWIIA), to the regulations as suggested. instead of focusing on cost sharing, no more than 7.5 percent of the Comment: One commenter stated that which could result in harm to patients, individual’s family income for those ‘‘sliding scale’’ premiums imposed on we should focus on best practices for whose annual income does not exceed the medically needy under § 457.55 medically sound ways of reducing 450 percent of the FPL. must actually ‘‘slide’’ so that there is a unnecessary emergency department Response: We agree with the lowest-income group of individuals for visits, such as electronic exchange of commenters. Due to a drafting error, the whom there is no premium and that patient information, care coordination, allowable premiums and limitations premiums for higher income individuals patient education on appropriate use of described at proposed § 447.55 were not increase linearly or quasi-linearly up to the ED, and guidelines for prescribing clear. We have revised paragraph (a) and $20 for those at or near 150 percent of narcotics. One commenter was paragraph (c) (redesignated as paragraph the FPL. One commenter stated the $20 concerned that focusing on cost sharing (b) for clarity), of § 447.55 to address allowable premium should be removed does not address why patients seek care this error. Paragraph (b)(1) describes the from the regulation.

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Response: Section 1916 of the Act the commenter believed that states services if the individual does not pay expressly permits states to impose should be encouraged to work with the cost sharing. premiums on medically needy beneficiaries on a payment schedule to Comment: We solicited comments individuals on a sliding scale, but does avoid a termination. about requiring states to periodically not require that the lowest income Response: Proposed § 447.55(c), renew an AI/AN’s cost sharing medically needy individuals are redesignated as § 447.55(b) in the final exemption based on current or previous charged $0 premiums. Current rule, does not represent new policy. use of a service from an Indian health regulations at § 447.52 allow for This option, established under both care provider or through referral under premiums on a sliding-scale basis up to sections 1916 and 1916A of the Act, is contract health services. A number of $19, and we are finalizing the proposal currently codified at § 447.80 for commenters supported proposed to increase that amount to $20. We have individuals with income over 150 § 447.56(a)(1)(vii) to exempt AI/ANs revised the regulations at § 447.55(a)(5) percent of the FPL who are subject to who are currently receiving, or have to clarify that, if premiums are imposed premiums under section 1916A of the ever received a service from an Indian on medically needy individuals on a Act. In this final rule, we are simply health care provider or through referral sliding scale, the agency must impose codifying the requirements as they under contract health services from any an appropriately higher premium for relate to premiums imposed under the cost sharing. Several commenters were individuals at higher levels of income, authority of section 1916(c) of the Act. concerned that requiring renewal of with $20 being the maximum allowable status for the exemption would be premium at the highest income level. 8. Limitations on Premiums and Cost administratively burdensome for both States may choose to set their highest Sharing (§ 447.56) AI/AN individuals and state Medicaid premium at a level below $20. We proposed a single streamlined agencies and could lead to exempt Comment: One commenter asked for approach to implement the limitations individuals being subject to clarification of the consequences for on premium and cost sharing impermissible cost sharing. A few ‘‘non-payment’’ that are described at established under sections 1916 and commenters recommended that if proposed § 447.55(c)(1)(ii) and (2)(ii). 1916A of the Act wherever the policies renewal of the AI/AN exemption status The commenter recommends that align. Sections 1916(a), (b), and (j), and is required, that such renewal be limited termination be allowed for failure to 1916A(b)(3) of the Act specify certain to no more than once every three years, make full payment, and that partial groups of individuals as exempt from which is the period of time used by IHS payment is not adequate to prevent premiums and/or cost sharing, for determining ‘‘active users’’ in an IHS termination from the program. including certain children, pregnant or tribal service unit. No commenters Response: As noted previously, due to women, certain American Indians and supported a renewal policy for AI/AN a drafting error, we have revised Alaska Natives (AI/ANs), certain exemption. § 447.55(c) (redesignated as paragraph Response: We are adopting the AI/AN individuals residing in an institution, (b) of the final rule) to clarify the exemption as proposed because we do individuals receiving hospice care and consequences for non-payment for all not see any particular utility in individuals eligible under the optional individuals subject to premiums. As requiring renewal of status, since the described in paragraph (2), except for eligibility group for individuals with underlying eligibility for IHS or tribal medically needy individuals, states breast and cervical cancer under health services is unlikely to change, have the option to terminate any § 435.213 of this part. The proposed and we agree that renewal of status can individual who has failed to pay all or changes are discussed in more detail in be burdensome for both the beneficiary part of his or her premium obligation. the January 22, 2013 Medicaid and the provider. Once the exemption The state may not terminate an Eligibility Expansion proposed rule (78 for an individual at § 447.56(a)(1)(x), as individual prior to 60 days after the FR 4660 and 4661). We received the redesignated in this final rule, is failure to pay the premium. The state following comments concerning the established, a renewal of such may not terminate an individual who, proposed limitations on premiums and exemption will not be necessary. We during that time period, has paid the cost sharing provisions: note that we added a definition of premium due in full. To reiterate Comment: Two commenters contract health service at § 447.51 for current policy, we also added a new recommended that proposed § 447.54(c), clarity and made a technical correction paragraph (5) to § 447.56(b) to indicate which permits states to impose cost under the definition of Indian to reflect that no further consequences can be sharing for non-emergency use of the ED revised citations to 25 U.S.C due to applied for non-payment of Medicaid on individuals otherwise exempt from changes made by the Affordable Care premiums, including ‘‘lock-out’’ cost sharing, should not apply to AI/AN Act. We do not intend these to be periods. We note that we redesignated beneficiaries who are exempt from cost substantive changes to the regulations. paragraph (c) as paragraph (b) in the sharing. Comment: One commenter final rule to move the state plan Response: We are finalizing the recommended we permit states to requirements after the section related to regulation as proposed. Sections implement specific processes to track consequences for non-payment. This 1916A(c)(2)(B) and 1916A(e)(2)(B) of the separate cost sharing for AI/ANs related change is to improve the flow of the Act permit states to charge nominal cost to the 5 percent aggregate limit as regulation and is not intended to be sharing to individuals otherwise exempt permitted by current regulation. substantive. from cost sharing under section Response: We do not see a need for Comment: One commenter was 1916A(b)(3)(B) of the Act for non- states to separately track cost sharing for concerned that proposed § 447.55(c) preferred drugs and non-emergency use AI/AN beneficiaries, the majority of would permit states to terminate of an ED. There is no differential whom are exempt from cost sharing Medicaid coverage for failure to pay treatment under the statute for AI/ANs under the regulations. For any premiums for as little as 60 days. While as compared to other individuals who individuals permissibly subject to cost the commenter calls this an are otherwise exempt from cost sharing. sharing, the same 5 percent aggregate improvement over the current However, such cost sharing must be limit applied to other beneficiaries, and regulation, which they believe does not limited to the nominal and neither a the same requirement to track cost establish any minimum grace period, pharmacy nor a hospital ED may deny sharing charges, would apply.

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Comment: A few commenters services, but states have the option to do exemption, therefore in the final rule, at suggested states should have broad so. § 447.56(a)(1)(viii), as redesignated, we latitude in applying verification Comment: One commenter requested maintain the option for states to exempt procedures to exempt AI/ANs who are that we clarify that pregnant women individuals receiving services in a home eligible for or currently or have ever receiving services during a period of and community-based setting, whose received a service from an Indian presumptive eligibility are also exempt medical assistance is reduced by provider or through referral under from premiums and cost sharing. amounts reflecting available income contract health services (CHS) from Response: Individuals who are other than required for personal needs. premiums and cost sharing respectively, receiving benefits during a presumptive This option is consistent with state and that procedures that create the least eligibility period, but who have not yet authority under section 1916A of the burden on individuals, including been determined Medicaid eligible by Act to target cost sharing to specified electronic processes, be employed by the agency, based on a regular groups. In addition, states may target states. They recommended that self- application, including pregnant women, cost sharing at particular types of attestation of status for the AI/AN cost may not be subjected to the premiums. services, and could determine not to sharing exemption be permitted, that if In addition, all pregnancy-related impose cost sharing on home and verification is required that electronic services are exempt from cost sharing, community-based services. We also note data matching should be used to the including during a period of that if an individual has his or her maximum extent possible, and that we presumptive eligibility. As described in medical assistance reduced to account provide a list of possible documents the March 2012 final eligibility rule, for available income, the individual which states could use when electronic ‘‘Pregnancy related services’’ is would be able to deduct any premiums verification is not available. presumed to include all services or cost sharing from the calculation of Response: There are no specific otherwise covered under the state plan available income used to determine the federal requirements regarding the unless the state has justified level of medical assistance provided. process for verifying premiums and cost classification of a service as not There would be no modification of pregnancy-related in its state plan. sharing exemptions for AI/ANs. States current regulations relating to post- Comment: Many commenters have flexibility to establish their own eligibility treatment of income or share- supported the provision in proposed of-cost. Again, we remind states of their processes for verifying who is eligible to § 447.56(a)(1)(v) to give states the option obligations under Olmstead. receive or has ever received a service to exempt individuals from cost sharing Comment: One commenter from an Indian provider or through if they are receiving long term services referral under CHS, including the use of and supports in a home or community- recommended that former foster care self-attestation, electronic data matches based setting and are required to children covered under § 435.150 or reasonable paper documentation, as contribute to the cost of care in a should be exempt from premiums and long as the process is not unduly manner similar to the post-eligibility cost sharing. Several commenters burdensome on AI/ANs. treatment of income for institutionalized recommended that states be given the Comment: One commenter requested individuals under part 435 subpart H of express option to exclude medically that CMS clarify that family planning the regulations. Many commenters frail individuals from cost sharing. supplies are exempt from differential recommended that we require states to Response: While we understand that cost-sharing for non-preferred drugs. exempt such individuals because these are populations upon which states Another commenter recommended that imposing cost sharing could push may not wish to impose cost sharing, we CMS clarify that the limitations on individuals into more restrictive settings do not see a clear basis to support a premiums and cost sharing also apply to in violation of the requirements of the federally-mandated exemption. States family planning-related services, Americans with Disabilities Act (ADA), are free to use targeted cost sharing, in including office visits. Commenters as applied by the Supreme Court in the accordance with § 447.52(d), to limit the believed that this clarification is Olmstead decision. A few commenters impact of cost sharing as needed to particularly important for coverage of recommended that we require states to address issues of non-exempt family planning under the state plan, exempt all individuals receiving populations that the state determines permitted under section services in a home and community- are particularly vulnerable. 1902(a)(10)(A)(ii)(XXI) of the Act, as based setting regardless of whether they Comment: One commenter requested added by section 2303 of the Affordable are required to contribute to the cost of clarification on the provision at Care Act, which defines ‘‘medical their care. Finally, one commenter § 447.56(c)(3), which is specific to assistance’’ covered under this option to asked that we clarify that we are not providers that the agency reimburses include both family planning and family proposing to extend the same post- under Medicare reasonable cost planning-related services. eligibility treatment of income rules reimbursement principles. The Response: Under sections 1916 and used for institutional services to commenter asked whether the policy 1916A of the Act and § 447.53 and individuals receiving services in a home that an agency may increase its payment § 447.70 of the current regulation, and community-based setting who, in to offset uncollected deductible, family planning services and supplies, addition to any contribution for the cost coinsurance, copayment, or similar including contraceptives and of their care, also generally have to charges that are bad debts of such pharmaceuticals for which the state cover other basic living expenses, such providers was a change or consistent properly claims or could claim at an as for housing and food, and would not with current law. enhanced federal match, are exempt be able to cover such expenses if they Response: This policy is contained in from cost sharing. We did not propose were required to contribute all but a the current regulations at § 447.57(b). any changes to this exemption, which is nominal amount of their income to However, consistent with the new codified at § 447.56(a)(2)(ii) of this final cover the cost of the services received, definition of cost sharing included at rule. We do not have the statutory as is the case for institutionalized § 447.51 of this final rule, we are authority to require states to exempt individuals. replacing the reference to ‘‘deductible, ‘‘family planning-related services,’’ Response: As noted above, we do not coinsurance, copayment, or similar’’ which are a separate category of see a statutory basis to require this with ‘‘cost sharing’’ in the final rule.

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Comment: Many commenters final rule that all services provided to succeeding paragraphs accordingly, to recommended that we amend sections pregnant women will be considered provide that the aggregate limit applies 1916 and 1916A of the Act to clarify pregnancy related unless the state has to all premiums and cost sharing that the preventive services included in justified classification of a service as not incurred by all individuals in the the EHBs are exempt from cost sharing, pregnancy-related in its state plan. Medicaid household, at all income because low income individuals Comment: One commenter asked that levels. At § 447.56(f)(2) of the final rule, enrolled in Medicaid ABPs may be we clarify what is meant by we maintain the requirement in current responsible for cost sharing for some of ‘‘nonexempt’’ and ‘‘otherwise exempt regulation that states must track all the preventive services that are available populations,’’ per the reference to incurred Medicaid premiums and cost to higher income individuals in the allowing states to impose cost-sharing at sharing for all members of the Medicaid private market with no cost sharing. higher than nominal levels for household, if such premiums and cost Response: Section 1916A of the Act nonexempt individuals and applying sharing could place any family member and the final rule at § 447.56(a)(2)(iii) do cost sharing to otherwise exempt at risk of reaching the aggregate limit. require exemption of preventive populations at § 447.56. Comment: Many commenters services for children under age 18. At a Response: Exempt populations are recommended we revise proposed minimum such services must include defined at sections 1916(a), (b) and (j) § 447.56(f)(3) to require states to inform those specified at § 457.520, which and 1916A(b) of the Act and at § 447.53 beneficiaries, at risk of reaching the reflect the well-baby and well child care and § 447.70 of the current regulations. aggregate limit, of the automated and immunizations in the Bright These populations are exempt from cost process used to track premiums and cost Futures guidelines issued by the sharing under section 1916 and sharing, and how they can obtain American Academy of Pediatrics. We do 1916A(a) of the Act, respectively, but ongoing information about how far they not see a basis to broaden this statutory are not exempt from cost sharing under are from reaching the limit. exemption under the Medicaid program section 1916A(c) or (e) of the Act, which Response: Section 447.56(f)(2), as to extend to preventive services for pertain to alternative cost sharing for redesignated in this final rule, requires older individuals. States have the non-preferred drugs and non-emergency that if a state imposes cost sharing that flexibility to exempt additional services use of the ED. These exemptions were could result in individuals reaching the from cost sharing and could determine consolidated at § 447.56(a) of the aggregate limit, the state must describe to exempt preventive services for all proposed rule and maintained in the their process for tracking the premiums beneficiaries. final rule. When using the term and cost sharing in their state plan. Comment: Many commenters ‘‘nonexempt’’ we are referring to Current regulations at § 447.64(d)(2), recommended that we exempt services beneficiaries who do not fall into one of redesignated at§ 447.56(f)(3) in this final associated with ‘‘never events’’ from the groups exempted under § 447.56(a) rule, do require the state to notify cost sharing. of the final rule and therefore may be beneficiaries and providers when the Response: We agree with commenters subject to cost sharing. ‘‘Otherwise beneficiary reaches the cap. We are that services associated with ‘‘never exempt populations’’ refers to those revising this paragraph to restore events’’ should not be subject to cost populations that are generally required language currently in § 447.68(d) that sharing. In accordance with to be exempted from cost sharing but are was inadvertently removed in the § 447.26(c)(1), ‘‘no medical assistance not exempt from cost sharing under proposed rule indicating that the state will be paid for ‘‘provider preventable section 1916A(c) or (e) of the Act. must inform beneficiaries and providers conditions’’ as defined in this section. Section 1916A of the Act allows states of the beneficiaries’ aggregate limit. We interpret medical assistance in this to impose cost sharing for drugs and States must also have a process in place context to include any state plan non-emergency use of the ED on for beneficiaries to request a imposed cost sharing, and providers, ‘‘otherwise exempt populations,’’ reassessment of their aggregate limit. We who are not permitted to claim meaning that such cost sharing may be believe these rules provide the best reimbursement from the agency for imposed on beneficiaries who are balance between minimizing these services, also are not entitled to exempted from all other cost sharing per administrative burden on states and charge the beneficiary any cost sharing § 447.56(a). modernizing the Medicaid program to amount. To clarify this requirement, we Comment: Many commenters were ensure beneficiaries are not charged have included provider-preventable concerned that the aggregate limit amounts in excess of the aggregate. We services, also known as ‘‘never events,’’ described in proposed § 447.56(f) does do not believe these rules prevent states among the list of exempted services at not apply to individuals with income at from establishing processes by which § 447.56(a)(2)(v). or below 100 percent of the FPL. beneficiaries can regularly check their Comment: One commenter Another commenter was concerned that status regarding the aggregate limit. To recommended that we revise these rules created a new requirement allow states flexibility, we are not § 447.56(a)(2)(iv) to require that all for states to apply the aggregate limit to specifying the mechanisms by which services provided to pregnant women be cost sharing imposed under section such notifications must occur. considered as pregnancy-related, except 1916 of the Act. A few commenters Comment: One commenter those services specifically identified in urged the Secretary to lower the recommended that the regulation the state plan as not being related to the aggregate limit to something less than 5 should use a single, annual (not pregnancy, only if the state is able to percent. monthly) cost sharing maximum, such justify and the Secretary concurs, that Response: Under sections 1916 and as that used for the Part D low-income the service is not pregnancy-related. 1916A of the Act, aggregate premiums subsidy, since renewals are completed Response: States have the discretion and cost sharing imposed may not on an annual basis, and therefore cost- to determine pregnancy-related services exceed 5 percent of an individual’s sharing maximums are most effectively within the parameters of § 440.210(a)(2). income. This is a statutory limit and we implemented on a well-established We are seeking to align the standard do not have the authority to require calendar-year basis. related to cost sharing with what is states to apply a lower cap. However, Response: Section 1916A of the Act required for the provision of pregnancy- we are revising the final regulation at requires that the aggregate limit be related services, and maintain in the § 447.56(f)(1), and redesignating the applied on a monthly or quarterly basis

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as determined by the state; an annual that they do not exceed the cap. aggregate limits. In addition, a state may limit is not permitted under the statute. Alternatively, a state could suspend any delegate this responsibility, as Comment: One commenter requested additional cost sharing until the next appropriate, to their managed care that we clarify what is meant by monthly or quarterly period begins. We organizations although we are not ‘‘premiums or cost sharing rules that have in the past encouraged, and requiring that they do so. Tracking of could place beneficiaries at risk of continue to encourage, states to track premiums and cost sharing is standard reaching the aggregate family limit’’ in cost sharing through their Medicaid industry practice among health plans, proposed § 447.56(f)(3). Management Information System including those that participate in the Response: If a state imposes (MMIS). As we review state plan Medicaid program, and is consistent premiums and/or cost sharing at a level amendments and conduct audits, we with implementing the requirements of that could result in cumulative will share best practices that emerge the Affordable Care Act out-of-pocket premiums and cost sharing exceeding 5 among states to promote effective and limits for all Americans, which will percent of a beneficiary’s family income efficient tracking systems. require tracking by all private health (for all family members on Medicaid, Comment: Many commenters insurance plans. over the course of a month or quarter as recommended that we remove the Comment: One commenter stated that determined by the state), the state must requirement at proposed § 447.56(f)(3) the flexibilities provided in the implement an effective tracking that states have an automated proposed rule, including the higher cost mechanism to ensure the cap is not mechanism for tracking each family’s sharing limits, are negated by the exceeded. For example, a state may incurred premiums and cost sharing continued application of the aggregate establish a prescription drug copayment because it is costly and presents a limit. The commenter argues that the targeted to individuals with family substantial administrative and high cost sharing limits effectively will income above 150 percent of the FPL, operational burden on state Medicaid serve as a provider rate cut, which will and set the copay at $1 for preferred agencies, their contractors, and trigger further decrease in access to drugs and $2 for non-preferred drugs. If providers. Instead, the commenters health care for Medicaid beneficiaries. this is the only cost sharing to which recommended that the state should have The commenter recommends that we these individuals are subject, and they an opportunity to develop its own allow exceptions to the 5 percent do not pay a premium, then it is mechanism for tracking a Medicaid aggregate limit and the automated unlikely that any beneficiary would enrollee’s premium and cost sharing tracking requirements, allowing states to accumulate cost sharing charges in spending. A few commenters also propose in their state plan reasonable excess of 5 percent of his or her family recommended that states should have assumptions and methodologies to limit income, and the state would not have to the option of having the enrollees track maximum out-of-pocket costs at an establish a tracking mechanism. their own information. One commenter individual or family level. The However, if these same beneficiaries asked that we clarify that a state that commenter believed such an approach, were also assessed a premium of 4 delegates responsibility for the coupled with provisions for exceptions percent of family income, beneficiaries administration of cost sharing to and an appeals process involving clear may be at risk of reaching the aggregate managed care organizations must ensure timelines to preserve access to care, limit and the state would need to the availability of complete and timely would be consistent with the spirit of establish a tracking mechanism. Anyone information necessary for performing the statute. with income under 100 percent of the this role. Response: We do not understand the FPL, who is subject to any cost sharing Response: We have revised connection that the commenter is would likely be at risk of reaching the § 447.56(f)(2) in this final rule to remove making between the aggregate limit and aggregate limit and a tracking the word ‘‘automated’’ and replace it effective provider reimbursement rates. mechanism would likely be required. with ‘‘effective.’’ CMS will review state Once the limit is reached, the We will work with states to determine proposals through the state plan beneficiary may not be charged any cost their need for a tracking mechanism amendment process to ensure that sharing amounts, and providers will be through the state plan amendment tracking mechanisms employed by paid the full reimbursement rate by the process. states are effective in ensuring that state. Regardless, the application of an We note that if more than one incurred premiums and cost sharing do aggregate limit, which is common Medicaid beneficiary resides in a not exceed the aggregate limit and that practice in commercial insurance as household, then the premiums or the tracking mechanism does not rely on well, is required by section 1916A of the copayments of each beneficiary in the beneficiaries. We note that under Act, as added by the Deficit Reduction household would count toward the current regulations states must account Act of 2005; we do not have authority aggregate limit. We do not specifically for cost sharing amounts in their MMIS to eliminate this requirement through define when cost sharing may place to ensure appropriate provider payment regulation. beneficiaries at risk of reaching the and must calculate each family’s 9. Beneficiary and Public Notice aggregate limit, because of the many aggregate limit—from data in the state’s Requirements (§ 447.57) different combinations of cost sharing eligibility system—and provide that and premium charges which it would be information to the beneficiary. States We proposed to codify existing policy possible for states to impose. We will may claim federal matching funds to to ensure that beneficiaries, providers, monitor state compliance through the update their MMIS and eligibility and the general public all have access to state plan amendment process. systems as necessary to implement a effective notice of Medicaid premium Comment: One commenter requested tracking system that uses the data and cost sharing charges. Appropriate further guidance on ways to track cost already available in their systems to vehicles for providing notice might sharing for beneficiaries who change implement the aggregate limit. States include the agency Web site, plans during the year. have the flexibility to develop any newspapers with wide circulation, web, Response: For individuals who effective process that does not rely on and print media reaching racial, ethnic, change plan mid-year, the state must beneficiaries, and contains timely and and linguistic minorities, stakeholder establish a mechanism to continue accurate information so that meetings, and formal notice and tracking through the transition to ensure beneficiaries do not exceed their comment in accordance with the state’s

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administrative procedures. We received the SPA approval process, as we believe that an individual’s election to receive the following comments concerning the this would be overly burdensome on notices electronically is confirmed by proposed provisions for beneficiary and states and significantly delay the SPA regular mail and that the individual is public notice requirements: process. informed of his or her right to change Comment: One commenter asked for such election. clarification on what constitutes a III. Provisions of the Final Regulations method to which applicants, For the most part, this final rule Change to § 435.923 beneficiaries, and providers are ‘‘likely incorporates the provisions of the • Clarified in § 435.923(a) that any to have access,’’ and whether proposed rule. We received many authorization granted under operation publication on a state Web site would be comments about the complexity of the of state law may serve in place of an acceptable method. One commenter proposed rules and the significance of written authorization by the applicant strongly disagreed that state legislative the changes that need to be made to or beneficiary. hearings do not provide sufficient fully implement the provisions of the Change to § 435.1015 public, beneficiary and provider notice Affordable Care Act. Many commenters and recommended that such hearings be were concerned about the short • Clarified that states are required to included as one of the options for timeframes for implementation and consider the cost sharing requirements providing sufficient notice. about states’ ability to make needed of the private health plan when Response: To allow flexibility for changes to policy, operations, and determining whether premium different state processes while ensuring information technology systems. We assistance is a cost-effective option. provision of meaningful notice, we are recognize that the timing of this rule Changes to § 435.1110 not prescribing the particular method or may result in implementation • format that states must use to provide challenges, especially from a systems Revised § 435.1110(c)(1) to make the required notice, but instead perspective. Therefore, we have clear that states electing to limit the proposed parameters at § 447.57, evaluated the provisions of the January presumptive eligibility determinations finalized with one revision (discussed proposed rule that are necessary to meet which hospitals can make must permit below) in this rulemaking, regarding the deadlines and are finalizing in this the hospitals to make presumptive what constitutes sufficient notice. We rule only those provisions that we eligibility determinations based on provided examples of acceptable believe states will be reasonably able to income for all of the populations methods in the preamble to the (or have already been planning to) included in § 435.1102 and § 435.1103. • proposed rule, including notice on the implement by January 1, 2014. Adding paragraph (d)(3) to provide state agency’s Web site. As stated in the Remaining provisions will be finalized that the agency may disqualify a preamble to the proposed rule, we do in future rulemaking. Those provisions, hospital as a qualified hospital only not believe that legislation discussed at included in this final rule, that differ after it has first provided the hospital a hearing or posted on a Web site is from the proposed rule are as follows: with additional training or taken other adequate, since state legislation and reasonable corrective action measures. legislative hearings often are not Change to § 431.10 Change to § 435.1200 accessible or understandable to many • Clarified responsibilities of single • beneficiaries, providers or other state agency related to delegation of fair Codified § 435.1200(d)(5) of interested members of the public. hearings. proposed rule at § 435.1200(d)(6). Comment: Many commenters supported the proposal to require that Change to § 431.201 Changes to § 447.51 • states provide additional public notice if • Added the definition of ‘‘send.’’ Added definition of ‘‘inpatient proposed cost sharing is substantially stay’’ and ‘‘outpatient services.’’ modified during the state plan Change to § 431.205 • Added definition of Federal poverty amendment (SPA) approval process. • Clarified language in § 431.205(b). level (FPL) to use the acronym Many of these same commenters also throughout the regulation. No recommended that we require states to Change to § 431.206 substantive change is intended. provide at least a 30-day comment • Clarified in § 431.206(d) that an • Added a definition of contract period on any revisions to a SPA individual has a right to a hearing before health service, for clarity (not a involving premiums or cost sharing the Medicaid agency instead of the substantive change to the regulations). charges. A few commenters were Exchange or Exchange appeals entity. concerned that the proposed rule would Changes to § 447.52 be too burdensome on states and Change to § 435.603 • Revised the maximum cost sharing recommended that no additional public • Specified in § 435.603(d)(4) that the allowed for an inpatient stay to $75 and notice requirements be imposed on 5 percent disregard should be applied to added a new paragraph at (b)(2), to states. the highest income standard in the require states with inpatient cost Response: We have revised the applicable Title of the Act under which sharing that exceeds the amount in the regulations at § 447.57(c) to require the individual may be determined final rule, as of July 15, 2013, to submit states to provide additional public eligible using MAGI-based a plan to CMS that provides for notice if proposed cost sharing is methodologies. reducing inpatient cost sharing to $75 substantially modified during the SPA on or before July 1, 2017. approval process. We are also applying Change to § 435.908 • Revised paragraph (b)(3) to be clear this rule to premiums that are • Deleted paragraph that, ‘‘in states that do not have fee-for- substantially modified during the SPA § 435.908(c)(3)(i). service payment rates, any cost sharing process. We are not, however, accepting imposed on individuals at any income the recommendation that states should Change to § 435.918 level may not exceed the maximum have to provide a second 30 day • Allowed for delayed amount established for individuals with comment period for any revisions made implementation of electronic notices income at or below 100 percent of the to the state’s cost sharing policy during and required that the Agency ensure FPL.

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• Revised § 447.52(d), adding • Revised paragraph (a)(5) to clarify Changes to § 155.200 paragraphs (1) and (2) to clarify that for that, if premiums are imposed on a • cost sharing imposed for non-preferred sliding scale, the agency must impose Removes the reference to subpart F, drugs and for non-emergency services an appropriately higher premium for as it will be finalized in a future rule. provided in a hospital emergency individuals at higher levels of income, Changes to § 155.227 department under, the agency may with $20 being the maximum allowable target to a specified group of individuals premium at the highest income level. • Clarifies that for the purpose of regardless of income. • Added a new paragraph (5) to § 155.227, the terms ‘‘applicant’’ and • Added and amended paragraph (g) § 447.55(b) to indicate that no further ‘‘enrollee’’ describe people on whose to restore the option to establish consequences can be applied for non- behalf authorized representatives are different cost sharing charges for payment of Medicaid premiums, acting, and that the term ‘‘person’’ individuals at different income levels. including ‘‘lock-out’’ periods. describes an individual acting as an • Added paragraph (h) to restore authorized representative. Changes to § 447.56 requirement that any cost sharing • Clarifies that authorized charges imposed by managed care • Revised at paragraph (a)(1)(i) the representatives are permitted to provide organization on Medicaid enrollees be description of children who are exempt assistance in the individual and SHOP in accordance with the requirements set from premiums and cost sharing at Exchanges, as well as for individuals forth in the regulations. § 447.56(a)(1)(i) through (iii) and (iv) to seeking an exemption from the shared • Added paragraph (i) to consolidate reflect the consolidation of different responsibility payment. the state plan requirements currently statutory eligibility groups for children • Adds language ensuring that the contained in § 447.53(d) and § 447.68. under a single regulatory section at Exchange provides information to both § 435.118 of the March 2012 final rule, the applicant or enrollee and the Changes to § 447.53 and to reflect the changes in the types • authorized representative regarding the Revised paragraph (d) to clarify that of assistance available under Title IV–E powers and duties of an authorized cost sharing for non-preferred drugs of the Act. These are not substantive representative. changes and are intended solely to assist imposed on otherwise exempt • populations cannot exceed the nominal states in appropriately identifying those Adds language allowing an amount defined in § 447.53(b) in children who may be charged premiums Exchange to permit an applicant or accordance with section 1916A(c) of the and cost sharing and exempting those enrollee to authorize their Act. who may not, as described in the representative to perform fewer than all • Revised paragraph (e) to require statute. of the activities described in this that states must have a timely process to • Amended paragraph (a)(2)(v) to section, provided that the Exchange allow for cost sharing at the preferred include provider-preventable services, tracks the specific permissions of each drug level if the prescribing provider also known as ‘‘never events,’’ among authorized representative. determines that the preferred drug the list of exempted services. • Clarifies that an authorized would be less effective or have adverse • Revised paragraph (f)(2) to restore representative will notify the Exchange effects on the individual to ensure that language currently in § 447.68(d) that and the applicant or enrollee on whose access to necessary drugs is not delayed. was inadvertently removed in the behalf he or she is acting when the authorized representative no longer has Changes to § 447.54 proposed rule indicating that the state must inform beneficiaries and providers legal authority to act on behalf of the • Amended paragraph (d)(2)(iii) to of the beneficiaries’ aggregate limit. applicant or enrollee. replace the word ‘‘ensure’’ with • Changes to § 447.57 Clarifies that the Exchange, not the ‘‘determine.’’ applicant or enrollee, will notify the • Added new paragraph (i) at • Revised language at paragraph (c) to authorized representative when an § 447.54(d)(2) requiring hospitals to require states to provide additional applicant or enrollee notifies the inform the individual of the amount of public notice if proposed cost sharing is Exchange that an authorized his or her cost sharing obligation for substantially modified during the SPA representative is no longer acting on his non-emergency services provided in the approval process. or her behalf. ED. Change to § 457.110 • Removes the provision that Changes to § 447.55 organizations as well as staff and • Required that states provide volunteers of organizations must enter • Due to a drafting error we revised individuals with a choice to receive an agreement with the Exchange. this section to accurate reflect who can notices and information required under be charged premiums and what this subpart and subpart K of this part, Changes to § 155.230 consequences for non-payment exist for in electronic format or by regular mail. • specified groups. Clarifies electronic notice standards Change to § 457.570 • Revised at paragraph (a)(1) the for an individual market Exchange, and description of pregnant women who can • Adding paragraph (c)(2). specifies that the individual market be charged premiums to reflect the Exchange may choose to delay the Change to § 457.810 consolidation of different statutory implementation of the process described eligibility groups for pregnant women • Added language requiring in § 435.918(b)(1) regarding sending a under a single regulatory section at protections against substitution of mailed confirmation of the choice to § 435.116 of the March 2012 final rule. coverage in states that operate premium receive electronic notices. This is not a substantive change and is assistance programs. • Adds standards to distinguish intended solely to assist states in notice standards for a SHOP and adds Changes to § 155.20 appropriately identifying those pregnant language to allow an employer or women who may be charged as • Clarifies the definition of advance employee in any SHOP to elect to described in the statute. payments of the premium tax credit. receive electronic notices.

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Changes to § 155.300 • Modifies the language concerning • Removes duplicative cross- • Clarifies the appropriate cross- the verification related to eligibility for references regarding termination of reference for the definition of minimum enrollment through the Exchange in a coverage. QHP that is a catastrophic plan for the value. Changes to § 155.340 purpose of clarity. Changes to § 155.302 • Clarifies the appropriate cross- Changes to § 155.320 • Clarifies that any contracting reference for the minimum value • arrangement for eligibility Clarifies that the Exchange must standard. determinations for Medicaid and CHIP obtain any available data from the SHOP Changes to § 155.345 that corresponds to the State in which is subject to the standards in • § 431.10(c)(2). the Exchange is operating. Reserves paragraphs (a)(3) and (g)(7) • • Modifies language to specify that for future finalization. Clarifies that the Exchange appeals • entity, in addition to the Exchange, the Exchange must select a statistically Clarifies that the Exchange and must adhere to the eligibility significant random sample of applicants Exchange appeals entity will adhere to determination or appeals decision for for whom the Exchange does not have the eligibility determination or appeals Medicaid or CHIP made by the any of the information specified in decision relating to an individual’s Medicaid or CHIP agency, or the appeals paragraphs (d)(2)(i) through (d)(2)(iii). eligibility for Medicaid or CHIP made by entity for such agency. • Removes language specifying that the state’s Medicaid or CHIP agency or • Specifies that the agreement under the Exchange must use any available the appeals entity for such agency. § 155.302(b)(6) will be made available to data regarding employment of an Changes to § 155.420 HHS upon request. applicant and members of his or her • household. Clarifies that the special effective Changes to § 155.305 dates for birth, adoption, and placement • Specifies that for eligibility for • Removes the clause ‘‘unless another for adoption also apply to placement in enrollment in a QHP through the foster care. Exchange verifies that the individual Exchange that is effective before January • Expands special enrollment period meets the residency standard of such 1, 2015, if the Exchange does not have for birth, adoption, and placement for Exchange’’ related to temporary any of the information specified in adoption to also include placement in residence. paragraphs (d)(2)(i) through (d)(2)(iii) foster care. • Clarifies that an applicant must be for an applicant, the Exchange may • Clarifies that the special enrollment eligible for enrollment in a QHP through accept an applicant’s attestation period for an individual who was not a the Exchange to be determined eligible regarding enrollment in an eligible citizen, national, or lawfully present for enrollment through the Exchange in employer-sponsored plan and eligibility non-citizen and gains such status also a QHP that is a catastrophic plan. for qualifying coverage in an eligible applies to his or her dependents, if employer-sponsored plan for the benefit Changes to § 155.310 eligible for coverage through the year for which coverage is requested • Clarifies that the provision Exchange. without further verification, instead of • regarding duration of eligibility following sampling procedures. Modifies the special enrollment determinations without enrollment only period for enrollees newly eligible or • Clarifies that the ability for the refers to an applicant who is determined ineligible for advance payments of the Exchange to satisfy the provisions of eligible for enrollment in a QHP through premium tax credit or who experience paragraph (d) of this section by relying the Exchange. a change in eligibility for cost-sharing on HHS is effective for eligibility for reductions to reflect that the special Changes to § 155.315 enrollment in a QHP through the enrollment period accommodates Exchange that is effective on or after • Modifies procedures for situations individuals enrolled in an eligible January 1, 2015, and clarifies that the in which key data sources are employer-sponsored plan, but not division of responsibilities under this unavailable and not reasonably eligible for qualifying coverage in an option is subject to guidance issued by expected to be available within 1 day, eligible employer-sponsored plan. the Secretary. such that the Exchange will make an • Changes to § 155.430 eligibility determination based on an Removes language concerning the applicant’s attestation and trigger the agreement associated with having HHS • Modifies language to allow inconsistency period in paragraph (f). conduct this verification. applicants and enrollees to request • Clarifies that the Exchange will Changes to § 155.330 termination from their QHP, in the accept an applicant’s attestation event they report access to other • regarding three specific factors of Removes cross-references to appeals minimum essential coverage and eligibility when electronic data is provisions, and clarifies that an become ineligible for advance payments required but it is not reasonably Exchange must implement changes of the premium tax credit and cost- expected that data sources will be resulting from an appeal decision on the sharing reductions. available within 1 day of the initial date specified in the appeal decision. • Modifies standards for enrollee- request to the data source, and that for • Consolidates standards for requested termination effective dates, purposes of eligibility for advance decreases in advance payments of the such that QHP issuers and Exchanges payments of the premium tax credit and premium tax credit and changes in cost- may only terminate prospectively, and cost-sharing reductions, other sections sharing reductions. not retroactively. in this subpart already address • Specifies that a change associated • Clarifies that terminations for situations in which data regarding with birth, adoption, placement for enrollees who are determined eligible MAGI-based income is unavailable. adoption and placement in foster care for Medicaid, CHIP or the BHP, such • Clarifies that paragraph (f)(5)(i) of must be implemented on the coverage that the last day of coverage is the day this section will follow the effective effective date described in before the individual is determined dates specified in § 155.330(f). § 155.420(b)(2)(i) and (ii). eligible for such coverage, rather than

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retroactive to the Medicaid or CHIP The policies in this rule will result in 457.350, 457.351, 457.355, 457.570, and eligibility effective date. a reduction in burden for individuals 457.805 • Aligns termination effective dates to applying for and renewing coverage, as These amendments to the Medicaid appropriately cross-reference with well as for states. The Medicaid program and CHIP state plans are necessary to eligibility effective dates. and CHIP will be made easier for states reflect changes in statute and federal • Adds language to clarify that in the to administer and for individuals to policy. While we are aware of the need case of termination due to death, the last navigate by streamlining Medicaid to estimate the PRA burden associated day of coverage is the date of death. eligibility and simplifying Medicaid and with the submission of state plan Changes to § 156.270 CHIP eligibility rules for most amendments related to the provisions individuals. Even though there are identified above, those amendments • Modifies coverage termination short-term burdens associated with the will be addressed as part of the requirements such that standards for implementation of the final rule, the electronic state plan filing process being QHP issuers align with those for Medicaid program and CHIP will be developed by CMS (the MACPro Exchanges. easier for states to administer over time system) and submitted to OMB for IV. Collection of Information due to the streamlined eligibility and approval under OCN 0938–1188 (CMS– Requirements coordinated efforts for Medicaid, CHIP, 10434). and the new affordable insurance 1b. Sections 435.113, 435.114, 435.223, Under the Paperwork Reduction Act exchanges. of 1995, we are required to provide 60- and 435.510 The final rule also continues to day notice in the Federal Register and Since we are eliminating the solicit public comment before a implement provisions related to the establishment of Exchanges. This final provisions in §§ 435.113, 435.114, collection of information requirement is 435.223, and 435.510, states will no submitted to the Office of Management rule: (1) Specifies standards related to authorized representatives, (2) outlines longer be required to submit state plan and Budget (OMB) for review and amendments related to those provisions. approval. To fairly evaluate whether an criteria related to the verification of enrollment in and eligibility for The provisions have been approved by information collection should be OMB under OCN 0938–1147). approved by OMB, section 3506(c)(2)(A) minimum essential coverage through an of the Paperwork Reduction Act of 1995 eligible employer-sponsored plan, and B. Medicaid Eligibility and Enrollment requires that we solicit comment on the (3) further specifies or amend standards related to other eligibility and 1. ICRs Regarding Delegation of following issues: Eligibility Determinations and Appeals • enrollment provisions. The description The need for the information (§§ 431.10(c), 431.11. and 457.1120) collection and its usefulness in carrying of the burden estimates associated with out the proper functions of our agency. these provisions is included in the In § 431.10(c), a state may delegate • The accuracy of our estimate of the information collection requirements authority to make eligibility information collection burden. outlined in section D. determinations and to conduct fair • The quality, utility, and clarity of Section A outlines the information hearings. States generally have written the information to be collected. collection requirements that involve agreements with various entities for • Recommendations to minimize the Medicaid and CHIP eligibility and similar purposes. Under this final rule, information collection burden on the enrollment. Section B outlines the agreements may need to be modified or affected public, including automated information collection requirements that new agreements established. However, collection techniques. involve Exchange eligibility and states that use the same agency to In the January 22, 2013 (78 FR 4593) enrollment. administer more than one program (for proposed rule, we requested public We used data from the Bureau of example, Medicaid and the Exchange) comment on each of the rule’s Labor Statistics to derive average costs will not need an agreement for the information collection requirements for all estimates of salary in establishing determination of eligibility by that (ICRs). The comments and our response the information collection requirements. agency. are discussed below. Salary estimates include the cost of Delegation of eligibility determinations was approved under Background fringe benefits, calculated at 35 percent of salary, which is based on the June OMB control number 0938–1147. This This final rule continues to 2012 Employer Costs for Employee rule sets out changes in the existing implement key provisions of the Compensation report by the U.S. Bureau requirement related to the type of Affordable Care Act including the of Labor Statistics. agencies that can make Medicaid and completion of the streamlining of CHIP eligibility determinations. These eligibility for children, pregnant A. Medicaid and CHIP Information amendments do not change the burden women, and adults that were initiated Collection Requirements (ICRs) To Be associated with the requirement. in the Medicaid eligibility final rule Addressed Through Separate Notices Medicaid and CHIP agencies will need published on March 23, 2012 (77 FR and Comment Process Under the to establish new agreements to delegate 17144). This rule also modifies CHIP Paperwork Reduction Act authority to conduct eligibility appeals. rules relating to substitution of coverage 1. ICRs Regarding State Plan The burden associated with the and premium lock-out periods, which Amendments delegation of appeals is the time and are important to a coordinated system of effort necessary for the Medicaid and coverage across programs. Finally, this 1a. Sections 431.10, 431.11, 431.206, CHIP agencies to create and execute the rule includes provisions related to 431.211, 431.213, 431.230, 431.231, agreements with the organization to authorized representatives, the 431.240, 435.110, 435.116, 435.603, which they are delegating authority. procedures for verifying access to 435.907, 435.908, 435.918, 435.1101, There are 53 Medicaid agencies (the qualifying employer-sponsored 435.1102, 435.1103, 435.1110, 435.1200, 50 states, the District of Columbia, coverage, catastrophic coverage and 435.1205, 440.130, 440.210, 440.220, Northern Mariana Islands, and other provisions related to eligibility 440.305, 440.315, 440.330, 440.335, American Samoa) and 43 CHIP agencies, and enrollment. 440.345, 447.52–54, 457.110, 457.340, for a total of 96 agencies. For the

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purpose of developing the cost, we workflow. The estimated cost for each to create the registration process and estimate that half of these agencies will agency is $3814.80. The total estimated workflow for the application counselors. establish an agreement with an cost is $366,220.80. For the purpose of the cost, we estimate organization to conduct fair hearings. it will take a health policy analyst 40 3. ICRs Regarding Application We estimate a one-time burden of 50 hours, at $49.35 an hour, a senior Counselors (§ 435.908(c)) hours to develop an agreement that can manager 10 hours, at $79.08 an hour, be used with the organization. It will In § 435.908(c), states have the option and a computer programmer 20 hours at take an additional 10 hours for to authorize certain staff and volunteers $52.50 to complete the registration Medicaid and 10 hours for a separate of organizations to act as certified process and workflow. The estimated CHIP agency to negotiate and execute application counselors. The burden cost for each state or territory is the agreement with the organization for associated with the requirements to $3,814.80. The total estimated cost is a total time burden of 2,880 hours [(53 assist individuals with the application $202,184.40. + 43)/2 × (50 + 10)] across all process is the time and effort necessary The next burden associated with this agreements. For the purpose of the cost, for the state to create agreements with provision is the time and effort we estimate it will take a health policy these organizations, to create a necessary for the 53 state Medicaid and analyst 40 hours at $49.35 an hour and registration process for assistors, and to CHIP agencies to provide training to the a senior manager 10 hours at $79.08 an train staff on the eligibility and application counselors. For the purpose hour to complete the model agreement confidentiality rules and requirements of the cost, we estimate it will take a (for a total of $2,764.80) plus 10 and how to assist applicants with the training specialist 40 hours at $26.64 an additional hours ($49.35) for a health completing the application. hour and a training and development policy analyst to execute a completed We estimate the 50 states, the District manager 10 hours at $64.43 an hour to agreement with each organization. The of Columbia, Northern Mariana Islands, develop training materials for the estimated cost for each agreement is and American Samoa will establish application counselors, for a total time $3,258.30 for a total cost of $156,398.40. agreements with on average 20 burden of 2,650 hours. The estimated organizations in their state or territory cost for each state or territory is 2. ICRs Regarding Fair Hearing for a total of 1,060 agreements related to $1,709.90. The total estimated cost is Processes (§§ 431.205(e), and 431.206(d) application assistance. As part of this $90,624.70. and (e)) estimate, we assumed that state Lastly, we estimate that each state or In §§ 431.205(e) and 431.206(e), the Medicaid and CHIP agencies will be territory will offer 50 hours of training hearing system and information must be party to the same agreements and, sessions to train individuals to assist accessible to persons who are limited therefore, will not establish separate applicants with Medicaid and CHIP English proficient and to persons with agreements. applications for a total time burden of disabilities. While states are required to The first burden associated with this 2650 hours. For the purpose of the cost, make the hearing system accessible, we provision is the time and effort we estimate it will take a training believe the associated burden is exempt necessary for the state Medicaid and specialist 50 hours at $26.64 an hour to from the PRA (see 5 CFR 1320.3(b)(2)) CHIP agencies to establish an train the application counselors. The since we believe that the time, effort, agreement. To develop an agreement, estimated cost for each agency is $1,332. and financial resources necessary to we estimate that it will take each of the The total estimated cost is $70,596. comply with this requirement will be 53 states and territories 50 hours to incurred by persons during the normal develop a model agreement. For the 4. ICRs Regarding Eligibility course of their activities and should, purpose of the cost, we estimate it will Determination Notices (§ 435.918, therefore, be considered as a usual and take a health policy analyst 40 hours at § 457.110) customary business practice. $49.35 an hour and a senior manager 10 In § 435.918 and § 457.110, states In § 431.206(d), states are required to hours at $79.08 to develop an must electronically provide notices to inform individuals that they may have agreement. The estimated cost is individuals when elected. their hearing before the agency (instead $2,764.80 (per state) or $146,534.40 The burden associated with the of the Exchange or the Exchange appeals (total) while the total annual hour requirements to deliver notices is the entity) and the method by which the burden is 2,650 hours. time necessary for the state staff to: (1) individual may make such election. To negotiate and complete the Familiarize themselves with the There are 53 Medicaid agencies (the 50 agreement, we estimate that each of the requirements related to notices; (2) states, the District of Columbia, 53 states/territories will execute 20 develop the language for approval, Northern Mariana Islands, and agreements. For the purpose of the cost, denial, termination, suspension, and American Samoa) and 43 CHIP agencies we estimate it will take a health policy change of benefits notices; and (3) for a total of 96 agencies that will be analyst 10 hours at $49.35 an hour to program the language in the Medicaid subject to this requirement. The burden execute each agreement. The estimated and CHIP notice systems so that the associated with providing this choice is cost is $9,870 (per state) or $523,110 notice can be populated and generated developing the process and workflow to (total) while the total annual hour based on the outcome of the eligibility enable the choice and sending the burden is 10,600 hours. determination and be delivered in an request for the fair hearing to the To develop and execute the model electronic format. appropriate agency. We estimate it will agreements, the total cost is $669,644.40 We estimate 53 state Medicaid take each agency an average of 70 hours for 13,250 hours of labor. agencies (the 50 states, the District of to create the process and workflow The next burden associated with this Columbia, Northern Mariana Islands, required in providing the choice. For provision is the time and effort and American Samoa) and 43 CHIP the purpose of the cost, we estimate it necessary for the 53 states and agencies (in states that have a separate will take a health policy analyst 40 territories to establish the registration or combination CHIP), totaling 96 hours at $49.35 an hour, a senior process and workflow for the agencies, will be subject to this manager 10 hours at $79.08 an hour, application counselors. We estimate it requirement. We estimate that it will and a computer programmer 20 hours at will take each state or territory an take each Medicaid and CHIP agency $52.50 to complete the process and average of 70 hours (3,710 total hours) 194 hours annually to develop,

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automate, and distribute the notice of In §§ 435.1101(b) and 457.355 (by (non-discrimination policy) under eligibility determination. For the reference to § 435.1101), states are § 440.347 (see section II.B.2.d of this purpose of the cost burden, we estimate required to provide qualified entities preamble); and (4) EPSDT and other it will take a health policy analyst 138 with training in all applicable policies required benefits (family planning hours at $49.35 an hour, a senior and procedures related to presumptive services and supplies) under § 440.345 manager 4 hours at $79.08, an attorney eligibility. The burden associated with (see the comments and responses 20 hours at $90.14, and a computer this provision is the time and effort section of the ABP portion of this programmer 32 hours at $52.50 to necessary for the states and territories to preamble). As a result of comments complete the notices. The estimated cost provide training to the hospitals. We received, CMS is finalizing the public burden for each agency is $10,609.42. estimate 50 states, the District of notice requirements in this final rule The total estimated cost burden is Columbia, Northern Mariana Islands, without change. $1,018,504.30, and the total annual hour and American Samoa will be subject to We also received a number of burden is 18,624 hours. this requirement. As part of this comments requesting clarification to our estimate, we assumed that state statement in the preamble that the 5. ICRs Regarding Authorized Medicaid agencies and CHIP agencies, section 1927 requirements apply to the Representatives (§ 435.923(a)) where there are separate agencies, will ABP prescription drug benefit. Section 435.923(a) sets out minimum develop and use the same training. Specifically, commenters requested requirements for the designation of For the purpose of the cost, we clarification, as part of this final rule, as authorized representatives. We are also estimate it will take a training specialist to how section 1927 of the Act applies applying these provisions to state CHIP 40 hours at $26.64 an hour and a to prescription drug coverage under the agencies through the addition of a cross training and development manager 10 ABP since ABP requirements for reference in § 457.340. hours at $64.43 an hour to develop prescription drug coverage must meet We are aware of the need to estimate training materials for the qualified the minimum EHB prescription drug the PRA burden associated with the entities, for a total time burden of 2,650 requirements at section 1937 of the Act. collection of information related to hours. The estimated cost for each state Based upon those comments, we have authorizing an individual to act as a or territory is $1,709.90. The total clarified in the regulation that when representative of an applicant, to permit estimated cost is $90,624.70. states pay for covered outpatient drugs self-attestation for individuals who do We also estimate that each state or under a state’s ABP, the section 1927 not have access to documentation, and territory will offer 50 hours of training requirements apply. There is no the citizenship and immigration sessions to qualified entities, for a total additional information collection verification requirements. These time burden of 2,650 hours. For the burden associated with this requirements were addressed as part of purpose of the cost, we estimate it will clarification. the single, streamlined application take a training specialist 50 hours at While this rule has finalized policy under OCN 0938–1191 (CMS–10440). $26.64 an hour to train the qualified related to these provisions, these 6. ICRs Regarding Presumptive entities. The estimated cost for each policies do not result in any additional agency is $1,332. The total estimated information collection requirements. Eligibility Determined by Hospitals cost is $70,596. Rather, the policy clarifications are (§ 435.1110) interpretations of information that is 7. ICRs Regarding ABP SPA-Related Under § 435.1110(d)(1), states may already being collected. establish state-specific standards for Requirements (§§ 440.305, 440.315, The information collection qualified hospitals that conduct 440.330, 440.335, 440.345, 440.347, requirements and burden estimates presumptive eligibility determinations 440.360, and 440.386) associated with §§ 440.305, 440.315, related to the success of assisting In the proposed rule, CMS requested 440.330, 440.335, 440.345, 440.347, individuals determined presumptively comment on habilitative services 440.360, and 440.386 have been eligible who submit a regular (§ 440.347(d)) and on the ‘‘medically approved by OMB through March 31, application and/or are approved for frail’’ definition (§ 440.315(f)). 2016, under OCN 0938–1188 (CMS– eligibility by the agency. States also Comments and CMS’ response can be 10434). This rule will not impose any have a great deal of flexibility in found in section B.3.a of this preamble. new or revised SPA-related reporting, determining and implementing the We also requested comment on essential recordkeeping, or third party disclosure standards appropriate for their programs health benefits (rehabilitative and requirements and, therefore, does not as well as appropriate corrective action habilitative services and devices) require additional OMB review under measures for hospitals which do not (§ 440.347). See section II.B. of this the authority of the Paperwork meet the state standards. preamble for the comments and our Reduction Act of 1995 (44 U.S.C. 3501 This change is necessary to reflect response. Additional comments were et seq.). changes in federal policy. A state’s solicited for exempt individuals election of state-specific standards will (modifying definition of ‘‘medically 8. ICRs Regarding Cost Sharing and affect their Medicaid state plan. While frail’’) (§ 440.315). Comments and CMS’ Premiums (§§ 447.52, 447.53, 447.54, we are aware of the need to estimate the response can be found in the ABP 447.55 and 447.56) burden associated with the submission portion of this preamble. The Deficit Reduction Act of 2005 of the state plan amendment, that CMS also received many comments (DRA) established a new section 1916A amendment will be addressed under the on the proposed changes to: (1) The of the Act, which gives states additional electronic state plan filing process being public notice requirement in § 440.386 flexibility, allowing for alternative developed by CMS (the MACPro (see section II.B.7.b. of this preamble for premiums and cost sharing, beyond system) and submitted to OMB for the comment and our response); (2) what is allowed under section 1916 of approval under OCN 0938–1188 (CMS– public notice in § 440.386 and the Act, for somewhat higher income 10434). The amendment and its prescription drug coverage in beneficiaries. Such alternative cost estimated burden will also be made § 440.345(f) (see section II.B.3.i. of this sharing may be targeted to specific available for public comment through preamble for the comment and our groups of beneficiaries and payment the PRA process. response); (3) essential health benefits may be required as a condition of

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providing services. Thus, in accordance In § 447.57(d), the information must individual person or organization as his with the DRA we reviewed and made be provided in a manner that ensures or her authorized representative. One changes to the current cost sharing and that affected beneficiaries and providers method for designating an authorized premiums regulations under §§ 447.52 are likely to have access to the notice representative is by submitting legal through 447.56. and are able to provide comments on documentation of the representative’s In a review of these sections we found proposed state plan amendments. authority. Exchanges have the option to that 45 states including the District of We estimate it will take each make available an ‘‘Appointment of Columbia impose cost-sharing and 40 Medicaid agency an average of 6 hours Authorized Representative Form’’ at the states impose premiums on to create the process and workflow time of application or anytime thereafter beneficiaries. While these provisions are required in providing the schedule and for an individual to designate an subject to the PRA, we believe that any notice. For the purpose of the cost authorized representative. Such a form changes a state makes to its current state burden, we estimate it will take a health would collect identifying and contact plan under any of these sections is a policy analyst 4 hours at $49.35 an hour information about the applicant, usual and customary practice under 5 and a senior manager 2 hours at $79.08 enrollee, and requested authorized CFR 1320.3(b)(2) and, as such, the an hour to complete the process and representative. Requested data elements burden associated with it is exempt workflow. The estimated cost burden for would include the following for both from the PRA. each agency is $355.56. The total the applicant or enrollee and the For those states electing to impose estimated cost burden is $18,844.68. requested representative: name, address, cost-sharing or premiums for the first C. Part 155—Exchange Establishment phone number, email address, date of time will only need to submit a state Standards and Other Related Standards birth, and relationship. The applicant, plan amendment one time for review. Under the Affordable Care Act enrollee, or authorized representative could obtain the form from the We estimate it will take each agency in For purposes of presenting an this circumstance an average of 2 hours Exchange Web site or from an assister estimate of paperwork burden, we (such as a Navigator, non-Navigator in- to fill out the state plan pre-print for reflect the participation of 18 State- either cost-sharing or premiums and person assister, etc.), and could submit Based Exchanges. It is important to note it to the Exchange by mail or online at submit it for approval. Thus we that the Exchange provisions found in anticipate six states may impose cost- any time. We expect that the Exchange part 155, subparts D and E discussed would use this information to authorize sharing and 11 states and the District of below involve several information Columbia may impose premiums on the authorized representative to act on collections that will occur through the behalf of the applicant or enrollee. An beneficiaries. For the purpose of the cost single, streamlined application for authorized representative could also burden, we estimate it will take a health enrollment in a QHP and for insurance submit this form if the applicant or policy analyst 1 hour at $49.35 an hour affordability programs described in enrollee is unable to do so. and a senior manager 1 hour at $79.08 § 155.405. We have accounted for the HHS is currently developing a model an hour to complete the process and burden associated with these collections Appointment of Authorized submission of each new state plan in the Supporting Statement for Data Representative Form to be used by the amendment. The estimated cost burden Collection to Support Eligibility Federally-facilitated Exchanges and will for each agency is $128.43. The total Determinations for Insurance make that form available to State-based estimated cost burden is $2,183.31. Affordability Programs and Enrollment Exchanges, which would also decrease 9. ICRs Regarding Beneficiary and through Health Benefits Exchanges, the burden on State-based Exchanges to Public Notice Requirements (§ 447.57) Medicaid, and Children’s Health develop such a form. If a state opts not Insurance Program Agencies (CMS– to use the form provided by HHS, we In § 447.57(a), 53 Medicaid agencies 10440; OCN 0938–1191). estimate the burden associated for the will be required to make available a We also highlight that the Supporting time and effort necessary for a State- public schedule describing current Statement includes several information based Exchange to develop the premiums and cost sharing collections from regulatory provisions Appointment of Authorized requirements containing the information finalized in the Exchange final rule (77 Representative Form to be 30 hours. in paragraphs (a)(1) through (6). In FR 18310). We have included these This includes a 10 hours from a mid- § 447.57(b), agencies are required to information collections in this PRA level health policy analyst at an hourly make the public schedule available to package to address PRA requirements cost of $49.35 and 10 hours from an those identified in paragraphs (b)(1) related to those provisions as they were operations analyst at an hourly cost of through (4). not included in the information $54.45 for drafting the form with 4 Prior to submitting a SPA for collection section of the Exchange final hours of managerial oversight at an Secretary approval to establish or rule. hourly cost of $79.08 and 6 hours of modify existing premiums or cost Lastly, we have not included legal review at an hourly cost of $90.14. sharing or change the consequences for information regarding information The estimated cost per State-based non-payment, § 447.57(c) requires that collections associated with certified Exchange is $1,895, for a total cost of the state: (1) Provide the public with application counselors, eligibility $34, 113 for 18 State-based Exchanges. advance notice of the SPA (specifying appeals, and SHOP coordination with For an applicant, enrollee, or the amount of premiums or cost sharing individual market Exchanges, which we prospective authorized representative, and who is subject to the charges); (2) will finalize at a future date with the we estimate that it will take up to 5 provide a reasonable opportunity to corresponding regulatory provisions. minutes to review instructions and comment on SPAs that propose to complete an Appointment of substantially modify premiums and cost 1. ICRs Regarding Authorized Authorized Representative Form. While sharing; (3) submit documentation to Representatives (§ 155.227) we expect most applicants, enrollees, or demonstrate that these requirements Section 155.227(a) provides that an prospective authorized representatives were met; and (4) provide additional applicant or enrollee, subject to to complete the Authorized public notice if cost sharing is modified applicable privacy and security Representative Form, an applicant, during the SPA approval process. requirements, may designate an enrollee, or prospective authorized

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representative may also comply with dynamic and include information determination. Because this notice will this provision by providing the tailored to all possible outcomes of an be sent to an employer at the address as necessary information online, by phone, application throughout the eligibility provided by an application filer on the by mail, or in-person. We expect a determination process. To develop the application, we anticipate all of these similar burden on the applicant, paper and electronic notices, Exchange notices will be sent by mail. As a result, enrollee, or authorized representative to staff will need to learn eligibility rules we estimated the associated mailing comply with this provision through and draft notice text for various decision costs for the time and effort needed to such means. If the applicant, enrollee, points, follow up, referrals, and appeals mail notices in bulk to employers. Like or authorized representative chooses to procedures. A health policy analyst, the eligibility notice, the employer submit an ‘‘Appointment of Authorized senior manager, and legal counsel will notice above will be developed and Representative Form,’’ the burden for a review the notice. The Exchange will programmed into the eligibility system. State-based Exchange to process the then engage in review and editing to However, unlike the eligibility notice, submitted information will be incorporate changes from the we expect the information on the approximately 10 minutes at a cost of consultation and user testing including employer notice to be minimal in $3.39 per submission. We anticipate review to ensure compliance with plain comparison to the eligibility notice and that an eligibility support staff person writing, translation, and readability therefore the burden on the Exchange to will scan, digitize, and link the form to standards. We intend that Exchanges develop the notice to be substantially an applicant’s or enrollee’s account, will work closely with the state less. Further, as with the individual review the submitted information, and Medicaid or CHIP agency to develop eligibility notice, HHS will provide update the authorized representative’s coordinated notices. Finally, a model notice text for Exchanges to use and applicant’s or enrollee’s account, if developer will program the template in developing this notice. applicable. notice into the eligibility system so that 3. ICRs Regarding Verification of the notice may be populated and 2. ICRs Regarding Notices (§§ 155.302, Enrollment in an Eligible Employer- generated in the correct format 155.310, 155.315, 155.320, 155.330, Sponsored Plan and Eligibility for according to an individual’s preference 155.335, 155.345, 155.355, 155.410, Qualifying Coverage in an Eligible to receive notices, via paper or 155.715, 155.720, 155.725, and Employer-Sponsored Plan (§ 155.320) electronically, as the applicant moves 155.1080) through the eligibility process. Section 155.320(d) proposes the Several provisions in subparts D and If a state opts not to use the model process for the verification of E outline specific scenarios in which the notices provided by HHS, we estimate enrollment in an eligible employer- Exchange will send a notice to that the Exchange effort related to the sponsored plan and eligibility for individuals and employers throughout development and implementation of the qualifying coverage in an eligible the eligibility and enrollment process. eligibility notice will necessitate 44 employer-sponsored plan. Paragraph HHS is currently developing model hours from a health policy analyst at an (d)(2) specifies that the Exchange will eligibility determination notices and hourly cost of $49.35 to learn eligibility obtain relevant data from any electronic several other models for notices rules and draft notice text; 20 hours data source available to the Exchange described in 45 CFR parts 155, 156, and from an attorney at an hourly cost of which has been approved by HHS, as 157 which will decrease the burden on $90.14 and 4 hours from a senior well as data from certain specified Exchanges to establish such notices. For manager at an hourly cost of $79.08 to electronic data sources. This will some notices, the Exchange will include review the notice; and 32 hours from a involve the development and execution specific notice text in another notice, computer programmer at an hourly cost of data sharing agreements; however, such as the eligibility determination of $52.50 to conduct the necessary this burden is already captured in the notice, rather than send an entirely development. In total, we estimate that data sharing agreements described in separate notice (effectively, two notices this will take a total of 100 hours for § 155.315. As these verification are combined into one). The purpose of each Exchange, at a cost of activities will all be electronic, we do these notices is to alert the individuals approximately $5,971 per Exchange and not expect for there to be any additional and employers who receive the notice of a total cost of $107,478 for 18 State- burden than that which is required to actions taken by the Exchange. When Based Exchanges. We expect that the design the overall eligibility and possible, we anticipate that the burden on the Exchange to maintain this enrollment system. Exchange will consolidate notices when notice will be significantly lower than to Paragraph (d)(3)(iii)(A) proposes that multiple members of a household are develop it. the Exchange provide notice to certain applying together and receive an Section 155.310(h) specifies that the applicants indicating that the Exchange eligibility determination at the same Exchange will notify an employer that will be contacting any employer time. The notice may be in paper or an individual in an employee’s tax identified on the application to verify electronic format but must be in writing household has been determined eligible whether the applicant is enrolled in an and sent after an eligibility for advance payments of the premium eligible employer-sponsored plan or is determination has been made by the tax credit and/or cost-sharing reductions eligible for qualifying coverage in an Exchange. We anticipate that a large based in part on the employer not eligible employer-sponsored plan for the volume of enrollees will request offering minimum essential coverage or benefit year for which coverage is electronic notification while others will not offering qualifying coverage in an requested. The burden associated with opt to receive the notice by mail. As a eligible employer-sponsored plan. Upon this notice to certain applicants is result of certain enrollees opting to making such an eligibility addressed in 155.310(g) as this will not receiving the notice by mail in some determination, the Exchange will send a be a separate notice, but incorporated instances, we estimated the associated notice to the employer with information into the eligibility determination notice mailing costs for the time and effort identifying the employee, along with a described in the above paragraph. needed to mail notices in bulk to notification that the employer may be In paragraph (d)(3)(iii)(D), we propose enrollees as appropriate. liable for the payment under section that the Exchange make reasonable We expect that the electronic 4980H of the Code, and that the attempts to contact any employer to eligibility determination notice will be employer has a right to appeal this which the applicant attested

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employment to verify whether the as the dollar amount of the advance requirements. We estimate that it will applicant is enrolled in an eligible payment and the cost-sharing take 142 hours annually for an Exchange employer-sponsored plan or is eligible reductions eligibility category, to enable to meet these recordkeeping for qualifying coverage in an eligible advance payments of the premium tax requirements for a total of 2,556 hours employer-sponsored plan for the benefit credit and cost-sharing reductions, for 18 State-Based Exchanges. year for which coverage is requested. reconciliation of the advance payments In the case of the requirement related We note that the flexibility we provide of the premium tax credit, and to termination standards, the burden to State-Based Exchanges for the first administration of the employer includes estimates related to the year of operations will significantly responsibility requirements. As we maintenance and transmission of reduce the burden of this information anticipate that these transmissions of coverage termination information, as collection in the first year. information will all be electronic, we do well as the time and effort needed to It is difficult to estimate the burden not expect for there to be any additional develop the system to collect and store associated with this information burden than that which is required to the information. We estimate that it will collection as the calculation involves design the overall eligibility and take 30 hours of a health policy analyst identifying the number of individuals enrollment system. at an hourly rate of $58.05, 20 hours for for whom employer-sponsored coverage a computer programmer at an hourly information will be unavailable. As 5. ICRs Regarding Reporting Changes (§§ 155.315, 155.330, and 155.335) rate of $52.50, and 20 hours for an such, below, we estimate the time and operations analyst at an hourly rate of cost associated with the Exchange Section 155.315(f) outlines the $54.45 for a total of 70 hours annually process for resolving inconsistencies making a reasonable attempt to contact per Exchange and a total of 1,260 hours identified through the verification one employer. We estimate the time for 18 Exchanges, for the time and effort process. In § 155.330(c)(1), we state that associated with this information to meet this standard. We estimate a the Exchange will verify any collection to be a total of 2.2 hours per cost of $3,881 for one Exchange and a information reported by an enrollee in employer at a total cost of $34. total cost of 69,858 for 18 State-Based accordance with the processes specified Exchanges. 4. ICRs Regarding Electronic in §§ 155.315 and 155.320 prior to using Transmissions (§§ 155.310, 155.315, such information in an eligibility 7. ICRs Regarding Agreements 155.320, and 155.340) redetermination. Section 155.335(e) (§§ 155.302 and 155.345) Sections 155.310, 155.315, 155.320, provides that the Exchange will require 155.330, and 155.340 involve the a qualified individual to report any Section 155.345(a) specifies that an electronic transmission of data to changes for the information listed in the Exchange and the corresponding state determine eligibility for enrollment in a notice described in § 155.335(c) of this Medicaid and CHIP agencies will enter QHP and for insurance affordability section within 30 days from the date of in to an agreement regarding the programs. Section 155.310(d)(3) the notice. It is not possible at this time coordination of eligibility specifies that the Exchange must notify to provide estimates for the number of determinations, and § 155.302(b)(6) the state Medicaid or CHIP agency and applicants for whom a reported change specifies that to the extent that an transmit all information from the will necessitate the adjudication of Exchange is making assessments of records of the Exchange for an applicant documentation, but we anticipate that eligibility for Medicaid and CHIP, rather determined eligible for Medicaid or this number will decrease as applicants than determinations, the Exchange will CHIP to the Medicaid or CHIP agency to become more familiar with the enter into an agreement with the state ensure that the Medicaid or CHIP eligibility process and as more data Medicaid and CHIP agencies regarding agency can provide the applicant with become available. As such, for now, we this arrangement. These agreements are coverage promptly and without undue note that the burden associated with necessary to minimize burden on delay. This applicant information will this provision is one hour for an individuals, ensure prompt be transmitted electronically from the individual to collect and submit determinations of eligibility and Exchange to the agency administering documentation, and 12 minutes (or 0.2 enrollment in the appropriate program Medicaid or CHIP once a determination hours) for eligibility support staff at an without undue delay and to provide has been made that the applicant is hourly cost of $28.66 to review the standards for transferring an application eligible for such program. The purpose documentation. between the Exchange and other entities of this data transmission is to notify the administering insurance affordability 6. ICRs Regarding Enrollment and agency administering Medicaid or CHIP programs. The specific number of Termination (§§ 155.400, 155.405, and that an individual is newly eligible and agreements needed may vary depending 155.430) thus the agency should facilitate on how states choose to divide enrollment in a plan or delivery system. In part 155, subpart E, we describe the responsibilities regarding eligibility Data will be transmitted through a requirements for Exchanges in determinations; where the Exchange is secure electronic interface. connection with enrollment and making assessments, we expect that the Sections 155.315 and 155.320 include disenrollment of qualified individuals agreement described in § 155.302(b)(6) transactions necessary to verify through the Exchange. These will be combined with the agreement in applicant information. We expect there information collections are associated § 155.345(a). to be no transactional burden associated with sending eligibility and enrollment The burden associated with this with the electronic transactions needed information to QHP issuers and to HHS, provision is the time and effort to implement §§ 155.315 and 155.320. maintaining records of all enrollments necessary for the Exchange to establish As these transmission functions will all in QHPs through the Exchange, or modify an agreement for eligibility be electronic, we do not expect for there reconciling enrollment information with determinations and coordination of to be any additional burden than that QHP issuers and HHS, and retaining eligibility and enrollment functions. If which is required to design the overall and tracking coverage termination an Exchange chooses to draft separate eligibility and enrollment system. information. The burden estimates agreements for each insurance In § 155.340, the Exchange must associated with these provisions include affordability program, then the estimate provide the relevant information, such the time and cost to meet these record will likely increase.

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In either case, we estimate it will take compliance with plain writing, language electronic notices while the rest will each Exchange an average of 105 hours access, and readability standards as receive notices by mail. We do not make to create a new agreement, although we required under § 156.250(c). Finally, a this assumption for notices described assume that such agreements will be developer will need to incorporate here as we expect that qualified largely standardized across states, and programming changes into the issuer’s employers would provide notices to that HHS will provide model noticing system to account for the employees in whatever format the agreements for state Medicaid and CHIP changes and updates that will be qualified employer usually provides agencies and the Exchange to use. This necessary to ensure that the QHP issuer notices to employees; in paper, includes a mid-level health policy is in compliance with the notice electronically, or in a combination of analyst and an operations analyst standards set forth in this rule and to both formats. We estimate that the reviewing the agreement with ensure the notice can be populated and associated printing costs for paper managerial oversight and generated according to an individual’s notices will be approximately $0.10 per comprehensive review of the agreement preference to receive notices. We notice. We do not take mailing costs by operations analyst. We estimate a estimate that the burden related to the into consideration for notices provided cost of $6,733 per Exchange. development and implementation of by qualified employers, as we expect this notice will necessitate 44 hours that if qualified employers provide 8. ICRs Regarding Notices From QHP from a health policy analyst at an hourly notices in paper format, the employer Issuers (§§ 156.260, 156.265, 156.270, cost of $49.35 to learn appeals rules and may provide the employee with the and 156.290) draft notice text; 20 hours from an notice in person, instead of mailing the First, § 156.260(b) provides that QHP attorney at an hourly cost of $90.14 and notice. We do not have a reasonable way issuers will notify a qualified individual four hours from a senior manager at an to estimate total printing costs for of his or her effective date of coverage, hourly cost of $79.08 to review the notices provided by qualified employers in accordance with the effective dates of notice; and 32 hours from a computer in the SHOP Exchange due to coverage established by the Exchange in programmer at an hourly cost of $52.50 uncertainty regarding the number of accordance with § 155.410(c) and (f). to conduct the necessary development. employees who will choose to receive Second, under § 156.270(b), QHP issuers In total, we estimate that this will take paper notices, as well as some will send a notice of termination of a total of 100 hours for each QHP issuer, uncertainty regarding the frequency of coverage to an enrollee if the enrollee’s at a cost of approximately $5,971 per circumstances that will trigger notices coverage in the QHP is being terminated issuer. We expect that the burden on in accordance with this part. in accordance with § 155.430(b)(1)(i), QHP issuers to maintain this notice will First, § 157.205(e) specifies that a (b)(2)(ii) or (b)(2)(iii). Third, § 156.270(f) be significantly lower than to develop it. qualified employer provide an employee provides that QHP issuers will provide However, we believe that the burden with information about the enrollment enrollees with a notice about the grace estimate described under § 155.310(g) process. A qualified employer will period for non-payment of premiums. likely represents an upper bound inform each employee that he or she has QHP issuers will send this notice to estimate of the burden on issuers to an offer of coverage through the SHOP enrollees who are delinquent on develop each of these notices as in some Exchange, and instructions for how the premium payments. Fourth, § 156.265(e) cases the notice described under employee can apply for and enroll in provides that QHP issuers will provide § 155.310(g) will be somewhat more coverage. We anticipate that the new enrollees with an enrollment dynamic to address the additional qualified employer will also provide information package, which we information we expect to be included in information about the acceptable anticipate that issuers may combine that notice. formats in which an employee may with the notification of coverage Since the above estimate applies to submit an application; online, on paper, effective date described in § 156.260(b). one notice, and we described 5 notices or by phone, as described under Lastly, under § 156.290(b), QHP issuers under part 156, the total burden § 157.205(c). If the employee being will provide a notice to enrollees if the estimate is $40,710. Due to uncertainty offered coverage was hired outside an issuer elects not to seek recertification regarding the number of individuals initial or annual enrollment period, the of a QHP. who will choose to receive paper notice will also inform the employee if We anticipate that some of the above notices, as well as some uncertainty he or she is qualified for a special QHP issuer required notices are similar regarding the frequency of enrollment period. Second, in in nature to the notices that issuers circumstances that will trigger notices § 157.205(f) we provide that a qualified currently send to enrollees. For in accordance with this part, we have employer will notify the SHOP example, it is standard practice for only included an estimate of the Exchange regarding an employee’s issuers to provide new enrollees with printing and mailing costs for a QHP change in eligibility for enrollment in a information about their enrollment in a issuer to send one notice to a qualified QHP through the SHOP Exchange, plan, their effective date of coverage, individual or enrollee. including when a dependent or and if and when their coverage is employee is newly eligible, or is no 9. ICRs Regarding Notices and Third- terminating. Accordingly, we anticipate longer eligible. that QHP issuers will review, update, Party Disclosures in the SHOP We expect that the information that and revise notice templates that they (§§ 157.205(e) and (f)) qualified employers will provide to utilize currently as they work to address 45 CFR part 157 includes several employees and the SHOP Exchange, as the notice requirements described below instances in which qualified employers described above, will be somewhat and to ensure that the notices include participating in the SHOP Exchange will standardized. Additionally, we the appropriate information. Similar to need to provide information to anticipate that qualified employers will notices that will be issued by the employees or to the SHOP Exchange. generate notices using a manual process. Exchange, we expect that for QHP- We include the data elements for these We expect that for a qualified employer issued notices, an analyst will develop notifications in appendix A of this PRA to establish a notice, the qualified text, and a peer analyst, manager, and package. For the individual market employer will need 20 hours from a legal counsel for the issuer will review Exchange, we anticipate that a large human resources specialist at an hourly the notices, including a review to ensure share of enrollees will elect to receive cost of $40.68 to develop the text; and

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four hours from a human resources that in most cases, these notices will be the burden on the qualified employer to manager at an hourly cost of $75.01 and manually generated on demand. maintain the notices will be ten hours from an attorney at an hourly Accordingly, we expect that the burden significantly lower than to develop the cost of $90.14 to review the notices. We hours for developing each of the notices notices. do not anticipate that a developer will will be approximately 34 hours, for a be needed to develop the notices total of 68 hours per qualified employer, D. Summary of Annual Burden described in this part since we expect at a total cost of $4,030. We expect that Estimates

TABLE 1—PROPOSED ANNUAL RECORDKEEPING AND REPORTING REQUIREMENTS

Regulation sec- OMB & CMS ID Responses Burden per re- Total annual Labor cost of tion(s) #s Respondents (total) sponse (hours) burden (hours) reporting ($) Total cost ($)

42 CFR 431.10, OCN 0938–New; 48 48 60 2,880 3,258 (per re- 156,398 431.11, and CMS–10456. spondent). 457.1120. §§ 435.917, OCN 0938–New; 96 96 194 18,624 10,609 (per re- 1,018,504 435.918, CMS–10456. spondent). 457.110, and 457.340. §§ 435.923 and OCN 0938–New; 53 1060 12.5 13,250 12,635 (per re- 669,644 457.340 (de- CMS–10456. spondent). velop and exe- cute agree- ments). §§ 435.923 and OCN 0938–New; 53 53 70 3,710 3,815 (per re- 202,184 457.340 (create CMS–10456. spondent). registration process and work flow). §§ 435.923 and OCN 0938–New; 53 53 50 2,650 1,710 (per re- 90,625 457.340 (de- CMS–10456. spondent). velop training materials). §§ 435.923 and OCN 0938–New; 53 53 50 2,650 1,332 (per re- 70,596 457.340 (train CMS–10456. spondent). application assistors). §§ 435.1101(b) OCN 0938–New; 53 53 50 2,650 1,710 (per re- 90,625 and 457.355. CMS–10456. spondent). § 447.57 ...... 0938–New; CMS– 53 53 6 318 210 (per re- 11,130 10456. spondent). § 155.227 (ICRs OCN 0938–New; 18 18 30 540 1,895 (per re- 34,113 Regarding Au- CMS–10400. spondent). thorized Rep- resentatives). §§ 155.302, OCN 0938–New; 18 18 100 1,800 5,971 (per re- 107,478 155.310, CMS–10400. spondent). 155.315, 155.320, 155.330, 155.335, 155.345, 155.410, 155.715, 155.720, 155.725, and 155.1080 (ICRs Regarding No- tices). § 155.320 (ICRs OCN 0938–New; 1 ...... 2.2 ...... 34 (for one re- ...... Regarding CMS–10400. spondent). Verification of Enrollment in an Eligible Em- ployer-Spon- sored Plan and Eligibility for Qualifying Cov- erage in an Eli- gible Employer- Sponsored Plan).

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TABLE 1—PROPOSED ANNUAL RECORDKEEPING AND REPORTING REQUIREMENTS—Continued

Regulation sec- OMB & CMS ID Responses Burden per re- Total annual Labor cost of tion(s) #s Respondents (total) sponse (hours) burden (hours) reporting ($) Total cost ($)

§§ 155.315, 155. OCN 0938–New; 18 18 .2 ...... 29 (for one re- 5.73 330, 155.335 CMS–10400. spondent). (ICRs Regard- ing Reporting Changes). §§ 155.400 and OCN 0938–New; 18 18 142 2,556 7,254 (per re- 136,314 405 (ICRs Re- CMS–10400. spondent). garding Enroll- ment). § 155.430 (ICRs OCN 0938–New; 18 18 70 1,260 3,881 (per re- 69,858 Regarding Ter- CMS–10400. spondent). mination). §§ 155.302, OCN 0938–New; 18 18 105 1,890 6,733 (per re- 121,194 155.345 (ICRs CMS–10400. spondent). Regarding Agreements). §§ 156.260, OCN 0938–New; 18 18 100 1,800 5,971 (per re- 107,478 156.265, CMS–10400. spondent). 156.270, and 156.290 (ICRs Regarding No- tices from QHP Issuers). § 157.205(e) and OCN 0938–New; ...... 68 ...... 4,030 (per re- ...... (f) (ICRs Re- CMS–10400. spondent). garding Notices and Third Party Disclosures in the SHOP).

Total ...... 55,578 ...... 2,886,146.73

E. Submission of PRA-Related PRA-specific comments must be this rulemaking. The RIA published Comments received by August 5, 2013. with the March 2012 Medicaid eligibility final rule detailed the impact V. Regulatory Impact Analysis We have submitted a copy of this final of the Medicaid eligibility changes rule to OMB for its review of the rule’s A. Overall Impact related to implementation of the information collection and We have examined the impact of this Affordable Care Act. The majority of recordkeeping requirements. These Medicaid eligibility provisions included requirements are not effective until they rule as required by Executive Order in this final rule were described in that have been approved by the OMB. 12866 on Regulatory Planning and detailed RIA and do not need to be To obtain copies of the supporting Review (September 30, 1993) and Executive Order 13563 on Improving repeated here. In the April 30, 2010 statement and any related forms for the final rule on State Flexibility for proposed paperwork collections Regulation and Regulatory Review (January 18, 2011). Executive Orders Medicaid Benefit Packages, the referenced above, access the CMS Web assumptions utilized in modeling the site at http://www.cms.gov/Regulations- 12866 and 13563 direct agencies to assess all costs and benefits of available estimated economic impact of the and-Guidance/Legislation/ associated provisions took into PaperworkReductionActof1995/PRA- regulatory alternatives and, if regulation is necessary, to select regulatory perspective the costs of the benefit Listing.html, or call the Reports package for the new adult group. Clearance Office at 410–786–1326. approaches that maximize net benefits (including potential economic, Coverage of these benefits was already We invite public comments on these environmental, public health and safety accounted for in the April 30, 2010 final potential information collection effects, distributive impacts, and rule, and therefore, does not need to be requirements. If you comment on these equity). A regulatory impact analysis repeated here. information collection and (RIA) must be prepared for rules with For coverage beginning on or after recordkeeping requirements, please do economically significant effects ($100 January 1, 2014, individuals and small either of the following: million or more in any 1 year). The businesses will be able to purchase 1. Submit your comments Office of Management and Budget has private health insurance—known as electronically as specified in the determined that this rulemaking is qualified health plans—through ADDRESSES section of this final rule; or ‘‘economically significant’’ within the competitive marketplaces called 2. Submit your comments to the meaning of section 3(f)(1) of Executive Affordable Insurance Exchanges, or Office of Information and Regulatory Order 12866, because it is likely to have ‘‘Exchanges.’’ This final rule: (1) Affairs, Office of Management and an annual effect of $100 million in any outlines criteria related to the Budget, Attention: CMS Desk Officer, one year. Accordingly, we have verification of enrollment in an eligible (CMS–2334–P) Fax: (202) 395–6974; or prepared a Regulatory Impact Analysis employer-sponsored plan and eligibility Email: [email protected]. that presents the costs and benefits of for qualifying coverage in an eligible

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employer-sponsored plan in connection are compelling practical, efficiency or contemplate the changes required under with advance payments of the premium consumer protection reasons. the Affordable Care Act, more states tax credit and cost-sharing reductions; may consider utilizing these flexibilities B. Estimated Impact of the Medicaid and (2) further specifies or amends other to either establish or expand cost Premium and Cost Sharing Provisions eligibility and enrollment provisions to sharing. We believe these proposed provide detail necessary for state The provisions in this final rule policies will encourage less costly care implementation. This rule continues to related to Medicaid premiums and cost and decreased use of unnecessary afford states substantial discretion in the sharing clarify and update existing services, which will reduce state and design and operation of the Exchange flexibilities and provide new flexibility federal costs for the specified services. established by a state, with greater for states for cost sharing for outpatient The following chart summarizes our standardization provided where services, drugs, and non-emergency use estimate of the anticipated effects of this directed by the statute or where there of the emergency department. As states final rule.

TABLE 2—ESTIMATED TOTAL IMPACT OF CHANGES IN MAXIMUM MEDICAID COST SHARING, FY 2014–2018 [In millions of dollars]

Year 2014 2015 2016 2017 2018 2014–2018

Federal ...... ¥25 ¥45 ¥70 ¥70 ¥70 ¥280 State ...... ¥15 ¥30 ¥45 ¥45 ¥50 ¥185

Total ...... ¥40 ¥75 ¥115 ¥115 ¥120 ¥465 Source: CMS’ Office of the Actuary

We estimate that this final rule will 1. Methods of Analysis Medicaid infrastructure will vary and result in total savings of $465 million The estimates in this analysis reflect depend on the level of maturity of over 5 years, including $280 million in estimates from the FY 2014 President’s current systems, current governance and cost savings to the federal government Budget for State Planning and business models, size, and other factors. and $185 million in savings to states. Establishment Grants, which It is important to note that, although These savings may be attributed incorporate the costs associated with states have the option to establish and primarily to the increased maximum state implementation of the provisions operate an Exchange, there is no federal allowable cost sharing for outpatient proposed in this rule. requirement that each state establish an Exchange. We believe the proposed services, drugs, and non-emergency use 2. Benefits of the Proposed Regulation of the emergency department. Such provisions provide options and savings are offset only nominally by the The provisions included in this final flexibility to states that minimize costs decreased maximum allowable cost rule amend provisions of the Exchange and burden on Exchanges, consumers, employers and other entities. We also sharing for an inpatient stay. In addition Establishment final rule. We do not believe the modifications made believe that overall administrative costs to direct savings from increased cost significantly alter the benefits associated may increase in the short term as states sharing, we assume some declines in with these provisions. Therefore, we build IT systems; however, in the long utilization as enrollees subject to new refer to the benefits discussion included term, states may see savings through the cost sharing requirements choose to in the regulatory impact analysis use of more efficient systems. decrease their use of services. associated with the Exchange Any administrative costs incurred in C. Estimated Impact of Exchange Establishment final rule for a full the development of IT infrastructure to Provisions analysis. The Exchange Establishment support the Exchange may be funded final rule regulatory impact analysis can through Exchange Planning and The provisions in this final rule be found at http://cciio.cms.gov/ Establishment Grants to states. The amend select provisions of the Exchange resources/files/Files2/03162012/hie3r- federal government expects that these Establishment final rule (77 FR 18319, ria-032012.pdf. grants will fund the development of IT March 27, 2012). Our approach in this 3. Costs of the Proposed Regulation systems that can be used by many states regulatory impact analysis was to build who either develop their own The Affordable Care Act and the off of the analysis presented in the Exchanges or who partner with the implementing regulations found in Exchange Establishment final rule, federal government to provide a subset subpart D of this final rule and the available at http://cciio.cms.gov/ of Exchange services.3 Costs for IT Exchange Establishment final rule infrastructure that will also support resources/files/Files2/03162012/hie3r- provide for a streamlined system based ria-032012.pdf. We do not believe the Medicaid must be allocated to on simplified eligibility rules, and an Medicaid, but are eligible for a 90 provisions in this final rule significantly expedited process that will facilitate alter our prior estimates of the impact of percent federal matching rate to assist in enrollment of eligible individuals and development.4 Exchanges on the budget or on minimize costs to states, Exchanges and enrollment in health insurance, and to the federal government. To support 3 therefore, this final rule does not For example, CMS has awarded a number of this new eligibility structure, states Early Innovator grants to develop efficient and significantly alter the regulatory impact seeking to operate Exchanges are replicable IT systems that can provide the analysis drafted as part of such expected to build new or modify foundation for other states’ work in this area. These rulemaking. This section summarizes existing information technology (IT) amounts vary from $6 million to $48 million per state. benefits and costs of the Exchange systems. We believe that how each state 4 Medicaid Program; Federal Funding for provisions presented in this final rule. builds and assembles the components Medicaid Eligibility Determination and Enrollment necessary to support its Exchange and Activities, Final rule, 75 FR 21950 (April 19, 2011).

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In general, as noted in our discussion study found that insured individuals funded by these grants. Performing of benefits, we anticipate that the final received more hospital care and more eligibility determinations is a minimum rule will increase take-up of health outpatient care than their uninsured function of the Exchange; therefore the insurance; therefore, one type of rule- counterparts.5 Exchange costs to develop the induced cost will be associated with Below we include estimated federal infrastructure for the provisions providing additional medical services to government payments related to grants included in this final rule are covered newly-enrolled individuals. A recent for Exchange startup. States’ initial costs by these grant outlays. due to the creation of Exchanges will be

TABLE 3—ESTIMATED FEDERAL GOVERNMENT OUTLAYS FOR THE AFFORDABLE INSURANCE EXCHANGES FY 2013– FY2017 [In billions of dollars]

Year 2013 2014 2015 2016 2017 2013–2017

Grant Authority for Exchange Start up a ...... 1.5 2.1 1.7 0.8 0.2 6.2 a FY 2014 President’s Budget.

D. Alternatives Considered could dissuade individuals from seeking is difficult to project, especially for coverage through the Exchange. people who are currently not in the We considered two alternatives to the • Exchange provisions. Alternative #2: Require Paper health care system—the population • Alternative #1: Require paper Notices from the Exchange targeted for the Medicaid eligibility documentation to verify access to In § 155.230(d), we provide that the changes and new insurance affordability employer-sponsored coverage. Exchange will provide the option to an programs. Such individuals could have Section 155.320(d) of the final rule individual or employer to receive pent-up demand and thus have costs provides a process for verification notices electronically. We anticipate that may be initially higher than other related to enrollment in an eligible that this will be accommodated by the enrollees in health coverage, while they employer-sponsored plan and eligibility Exchange generating electronic notices, might also have better health status than for qualifying coverage in an eligible storing them on a secure Web site, and those who have found a way (for employer-sponsored plan. The proposed notifying individuals and employers example, ‘‘spent down’’) to enroll in process relies on available electronic through a generic email or text message Medicaid. data sources, with the use of paper communication that a notice is available For the Exchange provisions, we use documentation in situations in which for review. the President’s Fiscal Year 2014 Budget The alternative model would require information submitted by an applicant as an estimate of the costs associated the Exchange to send all notices in is not reasonably compatible with with the Exchange provisions. It is paper form via US mail. This would information in electronic data sources, difficult to isolate the effects associated significantly increase administrative along with a sample-based review for with these particular provisions of the costs for printing and mailing, and also situations in which no data is available. Affordable Care Act, and therefore, in The alternative model we considered generate significant volumes of this analysis, we discuss the evidence would require the Exchange to require undeliverable mail which would be relating to the provisions of this final individuals to submit paper returned to the Exchange. rule in combination with related documentation to verify this provisions of the Affordable Care Act. information in all circumstances. This Summary of Costs for Each Alternative Further, with limited previous data and may increase the burden on individuals The paper-driven process outlined experiences, there is even greater to submit this documentation to the under alternatives 1 and 2 would uncertainty than in estimating the Exchange, which may not be readily ultimately increase the amount of time available to the applicant, but on it would take for an individual to implications of modifying a previously employers, who will have to produce receive health coverage through the existing program. Accordingly, we this information at the request of Exchange or an insurance affordability supplement the regulatory impact applicants, and will also require program, would increase administrative analysis with a qualitative discussion on additional time and resources for costs, and would dissuade individuals the specific provisions of this rule. Exchanges to accept and process the from seeking coverage through the F. Accounting Statement paper documentation needed for an Exchange. eligibility determination. In addition, it As required by OMB Circular A–4 could ultimately increase the amount of E. Limitations of the Analysis (available at http:// time it will take for an individual to A number of challenges face www.whitehouse.gov/omb/ receive health coverage through the estimators in projecting the Exchange, circulars_a004_a-4/), in Table X we Exchange or an insurance affordability Medicaid, and CHIP benefits and costs have prepared an accounting statement program, could reduce the number of under the Affordable Care Act and its table showing the classification of the states likely to operate an Exchange due implementing regulations, including impacts associated with implementation to increased administrative costs, and this final rule. Health care cost growth of this final rule.

5 Finkelstein, A. et al., (2011). The Oregon Health Year,’’ National Bureau of Economic Research Insurance Experiment: Evidence from the First Working Paper Series, 17190.

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TABLE 4—ACCOUNTING STATEMENT: CLASSIFICATION OF ESTIMATED NET COSTS AND TRANSFERS [In millions]

Units Category Estimates Year dollar Discount rate Period covered

Benefits

Annualized Monetized ($million/year) ...... Not Estimated ...... 2012 7% 2013–2017 Not Estimated ...... 2012 3% 2013–2017

Qualitative ...... The Exchanges, combined with other actions being taken to implement the Affordable Care Act, will improve access to health insurance, with numerous positive effects, including re- duced morbidity and fewer medical bankruptcies. The Exchange will also serve as a distribu- tion channel for insurance reducing administrative costs as a part of premiums and providing comparable information on health plans to allow for a more efficient shopping experience.

Costs*

Annualized Monetized ($million/year) ...... 1,311 ...... 2012 7% 2013–2017 1,283 ...... 2012 3% 2013–2017

Qualitative ...... Unquantified costs include State implementation costs above the amount covered by Federal grants; and increased medical costs associated with more widespread enrollment in health insurance.

Transfers

Annualized Monetized ($million/year) ...... 54.4 ...... 2013 7% 2014–2018 55.3 ...... 2013 3% 2014–2018

From Whom to Whom ...... Beneficiaries to Federal Government

Annualized Monetized ($million/year) ...... 35.8 ...... 2013 7% 2014–2018 36.5 ...... 2013 3% 2014–2018

From Whom to Whom ...... Beneficiaries to State Governments * These costs include grant outlays to States to establish Exchanges; most of these Exchange-establishment costs been included in the ac- counting statement for the Exchange final rule.

G. Regulatory Flexibility Analysis criteria related to the verification of code. Health issuers could also possibly The Regulatory Flexibility Act (5 enrollment in an eligible employer- be classified in 621491 (HMO Medical U.S.C. 601 et seq.) (RFA) requires sponsored plan and eligibility for Centers) and, if this is the case, the SBA agencies to prepare an initial regulatory qualifying coverage in an eligible size standard will be $30 million or less. employer-sponsored plan; and (2) flexibility analysis to describe the 1. QHP Issuers impact of the final rule on small further specifies or amends standards entities, unless the head of the agency related to other eligibility and This rule proposes standards for can certify that the rule will not have a enrollment provisions to provide detail Exchanges that affect eligibility significant economic impact on a necessary for state implementation. determinations for enrollment in a QHP substantial number of small entities. The intent of this rule is to continue through the Exchange, advance The Act generally defines a ‘‘small to afford states substantial discretion in payments of the premium tax credit, entity’’ as (1) a proprietary firm meeting the design and operation of an cost-sharing reductions, Medicaid, and the size standards of the Small Business Exchange, with greater standardization CHIP. Although these standards are for Administration (SBA); (2) a not-for- provided where directed by the statute Exchanges, they also affect health plan profit organization that is not dominant or where there are compelling practical, issuers that choose to participate in an in its field; or (3) a small government efficiency or consumer protection Exchange. QHP issuers receive jurisdiction with a population of less reasons. information from an Exchange about an than 50,000. States and individuals are For the purposes of the regulatory enrollee to enable the QHP issuer to not included in the definition of ‘‘small flexibility analysis, we expect the process the correct level of advance entity.’’ HHS uses as its measure of following types of entities to be affected payments of the premium tax credit and significant economic impact on a by this final rule—(1) QHP issuers; and cost-sharing reductions. The issuer of substantial number of small entities a (2) employers. We believe that health the QHP will adjust an enrollee’s net change in revenues of more than 3 to 5 insurers will be classified under the premium to reflect the advance percent. North American Industry Classification payments of the premium tax credit, as As discussed above, this final rule is System (NAICS) Code 524114 (Direct well as make any changes required to necessary to implement certain Health and CMS–9989–P 166 Medical ensure that cost-sharing reflects the standards related to the establishment Insurance Carriers). According to SBA appropriate level of reductions. QHP and operation of Exchanges as size standards, entities with average issuers benefit significantly from authorized by the Affordable Care Act. annual receipts of $7 million or less will advance payments of the premium tax Specifically, this final rule: (1) provides be considered small entities this NAICS credit and cost-sharing reductions, but

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may face some administrative costs definition of a small entity as that term effects on states, preempts state law, or relating to receiving enrollee is used in the RFA (for example, small otherwise has federalism implications. information from an Exchange. businesses, nonprofit organization, and We wish to note again that the impact As discussed in the Web Portal small governmental jurisdictions with a of changes related to implementation of interim final rule (75 FR 24470, 24481 population of less than 50,000) will be the Affordable Care Act were described (May 5, 2010), HHS examined the health impacted directly by this final rule. in the RIA of the March 2012 Medicaid insurance industry in depth in the Individuals and states are not included eligibility rule (77 FR 17144, March 23, Regulatory Impact Analysis we prepared in the definition of a small entity. In 2012). As discussed in the March 2012 for the final rule on establishment of the addition, the impact of the majority of RIA, we have consulted with states to Medicare Advantage program published this rule was addressed in the RIA receive input on how the various on August 3, 2004 (69 FR 46866). In that accompanying the March 2012 Affordable Care Act provisions codified analysis we determined that there were Medicaid eligibility rule (77 FR 17144, in this final rule will affect states. We few, if any, insurance firms March 23, 2012). Therefore, the continue to engage in ongoing underwriting comprehensive health Secretary has determined that this final consultations with Medicaid and CHIP insurance policies (in contrast, for rule will not have a significant Technical Advisory Groups (TAGs), example, to travel insurance policies or economic impact on a substantial which have been in place for many dental discount policies) that fell below number of small entities, and we have years and serve as a staff level policy the size thresholds for ‘‘small’’ business not prepared a regulatory flexibility and technical exchange of information established by the SBA (currently $7 analysis. between CMS and the states. Through million in annual receipts for health Additionally, section 1102(b) of the consultations with these TAGs, we have insurers, based on North American Act requires us to prepare a regulatory been able to get input from states Industry Classification System Code impact analysis if a final rule may have specific to issues surrounding the 524114).6 a significant economic impact on the changes in eligibility groups and rules Additionally, as discussed in the operations of a substantial number of that will become effective in 2014. Medical Loss Ratio interim final rule (75 small rural hospitals. This analysis must Because states have flexibility in FR 74918), the Department used a data conform to the provisions of section 604 deciding whether to implement an set created from 2009 National of the RFA. For purposes of section Exchange and, if a State opts to, in the Association of Insurance Commissioners 1102(b) of the Act, we define a small design of its Exchange, state decisions (NAIC) Health and Life Blank annual rural hospital as a hospital that is financial statement data to develop an located outside of a metropolitan will ultimately influence both updated estimate of the number of small statistical area and has fewer than 100 administrative expenses and overall entities that offer comprehensive major beds. We are not preparing an analysis premiums. However, because states are medical coverage in the individual and for section 1102(b) of the Act because not required to create an Exchange, group markets. For purposes of that the Secretary has determined that this these costs are not mandatory. For states analysis, the Department used total final rule will not have a direct electing to create an Exchange, the Accident and Health (A&H) earned economic impact on the operations of a initial costs of the creation of the premiums as a proxy for annual substantial number of small rural Exchange will be funded by Exchange receipts. The Department estimated that hospitals. Planning and Establishment Grants. there were 28 small entities with less After this time, Exchanges will be than $7 million in accident and health H. Unfunded Mandates financially self-sustaining with revenue earned premiums offering individual or Section 202 of the Unfunded sources left to the discretion of the state. group comprehensive major medical Mandates Reform Act of 1995 (UMRA) In the Department’s view, while this coverage; however, this estimate may requires that agencies assess anticipated final rule does not impose substantial overstate the actual number of small costs and benefits before issuing any direct effects on state and local health insurance issuers offering such rule whose mandates require spending governments, it has federalism coverage, because it does not include in any 1 year of $100 million in 1995 implications due to direct effects on the receipts from these companies’ other dollars, updated annually for inflation, distribution of power and lines of business. by state, local, or tribal governments, in responsibilities among the state and the aggregate, or by the private sector. In federal governments relating to 2. Employers 2013, that threshold is approximately determining standards relating to health The establishment of SHOP in $141 million. This final rule does not insurance coverage (that is, for QHPs) conjunction with tax incentives for mandate expenditures by state that is offered in the individual and eligible employers will provide new governments, local governments, tribal small group markets. Each state electing opportunities for employers to offer governments, in the aggregate, or the to establish a State-Based Exchange affordable health insurance to their private sector, of $140 million. The must adopt federal standards contained employees. A detailed discussion of the majority of state, local, and private in the Affordable Care Act and in this impact on employers related to the sector costs related to implementation of final rule, or have in effect a state law establishment of the SHOP is found in the Affordable Care Act were described or regulation that implements these the RIA for the Exchange final rule, 77 in the RIA accompanying the March federal standards. However, the FR 18010 (March 23, 2012) and 2012 Medicaid eligibility rule (77 FR Department anticipates that the available at http://cciio.cms.gov/ 17144, March 23, 2012). Furthermore, federalism implications (if any) are resources/files/Files2/03162012/hie3r- the final rule does not set any mandate substantially mitigated because states ria-032012.pdf. on states to set up an Exchange. have choices regarding the structure and Except in the Exchange provisions, governance of their Exchanges. few of the entities that meet the I. Federalism Additionally, the Affordable Care Act Executive Order 13132 establishes does not require states to establish an 6 Table of Size Standards Matched To North certain requirements that an agency Exchange; but if a state elects not to American Industry Classification System Codes,’’ effective November 5, 2010, U.S. Small Business must meet when it promulgates a final establish an Exchange or the state’s Administration, available at http://www.sba.gov. rule that imposes substantial direct Exchange is not approved, HHS will

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establish and operate an Exchange in 42 CFR Part 438 ■ 2. Section 431.10 is amended by that state. Additionally, states will have Grant programs—health, Medicaid, revising paragraph (a), adding paragraph the opportunity to participate in state and Reporting and recordkeeping (b)(3), and revising paragraphs (c), (d), Partnership Exchanges that will allow requirements. and (e) to read as follows: states to leverage work done by other states and the federal government. 42 CFR Part 440 § 431.10 Single State agency. In compliance with the requirement Grant programs—health, Medicaid. (a) Basis, purpose, and definitions. (1) of Executive Order 13132 that agencies This section implements section 42 CFR Part 447 examine closely any policies that may 1902(a)(4) and (5) of the Act. have federalism implications or limit Accounting, Administrative practice (2) For purposes of this part— Appeals decision means a decision the policy making discretion of the and procedure, Drugs, Grant programs— made by a hearing officer adjudicating states, the Department has engaged in health, Health facilities, Health a fair hearing under subpart E of this efforts to consult with and work professions, Medicaid, Reporting and part. cooperatively with affected states, recordkeeping requirements, Rural Exchange has the meaning given to including participating in conference areas. the term in 45 CFR 155.20. calls with and attending conferences of 42 CFR Part 457 Exchange appeals entity has the the National Association of Insurance Administrative practice and meaning given to the term ‘‘appeals Commissioners and consulting with entity,’’ as defined in 45 CFR 155.500. state officials on an individual basis. procedure, Grant programs—health, Health insurance, Reporting and Medicaid agency is the single State In accordance to the requirements set recordkeeping requirements. agency for the Medicaid program. forth in section 8(a) of Executive Order (b) * * * 13132, and by the signatures affixed to 45 CFR Part 155 (3) The single State agency is this regulation, the Department certifies Administrative practice and responsible for determining eligibility that CMS has complied with the procedure, Advertising, Brokers, for all individuals applying for or requirements of Executive Order 13132 Conflict of interest, Consumer receiving benefits in accordance with for the attached proposed regulation in protection, Grant programs—health, regulations in part 435 of this chapter a meaningful and timely manner. Grants administration, Health care, and for fair hearings filed in accordance J. Congressional Review Act Health insurance, Health maintenance with subpart E of this part. organization (HMO), Health records, (c) Delegations. (1) Subject to the This final rule is subject to the Hospitals, Indians, Individuals with requirement in paragraph (c)(2) of this Congressional Review Act provisions of disabilities, Loan programs—health, section, the Medicaid agency— the Small Business Regulatory Organization and functions (i)(A) May, in the approved state plan, Enforcement Fairness Act of 1996 (5 (Government agencies), Medicaid, delegate authority to determine U.S.C. 801 et seq.), which specifies that Public assistance programs, Reporting eligibility for all or a defined subset of before a rule can take effect, the federal and recordkeeping requirements, Safety, individuals to— agency promulgating the rule shall state and local governments, Technical (1) The single State agency for the submit to each House of the Congress assistance, Women, and Youth. financial assistance program under title and to the Comptroller General a report IV–A (in the 50 States or the District of containing a copy of the rule along with 45 CFR Part 156 Columbia), or under title I or XVI other specified information, this final Administrative practice and (AABD), in Guam, Puerto Rico, or the rule, and has been transmitted to procedure, Advertising, Advisory Virgin Islands; Congress and the Comptroller General committees, Brokers, Conflict of (2) The Federal agency administering for review. interest, Consumer protection, Grant the supplemental security income In accordance with the provisions of programs—health, Grants program under title XVI of the Act; or Executive Order 12866, this regulation administration, Health care, Health (3) The Exchange. was reviewed by the Office of insurance, Health maintenance (B) Must in the approved state plan Management and Budget. organization (HMO), Health records, specify to which agency, and the Hospitals, Indians, Individuals with individuals for which, authority to List of Subjects disabilities, Loan programs—health, determine eligibility is delegated. 42 CFR Part 431 Organization and functions (ii) Delegate authority to conduct fair (Government agencies), Medicaid, hearings under subpart E of this part for Grant programs—health, Health Public assistance programs, Reporting denials of eligibility for individuals facilities, Medicaid, Privacy, Reporting and recordkeeping requirements, Safety, whose income eligibility is determined and recordkeeping requirements. State and local governments, Sunshine based on the applicable modified 42 CFR Part 435 Act, Technical Assistance, Women, and adjusted gross income standard Youth. described in § 435.911(c) of this chapter, Aid to Families with Dependent For the reasons set forth in the to an Exchange or Exchange appeals Children, Grant programs-health, preamble, the Centers for Medicare & entity, provided that individuals who Medicaid, Reporting and recordkeeping Medicaid Services amends 42 CFR have requested a fair hearing of such a requirements, Supplemental Security chapter IV as set forth below: denial are given a choice to have their Income (SSI), Wages. fair hearing instead conducted by the 42 CFR Part 436 PART 431—STATE ORGANIZATION Medicaid agency. AND GENERAL ADMINISTRATION (2) The Medicaid agency may delegate Aid to Families with Dependent authority to make eligibility Children, Grant programs—health, ■ 1. The authority citation for part 431 determinations or to conduct fair Guam, Medicaid, Puerto Rico, continues to read as follows: hearings under this section only to a Supplemental Security Income (SSI), Authority: Sec. 1102 of the Social Security government agency which maintains and Virgin Islands. Act, (42 U.S.C. 1302). personnel standards on a merit basis.

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(3) The Medicaid agency— (3) Assurances that the entity to § 431.205 Provision of hearing system. (i) Must ensure that any agency to which authority to determine eligibility * * * * * which eligibility determinations or or conduct fair hearings will comply (b) * * * appeals decisions are delegated— with the provisions set forth in (1) A hearing before— (A) Complies with all relevant Federal paragraph (c)(3) of this section. (i) The Medicaid agency; or and State law, regulations and policies, (4) For appeals, procedures to ensure including, but not limited to, those that individuals have notice and a full (ii) For the denial of eligibility for related to the eligibility criteria applied opportunity to have their fair hearing individuals whose income eligibility is by the agency under part 435 of this conducted by either the Exchange or determined based on the applicable chapter; prohibitions against conflicts of Exchange appeals entity or the Medicaid modified adjusted gross income interest and improper incentives; and agency. standard described in§ 435.911(c) of this chapter, the Exchange or Exchange safeguarding confidentiality, including (e) Authority of the single State appeals entity to which authority to regulations set forth at subpart F of this agency. The Medicaid agency may not conduct fair hearings has been delegated part. delegate, to other than its own officials, (B) Informs applicants and under § 431.10(c)(1)(ii), provided that the authority to supervise the plan or to beneficiaries how they can directly individuals who have requested a fair develop or issue policies, rules, and contact and obtain information from the hearing are given the choice to have regulations on program matters. agency; and their fair hearing conducted instead by (ii) Must exercise appropriate ■ 3. Section 431.11 is amended by— the Medicaid agency; at state option the oversight over the eligibility ■ A. Removing paragraph (b). Exchange or Exchange appeals entity determinations and appeals decisions ■ B. Redesignating paragraphs (c) and decision may be subject to review by the made by such agencies to ensure (d), as paragraphs (b) and (c), Medicaid agency in accordance with compliance with paragraphs (c)(2) and respectively. § 431.10(c)(3)(iii); or (c)(3)(i) of this section and institute ■ C. Revising newly redesignated (2) An evidentiary hearing at the local corrective action as needed, including, paragraphs (b) and (c). level, with a right of appeal to the but not limited to, rescission of the The revisions read as follows: Medicaid agency. authority delegated under this section. (iii) If authority to conduct fair § 431.11 Organization for administration. * * * * * hearings is delegated to the Exchange or * * * * * ■ 7. Section 431.206 is amended by Exchange appeals entity under (b) Description of organization. (1) adding paragraphs (d) and (e) to read as paragraph (c)(1)(ii) of this section, the The plan must include a description of follows: agency may establish a review process the organization and functions of the § 431.206 Informing applicants and whereby the agency may review fair Medicaid agency. beneficiaries. hearing decisions made under that (2) When submitting a state plan * * * * * delegation, but that review will be amendment related to the designation, limited to the proper application of authority, organization or functions of (d) If, in accordance with federal and state Medicaid law and the Medicaid agency, the Medicaid § 431.10(c)(1)(ii), the agency has regulations, including sub-regulatory agency must provide an organizational delegated authority to the Exchange or guidance and written interpretive chart reflecting the key components of Exchange appeals entity to conduct the policies, and must be conducted by an the Medicaid agency and the functions fair hearing, the agency must inform the impartial official not directly involved each performs. individual in writing that— in the initial determination. (c) Eligibility determined or fair (1) He or she has the right to have his (d) Agreement with Federal, State or hearings decided by other entities. If or her hearing before the agency, instead local entities making eligibility eligibility is determined or fair hearings of the Exchange or the Exchange appeals determinations or appeals decisions. decided by Federal or State entities entity; and The plan must provide for written other than the Medicaid agency or by (2) The method by which the agreements between the Medicaid local agencies under the supervision of individual may make such election; agency and the Exchange or any other other State agencies, the plan must (e) The information required under State or local agency that has been include a description of the staff this section may be provided in delegated authority under paragraph designated by those other entities and electronic format in accordance with (c)(1)(i) of this section to determine the functions they perform in carrying § 435.918 of this chapter. Medicaid eligibility and for written out their responsibilities. agreements between the agency and the ■ 8. Section 431.211 is revised to read Exchange or Exchange appeals entity § 431.57 [Removed] as follows: that has been delegated authority to ■ 4. Section 431.57 is removed. conduct Medicaid fair hearings under § 431.211 Advance notice. ■ 5. Section 431.201 is amended by paragraph (c)(1)(ii) of this section. Such The State or local agency must send adding the definition of ‘‘send’’ in agreements must be available to the a notice at least 10 days before the date alphabetical order to read as follows: Secretary upon request and must of action, except as permitted under include provisions for: § 431.201 Definitions. §§ 431.213 and 431.214. (1) The relationships and respective * * * * * responsibilities of the parties, including ■ 9. Section 431.213 is amended by Send means deliver by mail or in but not limited to the respective revising the introductory text to read as electronic format consistent with responsibilities to effectuate the fair follows: § 435.918 of this chapter. hearing rules in subpart E of this part; § 431.213 Exceptions from advance notice. (2) Quality control and oversight by * * * * * the Medicaid agency, including any ■ 6. Section 431.205 is amended by The agency may send a notice not reporting requirements needed to revising paragraphs (b)(1) and (2) to read later than the date of action if— facilitate such control and oversight; as follows: * * * * *

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§ 431.230 [Amended] (d) * * * (4) Effective January 1, 2014, in ■ 10. In § 431.230, amend paragraph (a) (4) Applicable income limit for full determining the eligibility of an introductory text by removing the term Medicaid coverage of pregnant women. individual using MAGI-based income, a ‘‘mails’’ and adding in its place the term For purposes of paragraph (d)(1) of this state must subtract an amount ‘‘sends’’. section— equivalent to 5 percentage points of the (i) The minimum applicable income ■ 11. Section 431.231 is amended by Federal poverty level for the applicable limit is the State’s AFDC income revising the section heading and family size only to determine the standard in effect as of May 1, 1988 for paragraph (c)(2) to read as follows: eligibility of an individual for medical the applicable family size converted to assistance under the eligibility group § 431.231 Reinstating services. a MAGI-equivalent standard in with the highest income standard using * * * * * accordance with guidance issued by the MAGI-based methodologies in the (c) * * * Secretary under section 1902(e)(14)(A) applicable Title of the Act, but not to (2) The beneficiary requests a hearing and (E) of the Act. determine eligibility for a particular within 10 days from the date that the * * * * * eligibility group. individual receives the notice of action. ■ 16. Section 435.119 is amended by * * * * * The date on which the notice is received revising the introductory text in ■ 19. Section 435.907 is amended by is considered to be 5 days after the date paragraph (b) to read as follows: adding paragraph (h) to read as follows. on the notice, unless the beneficiary shows that he or she did not receive the § 435.119 Coverage for individuals age 19 § 435.907 Application. or older and under age 65 at or below 133 notice within the 5-day period; and percent FPL. * * * * * * * * * * (h) Reinstatement of withdrawn * * * * * applications. (1) In the case of ■ 12. Section 431.240 is amended by (b) Eligibility. Effective January 1, individuals described in paragraph adding paragraph (c) to read as follows. 2014, the agency must provide Medicaid (h)(2) of this section, the agency must § 431.240 Conducting the hearing. to individuals who: reinstate the application submitted by * * * * * * * * * * the individual, effective as of the date (c) A hearing officer must have access § 435.121 [Amended] the application was first received by the to agency information necessary to issue Exchange. ■ 17. In § 435.121, amend paragraph a proper hearing decision, including (2) Individuals described in this (f)(1)(iii) by removing the reference information concerning State policies paragraph are individuals who— ‘‘§ 447.52 or § 447.53’’ and by adding in and regulations. (i) Submitted an application described its place the reference ‘‘§ 447.52, in paragraph (b) of this section to the PART 435—ELIGIBILITY IN THE § 447.53, or § 447.54’’. Exchange; ■ STATES, DISTRICT OF COLUMBIA, 18. Section 435.603 is amended by— (ii) Withdrew their application for ■ THE NORTHERN MARIANA ISLANDS, A. In paragraph (b), adding the Medicaid in accordance with 45 CFR AND AMERICAN SAMOA definitions of ‘‘Child,’’ ‘‘Parent,’’ and 155.302(b)(4)(A); ‘‘Sibling’’ in alphabetical order. (iii) Are assessed as potentially ■ ■ 13. The authority citation for part 435 B. Revising paragraphs (c) and (d)(1). eligible for Medicaid by the Exchange ■ continues to read as follows: C. Adding paragraph (d)(4). appeals entity. The revisions and additions read as ■ 20. Section 435.908 is amended by Authority: Sec. 1102 of the Social Security follows: Act (42 U.S.C. 1302). adding paragraph (c) to read as follows: § 435.603 Application of modified adjusted ■ 14. Section 435.110 is amended by § 435.908 Assistance with application and gross income (MAGI). eepublishing paragraph (c) introductory renewal. text and revising paragraph (c)(1) to read * * * * * * * * * * as follows: (b) * * * (c) Certified Application Counselors. Child means a natural or biological, (1) At State option, the agency may § 435.110 Parents and other caretaker adopted or step child. relatives. certify staff and volunteers of State- * * * * * designated organizations to act as * * * * * Parent means a natural or biological, application assisters, authorized to (c) Income standard. The agency must adopted or step parent. provide assistance to applicants and establish in its State plan the income Sibling means natural or biological, beneficiaries with the application standard as follows: adopted, half, or step sibling. process and during renewal of (1) The minimum income standard is * * * * * eligibility. To be certified, application a State’s AFDC income standard in (c) Basic rule. Except as specified in assisters must be— effect as of May 1, 1988 for the paragraph (i), (j), and (k) of this section, (i) Authorized and registered by the applicable family size converted to a the agency must determine financial agency to provide assistance at MAGI-equivalent standard in eligibility for Medicaid based on application and renewal; accordance with guidance issued by the ‘‘household income’’ as defined in (ii) Effectively trained in the Secretary under section 1902(e)(14)(A) paragraph (d) of this section. eligibility and benefits rules and and (E) of the Act. (d) * * * regulations governing enrollment in a * * * * * (1) General rule. Except as provided QHP through the Exchange and all ■ 15. Section 435.116 is amended by in paragraphs (d)(2) through (d)(4) of insurance affordability programs republishing paragraph (d)(4) this section, household income is the operated in the State, as implemented in introductory text and revising paragraph sum of the MAGI-based income, as the State; and (d)(4)(i) to read as follows: defined in paragraph (e) of this section, (iii) Trained in and adhere to all rules of every individual included in the regulations relating to the safeguarding § 435.116 Pregnant women. individual’s household. and confidentiality of information and * * * * * * * * * * prohibiting conflict of interest,

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including regulations set forth at part (1) Ensure that the individual’s acting in such capacity, or there is a 431, subpart F of this chapter, and at 45 election to receive notices electronically change in the legal authority upon CFR 155.260(f), regulations relating to is confirmed by regular mail. which the individual or organization’s the prohibition against reassignment of (2) Ensure that the individual is authority was based. Such notice must provider claims specified in § 447.10 of informed of his or her right to change be in accordance with paragraph (f) of this chapter, and all other State and such election to receive notices through this section and should include the Federal laws concerning conflicts of regular mail. applicant or authorized representative’s interest and confidentiality of (3) Post notices to the individual’s signature as appropriate. information. electronic account within 1 business (d) The authorized representative— (2) For purposes of this section, day of notice generation. (1) Is responsible for fulfilling all assistance includes providing (4) Send an email or other electronic responsibilities encompassed within the information on insurance affordability communication alerting the individual scope of the authorized representation, programs and coverage options, helping that a notice has been posted to his or as described in paragraph (b)(2) of this individuals complete an application or her account. The agency may not section, to the same extent as the renewal, working with the individual to include confidential information in the individual he or she represents; provide required documentation, email or electronic alert. (2) Must agree to maintain, or be submitting applications and renewals to (5) Send a notice by regular mail legally bound to maintain, the the agency, interacting with the agency within three business days of the date confidentiality of any information on the status of such applications and of a failed electronic communication if regarding the applicant or beneficiary renewals, assisting individuals with an electronic communication is provided by the agency. responding to any requests from the undeliverable. (e) The agency must require that, as a agency, and managing their case (6) At the individual’s request, condition of serving as an authorized between the eligibility determination provide through regular mail any notice representative, a provider or staff and regularly scheduled renewals. posted to the individual’s electronic member or volunteer of an organization Application assisters may be certified by account. must affirm that he or she will adhere the agency to act on behalf of applicants ■ 22. Section 435.923 is added to read to the regulations in part 431, subpart F and beneficiaries for one, some or all of as follows: of this chapter and at 45 CFR 155.260(f) (relating to confidentiality of the permitted assistance activities. § 435.923 Authorized Representatives. (3) If the agency elects to certify information), § 447.10 of this chapter (a)(1) The agency must permit application assisters, it must establish (relating to the prohibition against applicants and beneficiaries to designate procedures to ensure that— reassignment of provider claims as an individual or organization to act (i) Applicants and beneficiaries are appropriate for a facility or an responsibly on their behalf in assisting informed of the functions and organization acting on the facility’s with the individual’s application and responsibilities of certified application behalf), as well as other relevant State renewal of eligibility and other ongoing assisters; and Federal laws concerning conflicts of communications with the agency. Such (ii) Individuals are able to authorize interest and confidentiality of a designation must be in accordance application assisters to receive information. with paragraph (f) of this section, confidential information about the (f) For purposes of this section, the including the applicant’s signature, and individual related to the individual’s agency must accept electronic, must be permitted at the time of application for or renewal of Medicaid; including telephonically recorded, application and at other times. and signatures and handwritten signatures (2) Authority for an individual or transmitted by facsimile or other (iii) The agency does not disclose entity to act on behalf of an applicant or confidential applicant or beneficiary electronic transmission. Designations of beneficiary accorded under state law, authorized representatives must be information to an application assister including but not limited to, a court unless the applicant or beneficiary has accepted through all of the modalities order establishing legal guardianship or described in § 435.907(a). authorized the application assister to a power of attorney, must be treated as ■ 23. Add an undesignated center receive such information. a written designation by the applicant or heading and 435.1015 to read as (4) Application assisters may not beneficiary of authorized representation. impose, accept or receive payment or (b) Applicants and beneficiaries may follows: compensation in any form from authorize their representatives to— FFP for Premium Assistance applicants or beneficiaries for (1) Sign an application on the application assistance. applicant’s behalf; § 435.1015 FFP for premium assistance for ■ 21. Section 435.918 is added to read (2) Complete and submit a renewal plans in the individual market. as follows: form; (a) FFP is available for payment of the (3) Receive copies of the applicant or costs of insurance premiums on behalf § 435.918 Use of electronic notices. beneficiary’s notices and other of an eligible individual for a health (a) Effective no earlier than October 1, communications from the agency; plan offered in the individual market 2013 and no later than January 1, 2015, (4) Act on behalf of the applicant or that provides the individual with the agency must provide individuals beneficiary in all other matters with the benefits for which the individual is with a choice to receive notices and agency. covered under the State plan, subject to information required under this part or (c) The power to act as an authorized the following conditions: subpart E of part 431 of this chapter in representative is valid until the (1) The insurer is obligated to pay electronic format or by regular mail and applicant or beneficiary modifies the primary to Medicaid for all health care must be permitted to change such authorization or notifies the agency that items and services for which the insurer election. the representative is no longer is legally and contractually responsible (b) If the individual elects to receive authorized to act on his or her behalf, under the individual health plan, as communications from the agency or the authorized representative informs required under part 433 subpart D of electronically, the agency must— the agency that he or she no longer is this chapter;

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(2) The agency furnishes all benefits § 435.603 of this part, determined using part, based on the income standard for which the individual is covered simplified methods prescribed by the established by the state for such under the State plan that are not agency) at or below the income standard individuals and providing the benefits available through the individual health established by the State for the age of covered under that section: §§ 435.110 plan; the child under § 435.118(c) or under (parents and caretaker relatives), (3) The individual does not incur any § 435.229 if applicable and higher. 435.119 (individuals aged 19 or older cost sharing charges in excess of any (b) * * * and under age 65), 435.150 (former amounts imposed by the agency under (2) * * * foster care children), and 435.218 subpart A of part 447; and (vi) Do not delegate the authority to (individuals under age 65 with income (4) The total cost of purchasing such determine presumptive eligibility to above 133 percent FPL). coverage, including administrative another entity. (c)(1) The terms of §§ 435.1101 and expenditures, the costs of paying all cost (3) Establish oversight mechanisms to 435.1102 apply to individuals who may sharing charges in excess of the amounts ensure that presumptive eligibility be eligible under § 435.213 of this part imposed by the agency under subpart A determinations are being made (relating to individuals with breast or of part 447, and the costs of providing consistent with the statute and cervical cancer) or § 435.214 of this part benefits as required by (a)(2) of this regulations. (relating to eligibility for limited family section, must be comparable to the cost * * * * * planning benefits) such that the agency of providing direct coverage under the (d) The agency— may provide Medicaid during a State plan. (1) May require, for purposes of presumptive eligibility period following (b) A State may not require an making a presumptive eligibility a determination by a qualified entity individual to receive benefits through determination under this section, that described in paragraph (c)(2) of this premium assistance under this section, the individual has attested to being, or section that— and a State must inform an individual another person who attests to having (i) The individual meets the eligibility that it is the individual’s choice to reasonable knowledge of the requirements of § 435.213; or receive either direct coverage under the individual’s status has attested to the (ii) The individual meets the Medicaid State plan or coverage through individual being, a— eligibility requirements of § 435.214, premium assistance for an individual (i) Citizen or national of the United except that coverage provided during a health plan. A State must require that an States or in satisfactory immigration presumptive eligibility period to such individual who elects premium status; or individuals is limited to the services assistance obtain through the insurance (ii) Resident of the State; and described in § 435.214(d). (2) May not— coverage all benefits for which the (2) Qualified entities described in this insurer is responsible and must provide (i) Impose other conditions for presumptive eligibility not specified in paragraph include qualified entities the individual with information on how which participate as providers under to access any additional benefits and this section; or (ii) Require verification of the the State plan and which the agency cost sharing assistance not provided by determines are capable of making the insurer. conditions for presumptive eligibility. (e) Notice and fair hearing regulations presumptive eligibility determinations. ■ Subpart L—Options for Coverage of in subpart E of part 431 of this chapter 27. Section 435.1110 is added to Special Groups under Presumptive do not apply to determinations of Subpart L to read as follows: presumptive eligibility under this Eligibility § 435.1110 Presumptive eligibility section. determined by hospitals. ■ 24. The heading for subpart L is ■ 26 Section 435.1103 is added to (a) Basic rule. The agency must revised as set forth above. Subpart L read as follows: ■ 25. Section 435.1102 is amended by— provide Medicaid during a presumptive ■ A. Revising the section heading. § 435.1103 Presumptive eligibility for other eligibility period to individuals who are ■ B. Revising paragraph (a). individuals. determined by a qualified hospital, on ■ C. Removing ‘‘and’’ at the end of (a) The terms of § 435.1101 and the basis of preliminary information, to paragraph (b)(2)(iv)(B) and adding § 435.1102 apply to pregnant women be presumptively eligible subject to the ‘‘and’’ at the end of paragraph such that the agency may provide same requirements as apply to the State (b)(2)(v)(B); Medicaid to pregnant women during a options under §§ 435.1102 and ■ D. Adding paragraph (b)(2)(vi). presumptive eligibility period following 435.1103, but regardless of whether the ■ E. Revising paragraph (b)(3). a determination by a qualified entity agency provides Medicaid during a ■ F. Removing paragraph (b)(4). that the pregnant woman has income at presumptive eligibility period under ■ G. Adding paragraphs (d) and (e). or below the income standard such sections. ■ The revisions and additions read as established by the State under (b) Qualified hospitals. A qualified follows: § 435.116(c), except that coverage of hospital is a hospital that— services provided to such women is (1) Participates as a provider under § 435.1102 Children covered under limited to ambulatory prenatal care and the State plan or a demonstration under presumptive eligibility. the number of presumptive eligibility section 1115 of the Act, notifies the (a) The agency may elect to provide periods that may be authorized for agency of its election to make Medicaid services for children under pregnant women is one per pregnancy. presumptive eligibility determinations age 19 or a younger age specified by the (b) If the agency provides Medicaid under this section, and agrees to make State during a presumptive eligibility during a presumptive eligibility period presumptive eligibility determinations period following a determination by a to children under § 435.1102 or to consistent with State policies and qualified entity, on the basis of pregnant women under paragraph (a) of procedures; preliminary information, that the this section, the agency may also apply (2) At State option, assists individuals individual has gross income (or, at state the terms of §§ 435.1101 and 435.1102 in completing and submitting the full option, a reasonable estimate of to the individuals described in one or application and understanding any household income, as defined in more of the following sections of this documentation requirements; and

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(3) Has not been disqualified by the Eligibility based on MAGI means from the date of application and 12 agency in accordance with paragraph (d) Medicaid eligibility based on the months from January 1, 2014. of this section. eligibility requirements which will be (4) For eligibility effective in 2013, for (c) State options for bases of effective under the State plan, or waiver all applicants— presumptive eligibility. The agency of such plan, as of January 1, 2014, may— consistent with §§ 435.110 through (i) Consistent with the requirements (1) Limit the determinations of 435.119, 435.218 and 435.603. of subpart J of this part, and applying presumptive eligibility which hospitals (b) Medicaid agency responsibilities to the eligibility requirements in effect may elect to make under this section to achieve coordinated open enrollment. under the State plan, or waiver of such determinations based on income for all For the period beginning October 1, plan, as of the date the individual of the populations described in 2013 through December 31, 2013, the submits an application to any insurance § 435.1102 and § 435.1103; or agency must affordability program— (2) Permit hospitals to elect to make (1) Accept all of the following: (A) Determine the individual’s presumptive eligibility determinations (i) The single streamlined application eligibility based on the information on additional bases approved under the described in § 435.907. provided on the application or in the State plan or an 1115 demonstration. (ii) Via secure electronic interface, an electronic account; or (d) Disqualification of hospitals. (1) electronic account transferred from (B) Request additional information The agency may establish standards for another insurance affordability program. from the individual needed by the qualified hospitals related to the (2) For eligibility based on MAGI, agency to determine eligibility based on proportion of individuals determined comply with the terms of § 435.1200 of the eligibility requirements in effect on presumptively eligible for Medicaid by this part, such that— such date, including on a basis excepted the hospital who: (i) For each electronic account from application of MAGI-based (i) Submit a regular application, as transferred to the agency under methods, as described in § 435.603, and described in § 435.907, before the end of paragraph (c)(1)(ii) of this section, the determine such eligibility if such the presumptive eligibility period; or agency consistent with either of the information is provided; and (ii) Are determined eligible for following: (C) Furnish Medicaid to individuals Medicaid by the agency based on such (A) Section 435.1200(c), accepts a determined eligible under this clause or application. determination of Medicaid eligibility provide notice and fair hearing rights in (2) The agency must take action, based on MAGI, made by another accordance with part 431 subpart E of including, but not limited to, insurance affordability program. this part if eligibility effective in 2013 disqualification of a hospital as a (B) Section 435.1200(d), determines is denied; or qualified hospital under this section, if eligibility for Medicaid based on MAGI. the agency determines that the hospital (ii) Consistent with § 435.1200(e), for (ii) Notify the individual of the is not— each single streamlined application opportunity to submit a separate (i) Making, or is not capable of submitted directly to the agency under application for coverage effective in making, presumptive eligibility paragraph (b)(1)(i) of this section— 2013 and information on how to obtain determinations in accordance with (A) Determine eligibility based on and submit such application. applicable state policies and MAGI; and procedures; or (B) For each individual determined PART 436—ELIGIBILITY IN GUAM, (ii) Meeting the standard or standards not Medicaid eligible based on MAGI, PUERTO RICO, AND THE VIRGIN established by the agency under determine potential eligibility for other ISLANDS paragraph (d)(1) of this section. (3) The agency may disqualify a insurance affordability programs, based on the requirements which will be ■ 30. The authority citation for part 436 hospital as a qualified hospital under continues to read as follows: this paragraph only after it has provided effective for each program, and transfer the hospital with additional training or the individual’s electronic account to Authority: Sec. 1102 of the Social Security taken other reasonable corrective action such program via secure electronic Act (42 U.S.C. 1302). measures to address the issue. interface. (iii) Provide notice and fair hearing § 436.831 [Amended] ■ 28. Section 435.1200 is amended by rights, in accordance with § 435.917 of ■ 31. In § 436.831, amend paragraph revising paragraph (d)(6) to read as this part, part 431 subpart E of this follows: (e)(1) by removing the reference chapter, and § 435.1200 for those ‘‘§ 447.51 or § 447.53’’ and by adding in § 435.1200 Medicaid Agency determined ineligible for Medicaid. its place the reference ‘‘§ 447.52,, responsibilities for a coordinated eligibility (3) For each individual determined § 447.53, or § 447.54’’. and enrollment process with other eligible based on MAGI in accordance insurance affordability programs with paragraph (c)(2) of this section— PART 438—MANAGED CARE * * * * * (i) Provide notice, including the (d) * * * effective date of eligibility, to such ■ 32. The authority citation for part 483 (6) Notify such program of the final individual, consistent with § 435.917 of continues to read as follows: determination of the individual’s this part, and furnish Medicaid. eligibility or ineligibility for Medicaid. (ii) Apply the terms of § 435.916 Authority: Sec. 1102 of the Social Security Act (42 U.S.C. 1302). * * * * * (relating to beneficiary responsibility to ■ 29. Section 435.1205 is added to read inform the agency of any changes in § 438.108 [Amended] as follows: circumstances that may affect eligibility) and § 435.952 (regarding use of ■ 33. Section 438.108 is amended by § 435.1205 Alignment with exchange initial information received by the agency). removing the reference ‘‘§§ 447.50 open enrollment period. The first renewal under § 435.916 of this through 447.60’’ and by adding in its (a) Definitions. For purposes of this part may, at State option, be scheduled place the reference ‘‘§§ 447.50 through section— to occur anytime between 12 months 447.57’’.

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PART 440—SERVICES: GENERAL meet the conditions for exemption must comparison of the proposed plan to one PROVISIONS be given the option of an Alternative or more of the three other benchmark Benefit Plan that includes all benefits plans specified above or to the State’s ■ 34. The authority citation for part 440 available under the approved State plan. standard full Medicaid coverage continues to read as follows: * * * * * package), and of the population to Authority: Sec. 1102 of the Social Security (f) The individual is medically frail or which coverage will be offered. In Act (42 U.S.C. 1302). otherwise an individual with special addition, the State should submit any medical needs. For these purposes, the other information that will be relevant ■ 35. Section 440.130 is amended by State’s definition of individuals who are to a determination that the proposed revising paragraph (c) to read as follows: medically frail or otherwise have special health benefits coverage will be § 440.130 Diagnostic, screening, medical needs must at least include appropriate for the proposed preventive, and rehabilitative services. those individuals described in population. * * * * * § 438.50(d)(3) of this chapter, (2) [Reserved] (c) Preventive services means services individuals with disabling mental ■ 39. Section 440.335 is amended by— recommended by a physician or other disorders (including children with ■ A. Adding paragraphs (b)(7)and (8). licensed practitioner of the healing arts serious emotional disturbances and ■ B. Revising paragraph (c)(1). acting within the scope of authorized adults with serious mental illness), ■ C. Removing paragraph (c)(3). practice under State law to— individuals with chronic substance use The revisions and additions read as (1) Prevent disease, disability, and disorders, individuals with serious and follows: other health conditions or their complex medical conditions, § 440.335 Benchmark-equivalent health progression; individuals with a physical, intellectual benefits coverage. or developmental disability that (2) Prolong life; and * * * * * (3) Promote physical and mental significantly impairs their ability to (b) * * * health and efficiency. perform 1 or more activities of daily (7) Prescription drugs. * * * * * living, or individuals with a disability (8) Mental health benefits. ■ 36. Section 440.305 is amended by determination based on Social Security (c) * * * revising paragraphs (a) and (b) and criteria or in States that apply more (1) In addition to the types of benefits removing paragraph (d). restrictive criteria than the of this section, benchmark-equivalent The revisions read as follows: Supplemental Security Income program, coverage may include coverage for any the State plan criteria. additional benefits of the type which are § 440.305 Scope. * * * * * covered in 1 or more of the standard (a) General. This subpart sets out (h) The individual is eligible and benchmark coverage packages described requirements for States that elect to enrolled for Medicaid under § 435.145 in § 440.330(a) through (c) or State plan provide medical assistance to certain of this chapter based on current benefits, described in section 1905(a), Medicaid eligible individuals within eligibility for assistance under title IV– 1915(i), 1915(j), 1915(k) and 1945 of the one or more groups of individuals E of the Act or under § 435.150 of this Act, any other Medicaid State plan specified by the State, through chapter based on current status as a benefits enacted under title XIX, or enrollment of the individuals in former foster care child. benefits available under base- coverage, identified as ‘‘benchmark’’ or * * * * * benchmark plans described in 45 CFR ‘‘benchmark-equivalent.’’ Groups must ■ 38. Section 440.330 is amended by 156.100. be identified by characteristics of revising paragraph (d) to read as * * * * * individuals rather than the amount or follows: ■ level of FMAP. 40. Section 440.345 is amended by revising the section heading and adding (b) Limitations. A State may only § 440.330 Benchmark health benefits apply the option in paragraph (a) of this coverage. paragraphs (b) through (f) to read as follows: section for an individual whose * * * * * eligibility is based on an eligibility (d) Secretary-approved coverage. Any § 440.345 EPSDT and other required category under section 1905(a) of the other health benefits coverage that the benefits. Act that could have been covered under Secretary determines, upon application * * * * * the State’s plan on or before February 8, by a State, provides appropriate (b) Family planning. Alternative 2006, except that individuals who are coverage to meet the needs of the Benefit Plans must include coverage for eligible under section population provided that coverage. family planning services and supplies. 1902(a)(10)(A)(i)(VIII) of the Act must Secretarial coverage may include (c) Mental health parity. Alternative enroll in an Alternative Benefit Plan to benefits of the type that are available Benefit Plans that provide both medical receive medical assistance. under 1 or more of the standard and surgical benefits, and mental health * * * * * benchmark coverage packages defined or substance use disorder benefits, must ■ 37. Section 440.315 is amended by in paragraphs (a) through (c) of this comply with the Mental Health Parity revising the introductory text and section, State plan benefits described in and Addiction Equity Act. paragraphs (f) and (h) to read as follows: section 1905(a), 1915(i), 1915(j), 1915(k) (d) Essential health benefits. or section 1945 of the Act, any other Alternative Benefit Plans must include § 440.315 Exempt individuals. Medicaid State plan benefits enacted at least the essential health benefits Individuals within one (or more) of under title XIX, or benefits available described in § 440.347, and include all the following categories are exempt under base benchmark plans described updates or modifications made from mandatory enrollment in an in 45 CFR 156.100. thereafter by the Secretary to the Alternative Benefit Plan, unless the (1) States wishing to elect Secretary- definition of essential health benefits. individuals are eligible under section approved coverage should submit a full (e) Updating of benefits. States are not 1902(a)(10)(A)(i)(VIII) of the Act. description of the proposed coverage required to update Alternative Benefit Individuals in that eligibility group who (including a benefit-by-benefit Plans that have been determined to

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include essential health benefits as of age, expected length of life, present or to providers who accept, as payment in January 1, 2014, until December 31, predicted disability, degree of medical full, the amounts paid by the agency 2015. States will adhere to future dependency, quality of life or other plus any deductible, coinsurance or guidance for updating benefits beyond health conditions. copayment required by the plan to be that date, as described by the Secretary. 42. Section 440.360 is revised to read paid by the individual. The provider (f) Covered outpatient drugs. To the as follows: may only deny services to any eligible extent states pay for covered outpatient individual on account of the drugs under their Alternative Benefit § 440.360 State plan requirements for providing additional services. individual’s inability to pay the cost Plan’s prescription drug coverage, states sharing amount imposed by the plan in must comply with the requirements In addition to the requirements of accordance with § 447.52(e). The under section 1927 of the Act. § 440.345, the State may elect to provide previous sentence does not apply to an additional coverage to individuals ■ 41. Section 440.347 is added to read individual who is able to pay. An enrolled in Alternative Benefit Plans, as follows: individual’s inability to pay does not except that the coverage for individuals eliminate his or her liability for the cost § 440.347 Essential health benefits. eligible only through section sharing charge. (a) Alternative Benefit Plans must 1902(a)(10)(A)(i)(VIII) of the Act is contain essential health benefits limited to benchmark or benchmark- § 447.20 [Amended] coverage, including benefits in each of equivalent coverage. The State must ■ 46. In § 447.20, amend paragraphs the following ten categories, consistent describe the populations covered and (a)(1) and (2) by removing the reference with the applicable requirements set the payment methodology for these ‘‘§§ 447.53 through 447.56’’ wherever it forth in 45 CFR part 156: benefits. Additional benefits must be occurs and adding in its place the (1) Ambulatory patient services; benefits of the type, which are covered reference ‘‘§§ 447.52 through 447.54’’. (2) Emergency services; in 1 or more of the standard benchmark ■ 47a. Remove the undesignated center (3) Hospitalization; coverage packages described in (4) Maternity and newborn care; § 440.330(a) through (c) or State plan headings which appear above §§ 447.50, (5) Mental health and substance use benefits including those described in 447.51, 447.53, 447.59, and 447.62. disorders, including behavioral health sections 1905(a), 1915(i), 1915(j), ■ 47b. Add a new undesignated center treatment; 1915(k) and 1945 of the Act and any above revised §§ 447.50 through 447.57 (6) Prescription drugs; other Medicaid State plan benefits to read as follows: (7) Rehabilitative and habilitative enacted under title XIX, or benefits Medicaid Premiums and Cost Sharing services and devices, except that such available under base benchmark plans coverage shall be in accordance with described in 45 CFR 156.100. Sec. § 440.347(d); ■ 43. Section 440.386 is added to read 447.50 Premiums and cost sharing: Basis and purpose. (8) Laboratory services; as follows: (9) Preventive and wellness services 447.51 Definitions. and chronic disease management; and § 440.386 Public notice. 447.52 Cost sharing. 447.53 Cost sharing for drugs. (10) Pediatric services, including oral Prior to submitting to the Centers for 447.54 Cost sharing for services furnished and vision care, in accordance with Medicare and Medicaid Services for in a hospital emergency department. section 1905(r) of the Act. approval of a State plan amendment to 447.55 Premiums. (b) Alternative Benefit Plans must establish an Alternative Benefit Plan or 447.56 Limitations on premiums and cost include essential health benefits in one an amendment to substantially modify sharing. of the state options for establishing an existing Alternative Benefit Plan, a 447.57 Beneficiary and public notice essential health benefits described in 45 state must have provided the public requirements. CFR 156.100, subject to with advance notice of the amendment Medicaid Premiums and Cost Sharing supplementation under 45 CFR and reasonable opportunity to comment 156.110(b) and substitution as permitted for such amendment, and have included § 447.50 Premiums and cost sharing: under 45 CFR 156.115(b). in the notice a description of the Basis and purpose. (c) States may select more than one method for assuring compliance with Sections 1902(a)(14), 1916 and 1916A base benchmark option for establishing § 440.345 related to full access to EPSDT of the Act permit states to require essential health benefits in keeping with services, and the method for complying certain beneficiaries to share in the costs the flexibility for States to implement with the provisions of section 5006(e) of of providing medical assistance through more than one Alternative Benefit Plan the American Recovery and premiums and cost sharing. Sections for targeted populations. Reinvestment Act of 2009. 447.52 through 447.56 specify the (d) To comply with paragraph (a) of standards and conditions under which this section, Alternative Benefit Plan PART 447—PAYMENTS FOR states may impose such premiums and coverage of habilitative services and SERVICES or cost sharing. devices will be based on the habilitative services and devices that are in the ■ 44. The authority citation for part 447 § 447.51 Definitions applicable base benchmark plan. If continues to read as follows: As used in this part— habilitative services and devices are not Authority: Section 1102 of the Social Alternative non-emergency services in the applicable base benchmark plan, Security Act (42 U.S.C. 1302). provider means a Medicaid provider, the state will define habilitative services ■ 45. Section 447.15 is revised to read such as a physician’s office, health care and devices required as essential health as follows: clinic, community health center, benefits using the methodology set forth hospital outpatient department, or in 45 CFR 156.115(a)(5). § 447.15 Acceptance of State payment as similar provider that can provide (e) Essential health benefits cannot be payment in full. clinically appropriate services in a based on a benefit design or A State plan must provide that the timely manner. implementation of a benefit design that Medicaid agency must limit Contract health service means any discriminates based on an individual’s participation in the Medicaid program health service that is:

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(1) Delivered based on a referral by, or (iv) Is determined to be an Indian Outpatient services for purposes of at the expense of, an Indian health under regulations promulgated by the imposing cost sharing means any program; and Secretary; service or supply not meeting the (2) Provided by a public or private (3) Is considered by the Secretary of definition of an inpatient stay. medical provider or hospital that is not the Interior to be an Indian for any Preferred drugs means drugs that the a provider or hospital of the IHS or any purpose; or state has identified on a publicly other Indian health program (4) Is considered by the Secretary of available schedule as being determined Cost sharing means any copayment, Health and Human Services to be an by a pharmacy and therapeutics coinsurance, deductible, or other similar Indian for purposes of eligibility for committee for clinical efficacy as the charge. Indian health care services, including as most cost effective drugs within each Emergency services has the same a California Indian, Eskimo, Aleut, or therapeutically equivalent or meaning as in § 438.114 of this chapter. other Alaska Native. therapeutically similar class of drugs, or all drugs within such a class if the Federal poverty level (FPL) means the Indian health care provider means a agency does not differentiate between Federal poverty level updated health care program operated by the preferred and non-preferred drugs. periodically in the Federal Register by Indian Health Service (IHS) or by an Premium means any enrollment fee, the Secretary of Health and Human Indian Tribe, Tribal Organization, or premium, or other similar charge. Services under the authority of 42 Urban Indian Organization (otherwise U.S.C. 9902(2). known as an I/T/U) as those terms are § 447.52 Cost sharing. Indian means any individual defined defined in section 4 of the Indian Health (a) Applicability. Except as provided at 25 U.S.C. 1603(13), 1603(28), or Care Improvement Act (25 U.S.C. 1603). in § 447.56(a) (exemptions), the agency 1679(a), or who has been determined Inpatient stay means the services may impose cost sharing for any service eligible as an Indian, under 42 CFR received during a continuous period of under the state plan. 136.12. This means the individual: inpatient days in either a single medical (b) Maximum Allowable Cost Sharing. (1) Is a member of a Federally- institution or multiple medical (1) At State option, cost sharing recognized Indian tribe; institutions, and also includes a return imposed for any service (other than for (2) Resides in an urban center and to an inpatient medical institution after drugs and non-emergency services meets one or more of the following four a brief period when the return is for furnished in an emergency department, criteria: treatment of a condition that was as described in §§ 447.53 and 447.54 (i) Is a member of a tribe, band, or present in the initial period. Inpatient respectively) may be established at or other organized group of Indians, has the same meaning as in § 440.2 of below the amounts shown in the including those tribes, bands, or groups this chapter. following table (except that the terminated since 1940 and those Non-emergency services means any maximum allowable cost sharing for recognized now or in the future by the care or services that are not considered individuals with family income at or State in which they reside, or who is a emergency services as defined in this below 100 percent of the FPL shall be descendant, in the first or second section. This does not include any increased each year, beginning October degree, of any such member; services furnished in a hospital 1, 2015, by the percentage increase in (ii) Is an Eskimo or Aleut or other emergency department that are required the medical care component of the CPI– Alaska Native; to be provided as an appropriate U for the period of September to (iii) Is considered by the Secretary of medical screening examination or September of the preceding calendar the Interior to be an Indian for any stabilizing examination and treatment year, rounded to the next higher 5-cent purpose; or under section 1867 of the Act. increment):

Maximum allowable cost sharing Services Individuals with family income Individuals with family income Individuals with family income ≤100% of the FPL 101–150% of the FPL >150% of the FPL

Outpatient Services (physician visit, $4 10% of cost the agency pays ...... 20% of cost the agency pays. physical therapy, etc.). Inpatient Stay ...... 75 10% of total cost the agency pays for 20% of total cost the agency pays for the entire stay. the entire stay.

(2) States with cost sharing for an (c) Maximum cost sharing. In no case hospital emergency department under inpatient stay that exceeds $75, as of shall the maximum cost sharing § 447.54, the agency may target cost July 15, 2013, must submit a plan to established by the agency be equal to or sharing to specified groups of CMS that provides for reducing exceed the amount the agency pays for individuals regardless of income. inpatient cost sharing to $75 on or the service. (e) Denial of service for nonpayment. before July 1, 2017. (d) Targeted cost sharing. (1) Except (1) The agency may permit a provider, (3) In states that do not have fee-for- as provided in paragraph (d)(2) of this including a pharmacy or hospital, to service payment rates, any cost sharing section, the agency may target cost require an individual to pay cost sharing imposed on individuals at any income sharing to specified groups of as a condition for receiving the item or level may not exceed the maximum individuals with family income above service if— amount established, for individuals 100 percent of the FPL. (i) The individual has family income with income at or below 100 percent of (2) For cost sharing imposed for non- above 100 percent of the FPL, the FPL described in paragraph (b)(1) of preferred drugs under § 447.53 and for (ii) The individual is not part of an this section. non-emergency services provided in a exempted group under § 447.56(a), and

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(iii) For cost sharing imposed for non- (h) Services furnished by a managed hospital emergency room services are emergency services furnished in an care organization (MCO). Contracts with identified as non-emergency service. emergency department, the conditions MCOs must provide that any cost- under § 447.54(d) of this part have been sharing charges the MCO imposes on § 447.53 Cost sharing for drugs. satisfied. Medicaid enrollees are in accordance (a) The agency may establish (2) Except as provided under with the cost sharing specified in the differential cost sharing for preferred paragraph (e)(1) of this section, the state state plan and the requirements set forth and non-preferred drugs. The provisions plan must specify that no provider may in §§ 447.50 through 447.57. in § 447.56(a) shall apply except as the deny services to an eligible individual (i) State Plan Specifications. For each agency exercises the option under on account of the individual’s inability cost sharing charge imposed under this paragraph (d) of this section. All drugs to pay the cost sharing. part, the state plan must specify— will be considered preferred drugs if so (3) Nothing in this section shall be (1) The service for which the charge identified or if the agency does not construed as prohibiting a provider from is made; differentiate between preferred and non- choosing to reduce or waive such cost (2) The group or groups of individuals preferred drugs. sharing on a case-by-case basis. (f) Prohibition against multiple that may be subject to the charge; (b) At state option, cost sharing for charges. For any service, the agency (3)The amount of the charge; drugs may be established at or below the may not impose more than one type of (4) The process used by the state to— amounts shown in the following table cost sharing. (i) Ensure individuals exempt from (except that the maximum allowable (g) Income-related charges. Subject to cost sharing are not charged, cost sharing shall be increased each the maximum allowable charges (ii) Identify for providers whether cost year, beginning October 1, 2015, by the specified in §§ 447.52(b), 447.53(b) and sharing for a specific item or service percentage increase in the medical care 447.54(b), the plan may establish may be imposed on an individual and component of the CPI–U for the period different cost sharing charges for whether the provider may require the of September to September of the individuals at different income levels. If individual, as a condition for receiving preceding calendar year, rounded to the the agency imposes such income-related the item or service, to pay the cost next higher 5-cent increment. Such charges, it must ensure that lower sharing charge; and increase shall not be applied to any cost income individuals are charged less (5) If the agency imposes cost sharing sharing that is based on the amount the than individuals with higher income. under § 447.54, the process by which agency pays for the service):

Maximum allowable cost sharing Services Individuals with family income Individuals with family income >150% of ≤150% of the FPL the FPL

Preferred Drugs ...... $4 $4. Non-Preferred Drugs ...... 8 20% of the cost the agency pays.

(c) In states that do not have fee-for- timely process in place so that cost department. The provisions in service payment rates, cost sharing for sharing is limited to the amount § 447.56(a) shall apply except as the prescription drugs imposed on imposed for a preferred drug if the agency exercises the option under individuals at any income level may not individual’s prescribing provider paragraph (c) of this section. exceed the maximum amount determines that a preferred drug for (b) At state option, cost sharing for established for individuals with income treatment of the same condition either non-emergency services provided in an at or below 150 percent of the FPL in will be less effective for the individual, emergency department may be paragraph (b) of this section. will have adverse effects for the established at or below the amounts (d) For individuals otherwise exempt individual, or both. In such cases the shown in the following table (except from cost sharing under § 447.56(a), the agency must ensure that reimbursement that the maximum allowable cost agency may impose cost sharing for to the pharmacy is based on the sharing identified for individuals with non-preferred drugs, not to exceed the appropriate cost sharing amount. family income at or below 150 percent maximum amount established in of the FPL shall be increased each year, paragraph (b) of this section. § 447.54 Cost sharing for services beginning October 1, 2015, by the (e) In the case of a drug that is furnished in a hospital emergency percentage increase in the medical care department. identified by the agency as a non- component of the CPI–U for the period preferred drug within a therapeutically (a) The agency may impose cost of September to September of the equivalent or therapeutically similar sharing for non-emergency services preceding calendar year, rounded to the class of drugs, the agency must have a provided in a hospital emergency next higher 5-cent increment):

Maximum allowable cost sharing Individuals with Individuals with Services family income family income ≤150% of the >150% of the FPL FPL

Non-emergency Use of the Emergency Department ...... $8 ...... No Limit.

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(c) For individuals otherwise exempt pregnant women. Such funds shall not (i) For individuals with annual from cost sharing under § 447.56(a), the be counted as income to the individual income exceeding 250 percent of the agency may impose cost sharing for for whom such payment is made. FPL, the agency may require payment of non-emergency use of the emergency (ii) Pregnant women described in this 100 percent of the premiums imposed department, not to exceed the maximum clause include pregnant women eligible under this paragraph for a year, such amount established in paragraph (b) of for Medicaid under § 435.116 of this that payment is only required up to 7.5 this section for individuals with income chapter whose income exceeds the percent of annual income for at or below 150 percent of the FPL. higher of – individuals whose annual income does (d) For the agency to impose cost (A) 150 percent FPL; and not exceed 450 percent of the FPL. sharing under paragraph (a) or (c) of this (B) If applicable, the percent FPL (ii) For individuals whose annual section for non-emergency use of the described in section 1902(l)(2)(A)(iv) of adjusted gross income (as defined in emergency department, the hospital the Act up to 185 percent FPL. section 62 of the Internal Revenue Code providing the care must— (2) Individuals provided medical of 1986) exceeds $75,000, increased by (1) Conduct an appropriate medical assistance only under sections inflation each calendar year after 2000, screening under § 489.24 subpart G to 1902(a)(10)(A)(ii)(XV) or the agency must require payment of 100 determine that the individual does not 1902(a)(10)(A)(ii)(XVI) of the Act and percent of the premiums for a year, need emergency services. the Ticket to Work and Work Incentives except that the agency may choose to (2) Before providing non-emergency Improvement Act of 1999 (TWWIIA), subsidize the premiums using state services and imposing cost sharing for may be charged premiums on a sliding funds which may not be federally such services: scale based on income. matched by Medicaid. (i) Inform the individual of the (3) Disabled children provided (4) For any premiums imposed under amount of his or her cost sharing medical assistance under section this section, the agency may waive obligation for non-emergency services 1902(a)(10)(A)(ii)(XIX) of the Act in payment of a premium in any case provided in the emergency department; accordance with the Family where the agency determines that (ii) Provide the individual with the Opportunity Act, may be charged requiring the payment will create an name and location of an available and premiums on a sliding scale based on undue hardship for the individual or accessible alternative non-emergency income. The aggregate amount of the family. services provider; child’s premium imposed under this (5) The agency may not apply further (iii) Determine that the alternative paragraph and any premium that the consequences or penalties for non- provider can provide services to the parent is required to pay for family payment other than those listed in this individual in a timely manner with the coverage under section 1902(cc)(2)(A)(i) section. imposition of a lesser cost sharing of the Act, and other cost sharing (c) State plan specifications. For each amount or no cost sharing if the charges may not exceed: premium, enrollment fee, or similar individual is otherwise exempt from (i) 5 percent of the family’s income if charge imposed under paragraph (a) of cost sharing; and the family’s income is no more than 200 this section, subject to the requirements (iv) Provide a referral to coordinate percent of the FPL. of paragraph (b) of this section, the plan scheduling for treatment by the (ii) 7.5 percent of the family’s income must specify— alternative provider. if the family’s income exceeds 200 (1) The group or groups of individuals (e) Nothing in this section shall be percent of the FPL but does not exceed that may be subject to the charge; construed to: 300 percent of the FPL. (2) The amount and frequency of the (1) Limit a hospital’s obligations for (4) Qualified disabled and working charge; screening and stabilizing treatment of an individuals described in section 1905(s) (3) The process used by the state to emergency medical condition under of the Act, whose income exceeds 150 identify which beneficiaries are subject section 1867 of the Act; or percent of the FPL, may be charged to premiums and to ensure individuals (2) Modify any obligations under premiums on a sliding scale based on exempt from premiums are not charged; either state or federal standards relating income, expressed as a percentage of and to the application of a prudent- Medicare cost sharing described at (4) The consequences for an layperson standard for payment or section 1905(p)(3)(A)(i) of the Act. individual or family who does not pay. coverage of emergency medical services (5) Medically needy individuals, as by any managed care organization. defined in §§ 435.4 and 436.3 of this § 447.56 Limitations on premiums and chapter, may be charged on a sliding cost sharing. § 447.55 Premiums. scale. The agency must impose an (a) Exemptions. (1) The agency may (a) The agency may impose premiums appropriately higher charge for each not impose premiums or cost sharing upon individuals whose income higher level of family income, not to upon the following groups of exceeds 150 percent of the FPL, subject exceed $20 per month for the highest individuals: to the exemptions set forth in level of family income. (i) Individuals ages 1 and older and § 447.56(a) and the aggregate limitations (b) Consequences for non-payment. under age 18 eligible under § 435.118 of set forth in § 447.56(f) of this part, (1) For premiums imposed under this chapter. except that: paragraphs (a)(1), (a)(2), (a)(3) and (a)(4) (ii) Infants under age 1 eligible under (1) Pregnant women described in of this section, the agency may not § 435.118 of this chapter whose income described in paragraph (a)(1)(ii) of this require a group or groups of individuals does not exceed the higher of— section may be charged premiums that to prepay. (A) 150 percent FPL (for premiums) or do not exceed 10 percent of the amount (2) Except for premiums imposed 133 percent FPL (for cost sharing); and by which their family income exceeds under paragraph (a)(5) of this section, (B) If applicable, the percent FPL 150 percent of the FPL after deducting the agency may terminate an individual described in section 1902(l)(2)(A)(iv) of expenses for care of a dependent child. from medical assistance on the basis of the Act up to 185 percent FPL. (i) The agency may use state or local failure to pay for 60 days or more. (iii) Individuals under age 18 eligible funds available under other programs (3) For premiums imposed under under § 435.120–§ 435.122 or § 435.130 for payment of a premium for such paragraph (a)(2) of this section— of this chapter.

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(iv) Children for whom child welfare regardless of family income, which (2) Any amounts paid by the agency services are made available under Part reflect the well-baby and well child care on behalf of ineligible individuals, B of title IV of the Act on the basis of and immunizations in the Bright whether or not the individual had paid being a child in foster care and Futures guidelines issued by the any required premium, except for individuals receiving benefits under American Academy of Pediatrics; and amounts for premium assistance to Part E of that title, without regard to age. (iv) Pregnancy-related services, obtain coverage for eligible individuals (v) At state option, individuals under including those defined at through family coverage that may age 19, 20 or age 21, eligible under §§ 440.210(a)(2) and 440.250(p) of this include ineligible individuals when § 435.222 of this chapter. chapter, and counseling and drugs for authorized in the approved state plan. (vi) Disabled children, except as cessation of tobacco use All services (f) Aggregate limits. (1) Medicaid provided at § 447.55(a)(4) (premiums), provided to pregnant women will be premiums and cost sharing incurred by who are receiving medical assistance by considered as pregnancy-related, except all individuals in the Medicaid virtue of the application of the Family those services specifically identified in household may not exceed an aggregate Opportunity Act in accordance with the state plan as not being related to the limit of 5 percent of the family’s income sections 1902(a)(10)(A)(ii)(XIX) and pregnancy. applied on either a quarterly or monthly 1902(cc) of the Act. (v) Provider-preventable services as basis, as specified by the agency. (vii) Pregnant women, except for defined in § 447.26(b). (2) If the state adopts premiums or premiums allowed under § 447.55(a)(1) (b) Applicability. Except as permitted cost sharing rules that could place and cost sharing for services specified in under § 447.52(d) (targeted cost beneficiaries at risk of reaching the the state plan as not pregnancy-related, sharing), the agency may not exempt aggregate family limit, the state plan during the pregnancy and through the additional individuals from cost sharing must indicate a process to track each postpartum period which begins on the obligations that apply generally to the family’s incurred premiums and cost last day of pregnancy and extends population at issue. sharing through an effective mechanism through the end of the month in which (c) Payments to providers. (1) Except that does not rely on beneficiary the 60-day period following termination as provided under paragraphs (c)(2) and documentation. of pregnancy ends. (c)(3) of this section, the agency must (viii) Any individual whose medical reduce the payment it makes to a (3) The agency must inform assistance for services furnished in an provider by the amount of a beneficiaries and providers of the institution, or at state option in a home beneficiary’s cost sharing obligation, beneficiaries aggregate limit and notify and community-based setting, is regardless of whether the provider has beneficiaries and providers when a reduced by amounts reflecting available collected the payment or waived the beneficiary has incurred out-of-pocket income other than required for personal cost sharing. expenses up to the aggregate family needs. (2) For items and services provided to limit and individual family members are (ix) An individual receiving hospice Indians who are exempt from cost no longer subject to cost sharing for the care, as defined in section 1905(o) of the sharing under paragraph (a)(1)(x) of this remainder of the family’s current Act. section, the agency may not reduce the monthly or quarterly cap period. (x) An Indian who is eligible to payment it makes to a provider, (4) The agency must have a process in receive or has received an item or including an Indian health care place for beneficiaries to request a service furnished by an Indian health provider, by the amount of cost sharing reassessment of their family aggregate care provider or through referral under that will otherwise be due from the limit if they have a change in contract health services is exempt from Indian. circumstances or if they are being premiums. Indians who are currently (3) For those providers that the agency terminated for failure to pay a premium. receiving or have ever received an item reimburses under Medicare reasonable (5) Nothing in paragraph (f) shall or service furnished by an Indian health cost reimbursement principles, in preclude the agency from establishing care provider or through referral under accordance with subpart B of this part, additional aggregate limits, including contract health services are exempt from an agency may increase its payment to but not limited to a monthly limit on all cost sharing. offset uncollected cost sharing charges cost sharing charges for a particular (xi) Individuals who are receiving that are bad debts of providers. service. Medicaid because of the state’s election (d) Payments to managed care to extend coverage as authorized by organizations. If the agency contracts § 447.57 Beneficiary and public notice § 435.213 of this chapter (Breast and with a managed care organization, the requirements. Cervical Cancer). agency must calculate its payments to (a) The agency must make available a (2) The agency may not impose cost the organization to include cost sharing public schedule describing current sharing for the following services: established under the state plan, for premiums and cost sharing (i) Emergency services as defined at beneficiaries not exempt from cost requirements containing the following section 1932(b)(2) of the Act and sharing under paragraph (a) of this information: § 438.114(a) of this chapter; section, regardless of whether the (1) The group or groups of individuals (ii) Family planning services and organization imposes the cost sharing who are subject to premiums and/or supplies described in section on its recipient members or the cost cost sharing and the current amounts; 1905(a)(4)(C) of the Act, including sharing is collected. contraceptives and pharmaceuticals for (e) Payments to states. No FFP in the (2) Mechanisms for making payments which the State claims or could claim state’s expenditures for services is for required premiums and cost sharing Federal match at the enhanced rate available for— charges; under section 1903(a)(5) of the Act for (1) Any premiums or cost sharing (3) The consequences for an applicant family planning services and supplies; amounts that recipients should have or recipient who does not pay a (iii) Preventive services, at a paid under §§ 447.52 through 447.55 premium or cost sharing charge; minimum the services specified at (except for amounts that the agency (4) A list of hospitals charging cost § 457.520 of chapter D, provided to pays as bad debts of providers under sharing for non-emergency use of the children under 18 years of age paragraph (c)(3) of this section; and emergency department; and

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(5) A list of preferred drugs or a applicable to children who have paid (6) Notify such program of the final mechanism to access such a list, outstanding premiums or enrollment determination of the individual’s including the agency Web site. fees. eligibility or ineligibility for CHIP. (b) The agency must make the public * * * * * * * * * * schedule available to the following in a ■ ■ 53. Section 457.350 is amended by manner that ensures that affected 50. Section 457.110 is amended by adding paragraph (a)(1) and a reserved revising paragraphs paragraph (i) to read applicants, beneficiaries, and providers as follows: are likely to have access to the notice: paragraph (a)(2) to read as follows: (1) Beneficiaries, at the time of their § 457.110 Enrollment assistance and § 457.350 Eligibility screening and enrollment and reenrollment after a information requirements. enrollment in other insurance affordability redetermination of eligibility, and when programs. (a) * * * premiums, cost sharing charges, or * * * * * aggregate limits are revised, notice to (1) The State may provide individuals (i) Applicants found potentially beneficiaries must be in accordance with a choice to receive notices and eligible for other insurance affordability with § 435.905(b) of this chapter; information required under this subpart programs. For individuals identified in (2) Applicants, at the time of and Subpart K of this part, in electronic paragraph (b)(3) of this section, application; format or by regular mail, provided that including during a period of (3) All participating providers; and the State establish safeguards in uninsurance imposed by the state under (4) The general public. accordance with § 435.918 of this § 457.805, the state must— (c) Prior to submitting to the Centers chapter. (1) Promptly and without undue for Medicare & Medicaid Services for (2) [Reserved] delay, consistent with the timeliness approval a state plan amendment (SPA) * * * * * standards established under § 457.340(d), transfer the electronic to establish or substantially modify ■ 51. Section § 457.340 is amended by existing premiums or cost sharing, or account to the applicable program via a revising paragraph (a) and adding secure electronic interfaces. change the consequences for non- paragraph (d)(3) to read as follows: payment, the agency must provide the (2) [Reserved.] public with advance notice of the SPA, § 457.340 Application for and enrollment in (3) In the case of individuals subject specifying the amount of premiums or CHIP. to a period of uninsurance under this cost sharing and who is subject to the part, the state must notify such program (a) Application and renewal of the date on which such period ends charges. The agency must provide a assistance, availability of program reasonable opportunity to comment on and the individual is eligible to enroll information, and Internet Web site. The in CHIP. such SPAs. The agency must submit terms of § 435.905, § 435.906, * * * * * documentation with the SPA to § 435.907(h), § 435.908, and ■ demonstrate that these requirements § 435.1200(f) of this chapter apply 54. Section 457.370 is added to read were met. If premiums or cost sharing equally to the State in administering a as follows: is substantially modified during the separate CHIP. § 457.370 Alignment with Exchange initial SPA approval process, the agency must * * * * * open enrollment period. provide additional public notice. (d) * * * The terms of § 435.1205 apply equally §§ 445.58 through 447.82 [Removed] (3) In the case of individuals subject to the State in administering a separate CHIP, except that the State shall make ■ 47c. Remove §§ 445.58 through to a period of uninsurance under this available and accept the application 447.82. part, the state must identify and implement processes to facilitate described in § 457.330, shall accept PART 457—ALLOTMENTS AND enrollment of CHIP-eligible children electronic accounts as described in GRANTS TO STATES who have satisfied a period of § 457.348, and furnish coverage in uninsurance (as described under accordance with § 457.340. ■ 48. The authority citation for part 457 § 457.805). To minimize burden on § 457.540 [Amended] continues to read as follows: individuals, a state may not require a ■ 55. In § 457.540, amend paragraph (a) Authority: Section 1102 of the Social new application or information already Security Act (42 U.S.C. 1302). provided by a family immediately by removing the reference ‘‘§ 447.52’’ preceding the beginning of a waiting and by adding in its place the reference ■ 49. Section 457.10 is amended by ‘‘§ 447.52, § 447.53, or § 447.54’’. adding the definitions of ‘‘Exchange period. States must also ensure that the proper safeguards are in place to ■ 56. Section 457.570 is amended by appeals entity,’’ and ‘‘Premium Lock revising paragraph (c) and adding Out’’ to read as follows: prevent a disruption in coverage for children transitioning from coverage paragraph (d) to read as follows: § 457.10 Definitions and use of terms. under another insurance affordability § 457.570 Disenrollment protections. program after the completion of a period * * * * * * * * * * Exchange appeals entity has the of uninsurance. (c) The State must ensure that meaning given to the term ‘‘appeals * * * * * disenrollment policies, such as policies entity,’’ as defined in 45 CFR 155.500. ■ 52. Section 457.348 is amended by related to non-payment of premiums, do * * * * * adding paragraph (c)(6) to read as not present barriers to the timely Premium Lock-Out is defined as a follows: determination of eligibility and State-specified period of time not to enrollment in coverage of an eligible exceed 90 days that a CHIP eligible § 457.348 Determinations of Children’s child in the appropriate insurance child who has an unpaid premium or Health Insurance Program eligibility by affordability program. A State may not— enrollment fee (as applicable) will not other insurance affordability programs. (1) Establish a premium lock-out be permitted to reenroll for coverage in * * * * * period that exceeds 90-days in CHIP. Premium lock-out periods are not (c) * * * accordance with § 457.10 of this part.

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(2) Continue to impose a premium (vii) The child lost coverage due to Catastrophic plan means a health lock-out period after a child’s past due the death or divorce of a parent. plan described in section 1302(e) of the premiums have been paid. ■ 58. Section 457.810 is amended by Affordable Care Act. (3) Require the collection of past due revising paragraph (a) to read as follows: * * * * * premiums or enrollment fees as a ■ 61. Section 155.105 is amended by condition of eligibility for reenrollment § 457.810 Premium assistance programs: revising paragraph (b)(2) to read as once the State-defined lock out period Required protections against substitution. follows: has expired, regardless of the length of * * * * * § 155.105 Approval of a State Exchange. the lock-out period. (a) Period without coverage under a (d) The State must provide the group health plan. For health benefits * * * * * enrollee with an opportunity for an coverage provided through premium (b) * * * impartial review to address assistance for group health plans, the (2) The Exchange is capable of disenrollment from the program in following rules apply: carrying out the information reporting accordance with § 457.1130(a)(3). requirements of 26 CFR 1.36B–5; (1) Any waiting period imposed under ■ * * * * * 57. Section 457.805 is revised to read the state child health plan prior to the ■ as follows: provision of child health assistance to a 62. Section 155.227 is added to read as follows: § 457.805 State plan requirement: targeted low-income child under the Procedures to address substitution under state plan shall apply to the same extent § 155.227 Authorized representatives. group health plans. to the provision of a premium assistance (a) General rule. (1) The Exchange (a) State plan requirements. The state subsidy for the child and shall not must permit an applicant or enrollee in plan must include a description of exceed 90 days. the individual or small group market, reasonable procedures to ensure that (2) States must permit the same subject to applicable privacy and health benefits coverage provided under exemptions to the required waiting security requirements, to designate an the State plan does not substitute for period for premium assistance as individual person or organization to act coverage provided under group health specified under the state plan at on his or her behalf in applying for an plans as defined at § 457.10. § 457.805(a)(2), and § 457.805(a)(3) for eligibility determination or (b) Limitations. (1) A state may not, the provision of child health assistance redetermination, under subpart D, G, or under this section, impose a period of to a targeted low-income child. H of this part, and in carrying out other uninsurance which exceeds 90 days * * * * * ongoing communications with the from the date a child otherwise eligible Exchange. for CHIP is disenrolled from coverage Title 45 (2) Designation of an authorized under a group health plan. For the reasons set forth in the representative must be in a written (2) A waiting period may not be preamble, the Department of Health and document signed by the applicant or applied to a child following the loss of Human Services amends 45 CFR subtitle enrollee, or through another legally eligibility for and enrollment in A, subchapter B, as set forth below: binding format subject to applicable Medicaid or another insurance authentication and data security affordability program. PART 155—EXCHANGE standards. If submitted, legal (3) If a state elects to impose a period ESTABLISHMENT STANDARDS AND documentation of authority to act on of uninsurance following the loss of OTHER RELATED STANDARDS behalf of an applicant or enrollee under coverage under a group health plan UNDER THE AFFORDABLE CARE ACT State law, such as a court order under this section, such period may not establishing legal guardianship or a be imposed in the case of any child if: ■ 59. The authority citation for part 155 power of attorney, shall serve in the (i) The premium paid by the family is revised to read as follows: place of the applicant’s or enrollee’s for coverage of the child under the signature. group health plan exceeded 5 percent of Authority: Sections 1301, 1302, 1303, (3) The Exchange must ensure that the household income; 1304, 1311, 1312, 1313, 1321, 1322, 1331, authorized representative agrees to (ii) The child’s parent is determined 1332, 1334, 1402, 1413, 1321, 1322, 1331, 1332, 1334, 1402, 1411, 1412, 1413 of the maintain, or be legally bound to eligible for advance payment of the Affordable Care Act, Pub. L 111–148, 124 maintain, the confidentiality of any premium tax credit for enrollment in a Stat 199. information regarding the applicant or QHP through the Exchange because the ■ enrollee provided by the Exchange. ESI in which the family was enrolled is 60. Section 155.20 is amended by (4) The Exchange must ensure that the determined unaffordable in accordance revising the definitions of ‘‘Advance authorized representative is responsible with 26 CFR 1.36B–2(c)(3)(v). payments of the premium tax credit,’’ for fulfilling all responsibilities (iii) The cost of family coverage that and adding a definition of ‘‘Catastrophic encompassed within the scope of the includes the child exceeds 9.5 percent plan’’ to read as follows: authorized representation, as described of the household income. § 155.20 Definitions. in this section, to the same extent as the (iv) The employer stopped offering * * * * * applicant or enrollee he or she coverage of dependents (or any represents. coverage) under an employer-sponsored Advance payments of the premium (5) The Exchange must provide health insurance plan; tax credit means payment of the tax information both to the applicant or (v) A change in employment, credit authorized by 26 U.S.C. 36B and enrollee, and to the authorized including involuntary separation, its implementing regulations, which are representative, regarding the powers resulted in the child’s loss of employer- provided on an advance basis to an and duties of authorized sponsored insurance (other than eligible individual enrolled in a QHP representatives. through full payment of the premium by through an Exchange in accordance (b) Timing of designation. The the parent under COBRA); with section 1412 of the Affordable Care Exchange must permit an applicant or (vi) The child has special health care Act. enrollee to designate an authorized needs; and * * * * * representative:

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(1) At the time of application; and § 155.230 General standards for Exchange affordability and minimum value (2) At other times and through notices. standards specified in 26 CFR 1.36B– methods as described in § 155.405(c)(2). (a) General requirement. Any notice 2(c)(3). (c) Duties. (1) The Exchange must required to be sent by the Exchange to * * * * * permit an applicant or enrollee to individuals or employers must be ■ 65. Section 155.302 is amended by authorize his or her representative to: written and include: revising paragraphs (a), (b), and (d) to (i) Sign an application on the (1) An explanation of the action read as follows: applicant or enrollee’s behalf; reflected in the notice, including the effective date of the action. § 155.302 Options for conducting eligibility (ii) Submit an update or respond to a determinations. redetermination for the applicant or (2) Any factual findings relevant to (a) Options for conducting eligibility enrollee in accordance with § 155.330 or the action. determinations. The Exchange may § 155.335; (3) Citations to, or identification of, the relevant regulations supporting the satisfy the requirements of this (iii) Receive copies of the applicant’s subpart— or enrollee’s notices and other action. (4) Contact information for available (1) Directly or through contracting communications from the Exchange; arrangements in accordance with and customer service resources. (5) An explanation of appeal rights, if § 155.110(a), provided that any (iv) Act on behalf of the applicant or applicable. contracting arrangement for eligibility enrollee in all other matters with the * * * * * determinations for Medicaid and CHIP Exchange. is subject to the standards in 42 CFR (2) The Exchange may permit an (d) Electronic notices. (1) The individual market Exchange must 431.10(c)(2); or applicant or enrollee to authorize a (2) Through a combination of the provide required notices either through representative to perform fewer than all approach described in paragraph (a)(1) standard mail, or if an individual or of the activities described in paragraph of this section and one or both of the employer elects, electronically, (c)(1) of this section, provided that the options described in paragraph (b) or (c) provided that the requirements for Exchange tracks the specific of this section, subject to the standards electronic notices in 42 CFR 435.918 are permissions for each authorized in paragraph (d) of this section. representative. met, except that the individual market (b) Medicaid and CHIP. Exchange is not required to implement (d) Duration. The Exchange must Notwithstanding the requirements of the process specified in 42 CFR consider the designation of an this subpart, the Exchange may conduct 435.918(b)(1) for eligibility authorized representative valid until: an assessment of eligibility for Medicaid determinations for enrollment in a QHP (1) The applicant or enrollee notifies and CHIP, rather than an eligibility through the Exchange and insurance determination for Medicaid and CHIP, the Exchange that the representative is affordability programs that are effective no longer authorized to act on his or her provided that— before January 1, 2015. (1) The Exchange makes such an behalf using one of the methods (2) The SHOP must provide required available for the submission of an assessment based on the applicable notices either through standard mail, or Medicaid and CHIP MAGI-based income application, as described in if an employer or employee elects, § 155.405(c). The Exchange must notify standards and citizenship and electronically, provided that the immigration status, using verification the authorized representative of such requirements for electronic notices in 42 change; or rules and procedures consistent with 42 CFR 435.918(b)(2) through (5) are met CFR parts 435 and 457, without regard (2) The authorized representative for the employer or employee. informs the Exchange and the applicant to how such standards are implemented ■ 64. Section 155.300(a) is amended by or enrollee that he or she no longer is by the State Medicaid and CHIP removing the definition of ‘‘Adoption acting in such capacity. An authorized agencies. taxpayer identification number’’ and representative must notify the Exchange (2) Notices and other activities revising the definitions of ‘‘Minimum and the applicant or enrollee on whose required in connection with an value,’’ ‘‘Modified Adjusted Gross behalf he or she is acting when the eligibility determination for Medicaid or Income (MAGI),’’ and ‘‘Qualifying authorized representative no longer has CHIP are performed by the Exchange coverage in an eligible employer- legal authority to act on behalf of the consistent with the standards identified sponsored plan’’ to read as follows: applicant or enrollee. in this subpart or the State Medicaid or CHIP agency consistent with applicable (e) Compliance with State and Federal § 155.300 Definitions and general standards for eligibility determinations. law. law. The Exchange must require an (3) Applicants found potentially authorized representative to comply (a) * * * eligible for Medicaid or CHIP. When the with applicable state and federal laws Minimum value when used to Exchange assesses an applicant as concerning conflicts of interest and describe coverage in an eligible potentially eligible for Medicaid or confidentiality of information. employer-sponsored plan, means that CHIP consistent with the standards in (f) Signature. For purposes of this the employer-sponsored plan meets the paragraph (b)(1) of this section, the section, designation of an authorized standards for coverage of the total Exchange transmits all information representative must be through a written allowed costs of benefits set forth in provided as a part of the application, document signed by the applicant or § 156.145. update, or renewal that initiated the enrollee, or through another legally Modified Adjusted Gross Income assessment, and any information binding format, as described in (MAGI) has the same meaning as it does obtained or verified by the Exchange to § 155.227(a)(2), and must be accepted in 26 CFR 1.36B–1(e)(2). the State Medicaid agency or CHIP through all of the modalities described * * * * * agency via secure electronic interface, in § 155.405(c). Qualifying coverage in an eligible promptly and without undue delay. ■ 63. Section 155.230 is amended by employer-sponsored plan means (4) Applicants not found potentially revising paragraph (a) and adding coverage in an eligible employer- eligible for Medicaid and CHIP. (i) If the paragraph (d) to read as follows: sponsored plan that meets the Exchange conducts an assessment in

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accordance with paragraph (b) of this and CHIP based on MAGI or eligibility exemption deduction on his or her tax section and finds that an applicant is determinations for advance payments of return for the benefit year, including the not potentially eligible for Medicaid or the premium tax credit and cost-sharing tax filer and his or her spouse, is a non- CHIP based on the applicable Medicaid reductions are made in accordance with citizen who is lawfully present and and CHIP MAGI-based income paragraphs (b) or (c) of this section, the ineligible for Medicaid by reason of standards, the Exchange must consider Exchange must ensure that— immigration status, in accordance with the applicant as ineligible for Medicaid (1) Eligibility processes for all 26 CFR 1.36B–2(b)(5). and CHIP for purposes of determining insurance affordability programs are (3) Enrollment required. The eligibility for advance payments of the streamlined and coordinated across Exchange may provide advance premium tax credit and cost-sharing HHS, the Exchange, the State Medicaid payments of the premium tax credit on reductions and must notify such agency, and the State CHIP agency, as behalf of a tax filer only if one or more applicant, and provide him or her with applicable; applicants for whom the tax filer attests the opportunity to— (2) Such arrangement does not that he or she expects to claim a (A) Withdraw his or her application increase administrative costs and personal exemption deduction for the for Medicaid and CHIP, unless the burdens on applicants, enrollees, benefit year, including the tax filer and Exchange has assessed the applicant as beneficiaries, or application filers, or his or her spouse, is enrolled in a QHP potentially eligible for Medicaid based increase delay; and that is not a catastrophic plan, through on factors not otherwise considered in (3) Applicable requirements under 45 the Exchange. this subpart, in accordance with CFR 155.260, 155.270, and 155.315(i), * * * * * § 155.345(b), and provided that the and section 6103 of the Code for the (5) Calculation of advance payments application will not be considered confidentiality, disclosure, of the premium tax credit. The withdrawn if he or she appeals his or maintenance, and use of information are Exchange must calculate advance her eligibility determination for advance met. payments of the premium tax credit in payments of the premium tax credit or ■ 66. Section 155.305 is amended by— accordance with 26 CFR 1.36B–3. cost-sharing reductions and the appeals ■ A. Revising paragraphs (f)(1)(i), entity described in § 155.500(a) finds * * * * * (f)(1)(ii)(B), (f)(2)(ii), (f)(2)(iii), (f)(3), and that the individual is potentially eligible (h) Eligibility for enrollment through (f)(5). the Exchange in a QHP that is a for Medicaid or CHIP; or ■ (B) Request a full determination of B. Adding paragraphs (a)(3)(v), and catastrophic plan. The Exchange must eligibility for Medicaid and CHIP by the (h). determine an applicant eligible for applicable State Medicaid and CHIP The revisions and additions read as enrollment in a QHP through the agencies. follows: Exchange in a QHP that is a catastrophic plan as defined by section 1302(e) of the (ii) To the extent that an applicant § 155.305 Eligibility standards. described in paragraph (b)(4)(i) of this Affordable Care Act, if he or she has met section requests a full determination of (a) * * * the requirements for eligibility for eligibility for Medicaid and CHIP, the (3) * * * enrollment in a QHP through the Exchange must— (v) Temporary absence. The Exchange Exchange, in accordance with (A) Transmit all information provided may not deny or terminate an § 155.305(a), and either— as a part of the application, update, or individual’s eligibility for enrollment in (1) Has not attained the age of 30 renewal that initiated the assessment, a QHP through the Exchange if the before the beginning of the plan year; or and any information obtained or individual meets the standards in (2) Has a certification in effect for any verified by the Exchange to the State paragraph (a)(3) of this section but for a plan year that he or she is exempt from Medicaid agency and CHIP agency via temporary absence from the service area the requirement to maintain minimum secure electronic interface, promptly of the Exchange and intends to return essential coverage under section 5000A and without undue delay; and when the purpose of the absence has of the Code by reason of— (B) Consider such an applicant as been accomplished. (i) Section 5000A(e)(1) of the Code ineligible for Medicaid and CHIP for * * * * * (relating to individuals without purposes of determining eligibility for (f) * * * affordable coverage); or advance payments of the premium tax (1) * * * (ii) Section 5000A(e)(5) of the Code credit and cost-sharing reductions until (i) He or she is expected to have a (relating to individuals with hardships). the State Medicaid or CHIP agency household income, as defined in 26 CFR ■ 67. Section 155.310 is amended by— notifies the Exchange that the applicant 1.36B–1(e), of greater than or equal to ■ A. Redesignating paragraph (i) as is eligible for Medicaid or CHIP. 100 percent but not more than 400 paragraph (j). (5) The Exchange and the Exchange percent of the FPL for the benefit year ■ B. Adding new paragraph (i). appeals entity adheres to the eligibility for which coverage is requested; and ■ C. Revising newly redesignated determination or appeals decision for (ii) * * * paragraph (j). Medicaid or CHIP made by the State (B) Is not eligible for minimum The addition and revision read as Medicaid or CHIP agency, or the appeals essential coverage, with the exception of follows: entity for such agency. coverage in the individual market, in (6) The Exchange and the State accordance with section 26 CFR 1.36B– § 155.310 Eligibility process. Medicaid and CHIP agencies enter into 2(a)(2) and (c). * * * * * an agreement specifying their respective (2) * * * (i) Certification program for responsibilities in connection with (ii) He or she is expected to have a employers. As part of its determination eligibility determinations for Medicaid household income, as defined in 26 CFR of whether an employer has a liability and CHIP, and provide a copy of such 1.36B–1(e) of less than 100 percent of under section 4980H of the Code, the agreement to HHS upon request. the FPL for the benefit year for which Internal Revenue Service will adopt * * * * * coverage is requested; and methods to certify to an employer that (d) Standards. To the extent that (iii) One or more applicants for whom one or more employees has enrolled for assessments of eligibility for Medicaid the tax filer expects to claim a personal one or more months during a year in a

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QHP for which a premium tax credit or for individuals relevant to the eligibility sources are sufficiently current and cost-sharing reduction is allowed or determination are not included in such accurate. paid. data sources or when electronic data (2) Verifying that an applicant has a (j) Duration of eligibility from IRS, DHS, or SSA is required but certification of exemption in effect as determinations without enrollment. To it is not reasonably expected that data described in § 155.305(h)(2). the extent that an applicant who is sources will be available within 1 day (3) To the extent that the Exchange is determined eligible for enrollment in a of the initial request to the data source, unable to verify the information QHP through the Exchange does not the Exchange: required to determine eligibility for select a QHP within his or her * * * * * enrollment through the Exchange in a enrollment period, or is not eligible for (4) During the periods described in QHP that is a catastrophic plan as an enrollment period, in accordance paragraphs (f)(1) and (f)(2)(ii) of this described in paragraphs (j)(1) and (2) of with subpart E, and seeks a new section, must: this section, the Exchange must follow enrollment period prior to the date on * * * * * the procedures specified in § 155.315(f), which his or her eligibility is (5) If, after the period described in except for § 155.315(f)(4). redetermined in accordance with paragraph (f)(2)(ii) of this section, the ■ 69. Section 155.320 is amended by— § 155.335, the Exchange must require Exchange remains unable to verify the ■ A. Revising paragraphs (c)(1)(i) the applicant to attest as to whether attestation, the Exchange must heading, (c)(1)(i)(A), (c)(1)(ii), information affecting his or her determine the applicant’s eligibility (c)(3)(i)(D), (c)(3)(ii)(A), (c)(3)(iii)(A) and eligibility has changed since his or her (B), (c)(3)(vi), (c)(3)(vii), (c)(3)(viii), and most recent eligibility determination based on the information available from (d). before determining his or her eligibility the data sources specified in this ■ B. Adding paragraphs (c)(3)(i)(E) and for a special enrollment period, and subpart, unless such applicant qualifies (c)(3)(iii)(C). must process any changes reported in for the exception provided under ■ C. Removing paragraph (e). accordance with the procedures paragraph (g) of this section, and notify ■ D. Redesignating paragraph (f) as specified in § 155.330. the applicant of such determination in accordance with the notice paragraph (e). ■ 68. Section 155.315 is amended by requirements specified in § 155.310(g), The revisions and additions read as revising paragraphs (b)(2), (f) including notice that the Exchange is follows: introductory text, (f)(4) introductory unable to verify the attestation. text, and (f)(5) and by adding paragraphs § 155.320 Verification process related to (6) When electronic data to support (f)(6) and (j) to read as follows: eligibility for insurance affordability the verifications specified in programs. § 155.315 Verification process related to § 155.315(d) or § 155.320(b) is required * * * * * eligibility for enrollment in a QHP through but it is not reasonably expected that the Exchange. data sources will be available within 1 (c) * * * (1) * * * * * * * * day of the initial request to the data (b) * * * source, the Exchange must accept the (i) Data regarding annual household (2) To the extent that the Exchange is applicant’s attestation regarding the income. (A) For all individuals whose unable to validate an individual’s Social factor of eligibility for which the income is counted in calculating a tax Security number through the Social unavailable data source is relevant. filer’s household income, as defined in Security Administration, or the Social 26 CFR 1.36B–1(e), or an applicant’s * * * * * household income, calculated in Security Administration indicates that (j) Verification related to eligibility for the individual is deceased, the accordance with 42 CFR 435.603(d), and enrollment through the Exchange in a for whom the Exchange has a Social Exchange must follow the procedures QHP that is a catastrophic plan. The specified in paragraph (f) of this section, Security number, the Exchange must Exchange must verify an applicant’s request tax return data regarding MAGI except that the Exchange must provide attestation that he or she meets the the individual with a period of 90 days and family size from the Secretary of the requirements of § 155.305(h) by— Treasury and data regarding Social from the date on which the notice (1) Verifying the applicant’s security benefits described in 26 CFR described in paragraph (f)(2)(i) of this attestation of age as follows— 1.36B–1(e)(2)(iii) from the section is received for the applicant to (i) Except as provided in paragraph Commissioner of Social Security by provide satisfactory documentary (j)(1)(iii) of this section, accepting his or transmitting identifying information evidence or resolve the inconsistency her attestation without further specified by HHS to HHS. with the Social Security Administration. verification; or The date on which the notice is received (ii) Examining electronic data sources * * * * * means 5 days after the date on the that are available to the Exchange and (ii) Data regarding MAGI-based notice, unless the individual which have been approved by HHS for income. For all individuals whose demonstrates that he or she did not this purpose, based on evidence income is counted in calculating a tax receive the notice within the 5 day showing that such data sources are filer’s household income, as defined in period. sufficiently current and accurate, and 26 CFR 1.36B–1(e), or an applicant’s * * * * * minimize administrative costs and household income, calculated in (f) Inconsistencies. Except as burdens. accordance with 42 CFR 435.603(d), the otherwise specified in this subpart, for (iii) If information regarding age is not Exchange must request data regarding an applicant for whom the Exchange reasonably compatible with other MAGI-based income in accordance with cannot verify information required to information provided by the individual 42 CFR 435.948(a). determine eligibility for enrollment in a or in the records of the Exchange, the * * * * * QHP through the Exchange, advance Exchange must examine information in (3) * * * payments of the premium tax credit, data sources that are available to the (i) * * * and cost-sharing reductions, including Exchange and which have been (D) If the Exchange finds that an when electronic data is required in approved by HHS for this purpose based applicant’s attestation of a tax filer’s accordance with this subpart but data on evidence showing that such data family size is not reasonably compatible

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with other information provided by the unavailable or are not reasonably verification, unless the Exchange finds application filer for the family or in the compatible with the applicant’s that an applicant’s attestation of a tax records of the Exchange, with the attestation, the Exchange must proceed filer’s annual household income is not exception of the data described in in accordance with § 155.315(f)(1) reasonably compatible with other paragraph (c)(1)(i) of this section, the through (4). information provided by the application Exchange must utilize data obtained * * * * * filer or available to the Exchange in through other electronic data sources to (vi) Alternate verification process for accordance with paragraph (c)(1)(ii) of verify the attestation. If such data decreases in annual household income this section, in which case the Exchange sources are unavailable or information and situations in which tax return data must request additional documentation in such data sources is not reasonably is unavailable. If a tax filer qualifies for using the procedures specified in compatible with the applicant’s an alternate verification process based § 155.315(f). attestation, the Exchange must request on the requirements specified in (D) Decreases in annual household additional documentation to support the paragraph (c)(3)(iv) of this section and income and situations in which attestation within the procedures the applicant’s attestation to projected electronic data is unavailable. If specified in § 155.315(f). annual household income, as described electronic data are unavailable or an (E) The Exchange must verify that in paragraph (c)(3)(ii)(B) of this section, applicant’s attestation to projected neither advance payments of the is greater than ten percent below the annual household income, as described premium tax credit nor cost-sharing annual household income computed in in paragraph (c)(3)(ii)(B) of this section, is more than ten percent below the reductions are being provided on behalf accordance with paragraph (c)(3)(ii)(A) annual household income as computed of an individual using information of this section, or if data described in using data sources described in obtained by transmitting identifying paragraph (c)(1)(i) of this section is paragraphs (c)(3)(vi)(A) of this section, information specified by HHS to HHS. unavailable, the Exchange must attempt the Exchange must follow the * * * * * to verify the applicant’s attestation of procedures specified in § 155.315(f)(1) (ii) * * * the tax filer’s projected annual (A) The Exchange must compute through (4). household income by following the (E) If, following the 90-day period annual household income for the family procedures specified in paragraph described in paragraph (c)(3)(vi)(D) of described in paragraph (c)(3)(i)(A) of (c)(3)(vi)(A) through (G) of this section. this section, an applicant has not this section based on the data described (A) Data. The Exchange must responded to a request for additional in paragraph (c)(1)(i) of this section; annualize data from the MAGI-based information from the Exchange and the * * * * * income sources specified in paragraph data sources specified in paragraph (iii) * * * (c)(1)(ii) of this section, and obtain any (c)(1) of this section indicate that an (A) Except as specified in paragraph data available from other electronic data applicant in the tax filer’s family is (c)(3)(iii)(B) and (C) of this section, if an sources that have been approved by eligible for Medicaid or CHIP, the applicant’s attestation, in accordance HHS, based on evidence showing that Exchange must not provide the with paragraph (c)(3)(ii)(B) of this such data sources are sufficiently applicant with eligibility for advance section, indicates that a tax filer’s accurate and offer less administrative payments of the premium tax credit, annual household income has increased complexity than paper verification. cost-sharing reductions, Medicaid, CHIP or is reasonably expected to increase (B) Eligibility. To the extent that the or the BHP, if a BHP is operating in the from the data described in paragraph applicant’s attestation indicates that the service area of the Exchange. (c)(3)(ii)(A) of this section for the benefit information described in paragraph (F) If, at the conclusion of the period year for which the applicant(s) in the (c)(3)(vi)(A) of this section represents an specified in paragraph (c)(3)(vi)(D) of tax filer’s family are requesting coverage accurate projection of the tax filer’s this section, the Exchange remains and the Exchange has not verified the household income for the benefit year unable to verify the applicant’s applicant’s MAGI-based income through for which coverage is requested, the attestation, the Exchange must the process specified in paragraph Exchange must determine the tax filer’s determine the applicant’s eligibility (c)(2)(ii) of this section to be within the eligibility for advance payments of the based on the information described in applicable Medicaid or CHIP MAGI- premium tax credit and cost-sharing paragraph (c)(3)(ii)(A) of this section, based income standard, the Exchange reductions based on the household notify the applicant of such must accept the applicant’s attestation income data in paragraph (c)(3)(vi)(A) of determination in accordance with the regarding a tax filer’s annual household this section. notice requirements specified in income without further verification. (C) Increases in annual household § 155.310(g), and implement such (B) If data available to the Exchange income. If an applicant’s attestation, in determination in accordance with the in accordance with paragraph (c)(1)(ii) accordance with paragraph (c)(3)(ii)(B) effective dates specified in § 155.330(f). of this section indicate that a tax filer’s of this section, indicates that a tax filer’s (G) If, at the conclusion of the period projected annual household income is annual household income has increased specified in paragraph (c)(3)(vi)(D) of in excess of his or her attestation by a or is reasonably expected to increase this section, the Exchange remains significant amount, the Exchange must from the data described in paragraph unable to verify the applicant’s proceed in accordance with (c)(3)(vi)(A) of this section to the benefit attestation for the tax filer and the § 155.315(f)(1) through (4). year for which the applicant(s) in the information described in paragraph (C) If other information provided by tax filer’s family are requesting coverage (c)(3)(ii)(A) of this section is the application filer indicates that a tax and the Exchange has not verified the unavailable, the Exchange must filer’s projected annual household applicant’s MAGI-based income through determine the tax filer ineligible for income is in excess of his or her the process specified in paragraph advance payments of the premium tax attestation by a significant amount, the (c)(2)(ii) of this section to be within the credit and cost-sharing reductions, Exchange must utilize data available to applicable Medicaid or CHIP MAGI- notify the applicant of such the Exchange in accordance with based income standard, the Exchange determination in accordance with the paragraph (c)(1)(ii) of this section to must accept the applicant’s attestation notice requirement specified in verify the attestation. If such data is for the tax filer’s family without further § 155.310(g), and discontinue any

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advance payments of the premium tax specified in paragraphs (d)(2)(i) through her attestation(s) regarding coverage credit and cost-sharing reductions in (iii) of this section for an applicant, the provided by that employer. accordance with the effective dates Exchange must select a statistically (G) To carry out the process described specified in § 155.330(f). significant random sample of such in paragraph (d)(3)(iii) of this section, (vii) For the purposes of paragraph applicants and— the Exchange must only disclose an (c)(3) of this section, ‘‘household (A) Provide notice to the applicant individual’s information to an employer income’’ means household income as indicating that the Exchange will be to the extent necessary for the employer specified in 26 CFR 1.36B–1(e). contacting any employer identified on to identify the employee. (viii) For the purposes of paragraph the application for the applicant and the (iv) For eligibility determinations for (c)(3) of this section, ‘‘family size’’ members of his or her household, as advance payments of the premium tax means family size as specified in 26 defined in 26 CFR 1.36B–1(d), to verify credit and cost-sharing reductions that CFR 1.36B–1(d). whether the applicant is enrolled in an are effective before January 1, 2015, if * * * * * eligible employer-sponsored plan or is the Exchange does not have any of the (d) Verification related to enrollment eligible for qualifying coverage in an information specified in paragraphs in an eligible employer-sponsored plan eligible employer-sponsored plan for the (d)(2)(i) through (iii) of this section for and eligibility for qualifying coverage in benefit year for which coverage is an applicant, the Exchange may accept an eligible employer-sponsored plan. (1) requested; an applicant’s attestation regarding (B) Proceed with all other elements of General requirement. The Exchange enrollment in an eligible employer- the eligibility determination using the must verify whether an applicant sponsored plan and eligibility for applicant’s attestation, and provide reasonably expects to be enrolled in an qualifying coverage in an eligible eligibility for enrollment in a QHP to the eligible employer-sponsored plan or is employer-sponsored plan for the benefit extent that an applicant is otherwise year for which coverage is requested eligible for qualifying coverage in an qualified; eligible employer-sponsored plan for the without further verification, instead of (C) Ensure that advance payments of following the procedure in paragraph benefit year for which coverage is the premium tax credit and cost-sharing requested. (d)(3)(iii) of this section. reductions are provided on behalf of an (4) Option to rely on verification (2) Data. The Exchange must— applicant who is otherwise qualified for (i) Obtain data about enrollment in performed by HHS. For eligibility such payments and reductions, as determinations for advance payments of and eligibility for an eligible employer- described in § 155.305, if the tax filer the premium tax credit and cost-sharing sponsored plan from any electronic data attests to the Exchange that he or she reductions that are effective on or after sources that are available to the understands that any advance payments January 1, 2015, the Exchange may Exchange and which have been of the premium tax credit paid on his or satisfy the provisions of paragraph (d) of approved by HHS, based on evidence her behalf are subject to reconciliation; showing that such data sources are (D) Make reasonable attempts to this section by relying on a verification sufficiently current, accurate, and contact any employer identified on the process performed by HHS, provided minimize administrative burden. application for the applicant and the that— (ii) Obtain any available data members of his or her household, as (i) The Exchange sends the notices regarding enrollment in employer- defined in 26 CFR 1.36B–1(d), to verify described in § 155.310(g) and (h); sponsored coverage or eligibility for whether the applicant is enrolled in an (ii) Other activities required in qualifying coverage in an eligible eligible employer-sponsored plan or is connection with the verifications employer-sponsored plan based on eligible for qualifying coverage in an described in this paragraph are federal employment by transmitting eligible employer-sponsored plan for the performed by the Exchange in identifying information specified by benefit year for which coverage is accordance with the standards HHS to HHS for HHS to provide the requested; identified in this subpart or in necessary verification using data (E) If the Exchange receives any accordance with guidance issued by the obtained by HHS. information from an employer relevant Secretary; and (iii) Obtain any available data from to the applicant’s enrollment in an (iii) The Exchange provides all the SHOP that corresponds to the State eligible employer-sponsored plan or relevant application information to HHS in which the Exchange is operating. eligibility for qualifying coverage in an through a secure, electronic interface, (3) Verification procedures. (i) Except eligible employer-sponsored plan, the promptly and without undue delay. as specified in paragraphs (d)(3)(ii) or Exchange must determine the * * * * * (iii) of this section, the Exchange must applicant’s eligibility based on such ■ 70. Section 155.330 is amended by accept an applicant’s attestation information and in accordance with the revising paragraphs (d)(1)(ii), (e)(2), and regarding the verification specified in effective dates specified in § 155.330(f), (f), and by removing paragraph (e)(3). paragraph (d) of this section without and if such information changes his or The revisions read as follows: further verification. her eligibility determination, notify the (ii) If an applicant’s attestation is not applicant and his or her employer or § 155.330 Eligibility redetermination during a benefit year. reasonably compatible with the employers of such determination in information obtained by the Exchange accordance with the notice * * * * * as specified in paragraphs (d)(2)(i) requirements specified in § 155.310(g) (d) * * * through (iii) of this section, other and (h); (1) * * * information provided by the application (F) If, after a period of 90 days from (ii) For an enrollee on whose behalf filer, or other information in the records the date on which the notice described advance payments of the premium tax of the Exchange, the Exchange must in paragraph (d)(3)(iii)(A) of this section credit or cost-sharing reductions are follow the procedures specified in is sent to the applicant, the Exchange is being provided, eligibility § 155.315(f). unable to obtain the necessary determinations for Medicare, Medicaid, (iii) Except as specified in paragraph information from an employer, the CHIP, or the BHP, if a BHP is operating (d)(3)(iv) of this section, if the Exchange Exchange must determine the in the service area of the Exchange. does not have any of the information applicant’s eligibility based on his or * * * * *

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(e) * * * point in a month after which a change redetermination notice including the (2) Data matching. (i) If the Exchange described in paragraph (f)(1) of this following: identifies updated information section will not be effective until the (1) [Reserved] regarding death, in accordance with first day of the month after the month (2) [Reserved] paragraph (d)(1)(i) of this section, or specified in paragraph (f)(1) of this (3) The qualified individual’s regarding any factor of eligibility not section. Such reasonable point in a projected eligibility determination for regarding income, family size, or family month must be no earlier than the 15th the following year, after considering any composition, the Exchange must— of the month. updated information described in (A) Notify the enrollee regarding the (3) Except as specified in paragraphs paragraph (b) of this section, including, updated information, as well as the (f)(4) and (5) of this section, the if applicable, the amount of any advance enrollee’s projected eligibility Exchange must implement a change payments of the premium tax credit and determination after considering such described in paragraph (f)(1) of this the level of any cost-sharing reductions information. section that results in a decreased or eligibility for Medicaid, CHIP or BHP. (B) Allow an enrollee 30 days from amount of advance payments of the * * * * * the date of the notice to notify the premium tax credit, or a change in the (e) Changes reported by qualified Exchange that such information is level of cost-sharing reductions, and for individuals. (1) The Exchange must inaccurate. which the date of the notices described require a qualified individual to report (C) If the enrollee responds contesting in paragraphs (f)(1)(i) and (ii) of this any changes for the information listed in the updated information, proceed in section, or the date on which the the notice described in paragraph (c) of accordance with § 155.315(f) of this Exchange is notified in accordance with this section within 30 days from the part. paragraph (f)(1)(iii) of this section is date of the notice. (D) If the enrollee does not respond after the 15th of the month, on the first (2) The Exchange must allow a within the 30-day period specified in day of the month after the month qualified individual, or an application paragraph (e)(2)(i)(B), proceed in specified in paragraph (f)(1) of this filer, on behalf of the qualified accordance with paragraphs (e)(1)(i) and section. individual, to report changes via the channels available for the submission of (ii) of this section. (4) The Exchange must implement a an application, as described in (ii) If the Exchange identifies updated change associated with the events information regarding income, family § 155.405(c)(2). described in § 155.420(b)(2)(i) and (ii) (f) Verification of reported changes. size, or family composition, with the on the coverage effective dates The Exchange must verify any exception of information regarding described in § 155.420(b)(2)(i) and (ii), information reported by a qualified death, the Exchange must— respectively. individual under paragraph (e) of this (A) Follow procedures described in (5) Notwithstanding paragraphs (f)(1) section using the processes specified in paragraph (e)(2)(i)(A) and (B) of this through (f)(4) of this section, the § 155.315 and § 155.320, including the section; and Exchange may provide the effective date relevant provisions in those sections (B) If the enrollee responds of a change associated with the events regarding inconsistencies, prior to using confirming the updated information, described in § 155.420(d)(4), (d)(5), and such information to determine proceed in accordance with paragraphs (d)(9) based on the specific eligibility. (e)(1)(i) and (ii) of this section. circumstances of each situation. (g) Response to redetermination (C) If the enrollee does not respond ■ 71. Section 155.335 is amended by notice. (1) The Exchange must require a within the 30-day period specified in revising paragraphs (a), (b), (c), (e), (f), qualified individual, or an application paragraph (e)(2)(i)(B) of this section, (g), (h), (k)(1), and (l), and adding filer, on behalf of the qualified maintain the enrollee’s existing paragraph (m) to read as follows: individual, to sign and return the notice eligibility determination without described in paragraph (c) of this considering the updated information. § 155.335 Annual eligibility redetermination. section. (D) If the enrollee provides more up- (2) To the extent that a qualified to-date information, proceed in (a) General requirement. Except as individual does not sign and return the accordance with paragraph (c)(1) of this specified in paragraphs (l) and (m) of notice described in paragraph (c) of this section. this section, the Exchange must section within the 30-day period * * * * * redetermine the eligibility of a qualified specified in paragraph (e) of this (f) Effective dates. (1) Except as individual on an annual basis. section, the Exchange must proceed in specified in paragraphs (f)(2) through (b) Updated income and family size accordance with the procedures (f)(5) of this section, the Exchange must information. In the case of a qualified specified in paragraph (h)(1) of this implement changes— individual who requested an eligibility section. (i) Resulting from a redetermination determination for insurance (h) Redetermination and notification under this section on the first day of the affordability programs in accordance of eligibility. (1) After the 30-day period month following the date of the notice with § 155.310(b) of this part, the specified in paragraph (e) of this section described in paragraph (e)(1)(ii) of this Exchange must request updated tax has elapsed, the Exchange must— section; or return information, if the qualified (i) Redetermine the qualified (ii) Resulting from an appeal decision, individual has authorized the request of individual’s eligibility in accordance on the date specified in the appeal such tax return information, data with the standards specified in decision; or regarding Social Security benefits, and § 155.305 using the information (iii) Affecting enrollment or premiums data regarding MAGI-based income as provided to the qualified individual in only, on the first day of the month described in § 155.320(c)(1) of this part the notice specified in paragraph (c) of following the date on which the for use in the qualified individual’s this section, as supplemented with any Exchange is notified of the change; eligibility redetermination. information reported by the qualified (2) Except as specified in paragraphs (c) Notice to qualified individual. The individual and verified by the Exchange (f)(3) through (5) of this section, the Exchange must provide a qualified in accordance with paragraphs (e) and Exchange may determine a reasonable individual with an annual (f) of this section.

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(ii) Notify the qualified individual in responsibility. (1) In the event that the (f) Special rule. If the Exchange accordance with the requirements Exchange determines that an individual verifies that a tax filer’s household specified in § 155.310(g). is eligible for advance payments of the income, as defined in 26 CFR 1.36B– (iii) If applicable, notify the qualified premium tax credit or cost-sharing 1(e), is less than 100 percent of the FPL individual employer, in accordance reductions based in part on a finding for the benefit year for which coverage with the requirements specified in that an individual’s employer does not is requested, determines that the tax § 155.310(h). provide minimum essential coverage, or filer is not eligible for advance (2) If a qualified individual reports a provides minimum essential coverage payments of the premium tax credit change for the information provided in that is unaffordable, within the standard based on § 155.305(f)(2), and one or the notice specified in paragraph (c) of of 26 CFR 1.36B–2(c)(3)(v), or provide more applicants in the tax filer’s this section that the Exchange has not minimum essential coverage that does household has been determined verified as of the end of the 30-day not meet the minimum value standard ineligible for Medicaid and CHIP based period specified in paragraph (e) of this of § 156.145, the Exchange must on income, the Exchange must— section, the Exchange must redetermine transmit the individual’s name and * * * * * the qualified individual’s eligibility taxpayer identification number to HHS. (g) Determination of eligibility for after completing verification, as * * * * * individuals submitting applications specified in paragraph (f) of this section. (c) Requirement to provide directly to an agency administering * * * * * information related to reconciliation of Medicaid, CHIP, or the BHP. The (k) * * * advance payments of the premium tax Exchange, in consultation with the (1) The Exchange must have credit. The Exchange must comply with agency or agencies administering authorization from a qualified the requirements of 26 CFR 1.36B–5 Medicaid, CHIP, and the BHP if a BHP individual to obtain updated tax return regarding reporting to the IRS and to is operating in the service area of the information described in paragraph (b) taxpayers. Exchange, must establish procedures to of this section for purposes of ensure that an eligibility determination conducting an annual redetermination. * * * * * ■ 73. Section 155.345 is amended by— for enrollment in a QHP, advance * * * * * payments of the premium tax credit, (l) Limitation on redetermination. To ■ A. Revising paragraphs (a) introductory text and (a)(2). and cost-sharing reductions is the extent that a qualified individual performed when an application is has requested an eligibility ■ B. Redesignating paragraph (a)(3) as paragraph (a)(4). submitted directly to an agency determination for insurance administering Medicaid, CHIP, or the affordability programs in accordance ■ C. Adding reserved paragraph (a)(3). ■ D. Revising paragraphs (f) BHP if a BHP is operating in the service with § 155.310(b) and the Exchange area of the Exchange. Under such does not have an active authorization to introductory text, (g) introductory text, procedures, the Exchange must— obtain tax data as a part of the annual and (g)(2) through (5). redetermination process, the Exchange ■ E. Adding paragraph (g)(6). * * * * * must redetermine the qualified ■ F. Redesignating paragraphs (h) and (2) Notify such agency of the receipt individual’s eligibility only for (i) as paragraphs (i) and (j). of the information described in ■ enrollment in a QHP and notify the G. Adding new paragraph (h). paragraph (g)(1) of this section and final enrollee in accordance with the timing The revisions and addition read as eligibility determination for enrollment described in paragraph (d) of this follows: in a QHP, advance payments of the section. The Exchange may not proceed premium tax credit, and cost-sharing § 155.345 Coordination with Medicaid, reductions. with a redetermination for insurance CHIP, the Basic Health Program, and the affordability programs until such Pre-existing Condition Insurance Plan. (3) Not duplicate any eligibility and verification findings already made by authorization has been obtained or the (a) Agreements. The Exchange must qualified individual continues his or her the transmitting agency, to the extent enter into agreements with agencies such findings are made in accordance request for an eligibility determination administering Medicaid, CHIP, and the for insurance affordability programs in with this part. BHP, if a BHP is operating in the service (4) Not request information or accordance with § 155.310(b). area of the Exchange, as are necessary to (m) Special rule. The Exchange must documentation from the individual fulfill the requirements of this subpart already provided to another agency not redetermine a qualified individual’s and provide copies of any such eligibility in accordance with this administering an insurance affordability agreements to HHS upon request. Such program and included in the section if the qualified individual’s agreements must include a clear eligibility was redetermined under this transmission of information provided on delineation of the responsibilities of the application or other information section during the prior year, and the each agency to— qualified individual was not enrolled in transmitted from the other agency. * * * * * (5) Determine the individual’s a QHP through the Exchange at the time (2) Ensure prompt determinations of of such redetermination, and has not eligibility for enrollment in a QHP, eligibility and enrollment in the advance payments of the premium tax enrolled in a QHP through the Exchange appropriate program without undue since such redetermination. credit, and cost-sharing reductions, delay, based on the date the application promptly and without undue delay, and ■ 72. Section 155.340 is amended by is submitted to or redetermination is in accordance with this subpart. revising paragraphs (b) heading, (b)(1), initiated by the Exchange or the agency (6) Follow a streamlined process for and (c) to read as follows: administering Medicaid, CHIP, or the eligibility determinations regardless of § 155.340 Administration of advance BHP; the agency that initially received an payments of the premium tax credit and (3) [Reserved] application. cost-sharing reductions. (4) Ensure compliance with (h) Adherence to state decision * * * * * paragraphs (c), (d), (e), and (g) of this regarding Medicaid and CHIP. The (b) Requirement to provide section. Exchange and the Exchange appeals information related to employer * * * * * entity must adhere to the eligibility

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determination or appeals decision for (iii) In the case of a qualified (2) The qualified individual gains a Medicaid or CHIP made by the State individual or enrollee eligible for a dependent or becomes a dependent Medicaid or CHIP agency, or the appeals special enrollment period as described through marriage, birth, adoption, entity for such agency. in paragraphs (d)(4), (d)(5), or (d)(9) of placement for adoption, or placement in * * * * * this section, the Exchange must ensure foster care. ■ 74. Section 155.350 is amended by that coverage is effective on an (3) The qualified individual, or his or revising paragraph (a)(1)(ii) to read as appropriate date based on the her dependent, which was not follows: circumstances of the special enrollment previously a citizen, national, or period, in accordance with guidelines lawfully present individual gains such § 155.350 Special eligibility standards and issued by HHS. Such date much be status; process for Indians. either— (4) The qualified individual’s or his or (a) * * * (A) The date of the event that her dependent’s, enrollment or non- (1) * * * triggered the special enrollment period enrollment in a QHP is unintentional, (ii) Is expected to have a household under (d)(4), (d)(5), or (d)(9) of this inadvertent, or erroneous and is the income, as defined in 26 CFR 1.36B–1(e) section; or result of the error, misrepresentation, or that does not exceed 300 percent of the (B) In accordance with the regular inaction of an officer, employee, or FPL for the benefit year for which effective dates specified in paragraph agent of the Exchange or HHS, or its coverage is requested. (b)(1) of this section. instrumentalities as evaluated and * * * * * (3) Option for earlier effective dates. determined by the Exchange. In such ■ 75. Section 155.400 is amended by Subject to the Exchange demonstrating cases, the Exchange may take such adding paragraph (b)(3) to read as to HHS that all of its participating QHP action as may be necessary to correct or follows: issuers agree to effectuate coverage in a eliminate the effects of such error, timeframe shorter than discussed in misrepresentation, or inaction; § 155.400 Enrollment of qualified paragraph (b)(1) or (b)(2)(ii) of this individuals into QHPs. (5) The enrollee or, his or her section, the Exchange may do one or dependent adequately demonstrates to * * * * * both of the following for all applicable the Exchange that the QHP in which he (b) * * * individuals: (3) Send updated eligibility and or she is enrolled substantially violated (i) For a QHP selection received by enrollment information to HHS a material provision of its contract in the Exchange from a qualified promptly and without undue delay, in relation to the enrollee; individual in accordance with the dates a manner and timeframe as specified by (6) Newly eligible or ineligible for specified in paragraph (b)(1) or (b)(2)(ii) HHS. advance payments of the premium tax of this section, the Exchange may credit, or change in eligibility for cost- * * * * * provide a coverage effective date for a sharing reductions. (i) The enrollee is ■ 76. Section 155.420 is amended by qualified individual earlier than determined newly eligible or newly revising paragraphs (a), (b)(2), (b)(3), specified in such paragraphs. ineligible for advance payments of the adding paragraph (b)(4), and revising (ii) For a QHP selection received by premium tax credit or has a change in paragraph (d) to read as follows: the Exchange from a qualified eligibility for cost-sharing reductions; § 155.420 Special enrollment periods. individual on a date set by the Exchange (ii) The enrollee’s dependent enrolled after the fifteenth of the month, the (a) General requirements. (1) The in the same QHP is determined newly Exchange may provide a coverage Exchange must provide special eligible or newly ineligible for advance effective date of the first of the following enrollment periods consistent with this payments of the premium tax credit or month. section, during which qualified has a change in eligibility for cost- (4) Advance payments of the premium individuals may enroll in QHPs and sharing reductions; or tax credit and cost-sharing reductions. enrollees may change QHPs. (iii) A qualified individual or his or (2) For the purpose of this section, Notwithstanding the standards of this her dependent who is enrolled in an ‘‘dependent’’, has the same meaning as section, the Exchange must ensure that eligible employer-sponsored plan is it does in 26 CFR 54.9801–2, referring advance payments of the premium tax determined newly eligible for advance to any individual who is or who may credit and cost-sharing reductions payments of the premium tax credit become eligible for coverage under the adhere to the effective dates specified in based in part on a finding that such terms of a QHP because of a relationship § 155.330(f). individual is ineligible for qualifying to a qualified individual or enrollee. * * * * * coverage in an eligible-employer (b) * * * (d) The Exchange must allow a sponsored plan in accordance with 26 (2) Special effective dates. (i) In the qualified individual or enrollee, and, CFR 1.36B–2(c)(3), including as a result case of birth, adoption, placement for when specified below, his or her of his or her employer discontinuing or adoption, or placement in foster care, dependent, to enroll in or change from changing available coverage within the the Exchange must ensure that coverage one QHP to another if one of the next 60 days, provided that such is effective for a qualified individual or following triggering events occur: individual is allowed to terminate enrollee on the date of birth, adoption, (1) The qualified individual or his or existing coverage. The Exchange must placement for adoption, or placement in her dependent loses minimum essential permit an individual who is enrolled in foster care. coverage: an eligible employer-sponsored plan (ii) In the case of marriage, or in the (i) In the case of a QHP and will lose eligibility for qualifying case where a qualified individual loses decertification, the triggering event is coverage in an eligible employer- minimum essential coverage, as the date of the notice of decertification sponsored plan within the next 60 days described in paragraph (d)(1) of this as described in § 155.1080(e)(2); or to access this special enrollment period section, the Exchange must ensure that (ii) In all other cases, the triggering prior to the end of his or her existing coverage is effective for a qualified event is the date the individual or coverage, although he or she is not individual or enrollee on the first day of dependent loses eligibility for minimum eligible for advance payments of the the following month. essential coverage; premium tax credit until the end of his

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or her coverage in an eligible employer- (i) Reasonable notice is defined as at tax credit, as specified in subpart D of sponsored plan; least fourteen days before the requested this part, including the procedures (7) The qualified individual or effective date of termination; and described in § 155.315(c)(1), and the enrollee, or his or her dependent, gains (ii) Changes in eligibility for advance procedures used to verify eligibility for access to new QHPs as a result of a payments of the premium tax credit and qualifying coverage in an eligible permanent move; cost sharing reductions, including employer-sponsored plan, as specified (8) The qualified individual who is an terminations, must adhere to the in § 155.320(d), except as specified in Indian, as defined by section 4 of the effective dates specified in § 155.330(f). § 155.615(f)(2)(ii). Indian Health Care Improvement Act, (2) * * * * * * * * (iii) On a date on or after the date on may enroll in a QHP or change from one which the termination is requested by QHP to another one time per month; PART 156—HEALTH INSURANCE the enrollee, subject to the (9) The qualified individual or ISSUER STANDARDS UNDER THE determination of the enrollee’s QHP AFFORDABLE CARE ACT, INCLUDING enrollee, or his or her dependent, issuer, if the enrollee’s QHP issuer demonstrates to the Exchange, in STANDARDS RELATED TO agrees to effectuate termination in fewer EXCHANGES accordance with guidelines issued by than fourteen days, and the enrollee HHS, that the individual meets other requests an earlier termination effective ■ exceptional circumstances as the 79. The authority citation for part 156 date. continues to read as follows: Exchange may provide; (iv) If the enrollee is newly eligible for * * * * * Medicaid, CHIP, or the BHP, if a BHP Authority: Sections 1301, 1302, 1303, is operating in the service area of the 1304, 1311, 1312, 1313, 1321, 1322, 1324, ■ 77. Section 155.430 is amended by 1334, 1341, 1342, 1343, 1402, 1413, 1321, revising paragraphs (b)(1), (d)(1), Exchange, the last day of QHP coverage 1322, 1331, 1332, 1334, 1341, 1342, 1343, (d)(2)(iii), (d)(2)(iv), (d)(3), and by is the day before the individual is 1401, and 1402 of the Affordable Care Act, adding paragraph (d)(7) to read as determined eligible for Medicaid, CHIP, Pub. L 111–148, 124 Stat 199. follows: or the BHP. (3) In the case of a termination in ■ 80. Section 156.270 is amended by § 155.430 Termination of coverage. accordance with paragraph (b)(2)(i) of revising paragraph (b) to read as follows: * * * * * this section, the last day of QHP § 156.270 Termination of coverage for (b) * * * coverage is the last day of eligibility, as qualified individuals. described in § 155.330(f), unless the (1) Enrollee-initiated terminations. (i) * * * * * individual requests an earlier The Exchange must permit an enrollee (b) Termination of coverage notice to terminate his or her coverage in a termination effective date per paragraph (b)(1) of this section. requirement. If a QHP issuer terminates QHP, including as a result of the an enrollee’s coverage in accordance enrollee obtaining other minimum * * * * * with § 155.430(b)(1)(i), (ii), or (iii), the (7) In the case of a termination due to essential coverage, with appropriate QHP issuer must, promptly and without death, the last day of coverage is the notice to the Exchange or the QHP. undue delay: date of death. (ii) The Exchange must provide an (1) Provide the enrollee with a notice opportunity at the time of plan selection * * * * * of termination of coverage that includes for an enrollee to choose to remain ■ 78. Section 155.615 is amended by the termination effective date and enrolled in a QHP if he or she becomes revising paragraph (f)(2)(i) to read as reason for termination. eligible for other minimum essential follows: (2) [Reserved] coverage and the enrollee does not request termination in accordance with § 155.615 Verification process related to * * * * * eligibility for exemptions. paragraph (b)(1)(i) of this section. If an Dated: May 28, 2013. enrollee does not choose to remain * * * * * Marilyn Tavenner, enrolled in a QHP in such a situation, (f) * * * (2) * * * Administrator, Centers for Medicare & the Exchange must initiate termination (i) For any applicant who requests an Medicaid Services. of his or her coverage upon completion exemption based on the hardship Approved: May 31, 2013. of the redetermination process specified described in § 155.605(g)(2), the Kathleen Sebelius, in § 155.330. Exchange must verify the unavailability Secretary, Department of Health and Human * * * * * of affordable coverage through the Services. (d) * * * procedures used to determine eligibility [FR Doc. 2013–16271 Filed 7–5–13; 11:15 am] (1) For purposes of this section— for advance payments of the premium BILLING CODE 4120–01–P

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Part III

Department of Transportation

Federal Aviation Administration 14 CFR Parts 61, 121, 135, et al. Pilot Certification and Qualification Requirements for Air Carrier Operations; Final Rule

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DEPARTMENT OF TRANSPORTATION academic coursework and training in a highest professional standards. Section flight simulation training device. These 217 also directed the FAA to ensure Federal Aviation Administration requirements will ensure that a pilot has pilots have sufficient flight hours in the proper qualifications, training, and difficult operational conditions that may 14 CFR Parts 61, 121, 135, 141, and 142 experience before entering an air carrier be encountered in air carrier operations environment as a pilot flightcrew [Docket No. FAA–2010–0100; Amdt. Nos. and stated that the minimum total flight 61–130; 121–365; 135–127; 141–1; 142–9] member. hours to be qualified for an ATP DATES: Effective Date: July 15, 2013. certificate shall be at least 1,500 flight RIN 2120–AJ67 This final rule will be effective hours. Notwithstanding the stated immediately upon publication in the minimum, the section gave the FAA Pilot Certification and Qualification Federal Register. Section 553(d)(3) of discretion to allow specific academic Requirements for Air Carrier the Administrative Procedure Act training courses to be credited toward Operations provides that publication of a rule shall the 1,500 total flight hours, provided the AGENCY: Federal Aviation be made not less than 30 days before its academic training courses will enhance Administration (FAA), DOT. effective date, except ‘‘for good cause safety more than requiring the pilot to comply fully with the flight hour ACTION: Final rule. found and published with the rule.’’ 5 U.S.C. 553(d)(3). Consistent with section requirement. SUMMARY: This action creates new 553(d)(3), and for reasons discussed in In addition to the authority provided certification and qualification Section III.H.6, the FAA finds good in the Act, the FAA has authority under requirements for pilots in air carrier cause exists to publish this final rule Title 49 of the United States Code. operations. As a result of this action, a with an immediate effective date. Subtitle I, Section 106 to issue rules on second in command (first officer) in Compliance Date: Unless otherwise aviation safety. This rulemaking is domestic, flag, and supplemental noted in the regulatory text, compliance consistent with the authority described operations must now hold an airline with the provisions of this rule is in Subtitle VII, Part A, Subpart III, transport pilot certificate and an required by August 1, 2013. Section 447—Safety Regulation. Under airplane type rating for the aircraft to be FOR FURTHER INFORMATION CONTACT: For § 44703, the FAA is charged with flown. An airline transport pilot technical questions concerning this final prescribing regulations for the issuance certificate requires that a pilot be 23 rule contact Barbara Adams, Air of airman certificates when the years of age and have 1,500 hours total Transportation Division, AFS–200, Administrator finds, after investigation, time as a pilot. Pilots with fewer than Federal Aviation Administration, 800 that an individual is qualified for, and 1,500 flight hours may qualify for a Independence Avenue SW., physically able to perform the duties restricted privileges airline transport Washington, DC 20591; telephone (202) related to, the position authorized by pilot certificate beginning at 21 years of 267–8166; facsimile (202) 267–5299, the certificate. This rulemaking is age if they are a military-trained pilot, email [email protected]. intended to ensure that flightcrew have a bachelor’s degree with an For legal questions concerning this members have training and aviation major, or have an associate’s final rule contact Anne Moore, Office of qualifications that will enable them to degree with an aviation major. The the Chief Counsel—International Law, operate aircraft safely. For these reasons, restricted privileges airline transport Legislation, and Regulations Division, the regulation is within the scope of our pilot certificate will also be available to AGC–240, Federal Aviation authority and is a reasonable and pilots with 1,500 flight hours who are at Administration, 800 Independence necessary exercise of our statutory least 21 years of age. This restricted Avenue SW., Washington, DC 20591; obligations. privileges airline transport pilot telephone (202) 267–3123; facsimile certificate allows a pilot to serve as (202) 267–7971, email List of Abbreviations and Acronyms second in command in domestic, flag, [email protected]. Frequently Used In This Document and supplemental operations not SUPPLEMENTARY INFORMATION: ANPRM Advance Notice of Proposed requiring more than two pilot flightcrew Authority for This Rulemaking Rulemaking members. This rule also retains the ARC Aviation Rulemaking Committee second-class medical certification The Airline Safety and Federal ATP Airline Transport Pilot requirement for a second in command Aviation Administration Extension Act ATP CTP Airline Transport Pilot in part 121 operations. Pilots serving as of 2010 (Pub. L. 111–216) directed the Certification Training Program an air carrier pilot in command FAA to conduct a rulemaking to FFS Full Flight Simulator (captain) must have, in addition to an improve the qualifications and training FOQ ARC First Officer Qualifications airline transport pilot certificate, at least for pilots serving in air carrier Aviation Rulemaking Committee 1,000 flight hours in air carrier operations. Specifically, section 216 of FSTD Flight Simulation Training Device operations. This rule also adds to the the Act focused on the qualifications of FTD Flight Training Device eligibility requirements for an airline air carrier pilots and directed the FAA NPRM Notice of Proposed Rulemaking transport pilot certificate with an to issue a rule that would require all PIC Pilot in Command (Captain) airplane category multiengine class pilots serving in part 121 air carrier R–ATP Restricted Privileges Airline rating or an airline transport pilot operations to hold an ATP certificate by Transport Pilot certificate obtained concurrently with a August 2, 2013. Section 217 of the Act SIC Second in Command (First Officer) type rating. To receive an airline directed the FAA to amend 14 CFR part Table of Contents transport pilot certificate with a 61 to modify ATP certification multiengine class rating a pilot must requirements to prepare a pilot to I. Overview of Final Rule have 50 hours of multiengine flight function effectively in a multipilot II. Background experience and must have completed a (multicrew) environment, in adverse A. Statement of the Problem new FAA-approved Airline Transport weather conditions, during high altitude B. FAA Accident Analysis and National Pilot Certification Training Program. operations, and in an air carrier Transportation Safety Board (NTSB) This new training program will include environment, as well as to adhere to the Recommendations

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C. Airline Safety and Federal Aviation c. Cross Country Time for the R–ATP I. Overview of Final Rule Administration Extension Act of 2010 Certificate (Pub. L. 111–216) d. The role of the institution of higher This rulemaking modifies D. Notice of Proposed Rulemaking (NPRM) education in certifying its students requirements for pilots who fly in part E. Differences Between the NPRM and the 6. Recommendations for Expanding 121 air carrier operations. It changes Final Rule Eligibility for the R–ATP Certificate requirements for all pilots seeking an F. Related Actions a. Graduates with an Associate’s degree in airline transport pilot (ATP) certificate III. General Discussion of Public Comments with an airplane category multiengine and the Final Rule an Aviation Major A. ATP Certificate for All Pilots Operating b. Transfer students class rating or an ATP certificate Under Part 121 (§ 121.436) c. Pilots with 1,500 hours who are not yet obtained concurrently with an airplane B. Medical Certificate (§ 61.23) 23 years old type rating. These new requirements C. Aeronautical Experience Requirement in d. Other Degree Programs will ensure that all pilots entering air the Class of Airplane for the ATP e. Other Approved Training and carrier operations have a background of Certificate Sought (§ 61.159) Specialized Courses training and experience that will allow D. ATP Certification Training Program for f. Certified Flight Instructors them to adapt to a complex, multicrew an Airplane Category Multiengine Class 7. Summary of FAA Decision environment in a variety of operating Rating or ATP Certificate Obtained Concurrently with an Airplane Type F. Aircraft Type Rating for All Pilots conditions. Rating (§ 61.156) Operating Under Part 121 (§ 121.436) Those most affected by these changes 1. Required Training for an ATP Certificate 1. Aircraft Type Rating Requirement for will be pilots applying for an ATP 2. Training Providers Part 121 SICs certificate with an airplane category 3. Instructor Requirements 2. Compliance Time multiengine class rating or an ATP a. Operational Experience 3. Aircraft Type Rating Requirement for certificate concurrently with an airplane b. Instructor Training SICs Outside of Part 121 type rating. The changed requirements c. Type Rating G. Minimum of 1,000 Hours in Air Carrier will also affect anyone wanting to serve d. Subject Matter Experts Operations to Serve as PIC in Part 121 4. Training Topics and Hours as pilot in command (PIC) in part 121 Operations (§ 121.436) a. Academic Topics and Hours air carrier operations and anyone b. FSTD Topics 1. Air Carrier Experience Requirement wanting to serve as PIC in part 91 c. Level of FSTD and Hours 2. Part 135 and Part 91, Subpart K Time subpart K operations or part 135 5. FAA Knowledge Test for an ATP 3. Military Time operations as defined by Certificate 4. Other Time § 91.1053(a)(2)(i) or § 135.243(a)(1).1 H. Miscellaneous Issues 6. Credit Toward Air Carrier Training Those wanting to serve as second in Programs 1. Pilot Supply command (SIC) in part 121 air carrier 7. Additional Course Requirements a. Part 121 Pilot Supply E. ATP Certificate with Restricted b. Part 135, 141, and 142 Pilot Supply operations will also be affected by this Privileges (§ 61.160) c. FAA Response final rule. Certificate holders approved 1. Public Law and NPRM 2. Benefits and Cost under parts 121, 135, 141, or 142 will 2. General Support for and Opposition to 3. Alternative Licensing Structure be affected if they choose to offer the an ATP Certificate with Reduced Hours 4. Accident Effectiveness Ratings ATP Certification Training Program 3. FOQ ARC Recommendation 5. Considerations for Offering the ATP CTP (ATP CTP). 4. Military Pilots A general summary of the previous 5. Graduates with a Bachelor’s Degree in an 6. Administrative Law Issues Aviation Major 7. Miscellaneous Amendments pilot certification requirements versus a. Flight Hour Requirement IV. Regulatory Notices and Analyses the pilot certification requirements as b. Institutional Accreditation and V. Executive Order Determinations defined by this final rule is included in ‘‘Aviation Degree Programs’’ VI. How To Obtain Additional Information the following table.

TABLE 1—HOW PREVIOUS REQUIREMENTS ARE CHANGED BY THIS FINAL RULE

Previous requirements Requirements in final rule

Scenario: (1) Receive an ATP certificate with an airplane category and multiengine class rating

(1) Be at least 23 years old; (1) Meet all of the previous requirements; (2) Hold a commercial pilot certificate with instrument rating; (2) Prior to taking the ATP knowledge test successfully complete an ATP CTP;2 and (3) Pass the ATP knowledge test and practical test; and (3) have a minimum of 50 hours in class of airplane. (4) Have at least 1,500 hours total time as a pilot. (Ref. §§ 61.153, 61.156 and 61.159)

1 These operations currently require the pilot in command to hold an ATP certificate.

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TABLE 1—HOW PREVIOUS REQUIREMENTS ARE CHANGED BY THIS FINAL RULE—Continued

Previous requirements Requirements in final rule

Scenario: (2) Receive an ATP certificate with restricted privileges (restricted to serving as SIC in part 121 operations—multiengine class rating only)

None. (1) Be at least 21 years old; (2) Hold a commercial pilot certificate with instrument rating; (3) Prior to taking the ATP knowledge test successfully complete an ATP CTP; (4) Pass the ATP knowledge test and practical test; and (5) Meet the aeronautical experience requirements of § 61.160. A pilot may be eligible if he or she was a military-trained pilot; a graduate of a four-year bachelor degree program with an aviation major; a grad- uate of a two-year associate degree program with an aviation major; or has 1,500 hours total time as a pilot.

(Ref. §§ 61.153 and 61.160)

Scenario: (3) Serve as an SIC (first officer) in part 121 operations

Hold: Hold: (1) An ATP certificate with appropriate aircraft type rating OR—An ATP (1) At least a commercial pilot certificate with an appropriate category certificate with restricted privileges and an appropriate aircraft type and class rating; rating; and (2) An instrument rating; and (2) At least a second-class medical certificate. (3) At least a second-class medical certificate.

(Ref. §§ 121.436 and 61.23)

Scenario: (4) Serve as SIC in a flag or supplemental operation requiring three or more pilots

Hold: Hold: (1) An ATP certificate with appropriate aircraft type rating; and (1) An ATP certificate 3 with appropriate aircraft type rating; and (2) A first class medical certificate. (2) A first class medical certificate.

(Ref. §§ 121.436 and 61.23)

Scenario: (5) Serve as PIC in part 121 operations

(1) Have at least 1,500 hours of total time as a pilot; (1) Meet all of the previous requirements; and (2) Hold an ATP certificate with appropriate aircraft type rating; and (2) Have a minimum of 1,000 flight hours in air carrier operations as an (3) Hold a first class medical certificate. SIC in part 121 operations, a PIC in operations under either § 135.243(a)(1) or § 91.1053(a)(2)(i), or any combination of these.4

(Ref. § 121.436)

ATP certificate is new and will take established additional training The costs and benefits of this rule are effect whether or not the FAA issues a provisions in the final rule which are best described as three major elements— regulation. Thus, the costs associated justified by expected accident statutory costs, discretionary cost with the requirement for SICs to have an prevention benefits. Table 2 reflects the savings, and additional rule provisions, ATP certificate are attributable to the costs of the ATP certificate requirement which sum to the total costs and statute, not to this regulation. The FAA for part 121 SICs as well as the benefits. While the FAA already exercised its discretion permitted under discretionary cost savings. In addition, requires an ATP certificate with 1,500 the statute and reduced the mandated the table shows the expected costs and hours total time as a pilot minimum for ATP certificate cost by establishing benefits of the remaining two primary part 121 PICs, the statute requirement offsetting academic credits. To ensure cost drivers of the rule: the aircraft type that SICs in part 121 operations have an the intent of increasing safety, the FAA rating and the ATP CTP.

TABLE 2—STATUTORY COSTS AND BENEFITS/ FINAL RULE COST SAVINGS, COSTS, AND BENEFITS

Total cost PVcost Statute costs ($ mil.) ($ mil.)

Part 121 ATP Certificate Requirement ...... $ 6,374.4 $ 2,213.0

2 This requirement takes effect after July 31, 2014. An ATP certificate issued per the reduced flight airplane in an operation requiring more than one 3 In this scenario a pilot must hold an ATP hours in § 61.160 is not sufficient. pilot may also be credited towards the 1,000 hours. certificate issued per the requirements of § 61.159. 4 In addition, military PIC time (up to 500 hours) in a multiengine turbine-powered, fixed-wing

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TABLE 2—STATUTORY COSTS AND BENEFITS/ FINAL RULE COST SAVINGS, COSTS, AND BENEFITS—Continued

Total cost PVcost Statute costs ($ mil.) ($ mil.)

Statute benefits Total benefit PV benefit

Part 121 ATP Certificate Requirement ...... No Identifiable Accident Benefits

Total cost Discretionary cost savings savings PV cost savings ($ mil.) ($ mil.)

Academic Training and Experience Credits ...... $ <2,309.3> $ <789.8>

Total cost PV 5 cost Rule additional provision costs ($ mil.) ($ mil.)

ATP CTP and Type Rating Total Costs ...... $ 312.7 $ 138.7

Rule additional provision benefits Total benefit PV benefit ($ mil.) ($ mil.)

All Safety Benefits 6 ...... $ 576.8 $ 251.7

Total cost PV 5 cost ($ mil.) ($ mil.)

Total Cost of Statute Cost + Cost Savings + Rule Cost ...... $ 4,377.8 $ 1,561.9

Total benefit PV benefit ($ mil.) ($ mil.)

Total Benefits from Statute + Rule ...... $ 576.8 $ 251.7

II. Background its airspeed was slowing, but the and whether pilots receive sufficient flightcrew failed to recognize this. The experience in a multicrew environment. A. Statement of the Problem airspeed continued to decrease, In early 2010, as a response to the On February 12, 2009, a Colgan Air resulting in the stick shaker activating, Colgan Air accident, the FAA published Bombardier DHC–8–400, operating as and warning the pilots of a potential an advance notice of proposed Continental Connection flight 3407, was aerodynamic stall (insufficient airflow rulemaking (ANPRM) entitled ‘‘New on an instrument approach to the over the wings). The flightcrew’s Pilot Certification Requirements for Air Buffalo-Niagara airport in upstate New response to the stall warning system Carrier Operations’’ (75 FR 6164 York. About 5 nautical miles from the was incorrect and the airplane stalled. (February 8, 2010)), asking for input on airport, the pilot lost control of the The flightcrew subsequently lost control current part 121 pilot eligibility, airplane. It crashed into a house in of the aircraft resulting in the accident. training, and qualification requirements Clarence Center, New York, killing The NTSB’s final accident report for SICs. In July 2010, as a result of everyone aboard and one person on the identified a number of safety issues, public response to the ANPRM, the FAA ground. This accident focused FAA, including improper handling of the chartered the First Officer Qualification NTSB, Congressional, and public airplane, a failure to adhere to sterile Aviation Rulemaking Committee (FOQ attention on multiple aspects of pilot cockpit rules, and questions about the ARC) which was comprised of a cross qualifications and air carrier training adequacy of flightcrew member training section of the aviation industry. requirements. and qualifications. The accident raised In August 2010, before the ARC The NTSB’s investigation revealed questions about whether SICs should be submitted its final recommendations, that the pilot had not followed held to the same training and flight hour President Obama signed into law the appropriate procedures in handling the requirements as PICs, and whether a Airline Safety and Federal Aviation aircraft. As the plane leveled at an pilot’s overall academic training and Administration Extension Act of 2010 assigned altitude the captain applied quality of flight training were as (Pub. L. 111–216 (August 1, 2010)) (the power to increase the airspeed, but the important as the total number of flight ‘‘Act’’). The Act included several increase in power was insufficient. The hours. The accident also raised specific provisions for modifying ATP airplane’s flight displays indicated that questions about pilot professionalism certification requirements to prepare air

5 Present value 7 percent discount rate over 10 million are greater than part 135 total costs of $22.4 certificate, were modeled after the part 135 on- years. million. The FAA does not have a quantitative demand operational rules therefore we believe there 6 Part 121 total safety benefits of $292.5 million estimate of benefits for part 91, subpart K. The part is a safety benefit due to the similarity of are greater than part 121 total costs of $280.4 91, subpart K operational rules, to include requiring operations. million. Part 135 total safety benefits of $284.3 the PIC of a multiengine airplane to hold an ATP

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carrier pilots to operate more safely. • Training in aircraft manual 2012. It proposed to amend the FAA’s Among those provisions was the handling skills, existing requirements to obtain an ATP requirement that by August 2, 2013, all • stall and upset recognition and certificate with an airplane category part 121 flightcrew members hold an recovery, multiengine class rating and raise the ATP certificate. Public Law 111–216, • high altitude operations, qualifications of part 121 pilot section 216(a)(2)(B)(i). The FAA asked • pilot monitoring skills, flightcrew members. the FOQ ARC to consider the provisions • effective crew resource In developing this final rule, the FAA of sections 216 and 217 of the Act in management, reviewed the requirements set forth in developing its final recommendations. • pilot leadership, professionalism, the Act, reconsidered the FOQ ARC Those recommendations were submitted and mentoring skills, recommendations, conducted a new to the FAA in September 2010. • stabilized approaches, and accident analysis,7 reviewed NTSB In addition to the FOQ ARC • operations in icing conditions. Safety Recommendations,8 and recommendations, the FAA reviewed The FAA considered its accident considered the public comments to the recent accidents in parts 121 and 135 to analysis, the FOQ ARC NPRM. The provisions of this final rule find out whether the certification recommendations, and numerous NTSB are consistent with the statutory requirements were sufficient to produce Safety Recommendations in developing mandates set forth in the Act. The table pilots who can enter an air carrier the Pilot Certification and Qualification below outlines the provisions of environment and train and perform Requirements for Air Carrier Operations sections 216 and 217 of the Act and the their duties effectively. The accident NPRM (77 FR 12374), which published parts of the final rule that correspond to reports revealed deficiencies in— in the Federal Register on February 29, them.

TABLE 3—PROVISIONS OF PUBLIC LAW 111–216 AND CORRESPONDING RULE PROVISIONS

Public Law 111–216, The Airline Safety Act, Sections 216 & 217 Final rule

1. All part 121 flightcrew members must hold an ATP certificate by August 2, 2013. (216(c)) ..... 1. An SIC in part 121 operations must have one of the following: • ATP certificate • ATP certificate with restricted privileges (§§ 61.160, 61.167) 2. To be qualified to receive an ATP certificate, an individual shall have sufficient flight hours, as determined by the Administrator, to enable a pilot to function effectively in an air carrier operational environment; and have received flight training, academic training, or operational experience* * *to function effectively in an air carrier operational environment. (217(b)). Minimum number of flight hours shall be at least 1,500 flight hours. (217(c)). A pilot need not fully comply with the flight hours requirement above provided that the pilot has 2. ATP certificate with restricted privileges taken specific academic training courses, beyond those listed below, as determined by the (§ 61.160). Administrator. (217(d)). 3. All part 121 flightcrew members must have an appropriate amount of multi-engine flight ex- 3. (a) 50 hours of aeronautical experience in perience, as determined by the Administrator. (216(a)(2)(B)(ii)). class of airplane required for an ATP certifi- cate (§ 61.159); (b) Aircraft type rating for part 121 SICs (§ 121.436(a)(2)); and (c) 1,000-hour minimum air carrier experience to serve as a PIC in part 121 operations (§ 121.436(a)(3)). 4. To be qualified to receive an ATP certificate an individual shall have received flight training, academic training, or operational experience that will prepare a pilot to:. a. function in a multipilot environment;. b. function in adverse weather conditions (icing);. c. function during high altitude operations;. d. adhere to the highest professional standards; and. e. function in an air carrier operational environment. (217(b)(2)(A)–(E)). The total flight hours should include sufficient flight hours in difficult operational conditions. 4. ATP CTP (§§ 61.156, 121.410, 135.336, (217(c)(2)). 141.11, 142.54). 5. Prospective flightcrew members must undergo comprehensive pre-employment screening, 5. (a) Revised ATP requirements (ATP CTP, including an assessment of the skills, aptitudes, airmanship, and suitability * * * for oper- increased minimum total time as a pilot, and ating in an air carrier operational environment. (216(a)(2)). increased minimum multiengine time); (b) Aircraft type rating for the aircraft to be flown in part 121 operations (SIC) (§ 121.436(a)(2)); and (c) 1,000-hour minimum air carrier experience to serve as a PIC in part 121 operations (§ 121.436(a)(3)).

7 As a result of modifications to the ATP 8 The FAA has placed a document in the docket supplementary material can be found at Certification Training Program and comments made for this rulemaking that provides greater detail on www.regulations.gov, Docket No. FAA–2010–0100. regarding some of the accidents used for benefits in which aspects of the final rule—in particular which the NPRM the FAA conducted a new accident items in the curriculum for the ATP CTP—respond analysis. to specific NTSB recommendations. That

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B. FAA Accident Analysis and National professionalism, and first officer enable a pilot to function effectively in Transportation Safety Board (NTSB) assertiveness (Recommendation A–10– an air carrier operational environment; Recommendations 15 and A–11–39); • Flight training, academic training, • Human error, as evidenced in the Require training in icing conditions or operational experience that will Colgan Air accident, has been a major (Recommendation A–07–14 and A–11– prepare a pilot to function effectively in factor in many of the commercial airline 47); a multipilot (multicrew) environment, accidents over the past 10 years. The • Require hypoxia awareness training in adverse weather conditions, during FAA has identified 31 accidents in part (Recommendation A–00–110); and high altitude operations, and in an air 121 air carrier operations and 27 in part • Require training in crosswinds with carrier environment, as well as to 135 commuter and on-demand gusts (Recommendations A–10–110 and adhere to the highest professional operations from fiscal year 2001 through A–10–111). standards; and • Sufficient flight hours, as fiscal year 2010 that could have been C. Airline Safety and Federal Aviation determined by the Administrator, in prevented if the enhanced ATP Administration Extension Act of 2010 difficult operational conditions that may qualification standards and part 121 (Pub. L. 111–216) requirements required by this final rule be encountered by an air carrier to had been in effect. Those accidents The Airline Safety and Federal enable a pilot to operate safely in such resulted in 99 fatalities, 28 serious Aviation Administration Act included conditions. injuries, and 44 minor injuries. A provisions to improve airline safety and Section 217 also directs that the detailed description of this analysis, and pilot training. Specifically, section 216, minimum total flight hours to be how it was conducted, is provided in Flight Crewmember Screening and qualified for an ATP certificate shall be Section E of the final regulatory Qualifications, focused on the at least 1,500 flight hours. evaluation and can also be found in qualifications of airline pilots operating Notwithstanding the stated minimum, Docket # FAA–2010–0100. under part 121. In section 217, Airline the section permits the Administrator to The NTSB investigated these Transport Pilot Certification, the FAA allow specific academic training courses accidents and the changes enacted in was directed to modify the requirements to be credited toward the 1,500 total this rule address, at least in part, the for an ATP certificate to better prepare flight hours, provided the Administrator following NTSB recommendations— pilots for operating in an air carrier determines that specific academic • Train flightcrews to respond to environment. Both sections of the Act training courses will enhance safety sudden, unusual, or unexpected aircraft are addressed in this rulemaking. more than requiring the pilot to comply upsets (Recommendations A–96–120, Section 216 directs the FAA to fully with the flight hours requirement. A–04–62, A–07–3, and A–09–113); conduct a rulemaking proceeding to Section 217 also requires the • Develop and conduct stall recovery require: Administrator to consider the training and provide stick pusher • Part 121 air carriers to develop and recommendations from an expert panel familiarization training for pilots of implement means and methods for established under section 209(b) of the stick-pusher equipped aircraft ensuring flightcrew members have Act. That section focuses on part 121 (Recommendations A–10–22 and A–10– proper qualifications and experience; and part 135 training programs. A report 23); • • All flightcrew members in part 121 to Congress and to the NTSB was Enhance training syllabi for air carrier operations to hold an ATP submitted on September 23, 2011. operations in high altitude certificate and to have obtained D. Notice of Proposed Rulemaking (Recommendations A–07–1 and A–07– appropriate multiengine flight 2); (NPRM) • experience, as determined by the Review training for unusual and Administrator by August 2, 2013; and In the Pilot Certification and emergency situations in transport- • Prospective flightcrew members to Qualification Requirements for Air category aircraft to make sure pilots are undergo comprehensive pre- Carrier Operations NPRM (77 FR not trained to use the rudder in ways employment screening, including an 12374), the FAA proposed to amend the that could result in dangerous situations assessment of the skills, aptitudes, existing requirements to obtain an ATP (Recommendation A–02–2); airmanship, and suitability, of each certificate with an airplane category • Require procedures and guidance applicant for a position as a flightcrew multiengine class rating and raise the for airport situational awareness member in terms of functioning qualifications of part 121 pilot (Recommendation A–07–44); • Ensure that all carriers include effectively in the air carrier’s flightcrew members. Specifically the operational environment. NPRM proposed to— criteria for stabilized approach in their • flight manuals and training programs Section 216 requires the FAA to issue Require an ATP certificate for all (Recommendations A–01–69 and A–08– an NPRM by January 28, 2011, and a pilots operating under part 121 18); final rule by August 2, 2012. consistent with the self-enacting • Require operators to provide clear Independent of any rulemaking provision in section 216 of the Act. • guidance to pilots about landing proceeding by the FAA, this section Establish an aeronautical performance calculations directs that all flightcrew members in experience requirement for 50 hours in (Recommendations A–07–59 and A–08– part 121 air carrier operations must hold the class of airplane for the ATP 41); an ATP certificate, issued under part 61, certificate sought. • Require Crew Resource by August 2, 2013. • Establish a requirement for all Management training (Recommendation Section 217 of the Act requires the pilots operating under part 121 to obtain A–03–52); FAA to issue a final rule by August 2, an aircraft type rating for the aircraft to • Require operators to verify that 2013, modifying the requirements for an be flown. An SIC in a part 121 flag or their pilot monitoring duties are ATP certificate in part 61. The section supplemental operation that requires consistent with AC 120–71A establishes minimum requirements for three or more pilots is required by (Recommendation A–10–10); an ATP certificate that include: existing regulations to hold an ATP • Require flight crewmember • Sufficient flight hours, as certificate with an aircraft type rating for academic training in leadership, determined by the Administrator, to the aircraft being flown, but SICs in

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other part 121 operations are not courses’’ to obtain an ATP certificate 30, 2012. One request for extension to required to have it. with fewer than the minimum 1,500 the comment period was received, but • hours. the FAA declined to extend given the Establish a requirement for pilots • seeking an ATP certificate with an Allow specific academic industry input it had received from the airplane category multiengine class coursework to be credited towards the advanced noticed of proposed rating or an ATP certificate obtained total flight hours required for an ATP rulemaking published in February 2010, concurrently with an airplane type certificate. The proposed alternative as well as the input it received from the rating to complete specific training hour requirements for a restricted FOQ ARC. In addition, the statutory before taking the ATP knowledge test. privileges ATP certificate were— Æ 750 hours for a military pilot; and deadlines imposed by the Act did not The proposed requirements would Æ 1,000 hours for a graduate of a four- afford the FAA additional time to include academic training and training receive comments. The FAA received 9 year baccalaureate aviation-degree in a flight simulation training device program who also received a nearly 600 comments posted to the (FSTD). A draft advisory circular commercial certificate and instrument docket. Commenters included major air providing additional guidance as to the rating from an affiliated part 141 pilot carriers, regional air carriers, part 135 content of the course and how to obtain school. operators, cargo air carriers, associations FAA-approval was placed in the docket • Establish a requirement that a pilot and industry groups, colleges and for comment. must have 1,000 hours in air carrier universities, training centers, flight • Based on the discretion provided to operations to serve as PIC in part 121 schools, pilots, and private citizens. the Administrator in section 217 of the operations. Act, permit applicants who have The NPRM provided for a 60-day E. Differences Between the NPRM and completed ‘‘specific academic training comment period, which ended on April the Final Rule

TABLE 4—DIFFERENCES BETWEEN THE NPRM AND THE FINAL RULE

Issue NPRM Final rule

A. R–ATP certificate ...... 1. Eligible pilots: 1. Eligible pilots: Æ Military-trained; Æ Military-trained; Æ Graduates of a bachelor’s degree program with an Æ Graduates of a bachelor’s degree program with an aviation major; aviation major; 2. Proposed minimum age is 21 years; and Æ Graduates of an associate’s degree program with an 3. Proposed minimum cross country time for military pi- aviation major; lots is 250 hours; proposed minimum cross country Æ Pilots with 1,500 hours total time as a pilot; time for graduates with a bachelor’s degree is 375 2. Minimum age is 21 years; and hours. 3. Minimum cross country time for all eligible pilots is 200 hours. B. Aviation Degree Program A pilot eligible for academic credit towards a restricted 1. Established criteria to define what coursework must privileges ATP certificate needs to have:. be completed as part of a bachelor’s or associate’s 1. Graduated from a four-year aviation-related degree degree program with an aviation major; program (bachelor’s degree with an aviation major); 2. Further defined what an associated part 141 school and is; 2. Obtained their commercial pilot certificate and instru- 3. Created a process by which colleges and universities ment rating from an affiliated part 141 pilot school. can obtain authority from the FAA to certify their graduates for an R–ATP certificate (new advisory cir- cular 61-School); and 4. More clearly defined what a graduate has to present at the time of the practical test to show eligibility for a restricted privileges ATP certificate. C. ATP CTP ...... 1. Academic training: 24 hours; 1. Academic training: 30 hours; 2. FSTD training: 16 hours 2. FSTD training: 10 hours Æ Level C or higher FFS: 8 hours; Æ Level C or higher FFS: 6 hours; Æ Level 4 or higher FTD: 8 hours; and Æ Level 4 or higher FTD: 4 hours; and 3. Draft advisory circular. 3. Advisory circular 61–ATP. D. ATP CTP Instructor Re- 1. Hold an ATP certificate with an airplane category 1. Hold an ATP certificate with an airplane category quirements. multiengine class rating; multiengine class rating; 2. Meet the aeronautical experience requirements of 2. Meet the aeronautical experience requirements of § 61.159; § 61.159; 3. Have 2-years of air carrier experience; and 3. Have 2-years of air carrier experience; 4. For training in an FSTD—have an appropriate air- 4. For training in an FSTD—(a) have an appropriate craft type rating which the FSTD represents or have aircraft type rating which the FSTD represents, (b) received training in the aircraft type from the certifi- have received training in the aircraft type from the cate holder on those maneuvers they will teach. certificate holder on those maneuvers they will teach, and (c) received training on data and motion limita- tions of simulation; and 5. Hold a certified flight instructor certificate or complete training in fundamentals of instruction.

9 A flight simulation training device (FSTD) incorporates both full flight simulators (FFS) and flight training devices (FTD).

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TABLE 4—DIFFERENCES BETWEEN THE NPRM AND THE FINAL RULE—Continued

Issue NPRM Final rule

E. Reduction in an air car- A principal operations inspector may approve a reduc- A principal operations inspector may approve a reduc- riers’ initial training pro- tion to an air carrier’s initial training program based tion to an air carrier’s initial training program if the gram for Pilots Who Have on material taught by that carrier in the ATP CTP. pilot beginning initial training has successfully com- Completed the ATP CTP. pleted the ATP CTP. The carrier does not have to provide the ATP CTP training to be eligible for a re- duction. F. Medical Certificate...... No change proposed to medical requirements in Section 61.23 requires only those pilots exercising the § 61.23. Pilots exercising the privileges of an ATP PIC privileges of an ATP certificate and SIC privi- certificate would be required to hold a first-class leges in flag and supplemental operations requiring medical certificate. three or more pilots to hold a first-class medical cer- tificate. An SIC in part 121 may continue to hold a second-class medical certificate. G. FFS Credit Towards 50 10 hours of FFS time that represents a multiengine air- 25 hours of FFS training time that represents a multien- hours of Multiengine Aero- plane. gine airplane and is part of an approved training pro- nautical Experience. gram. H. Time Eligible for the 1. All time in part 121 operations; 1. All time in part 121 operations; 1,000 hours of Air Carrier 2. PIC time in § 135.243(a)(1) operations; and 2. PIC time in § 135.243(a)(1) operations; Experience. 3. PIC time in § 91.1053(a)(2)(i) operations 3. PIC time in § 91.1053(a)(2)(i) operations; and 4. Military PIC time in a multiengine turbine-powered, fixed-wing airplane in an operation requiring more than one pilot—up to 500 hours.

F. Related Actions discrete sections of the Act, the FAA would be necessary or appropriate, and The Act led to the establishment of will minimize any overlapping or therefore whether this rulemaking ARCs on additional subjects— duplicative requirements. would represent a good candidate for a • Flight Crewmember Mentoring, The FAA has made regulatory formal retrospective review under E.O. Leadership, and Professional decisions within this rule based upon 13610. Development (Section 206 of the Act) the best currently available scientific III. Discussion of Public Comments and • Flight Crewmember Training Hours data and information, and is confident Final Rule Requirement Review (Section 209 of the the rule incorporates the best available Act) information regarding the relationship A. ATP Certificate for All Pilots • Stick Pusher and Adverse Weather between flight hours and types of Operating Under Part 121 (§ 121.436) Event Training (Section 208 of the Act) training. In the future, however, FAA is In the NPRM, the FAA proposed • Air Carrier Safety and Pilot likely to gather and analyze additional requiring that all SICs in part 121 Training (Section 204 of the Act) data in this area; for example, through operations hold an ATP certificate by The FAA has reviewed the safety outcomes resulting from this rule, August 2013. This proposal was meant recommendations provided by these and additional information collections to be consistent with section 216 of the ARCs and has initiated two rulemaking associated with other rulemakings. FAA Act, which mandates that within 3 years projects as a result: (1) Flight may also consider additional collections of enactment (August 2, 2013), all Crewmember Mentoring Leadership, of information, and would notify the flightcrew members serving in part 121 and Professional Development; and (2) public of these collections through operations must hold an ATP certificate. Revisions to the Qualification and separate Federal Register Notices At the time the Act was signed into law, Performance Standards in Part 60. promulgated under the Paperwork PICs in part 121 air carrier operations as In addition, on May 20, 2011, the Reduction Act. Further information well as SICs of a part 121 flag or FAA published a supplemental notice of collected by FAA could be used to supplemental operation requiring three proposed rulemaking (SNPRM) inform future analysis. or more pilots were already required to proposing to amend the regulations for Because of the likely availability of hold ATP certificates. All other SICs in crewmember and aircraft dispatcher such data in the future, the FAA may part 121 air carrier operations, however, training programs in domestic, flag, and obtain additional empirical evidence were not required to hold ATP supplemental operations (76 FR 29336). relevant to the precise relationship certificates and were permitted to hold This SNPRM, which was specifically between flight hours and types of an instrument rating and a commercial cited in section 209 of the Act, focused training. For example, Phase III of the pilot certificate with the appropriate solely on part 121 air carrier training Pilot Source Study, explained elsewhere category and class rating for the aircraft. program requirements. The comment in this preamble, suggests areas for The FAA received more than 200 period for the SNPRM closed on further research. The FAA, consistent comments both in support of and in September 19, 2011. with its obligations under Executive opposition to the ATP certification Congress addressed these related Order (E.O.) 13563, Improving requirement for part 121 pilots. topics within discrete sections of the Regulation and Regulatory Review (Jan. American Eagle Airlines, Inc., citing a Act, which has resulted in the related 18, 2011), and E.O. 13610 on the lack of an identified safety benefit, rulemaking projects identified. Drafting retrospective review of regulations, will specifically suggested grandfathering all proposals on related topics review this evidence and may make incumbent SICs if they have at least simultaneously can give the appearance modifications as necessary and 1,000 hours in the type of aircraft they of overlapping or duplicative appropriate to improve the effectiveness are flying. American Airlines (AAL) requirements. As the final rules are of this regulatory program. The FAA suggested a similar grandfathering drafted and published to address the will consider whether such changes provision, but only for pilots who have

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been an SIC for at least six years, impose new requirements without a University (ERAU), ExpressJet Airlines, accrued 1,000 hours in aircraft type as corresponding safety benefit, the FAA is Inc. (ExpressJet), Flight Safety an SIC, and attended recurrent training modifying § 61.23(a)(1), (a)(2), (d)(1), International (FSI), Hyannis Air Service, more than three times. and (d)(2) in the final rule so pilots in Inc. (Cape Air), National Air While the FAA has considered and part 121 operations exercising SIC Transportation Association (NATA), appreciates all of the comments privileges (excluding flag or Purdue University (Purdue), Saint Louis received, the FAA was not given any supplemental operations requiring three University—Parks College (Parks discretion to allow pilots serving in part or more pilots) may continue to hold College), San Jose State University 121 operations to hold any certificate only a second-class medical certificate. (SJSU), and the U.S. Airline Pilots other than an ATP certificate. There is In this regard, the amendment alleviates Association (USAPA) indicated that 50 no latitude in the Act to permit a pilot any increased cost and removes the hours is adequate to be eligible for an with a commercial pilot certificate who possibility of inadvertently ATP certificate. is flying in part 121 today to continue disqualifying incumbent SICs from part The National Association of Flight flying beyond the date of this self- 121 air carrier operations. Instructors (NAFI) added that obtaining 50 hours would not be a significant enacting provision without having C. Aeronautical Experience obtained an ATP certificate. problem in the industry and would Requirement in the Class of Airplane for establish a minimum number of hours Accordingly, the FAA has removed the the ATP Certificate Sought (§ 61.159) current certification requirements in as a base for pilots to build upon. § 121.437 and added new §§ 121.435 Prior to the issuance of this final rule, Farmingdale State College (FSC) added and 121.436. New § 121.435 contains an applicant for an ATP certificate with that 50 hours is adequate but it is not the existing certification requirements an airplane category multiengine class a good measure of competencies. The for part 121 pilots; they will be in effect rating was not required to obtain any International Air Transport Association until July 31, 2013. After that date, the additional multiengine flight experience (IATA) stated that requiring these 50 requirements of § 121.436 will apply. above what is required for a commercial hours is appropriate if they are used to pilot certificate with an airplane develop and reinforce core B. Medical Certificate (§ 61.23) category multiengine class rating. competencies. Aerosim Flight Academy Medical certificate requirements are Section 216 of the Act addresses this (Aerosim) stated the 50 hours would be determined by the level of pilot issue by requiring all pilot flightcrew ‘‘okay’’ but ‘‘too costly and difficult to certificate that is required for the members serving in part 121 air carrier obtain.’’ JetBlue Airways Corporation operation being conducted. Section operations to have appropriate (JetBlue) agreed that 50 hours in the 61.23 requires a pilot exercising the multiengine flight experience, as class of airplane is sufficient and privileges of an ATP certificate to hold determined by the Administrator. pertinent and believes it is a first-class medical certificate and a One method the FAA used to address representative of quality flight pilot exercising the privileges of a the Act’s focus on multiengine experience. commercial pilot certificate to hold at experience was by proposing a Four commenters, including FSI, said least a second-class medical certificate. requirement that pilots obtain 50 hours that there would be no additional As a result of the statutory of flight time 11 in the class of airplane burden for those who obtain an ATP requirement for all pilots in part 121 to for the ATP certificate sought. The FAA certificate. FSI said that most pilot hold an ATP certificate, UPS and also proposed allowing an applicant to candidates exceed the 50-hour Spartan College sought clarification receive credit for up to 10 hours of this requirement before obtaining an ATP regarding whether all SICs in part 121 flight time in a full flight simulator certificate. An individual commenter operations would be required to hold a (FFS) that replicates a multiengine noted that most pilots would earn this first-class medical certificate and airplane. by getting a multiengine instructor whether the proposed rule would affect Ninety-three commenters addressed rating and instructing students. existing SICs who hold only second- the proposed 50-hour requirement. Six individual commenters did not class medical certificates. Fifty-nine commenters, including the object to having such a requirement but The FAA did not address medical Airline Pilots Association (ALPA), stated 50 hours is too high. One of them certification requirements in the NPRM Airlines for America (A4A), AAL, suggested 25 hours in the class of or propose any change to the first-class Aviation Professional Development, airplane as an alternative. The Ohio medical certificate requirement in LLC, Cargo Airline Association (CAA), State University (OSU) added that § 61.23. Without a change, the statutory Coalition of Airline Pilots Association current commercial certificate requirement for all part 121 flightcrew (CAPA), Embry-Riddle Aeronautical requirements are sufficient and members to hold an ATP certificate suggested giving credit towards this would require SICs to hold first-class and every six months for pilots age 40 and over. A requirement through completion of an second-class medical certificate, on the other hand, Advanced Jet Training (AJT) program. medical certificates after August 1, must be renewed every 12 months for all pilots 2013. regardless of age. If first-class medical certificates Boeing also said that 50 hours is too Requiring a first-class medical are required, SICs who are age 40 and over will be high and that the structured and focused certificate for all part 121 SICs could required to renew their medical certificates every FSTD training proposed in the ATP six months (as opposed to every 12 months for a certification training program provides potentially remove qualified and second-class medical certificate). In addition, experienced SICs who cannot hold a electrocardiography (EKG) testing is specifically any needed additional multiengine first-class medical certificate from part required under first class medical certificate experience above that which is standards while EKG testing is used on a case-by- minimally required by the commercial 121 air carrier operations. It would also case basis for second class medical certificates. The impose additional costs on industry, FAA has reviewed part 121 accident and incident pilot certificate. The Regional Air Cargo individual pilots, and the FAA that data dating back to 2001 and found no accidents or Carrier Association (RACCA) stated that were not reflected in the initial incidents attributable to an SIC with a medical 50 hours is probably adequate but may condition that may have been detected by regulatory evaluation.10 Rather than be unnecessarily high ‘‘presuming the electrocardiography testing. flight time includes adequate training, 11 The FAA notes that this 50 hours of flight time 10 A first-class medical certificate must be counts towards the 1,500 hours of total time experience, and motivation by the renewed every 12 months for pilots under age 40 required for an ATP certificate. pilot.’’

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Three individual commenters noted recommends any time in an FFS should different than current practice. For that that 50 hours in class is too low. Two be credited towards the 50 hours. reason the FAA disagrees with the IFL of these commenters recommended 100 Congress directed the FAA to ensure Group’s assertion that pilots seeking hours in class. Ameriflight, LLC that all flightcrew members have an experience in multiengine aircraft will (Ameriflight) added that 50 hours of appropriate amount of multiengine result in an increase in accidents. To the multiengine experience is insufficient experience. Since the ATP certificate is extent that commenters have suggested for part 121 operations because the the highest level of pilot certificate that, as a result of the multiengine flight remaining 1,450 hours could be in a currently available, the FAA has time requirement, pilots may be determined the minimum multiengine single-engine airplane. The Allied Pilots encouraged to falsify their logbooks, the Association (APA) recommended 100 experience required to apply for an ATP FAA cautions that the regulations (14 hours of flight time in the type of certificate should exceed the minimum CFR 61.59) prohibit the falsification of aircraft before a pilot could be eligible requirements for a commercial pilot for a restricted privileges ATP certificate. Additional experience in logbooks. certificate, because time in the aircraft inherently faster and more complex A majority of the commenters type makes for a safer pilot. multiengine airplanes establishes a supported the proposed requirement for Thirteen commenters, including, foundation that provides quality 50 hours in the class of airplane to Delta Airlines (Delta), Bemidji Aviation experience to prepare a pilot for a obtain an ATP certificate; therefore, the Services, Inc., the Professional Aviation professional piloting career. FAA has retained this provision in the Board of Certification (PABC), Prairie Multiengine flight experience is final rule. Based on the comments Air Service, Kansas State University— essential not only for pilots serving in suggesting that the FAA increase the Salina (KSU), and the University part 121 air carrier operations but for all amount of FFS time that may be Aviation Association (UAA), found the pilots who apply for an ATP certificate credited towards the 50 hours, the FAA 50-hour requirement unnecessary. with an airplane category multiengine agrees that the quality of training and Sporty’s Academy added that there is no class rating. The FAA concedes there experience gained from flying an FFS is evidence of accident rates to support the are no air carrier accidents that valuable and additional time should requirement. Southern Illinois specifically cite a lack of multiengine University—Carbondale (SIU), Western experience as a probable cause. count. Advanced simulation training Michigan University (WMU) and CAE, However, establishing a minimum devices readily provide additional Inc. (CAE) added that the requirement experience requirement in the class of training opportunities in turbine aircraft should be competency based. Human airplane is consistent with other pilot utilizing multicrew concepts and may Capital Management and Performance, certificates and supports the include training in difficult operational LLC added that time gained in light requirements of section 216 of the Act, conditions beyond that required of twin-engine piston aircraft does not which placed significant emphasis on existing pilot licensing requirements. prepare pilots for high altitude, swept- increased multiengine experience. As The FAA disagrees with commenters wing turbojet operations. The IFL Group proposed, such an hour requirement that believe all of the multiengine believes pilots will get that time in any would have minimal impact on pilots experience could be gained in an FFS. way possible without a guarantee of seeking an ATP certificate because the The FAA believes accruing multiengine receiving specific training, and this may hours will likely be acquired by pilots experience in an airplane is important increase the accident rate. The IFL engaged in other commercial aviation and would eliminate the possibility of a Group also believes there will be an activities such as flight instruction or pilot carrying passengers in a ‘‘increase in the number of pilots who part 135 operations. This assertion was multiengine airplane without previous make fake flight time entries into their not disputed by many of the multiengine airplane experience. logbooks because of the cost of commenters. Additionally, the FAA Accordingly, the FAA has amended obtaining the additional multiengine reviewed the hiring minimums for part § 61.159 in the final rule. Specifically, flight time, thus offsetting any safety 121 air carriers and found most have § 61.159(a)(3) will permit pilots to credit benefit and increasing FAA cost as a established hiring minimums for 25 hours of flight training in an FFS that proportion of them are caught and the multiengine time which equal or exceed FAA incurs the cost of revoking their the proposed rule, further minimizing represents a multiengine airplane certificates.’’ the cost of this provision. toward the 50 hours of flight time in the Six commenters, including Purdue, In response to commenters who class of airplane. The 25 hours must be Spartan College, and the University of suggested increasing the minimum accomplished as part of an FAA Dubuque noted the FAA should hours in class of airplane above 50 approved training course (e.g., part 121 consider credit for simulation. An hours, the FAA accepts the air carrier training program).12 The FAA individual commenter stated allowance recommendation of the FOQ ARC. The notes that an aviation training device for simulators should be expanded. CAE FAA agrees that time in the class of (ATD) or an FTD cannot be substituted stated 50% of the hours should be airplane alone may not prepare a pilot for the FFS in order to obtain the credit allowed in a level C or D FFS due to the for operating a large swept-wing turbojet toward the 50 hours of multiengine numerous training advantages of that at high altitudes nor does it necessarily flight time. training environment. Based on hiring ensure competency. For that reason data and success rates in airline training there are additional building block and line operations, ExpressJet highly requirements in this final rule for recommended that AJT simulation time obtaining an ATP certificate with a (in either a level 5 flight training device multiengine class rating, such as the 12 The FAA has modified section 61.159(a)(5) to (FTD) or FFS) be credited towards the ATP certification training program and permit pilots to credit FSTD time accomplished in 50 hours of multiengine time. JetBlue a practical test to determine a pilot’s approved training programs under parts 121, 135, and 141 toward the aeronautical experience believes the capabilities and quality of competency prior to issuance of an ATP requirements for the ATP certificate. Under the training possible in an advanced certificate. The FAA notes that pilots prior rule, only FSTD time accomplished as part of simulation device far exceeds those of will seek opportunities to acquire time an approved training course in part 142 could be the actual aircraft and therefore in the class of airplane, which is no credited.

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D. ATP Certification Training Program National Air Disaster Alliance course would just be an extra cost for an Airplane Category Multiengine Foundation (NADA/F) was also burden and was unlikely to provide any Class Rating or ATP Certificate supportive of the proposed course and additional safety benefit. GAMA, Obtained Concurrently with an Airplane highlighted the use of a standardized however, expressed support for the Type Rating (§ 61.156) course of training. USAPA supports the proposed FSTD portion of the training In Section 217 of the Act, Congress additional training maintaining that it is course, indicating that such training can directed the FAA ‘‘to modify more effective than just having a be ‘‘extremely beneficial.’’ NATA requirements for the issuance of an multiple choice exam. UAA supported believes the course as proposed is too pilots completing ground training prior costly. NATA is supportive of airline transport pilot certificate’’ to to taking a knowledge test. modifications to the ATP certification ensure pilots can function effectively in Several commenters, including regulations, but indicated the delivery an air carrier/multipilot environment, in Aerosim, Middle Tennessee State of any new training should be made adverse weather conditions, during high University (MTSU), FSC, and WMU, available through lower cost methods, altitude and icing operations while support additional training but disagree such as on-line course delivery. adhering to the highest professional with it being required for the knowledge Based on the support for additional standards. The public law stated that test. ERAU, KSU, and 20 individual training expressed by many of the the FAA could consider academic commenters support the additional commenters, the FAA has decided to training, flight training, or operational training being part of a degree program require academic and FSTD training for experience as a means of ensuring pilots or collegiate flight training program. the ATP certificate multiengine class have the skills identified in the public Spartan College suggested it be part of rating and the ATP certificate when law. an overall collegiate curriculum rather obtained concurrently with an airplane In the NPRM, the FAA proposed to than a single course. type rating.13 This training, required at require applicants for the ATP Purdue, OSU, and the University of the ATP certification level, will address knowledge test complete an ATP North Dakota (UND) suggested allowing the gap in knowledge between a Certification Training Program (ATP the academic and FSTD portions of the commercial pilot certificate and the CTP) comprised of academic and FSTD proposed course to be completed at knowledge a pilot should have prior to training. The training program, as separate times enabling students to entering an air carrier environment. In proposed, focused on the areas set forth complete the academic portion as part addition, the FAA has decided that the in the Act and a majority of the of their degree program. The safest and most effective way to ensure competencies identified in the FOQ universities added that many of the that applicants for an ATP certificate ARC report. The FAA included a draft topics are already covered as part of the have met the requirements of section advisory circular (AC) in the docket that degree program and graduates should 217 of the Act is to establish specific provided further detail on the content get credit for the academic portion of training requirements and evaluate the and the structure of the course. the proposed course and therefore only pilot’s understanding of those areas of 1. Required Training for an ATP have to complete the FSTD portion at a instruction consistent with the Certificate later time. They also suggested allowing regulatory framework for other pilot the knowledge test to be completed certificates. The FAA received over 120 comments following the academic portion, which To the extent that several commenters regarding whether the FAA should falls more in line with how knowledge suggested that the coursework in require a training course prior to taking areas for other FAA pilot certificates are university aviation degree programs the ATP knowledge test. More than 30 tested. already may satisfy the academic commenters, including Delta, A4A, ExpressJet supported imbedding the training requirements of the ATP CTP, CAPA, CAA, Parks College, and the ATP CTP training into an air carrier’s the FAA does not agree. Many colleges Families of Continental Flight 3407, initial training program. The Aircraft and universities teach ground school for generally supported such a training Owners and Pilots Association (AOPA) other certificates and ratings as part of course. An equal number of commenters equated the ATP CTP to the AJT course their academic curriculum that include including the University of Dubuque, the FOQ ARC recommended for pilots a general overview of topics for which Delaware State University (DSU), and entering part 121 service and therefore the collegiate program has numerous individual commenters disagrees that the ATP CTP should comprehensive standalone courses. For generally stated such a course is apply to all pilots required to have an example, despite most collegiate unnecessary. Many commenters ATP certificate. AOPA suggested the programs having a separate addressed specific elements of the FAA ‘‘reword the AJT requirement so it aerodynamics course, this topic remains proposal and suggested some is required only of individuals a component of private pilot ground alternatives which will be addressed employed by part 121 air carriers, prior school and is generally reinforced in a later in the document. to flying in revenue service and not as concurrent flight training lab. The IATA stated that the additional a prerequisite to all ATP certificates.’’ aerodynamics training for private pilots training for the ATP certificate is OSU generally agreed with the generally applies to small, single- appropriate because the current academic portion of the course but engine, piston-powered aircraft—the requirements are inadequate and have believed the FSTD portion of the course type of airplane most people initially become irrelevant. Boeing agreed with ‘‘represents an overwhelming financial learn to fly. Similarly, the academic the FAA’s rationale for the ATP CTP burden’’ to ATP certificate applicants. portion of the ATP CTP (essentially and asserted that pilots who Many other individual commenters successfully complete the program disagreed with imposing additional 13 The FAA notes that a pilot is not required to would have the needed ‘‘foundational training requirements on pilots seeking take the ATP CTP for a type rating added to any knowledge to operate as second in an ATP certificate, in part due to the other pilot certificate. The requirement only applies command (SIC) in part 121 operations.’’ additional cost. The General Aviation to pilots obtaining an ATP certificate concurrently with an airplane type rating. In addition, AAL echoed Boeing, indicating that the Manufacturers Association (GAMA) subsequent airplane type ratings added to an ATP added training would provide valuable stated an ATP applicant has already certificate that already has a multiengine class experience to future part 121 pilots. The gone through ample training and this rating would not require taking the ATP CTP.

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ground training for ATP certification) carrier initial training because the icing conditions. The FAA will not will focus on the aerodynamic subjects are already taught or because encourage pilots to seek experience in principles for large turbine aircraft—the the training only applies to pilots in part hazardous conditions for the purpose of type of aircraft flown in part 121 121 operations, the FAA disagrees. The meeting the aeronautical experience operations as well as many operations ATP CTP is the base upon which a pilot requirements for the ATP certificate in part 135 and subpart K of part 91. must build. The concepts in the course required by the Act. The FAA has long The ATP CTP will then incorporate will apply to any pilot who flies a large recognized that flight simulators and those concepts learned in the academic turbine aircraft regardless of operating flight training devices provide a safe portion of the course into practical rule part and therefore has value to flight training environment that can scenarios during the FSTD training to pilots flying outside of part 121. The reduce the number of training accidents reinforce the critical concepts of ATP CTP will cover topics the air by allowing training for emergency operating at high altitudes and its effects carrier is not required to teach. For situations, such as fire, total loss of on the airplane and the importance of those general knowledge areas that are thrust, and systems failures, that cannot stall recognition and recovery. The FAA currently part of a part 121 initial be safely conducted in flight. 61 FR supports colleges and universities with training program, the FAA has modified 34508 (July 2, 1996). Therefore, the FAA FAA certificated part 141 pilot schools subpart N to remove those requirements has determined that many of the teaching the ATP CTP but as a and reduce ground training for those difficult operational conditions can be standalone course, just as they do with pilots who have completed the ATP most safely demonstrated to students ground schools and flight labs for other CTP. A pilot in an air carrier training through simulation. Simulation will be pilot certificates and ratings. program receives training specific to the discussed in greater detail later in this The FAA also maintains that the air carrier’s operation and the specific section. academic training requirements cannot aircraft that pilot is going to fly. Even if Although the Act permitted the FAA be separated from the FSTD training. the subjects are offered by an air carrier to consider operational experience as a The FAA has acknowledged the value of in initial training, the pilot is focused means of ensuring that a pilot has structured university aviation degree primarily on learning the company received adequate flight hours in programs in other parts of this final rule; operation and the specific type of conditions such as adverse weather, however, the design of the ATP CTP aircraft they will fly, not on broader, high altitude operations, and an air ensures the knowledge gained in the foundational concepts that the ATP CTP carrier operational environment, the academic portion of the course is is designed to provide. FAA has determined that it is not directly applicable to air carrier The FAA recognizes commenters’ appropriate to encourage pilots to seek operations and operating sophisticated, concerns regarding the cost of the such conditions in an aircraft. In high performance, large, turbine aircraft. proposed ATP CTP and considered addition it would be difficult to validate The training in the FSTD portion of the these costs when establishing the experience in those conditions. course consolidates the academic requirements for the course. Section 217 Moreover, it would be difficult for pilots concepts with scenario-based training, of the Act directed the FAA to modify to obtain experience in the complex practical applications, demonstrations, the requirements for ATP certification to aircraft that would be required to and multiengine experience. The course include ensuring that applicants for the replicate an air carrier operational will consolidate many broader topics ATP certificate have sufficient flight environment. and focus on its applicability to air hours in difficult operational conditions Therefore, the FAA has determined carrier-like operations. For many pilots ‘‘that may be encountered by an air that academic and FSTD training, who take the ATP CTP, it will likely be carrier.’’ The FAA sought input from the followed by an evaluation through a their first exposure to large turbine FOQ ARC on how to define difficult revised knowledge test that includes the aircraft and how those aircraft perform operational conditions and how a pilot content of the course and subsequent at high altitude, how they perform in can best obtain experience in those completion of a practical test will meet low energy states, and in adverse conditions. As indicated it its report, the the requirements of the Act and provide weather phenomena, like thunderstorms FOQ ARC ‘‘extensively discussed the valuable training for the ATP certificate. and icing conditions. Combining the issue of difficult operating conditions 2. Training Providers academic training requirements with the and determined that simulator training FSTD experience is the most effective is an important tool by which to provide Due to the FSTD requirement in the method to consolidate the learning and flight experience to the pilot for ATP CTP, the FAA proposed that the deliver the training and experience recognition and appropriate response in course be conducted only by the mandated by the Act. the difficult environments experienced following certificate holders who are Additionally, the FAA has by air carriers.’’ Because of safety approved to sponsor an FSTD under 14 determined that students must complete concerns, the FOQ ARC did not CFR part 60: A part 141 pilot school, a both the academic and FSTD training recommend that pilots be intentionally part 142 training center, or a part 119 prior to taking the knowledge test. By placed in these difficult conditions in certificate holder authorized to conduct separating the academics and flight actual aircraft. The FOQ ARC operations under parts 121 or 135. training, possibly by years since a pilot recommended scenario-based training to AOPA was concerned that the FAA may wait until he or she is further in a address difficult operating conditions ‘‘did not consider the negative impact professional career, the learning including thunderstorms, icing, low on independent part 61 flight schools, objectives are less likely to be achieved. visibility, maximum crosswinds for other training providers who conduct In light of that fact, the knowledge test takeoff and landing, and contaminated ATP certification training or [designated cannot be taken following completion of runways. pilot examiners] who currently conduct only the academic portion of the course. Generally, pilots from their earliest ATP certificate testing.’’ NAFI The FAA is retaining the requirement training are taught to avoid commented the proposal completely that a pilot complete all of the ATP CTP thunderstorms and icing conditions. excludes ‘‘the very broad base of part 61 to be eligible to take the knowledge test. Even when flying an airplane approved training providers who have To those commenters that suggested for flight in icing conditions, a pilot is traditionally helped maintain training the ATP CTP be incorporated into air cautioned to minimize time flying in capacity.’’ NAFI further stated that part

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61 instructors provide a significant to those pilots that do require ATP KSU stated the academic training amount of training toward professional certificates, but that is not a regulatory requirements should be administered by pilot careers and to eliminate these decision. a qualified instructor as part of a instructors may reduce overall training The FAA has determined authorized collegiate flight education program. capacity and result in a negative training providers for the ATP CTP will AOPA, UAA, and several individual economic impact on these training be limited to certificate holders commenters disagreed with stipulating providers. ALPA recommends the conducting operations under parts 121 instructor qualification requirements for proposed ‘‘authorized training or 135, and pilot schools and training the ATP CTP. Boeing recommended provider’’ be clearly defined in the centers certificated under parts 141 or removing the two-year experience regulations to assure the highest 142, respectively. Each of these requirement from the ATP CTP for standards and quality of training for certificate holders have defined instructors under 14 CFR parts 121, 135, ATP applicants. NATA disagreed with management structures, FAA approved and 142, and devising an equitable part 135 operators being eligible to offer training programs, and pilot training solution for instructors under part 141 the ATP CTP stating it is impractical for record retention requirements. Further, to gain line operational experience in part 135 operators because the required each ATP CTP submitted for approval order to instruct. Utah Valley University FSTDs are too expensive to acquire and will be reviewed by FAA Headquarters concurred with the requirement for the training must be outsourced. In to ensure standardization. The FAA has instructors to hold an ATP certificate addition, NATA stated the proposed modified the regulations for parts 121, but was unsupportive of the air carrier requirements are a disincentive for part 135, and 141 to permit those certificate experience requirement because very 135 pilots to get an ATP certificate holders to provide the training. few highly qualified instructor pilots because the proposed training Specifically, the FAA has: (1) Added the would be interested in low-paying requirements are not all relevant to ATP CTP to the list of pilot school educational positions. operations outside of 14 CFR part 121. ratings in § 141.11 and to the list of NAFI raised concerns over the The FAA acknowledges that, as a special preparation courses in appendix apparent prohibition of subject matter practical matter, pilots preparing for the K of part 141; and (2) established new experts (SMEs) from teaching in the ATP practical test have sought flight §§ 121.410 and 135.336 to permit part course, stating ‘‘such a limitation could training from certified flight instructors 121 and part 135 certificate holders to force the hiring of less knowledgeable even without explicit regulatory training obtain approval to provide the ATP instructors who have met the requirements. Although such training CTP. The applicability provision in part requirements for instruction based may have covered ground training on 142 permits those training centers to solely upon the acquisition of Part 121 the aeronautical knowledge areas in provide training required by 14 CFR experience, and not on individual § 61.155, pilots primarily sought flight part 61. qualifications.’’ training in the specific type of aircraft In the development of the final rule’s 3. Instructor Requirements in which they planned to take the ATP instructor requirements, the FAA practical test. Although fewer pilots In the NPRM, the FAA proposed that analyzed the existing training may choose to pursue an ATP certificate instructors for the ATP CTP must meet requirements for instructors in each rule with a multiengine class rating as a the following requirements: part authorized to teach the ATP CTP. result of the new training requirements, (1) Hold an ATP certificate with an Whereas each rule part’s instructor the pilots who seek an ATP certificate airplane category multiengine class requirements are designed to meet the outside of an air carrier will continue to rating; needs of the specific part (e.g. airman seek flight training from certified flight (2) have two years’ experience in certification for part 141, simulator instructors as preparation for the operations that require an ATP instruction for part 142, and air carrier practical test. Additionally, the practical certificate to serve as PIC; and operations for parts 121 and 135), none test in many cases will still be given by (3) for those instructors that will sufficiently cover all the competencies designated pilot examiners who provide training in an FSTD, have an necessary to deliver the ATP CTP as currently evaluate ATP applicants. appropriate aircraft type rating which designed. The specified training providers for the FSTD represents or have received Based on this regulatory review and the ATP CTP were chiefly determined training in the aircraft type from the the public comments, the FAA has by two factors: (1) The ability to sponsor certificate holder on those maneuvers assembled a specific set of instructor an FSTD as set forth in 14 CFR part 60; they will teach. requirements designed to ensure the and (2) the structure, systems, and As set forth in the NPRM, the ATP CTP instructor: (1) Understands management personnel required to instructors would also meet the fundamental principles of instruction; develop, implement and maintain the individual requirements associated with (2) has the requisite experience to FAA approved training program. This the applicable part under which they deliver the training topics with structure does not typically exist and is provide the ATP CTP (unless sufficient context to air carrier not required in part 61 training. specifically excepted in the proposed operations; and (3) if teaching in an The FAA disagrees with those regulatory text) to ensure the quality of FSTD, receives training on the commenters who suggested part 135 instruction. limitations of simulation in order to certificate holders should not be eligible Northern Michigan College supported mitigate the possibility of negative to provide this course. Part 135 the proposed instructor requirements learning. Specifically, the FAA created operators are eligible to sponsor a and stated an ATP training course new §§ 121.410, 135.336, and 142.54 simulator per the regulations and have taught by qualified training providers and modified § 141.33 to standardize approved designated examiners who are should provide higher quality course the instructor requirements for the ATP authorized to conduct proficiency content than that provided by a local CTP. checks that result in ATP certification. flight instructor, thereby increasing the A part 135 certificate holder may choose chance for improved flight safety.’’ CAE a. Operational Experience not to provide the course because its stated the instructor must have the The FAA has determined only pilots do not require ATP certificates or necessary qualifications and experience instructors with air carrier experience because it is cost prohibitive to provide requirements to teach the ATP CTP. may teach the course because only

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pilots with experience in part 121, and records to verify air carrier experience The final rule ensures that instructors PIC experience in parts 135 and 91, may not always be available. The FAA receive initial and recurrent training on subpart K—as defined by § 135.243(a)(1) has developed guidance in AC 61–138, the following topics: 14 and § 91.1053(a)(2)(i)—can effectively Airline Transport Pilot Certification • Proper operation of flight simulator link the academic content of the course Training Program, which provides a and flight training device controls and to the practical application of that systems; method for a pilot to attest to previous • knowledge in an air carrier experience. Proper operation of environmental environment. The concept and structure and fault panels; of the ATP CTP focuses on delivering b. Instructor Training • Data and motion limitations of the academic subjects and applying that simulation; • knowledge in an FSTD through As part of this final rule, each Minimum equipment requirements instructor who provides training for the for each curriculum; and scenario-based training emphasizing • how each subject area specifically ATP CTP must receive initial training in The tasks and maneuvers that will relates to large turbine airplanes and air the following topics: be demonstrated in the FSTD. The carrier operations. • The fundamental principles of the specific training requirements have been In order to clarify the position on the learning process; added to § 141.33 for those instructors operational experience requirement, the who will provide FSTD training for the • Elements of effective teaching, FAA proposed that instructors have at ATP CTP. In addition, because part 121 instruction methods, and techniques; least two years of experience as a pilot and part 135 instructor requirements for in command in operations under • Instructor duties, privileges, simulator operations and limitations are § 91.1053(a)(2)(i) or § 135.243(a)(1), or in responsibilities, and limitations; specific to air carrier training conducted under those parts, the FAA has added any operation conducted under 14 CFR • Training policies and procedures; this requirement to new §§ 121.410 and part 121. Whereas the experience in part and 135.336 to ensure that the training 121 operations is directly applicable, • the FAA chose these particular Evaluation. across rule parts is consistent with the operations in subpart K of part 91 and The FAA recognizes that some of objectives and requirements of the ATP part 135 because they are air carrier-like these training requirements may be CTP. operations that require the PIC to hold duplicative for holders of a flight c. Type Rating an ATP certificate. The ability to fly at instructor certificate that has not The NPRM also proposed the FSTD the ATP certificate level and have expired as well as instructors already instructor must either have an demonstrated this proficiency during qualified under certain rule parts. For appropriate aircraft type rating which evaluation is an important regulatory example, the fundamentals of the FSTD represents or have received differentiation. Specifically, these pilots instruction are trained and evaluated as will have gained experience as a PIC of training in the maneuvers they will part of the practical test standards for teach. As noted above, several a turbojet airplane or an aircraft with receiving a flight instructor certificate seating of 10 or more in operations very commenters expressed concern over the under part 61 and as part of the training potential for negative learning during closely aligned to part 121 operations. for instructors under part 142. The In addition, requiring air carrier the FSTD portion of the ATP CTP. As fundamentals of instruction are operational experience is consistent a result the FAA has determined that reemphasized for an active flight with existing instructor requirements. instructors for the ATP CTP must have Part 142 training centers are not air instructor or through instructor a type rating in the airplane that is carriers, but those part 142 instructors refresher courses and annual training replicated by the FSTD and receive who provide air carrier training must center evaluator/instructor training. As training on the maneuvers they will meet operational experience such, with sufficient documentation, the teach. Requiring a type rating of requirements for part 121 and part 135 FAA does not believe pilots with instructors is consistent with current instructors. The operational experience current flight instructor certificates or regulations for existing air carriers. For is necessary to ensure that each subject currently qualified part 142 training the purposes of the ATP CTP, the type area specifically relates to transport center personnel need to repeat such rating requirement has been added to aircraft and air carrier operations. For training. This accommodation is new §§ 121.410, 135.336, and 142.54. that reason, having an instructor with reflected in the final regulatory text. The requirement for a type rating was air carrier experience is critical. Further, With regard to FSTD training the FAA not included in part 141 regulatory text the FAA believes there are a sufficient believes well-trained instructors are the because those instructors must already number of instructors with the required best means of ensuring that pilots are hold a type rating on their pilot certificate in order to conduct training experience available, many of whom are receiving effective training through in a type specific aircraft or FSTD. already employed at likely ATP CTP simulation. There are two necessary providers. For example, air carriers that components for ATP CTP instructors: d. Subject Matter Experts conduct their own training often use (1) Training on the use and limitations their own line pilots for the FSTD The FAA has clarified its position on of simulation; and (2) training on the training. The FAA recognizes ATP CTP SMEs delivering academic training in tasks and maneuvers required in the instructors with the requisite experience the ATP CTP. As identified by ATP CTP. With the exception of part may require higher pay in comparison commenters, the ATP CTP contains to current part 141 instructors and even 142, no rule part specifically requires academic subjects for which SMEs some part 142 instructors. As a result, this training as a prerequisite to might be appropriate. The FAA sees the FAA has accounted for a higher instructing in a simulator. These benefit in a SME delivering a hourly wage in its economic analysis of requirements are especially critical for the costs associated with the course. the delivery of stall training, upset 14 The FAA notes that any instructor providing The FAA also recognizes due to many prevention and recovery training, and training in an FSTD should receive training on the operations in icing conditions where the topics listed. Making such a regulatory adjustment, factors, including air carriers that have however, would be outside of the scope of this terminated operations, employment risk for negative learning is high. rulemaking.

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specialized subject such as meteorology, for course completion. An individual such, the FAA has not incorporated this human factors, or flight dispatch. commenter stated the FAA had not time into the programmatic hours for Because the subjects focus on applying accounted for pre-brief and post-brief the ATP CTP in § 61.156; however, the knowledge to an air carrier time that is generally part of FSTD time is accounted for in the economic environment, the FAA will allow SMEs training. analysis. to deliver content in the ATP CTP while The FAA concurs with major To the extent that commenters requiring an instructor with the required commenters that additional topics recommended that the ATP CTP be air carrier operational experience be should be added and the training time competency-based rather than have present to ensure that the material should increase. Based on the specific specific hour requirements, such an presented is applied to air carrier topic areas proposed by commenters approach is not appropriate given the operations. The FAA has determined and the new accident analysis the FAA objectives of the ATP CTP. The FAA is these concepts can only be properly completed, the FAA reassessed the very aware of competency-based conveyed through an instructor with entire course and expanded the training and is clearly supportive of its practical operational experience to meet academic portion of the ATP CTP to concepts in air carrier training by the objectives of the course. emphasize certain areas proposed in the allowing advanced qualification NPRM. In particular, the FAA has programs (AQP), which use air carrier- 4. Training Topics and Hours expanded training on leadership, specific data to establish and revise a. Academic Topics and Hours professional development, CRM, and curricula. Training for certification, safety culture. Section § 61.156 requires however, is traditionally and necessarily The proposed ATP CTP incorporated six hours of training on these topics. more prescriptive and based on program most of the academic and FSTD Enhancing these training topics in the hours. Competency-based programs are competencies identified by the FOQ ATP CTP supports the objectives of most effective when the pilot is ARC and also addressed in part Section 206 of the Act by raising the continually trained and evaluated numerous NTSB safety baseline knowledge level of new-hire within the same training program over recommendations. The proposed pilots on these topics; however these the course of multiple years like at an program hours for the ATP CTP were provisions do not fully meet the intent air carrier. A pilot typically spends based on an assessment of the quantity of the statute. This will be addressed in weeks in an air carrier initial training and complexity of the subject matter. In the Flight Crewmember Mentoring program receiving multiple evaluations the NPRM, the FAA was prescriptive for Leadership, and Professional prior to the qualification event. Once 20 of the 24 proposed academic hours, Development rulemaking project. qualified, the pilot’s performance is leaving some discretion to the training Additionally, some subjects, measured by multiple data sources providers to determine what subject including checklist and MEL/CDL usage including line operations. An air areas needed additional time. The FAA and weight and balance, were moved carrier’s training programs and even its believed 24 hours of academic training from the FTD portion of the course to hiring practices can be altered to adjust was the minimum amount of time the academic portion. The FAA to inadequacies of its training programs necessary to cover the material and be determined these subjects could be whereas part 61 certification is typically effective. The FAA further described the taught effectively in the academic a one-time evaluation of the pilot’s academic content in a draft AC that was portion of the course using alternative skills during a practical test. As such, posted to the docket. devices, if appropriate, that do not standardized training requirements are The FAA received more than 80 require approval under part 60. The necessary to achieve the level of safety comments regarding the training topics expansion of training topics and focus desired. Further, since the training and training hours for the ATP CTP. on particular topic areas will remove the program could be provided across four Commenters including ALPA, Boeing, 4 hours of discretion to training different rule parts by different and Rocky Mountain College were providers allotted in the NPRM and will certificated air agencies and operators, a generally supportive of the topics increase the total minimum academic structured and approved curriculum proposed in the academic portion of the program hours from 24 to 30. combined with mandatory program ATP CTP. As noted by one commenter, the FAA hours will allow for the consistency Commenters such as A4A, Delta, did not account for briefing and desired by the FAA from all providers. NTSB, and IATA offered additional debriefing time for FSTD training academic training topics for the ATP sessions; a typical component of flight b. FSTD Topics CTP such as human factors, fatigue, training. The FAA agrees that briefing In the NPRM, the FAA proposed as error trapping, United States Standard and debriefing are an important part of part of the ATP CTP 16 hours of training for Terminal Instrument Procedures flight training because it allows for an in an FSTD qualified under 14 CFR part (TERPS), air law, mentoring, leadership, explanation of the learning objectives 60 on topics including low energy professional development, decision for the training session and the states/stalls, upset recovery techniques, making, dispatch and flight following. opportunity for the instructor to adverse weather conditions, aircraft Additional commenters, including reinforce the academic topic areas prior performance, navigation, automation, NAFI, recommended using the topics to the session and following the training and CRM. The draft AC that was placed presented in the FOQ ARC report. A4A, event. As such, the FAA has decided to in the docket further defined those FedEx Corporation (FedEx), and Parks emphasize briefing and debriefing time subject areas. Because the proposed College recommended additional before and after each FSTD period in the training was focused on introducing training hours to teach the material, 61–ATP advisory circular. This pilots to general concepts affecting all with total hours ranging between 30 and additional briefing time (3 hours) will transport category aircraft, the NPRM 50 hours. IATA commented that there provide a review of the training topics did not propose that the FSTD training should not be a specified number of before each FSTD period and tie them be conducted in a particular aircraft hours for the ATP CTP, but rather a directly to the academic portion of the type (non-type specific) as is required curriculum should be established and course. Briefing time before and after a for air carrier training. The FAA stated approved by the FAA based on the flight is not normally a prescriptive time in the AC, however, that the training concept of demonstrated competency accounted for in the regulations. As should take place in an FSTD that

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represents an aircraft with a maximum that does not apply to their experience FSTD for the entire course as long as it take-off weight of at least 40,000 and operational goals will lead to a has visual capabilities and a stick pounds. negative experience that does not shaker/pusher. Cape Air proposed that a The FAA received nearly 70 increase safety. level 5 or 6 FTD with realistic visuals comments regarding the appropriateness The FAA has concluded the ATP CTP would be sufficient for the course. OSU of requiring FSTD training that is not FSTD training topics are necessary to indicated a level 5 or higher device with specific to any aircraft type. Many of the reinforce the academic topics and to visuals would be just as effective as a commenters, including AAL, agreed the address the requirements of the Act. In Level C FFS and would result in training course should and can include addition, the FAA agrees with those reduced costs. The commenters added concepts that are generally universal to commenters that believe the FSTD that FTDs are an acceptable and safe transport category aircraft. CAPA noted training can be non-type specific and alternative to FFSs. AOPA was aircraft performance and high altitude not result in negative learning and particularly concerned that the FAA had flight environments are universal across therefore has decided to retain the non- not considered whether there was an the transport category spectrum. type specific training in an FSTD. adequate number of available FSTDs in IATA stated the ATP CTP should First, the FAA reiterates that this the United States to accommodate the include training in a non-type specific framework of academic training and number of ATP applicants who will FSTD because ‘‘the intention of the flight training is consistent with that of require training and raised concerns that course is the development of core other pilot certificates. Pilots routinely compliance may be difficult. competencies independent of airplane receive basic certification flight training ERAU cited various studies in their type and applicable to all types of multi- in one type of aircraft and then move on response that raised concerns regarding crew transport category airplane to fly many other types of aircraft the use of motion-based training operations.’’ KSU stated training on without a negative transfer of learning. devices, including the value of using non-type specific FSTDs would be The training received in the ATP CTP motion-based training devices in upset beneficial and would add significant will also be the last basic certification maneuvers, and disputed the need for value to the ATP CTP. The University training a pilot receives. It will address simulator training in extended of Dubuque and SCSU stated training in topics not covered at the commercial envelopes. One study asserts there are non-type specific FSTDs reinforces and pilot certificate level and establish a compromises made between cost and demonstrates concepts covered knowledge base that additional aircraft fidelity with the goal of getting the academically. A4A agreed with this type-specific and air carrier-specific highest degree of transfer of training proposal and stated principles of training can build upon when a pilot is from the simulation device to the real transport category jet operations do not trained to fly for an air carrier. world (Roscoe, 1980). An additional need to be type specific. Boeing noted Second, the ATP CTP is designed to study that was cited by ERAU expanded the concepts proposed to be trained in teach high-level concepts that are upon that finding, indicating that FAA- FSTDs are among those that have been applicable to operating all large qualified FFSs are unable to accurately consistently identified as lacking in transport aircraft. It will increase portray how an airplane would react recent accidents. knowledge through academic outside of the normal flight envelope— Several commenters, including introduction to concepts that are often referred to as extended envelope Ameriflight, FSI, and IFL Group, generally true across all large aircraft operations (Schroeder & Grant, 2010). disagreed with permitting portions of types and then consolidate those same ERAU noted the FAA participates in the the ATP certification training course in concepts through demonstration and International Committee for Aviation a non-type specific FSTD. The UAA experience in FSTDs. None of the Training in Extended Envelopes disagreed with any FSTD requirement training tasks will require applicants to (ICATEE). ERAU added ICATEE (2012) as part of the ATP CTP and noted the perform maneuvers to proficiency, but proposes an approach to examining the phrase ‘‘generally universal to transport rather experience critical events (stall issue by first defining training needs category aircraft’’ causes problems onset, low energy states, upset and then proposing solutions. The because it is onerous to pilots seeking prevention and recovery) with ICATEE solution for training extended an ATP certificate for non-transport continuous instructor explanation and envelope flight tasks includes using category aircraft. feedback. By combining this training flight simulation within its limitations. NATA opposed the requirement for experience with instructor explanation, The eight hours of training with motion- general instruction in an FSTD because the academic portion of the course will based simulation in the ATP CTP will it shifts the cost to pilots with no benefit be effectively consolidated while be for tasks in, or near, the extended because the training would be reducing the possibility of negative envelope where the correlation to actual superseded by air carrier initial training. transfer of learning for those pilots who flight conditions is problematic. ERAU The FAA received several comments may fly different aircraft types than concluded its comment with the concerning the possibility for negative those used in the course. statement ‘‘[n]o motion is preferable to training when conducting non-type incorrect motion.’’ specific training. NATA acknowledged c. Level of FSTD and Hours NTSB commented that, because value in additional training for The FAA proposed 16 hours in an simulators may not be able to accurately prospective ATP certificate candidates FSTD—8 hours in a Level C or D FFS portray stalls and upset recovery, the but stated that the ATP CTP will create and 8 hours in a Level 4 or higher FTD. FAA should allow flexibility in negative learning situations by forcing The FAA received more than 130 determining what level of simulation or pilots into non-applicable training. comments regarding the level of the automation is appropriate for specific NATA believes there are many pilots appropriate device but very little training. operating turboprop or piston engine comment concerning the appropriate A number of colleges and universities, aircraft that will be required to number of hours. including Utah Valley University (UVU) accomplish the training in turbine Many commenters, including the and Rocky Mountain College stated the simulators as part of the ATP CTP. Regional Airline Association (RAA), FFS requirement in the ATP CTP creates NATA and RACCA believe that UND, and FIT, stated that a level 4 or a significant obstacle for colleges and requiring these pilots to obtain training 5 FTD would be an appropriate level of universities with aviation degree

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programs due to the high costs of Many of the maneuvers such as taxi, that maneuver-based tasks must be obtaining and maintaining those takeoff, and landing can be conducted conducted in a Level C or higher FFSs devices. Aims Community College, only in a Level C or higher FFSs. because the FFSs provide the level of which operates a Level C FFS, was Neither FTDs nor Level A or B FFSs are motion cueing necessary to ensure supportive of the proposed minimum evaluated to perform such maneuvers. proper response in real flight FFS level. Commenters, including KSU, Additionally, low energy states, stall operations. These simulators most SCSU, USAPA, and WMU, stated the events, upset prevention and recovery closely represent an aircraft with respect approved curriculum should have techniques, and adverse weather to aerodynamic handling characteristics specified goals and competencies, not conditions, including icing, and possess the motion required to required hours. thunderstorms, and crosswinds, require achieve the learning objective of many The FAA concurs with many of the devices with motion cueing to achieve tasks. commenters’ assertions regarding the the learning objective. Only Level C or The FAA agrees with ERAU’s ability to utilize FTDs in an effective higher FFSs can replicate both the assertion regarding the limitations of training program. While an FTD does specific aerodynamic characteristics of FFS in extended envelope maneuvering not provide the sensory input of motion, the aircraft and the sensory perceptions and modeling; however, none of the the fidelity of the aircraft data and that motion provides, which are requirements in the ATP CTP involve replication of the aircraft controls can be necessary to allow the applicant the training in these extended envelopes. very high. These high fidelity devices opportunity to fully grasp the critical The FAA believes the commenter’s use without motion can offer effective concepts of the course. Level C or higher of the term extended envelope is training benefits for tasks that do not FFSs offer superior training benefits for referring to theoretical or analytical data require motion inputs to meet the maneuver-based training that cannot be used in simulation which may exceed learning objective (e.g., use of replicated adequately by an FTD. This typical manufacturer-captured flight test automation and navigational determination is based on the data. As set forth in AC 61–138, low instruments and CRM). conclusion that, while both visual and energy states (slow flight), approach to Following a review of the comments vestibular systems are directly impacted stalls, and even the upset prevention and a training task analysis consisting of by simulation, the element of these and recovery training will all be a re-evaluation of the FSTD topics and systems that is critical to satisfactory conducted within the manufacturer’s proposed device level, the FAA has training is motion on-set (or supplied and FAA’s National Simulator reaffirmed that it is not possible to train acceleration) cueing. In addition, for a Program validated aerodynamic all of the topics in an FTD. Therefore, pilot’s first exposure to critical envelope. the FAA has retained the requirement concepts, such as high altitude As noted by ERAU, the FAA participates in ICATEE and other for training certain topics in an FFS. A handling, low energy states, and aircraft flight training program that combines research projects in order to develop handling in adverse weather conditions, effective use of Level 4 and higher FTDs training tasks within current limitations Level C or higher devices are necessary and the benefits of Level C or higher and research adjusting future simulator in order for the pilot to achieve the FFSs best ensures that the learning modeling where appropriate. The learning envisioned by the Act. objectives will be effectively met. commenter also expresses concerns over Notwithstanding the decision to retain Various studies have shown an the lack of available displacement of training in FSTD, the FAA has modified increase in pilot performance when hexapod motion platforms that could the training hours in the final rule. pilots use simulators with motion. See induce negative transfer training if the Based on the task analysis, rather than Showalter, T.W.; Parris, B.L., ‘‘The training task exceeds the motion the 16 hours of FSTD training proposed Effects Of Motion And GSeat Cues On capabilities of the device. We concur in the NRPM, the final rule requires 10 Pilot Simulator Performance Of Three with this thought but re-emphasize all hours of training in FSTDs: Six hours in Piloting Tasks,’’ Ames Research Center, the training tasks proposed will occur a Level C or higher FFS and four hours Jan 1, 1980 (indicating 40% within the validated aerodynamic and in Level 4 or higher FTD. improvement on yaw performance and simulator motion envelopes. The upset As previously stated, the FAA has roll performance, engine out on takeoff training maneuvers used in the ATP moved some topics that were originally with use of motion simulators); Parris, CTP are supported through the research proposed for the FSTD portion of the B.L.; Cook, A.M., ‘‘Effects of visual and and development of the Airplane Upset course to the academic portion. The motion simulation cueing systems on Recovery Training Aid (AURTA) and FAA has matched the remaining flight pilot performance during takeoffs with recently validated by the 2012 Loss of training objectives from the ATP CTP engine failures,’’ Ames Research Center, Control Avoidance and Recovery with the appropriate level of device and Dec 1, 1978; Hosman, R.J.A.W., & van Training (LOCART) ARC. The LOCART determined the ‘‘FTD topics’’ (e.g. flight der Vaart, J.C. ‘‘Effects of vestibular and ARC was sponsored by the FAA and management systems) could be trained visual motion perception on task additionally supported by International in four hours rather than the eight hours performance,’’ (1981); Heintzman, Civil Aviation Organization (ICAO), the proposed in the NPRM. As a result, the Richard J. ‘‘Determination of Force European Aviation Safety Agency, and regulatory text of § 61.156 permits up to Cueing Requirements for Tactical Transport Canada to develop four hours of the ten hours of FSTD Combat Flight Training Devices,’’ recommendations for upset prevention training to be completed in an FTD— Training Systems Product Group and recovery maneuvers in order to which may be conducted in a Level 4 Aeronautical Systems Center Air Force minimize the loss of control inflight or higher FTD or Level A or higher FFS Materiel Command Wright Patterson accidents worldwide. The AURTA was (with or without motion activated). AFB, February 1997; Gebman, J.R.; developed by Airbus, Boeing, and the In completing the task analysis of the Stanley, W.L.; Barbour, A.A.; Berg, R.T.; Flight Safety Foundation; it contains ATP CTP, the FAA also determined that Birkler, J.L., ‘‘Assessing the Benefits and effective upset recovery training tools the training that must be completed in Costs of Motion for C–17 Flight designed to work within the simulator’s a Level C or higher FFS could be Simulators,’’ Department of The Air designed motion platform. This training accomplished in six hours rather than Force, Washington, DC, June 1986. is intended to increase a pilot’s ability the eight hours proposed in the NPRM. Accordingly, the FAA has determined to recognize and avoid situations that

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can lead to airplane upsets and improve captures most regional aircraft including less than 40,000 pounds that may be the pilot’s ability to recover control of larger turboprops like the Bombardier capable of replicating the lower an airplane that has exceeded the DHC–8–400. To ensure that the performance margins and handling normal flight regime. To further mitigate objectives of the ATP CTP are met, the qualities desired at higher altitudes to the possibility of negative transfer of FAA has incorporated the weight meet the learning objectives of the training, the FAA has published AC requirement from the AC into § 61.156. course. If a training provider seeks to 120–109, Stall and Stick Pusher Due to the potential for differing use a device that does not meet the Training, comprehensive guidance for interpretations associated with the weight criteria set forth in § 61.156, it the training and checking of stall events. terms ‘‘swept-wing’’ or ‘‘straight wing,’’ must apply for a deviation. In The FAA will publish additional the FAA has decided to remove that considering a deviation request, the Air guidance material in AC 61–138 for the language from the FSTD requirements. Transportation Division, the National academic training portion of the course The weight requirements described Simulator Program, and the certificate for the aerodynamics, and upset above and listed in the final regulatory holder’s assigned principal inspector or prevention and recovery topics based on language will produce the desired TCPM will work together to determine the recommendations of the LOCART handling qualities sought in order to if the training platform ensures quality, ARC. The FAA emphasizes instructor achieve the objectives of the course. effective training for ATP applicants training in all of its guidance material In response to commenters’ concerns and provides an equivalent level of relating to stall and upset, for both the over the lack of sufficient number of safety. operation of the training device and training devices to deliver the ATP CTP, d. FSTD Cost training in the device’s limitations, in currently there are 407 FAA-evaluated order to avoid a student’s potential for Level C or higher FFS devices that As reflected in the final regulatory negative learning. replicate aircraft with a maximum evaluation, the cost to provide the In the draft AC for the ATP CTP that takeoff weight at or exceeding 40,000 training is estimated to be equivalent was placed in the docket when the pounds. These devices represent 98% of across all possible training providers. NPRM published, the FAA stated that in all Level C and D FFSs that have been Although part 121, 135, 141 and 142 order to replicate the high altitude and approved by the FAA. The FAA has certificate holders may sponsor a low energy handling characteristics evaluated the average number of ATP simulator under part 60, there is no desired, the FFS should represent a certificate applicants per year over the requirement to own a simulator. Many swept-wing transport category airplane last 10 years (5,500), compared to the part 121 and part 135 certificate holders with a maximum gross takeoff weight of number of devices (81 FTDs and 407 currently utilize simulation for training 50,000 pounds or greater. The FAA did FFSs) defined by the rule and without the ownership and maintenance not propose this standard in the recommended for use in the ATP CTP. of the devices. It is common practice for regulatory text. Despite receiving Being conservative, the FAA assumed many air carriers to enter into significant comment on the training that all 10 hours of FSTD training would agreements with other carriers and part topics listed in the AC as well as what occur in Level C or higher FFSs. 142 training centers to lease time in level of device would be appropriate, Assuming each FFS is capable of five 4- FSTDs. Additionally, there is no the FAA received only one comment— hour simulator periods per day requirement to deliver the ATP CTP which was supportive—regarding the (allowing for one 4-hour maintenance training program, and each certificate proposed takeoff weight or wing design period per day), the U.S. inventory of holder must individually determine if of the type of airplane the FFS should these FFSs offers over 700,000 simulator providing the course best meets its represent. As part of the evaluation of periods. The 5,500 ATP certificate needs and ability. Although the FAA the FFS training topics and learning applicants will require 16,500 FFS considered cost when aligning the objectives, the FAA reviewed all of the periods from the U.S. inventory—less appropriate device to the training task, approved FFSs under 14 CFR part 60 than 2% of available simulator time. meeting the learning objective was the including the associated weights of the Use of FTDs in the course will only paramount consideration. aircraft they represent. Based on that improve availability. The AC suggests 5. FAA Knowledge Test for an ATP review, the FAA has determined an FFS the FTD should replicate multicrew Certificate representing an aircraft with a aircraft and be equipped with a flight maximum takeoff weight of at least management system (FMS) and In the NPRM, the FAA proposed to 40,000 pounds is necessary to meet the autoflight. Currently, 68% of FAA- revise the aeronautical knowledge areas objectives of the ATP CTP. evaluated Level 4 or higher FTDs (a total in § 61.155 to incorporate the new The weight of the aircraft the of 81 FTDs) replicate the desired aircraft knowledge areas in the ATP CTP. We simulator represents is an important as defined by AC 61–138. Therefore, the noted that such a revision would result factor in ensuring handling FAA has determined even with in changes to the ATP knowledge test. characteristics of a typical transport moderate usage for non ATP CTP Commenters such as IATA and the IFL aircraft. The 40,000 pound minimum training, there is ample inventory of Group believed the current ATP requirement will ensure the device can available FSTD time to accommodate knowledge test is inadequate. replicate the lower performance margins the requirements of the course. Commenters assert the current and handling qualities inherent in Finally, the FAA has decided to allow preparatory products available to transport category aircraft when being for consideration of a deviation from the applicants of the knowledge test only operated near their maximum operating weight requirement set forth in § 61.156. ensure rapid rote memorization of the weight at altitudes near their service The FAA established a baseline weight material and not knowledge retention. ceiling. Critical concepts such as high because it believes that having all FFSs The FAA concurs and has determined speed slowdowns and approach to stall representing aircraft weighing 40,000 academic knowledge gained and recoveries, which can take thousands of pounds or more allows for adequate evaluated in a classroom setting, feet to recover at high altitudes, cannot demonstration of the learning objectives reinforced with demonstration and be achieved in lighter aircraft types with described in AC 61–138. The FAA experience in an FSTD, and then higher thrust-to-weight ratios. The FAA recognizes, however, that there may be validated by a revised written notes that 40,000 pounds generally FFSs that represent an aircraft weighing knowledge test gives the applicant the

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best chance of knowledge retention. 6. Credit Toward Air Carrier Training for initial training in part 121, subpart This knowledge will allow the student Programs N. The general subjects that are listed in to perform more effectively upon In the NPRM, the FAA proposed that § 121.419(a)(1) contain many of the entering an air carrier environment—the the ATP CTP would be a basic more basic knowledge requirements ultimate goal of the Act. certification requirement, not an air now addressed by the ATP CTP. The FAA also proposed to extend the carrier training program requirement. The FAA has determined that some validity period for the knowledge test This position was consistent with the reductions in initial training for those for an ATP certificate to five years in provision in the Act that directed the more generic items listed in consideration of the applicant’s time FAA to modify the ATP certificate to § 121.419(a)(1) can occur. However, in and financial commitment to the ATP require the specific training previously CTP. The FAA considered the extension place of requiring POI approval for these discussed in this final rule. The FAA appropriate due to the proposed reductions, as was proposed in the specifically asked commenters whether elimination of the ability for air carrier NPRM, the FAA has decided to amend changes or reductions could be made to pilots to use expired knowledge tests. the general subject areas of initial a part 121 air carrier training program The FAA received no comments on this training for those air carrier new hire based on the proposed content of the proposal. In the final rule, FAA has pilots who have completed the ATP retained the five-year validity period for ATP CTP. There were 27 respondents CTP prior to initial training. As these the ATP knowledge test only for those who indicated that air carriers could general subjects will now be taught in pilots who pass the knowledge test after either incorporate the ATP CTP into the ATP CTP, it will raise the baseline having completed the ATP CTP— their initial program or reduce initial knowledge for all new hire pilots meaning any test passed after July 31, training hours based on the air carrier entering part 121 operations. This 2014. The FAA has also retained the providing the ATP CTP. Whereas most change will allow for more air carrier provision that allows pilots employed of the respondents were favorable to air specific training to occur in initial by certificate holders in parts 121, 125, carriers offering the course, commenters training while allowing for reductions or 135 to use expired knowledge tests. were split on the issue of reducing an in the required program hours. The FAA As set forth in § 61.39, pilots employed air carrier’s initial training program as a notes that, until August 1, 2016—the in parts 125 and 135 may use an expired result of the ATP CTP. FlightSafety and date that all knowledge test results knowledge test if they have completed Aerosim supported a reduction of initial completed without completion of the the ATP CTP and the operator’s training if additional subjects were ATP CTP will have expired—air carrier approved pilot-in-command training or covered by the ATP CTP. RAA indicated training classes could be comprised of checking program. New hire pilots in that reductions to air carrier flight some pilots who have completed the part 121 operations may use an expired training programs based on the ATP CTP and some pilots who have not knowledge test if they have completed proposed content of required ATP CTP completed the course. the ATP CTP and the operator’s initial would be difficult because the content of the ATP CTP was more generic than With regard to Ameriflight’s comment training program.15 These pilots regarding the impropriety of air carriers employed by air carriers are subject to air carrier training. A4A stated ‘‘a review of initial training should be providing training that results in part 61 additional training and evaluation certification, the FAA is unclear of the requirements that will ensure that they accomplished’’ without further explanation for why such a review basis of Amerifight’s confusion. have a continued understanding of the Regulations have recognized part 61 general concepts of the ATP CTP. If an should occur. Ameriflight claimed there is no legal basis for air carriers to certification events for ATP certification applicant outside of an air carrier and type ratings through air carrier environment fails to take the practical provide part 61 training. Although part 121 and part 135 training programs for many years. test within five years of taking the operators may elect to offer this training knowledge test, he or she must retake 7. Additional Course Requirements for their pilots, it would remain separate the knowledge test to validate retention from part 121 and part 135 training The FAA has added provisions to new of the subject areas of the ATP CTP. The requirements. Because the proposed §§ 121.410, 135.336, and 142.54 to FAA has modified § 61.35 to make clear ATP CTP is part of the basic ensure that certificate holders maintain that a person may not take the certification requirements for an ATP certain standards for the ATP CTP. First, knowledge test for the ATP certificate certificate, air carriers who elect to offer there is a provision in the final rule that with an airplane category multiengine this training would be required to prevents certificate holders from issuing class rating until the person is 18 years provide the course to their pilots prior graduation certificates unless a student of age. has satisfactorily completed all of the Finally, as set forth in existing to beginning initial training. The FAA training requirements for the ATP CTP. § 61.49, those applicants who fail the proposed that principal operations Second, the FAA is requiring certificate knowledge test for the ATP certificate inspectors may approve a reduction of holders to establish a mechanism that after completing the ATP CTP are hours in an air carrier’s initial training insures continued evaluation of the ATP required to receive the necessary program based on material taught in the CTP to guarantee that training remedial training from an approved ATP CTP. However, because the ATP techniques, procedures, and standards ATP CTP training provider and receive CTP requirements are basic certification are acceptable to the Administrator. an endorsement before retaking the requirements, these hours could not be These requirements are in addition to knowledge test. reduced based on the contents of an air carrier’s initial training program. the administrative requirements that are already contained in the various rule 15 As set forth in § 61.39(b), the knowledge test The FAA agrees with many results for pilots who pass the knowledge test commenters that the initial flight parts. Because part 141 pilot schools before August 2014—meaning they have not training should not be reduced because currently have similar requirements for completed the ATP CTP—will expire 24 months type-specific and operator-specific training courses and are required to after the date the test was passed. These pilots may renew their certificates every two years, not use an expired knowledge test to take the training is critical in the development of practical test even if they are employed by an air air carrier pilots. The FAA conducted a no provisions have been added to that carrier. review of the ground training required part.

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E. ATP Certificate With Restricted FAA also proposed amending § 61.167 attending a four-year postsecondary Privileges (§ 61.160) to preclude a pilot who holds an R–ATP institution is an adequate replacement certificate from providing instruction for 500 hours of flight time and 175 1. Public Law and NPRM under that section. hours of flight time in cross-country Section 217 of the Act mandates that operations. Delta stated that a reduction 2. General Support for and Opposition an applicant for an ATP certificate have in hours, training, or experience for to an ATP Certificate With Reduced ‘‘at least 1,500 flight hours.’’ The section pilots exercising the PIC privileges of an Hours gave the FAA discretion to permit ATP certificate is not appropriate based applicants to obtain an ATP certificate Sixteen commenters, including APA, on the statute. with fewer than the minimum 1,500 CAPA, USAPA, and Kestrel Aviation, The majority of commenters, hours if they have completed ‘‘specific LLC, (Kestrel) believe reducing the flight including representatives of air carriers, academic training courses,’’ 16 as hour requirement to be eligible for an educational institutions, and aviation determined by the Administrator. The ATP certificate should not be allowed. organizations, were generally supportive Act permitted a reduction only upon a The Families of Continental Flight 3407 of a restricted privileges ATP certificate determination by the Administrator that stated that they would like to see ‘‘every but recommended alternatives to the the courses would ‘‘enhance safety more pilot required to have the minimum proposal and suggested that it be made than requiring the pilot to fully comply 1,500 actual flight hours before being available to a greater number of pilots. with the flight hours requirement.’’17 eligible for an ATP certificate.’’ Four Fifteen commenters offered opinions Based on the discretion afforded to New York Congressmen and RACCA and comments on what they referred to the Administrator in section 217, the opposed a reduction in flight time for as arbitrary hour requirements, FAA proposed a new section, everyone except military pilots. Several including CAA and IATA. A4A stated § 61.160,which set forth two alternative individual commenters added that that flight time alone does not ensure flight hour requirements for an ATP completing flight training through a part pilot proficiency or professionalism and certificate with airplane category 141 pilot school or part 142 training added that formal education combined multiengine class rating based on center cannot replace flight experience. with good hiring practices, training, and academic experience. Specifically, the CAPA commented that ATP mentoring will produce the most highly FAA proposed to permit military pilots certification is a well-proven system and qualified pilots. American Flyers/Nova who have graduated from an Armed the 1,500-hour minimum time Southeastern University argued that the Forces undergraduate pilot training requirement provides an undeniable FAA should not consider flight hours school to obtain an ATP certificate with basic level of safety and operational alone as a satisfactory indicator or 750 total flight hours and graduates of proficiency. APA stated: (1) The 1,500 piloting ability, judgment, or four-year aviation degree programs with flight hour requirement helps ensure experience. It stated that the integrated flight training to obtain an that a mature, experienced aviator will qualification for the R–ATP certificate ATP certificate with 1,000 total flight be at the controls; (2) there is no should be based on a combination of hours. substitute for experience; and (3) the academic training and experience. The FAA proposed to limit the most effective way for pilots to gain Several commenters, including AOPA, privileges of any pilot who obtains an essential experience is to fly aircraft. RACCA, and the University of Dubuque ATP certificate under the aeronautical APA noted that, along with total flight thought the minimum age of 21 for an experience requirements of new hours, ATP certificate requirements R–ATP was also arbitrary. One § 61.160. As set forth in the NRPM, a include cross country, night, and individual commenter added that there pilot holding an ATP certificate with instrument flight hours that develop was no evidence to suggest age 18 fewer than 1,500 hours (an R–ATP pilot skills that cannot be taught in a undermined safety. certificate) would not be permitted to classroom or properly developed in a SAFE stated that academic experience act as PIC in part 121 operations or as simulator. CAPA stated that real-world should only be used to reduce flight PIC in operations conducted under experience is vital. hours if there is demonstrable evidence § 91.1053 and § 135.243—the only NAFI submitted results of a survey it to support it. Four commenters, operations under parts 91 and 135 that conducted with 427 of its members including WMU, and John A. O’Brien require the PIC to hold an ATP regarding the proposals and questions Consulting, LLC, agreed that a R–ATP certificate. A pilot holding an R–ATP presented in the NPRM. A majority of certificate should be permitted based on certificate would also not be permitted the responders indicated that they did training or experience. to serve as SIC of an aircraft in flag or not support an ATP certificate with GAMA argued that there should be no supplemental operations that require restricted privileges for pilots with flight hour minimum; rather, the FAA three or more pilots because, even prior fewer than 1,500 flight hours based on should focus on ensuring the quality of to the statutory requirement, SICs in academic training or experience. flight training. It added that eligibility those operations were required to hold However, the results of the survey also for an R–ATP certificate should be an ATP certificate. showed that a significant number of determined through evaluation of the In addition, the FAA proposed to NAFI members (327 respondents) quality of the applicant’s academic and modify the eligibility requirements of believed that segments of the pilot practical flight training. Three § 61.153 to establish a minimum age of community other than military pilots commenters noted that the quality of 21 years for an R–ATP certificate. The and graduates of four-year aviation flight experience was a better indicator degree programs should be eligible for of pilot success than only quantity of 16 The Act specified that these training courses an R–ATP certificate. flight hours. Six commenters contended must be beyond the additional training required by the Act itself. In other words, the new training AmeriFlight commented that the that the FAA needs to allocate resources mandated by the Act could not be a basis for a proposed rule will isolate many factions to develop a better formula for rating the reduction in flight hours below 1,500 hours. of the industry and funnel students to formal training, education, and 17 Current regulations do not define the term the cost-prohibitive four-year college experience of candidates for an R–ATP ‘‘flight hours;’’ therefore, the FAA assumes that the flight training programs. AmeriFlight 1,500 flight hours referenced in the Act represents certificate. the 1,500 hours total time as a pilot currently questioned whether the FAA believed The FAA continues to support an required by § 61.159. that the knowledge gained while ATP certificate with restricted privileges

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for pilots who are at least 21 years of provides satisfactory evidence of having commenters. The RAA contended that age. The majority of commenters met the age requirements in the FOQ ARC credit system is the model asserted that allowing a reduction in § 61.153(a)(1) and the aeronautical for establishing the proper level of flight hours based on academic experience requirements of § 61.159. eligibility and academic credit levels coursework is safe, appropriate, and The flight time requirements for an that should be provided for students of meets the intent of Congress. For the ATP certificate under § 61.159 are not worthy programs. Finally, the RAA commenters who disagree with being altered by this rule. Therefore, added that the NPRM fails to recognize establishing an ATP certificate with pilots acting as PIC under part 121, the myriad of important providers of fewer than 1,500 hours, the FAA also § 135.243(a)(1), and § 91.1053(a)(2)(i) are academic education and relevant flight maintains that flight experience in an still required to have at least 1,500 experience that should be considered aircraft is an important component in hours of total time as a pilot. for flight hour reductions. Additional developing the knowledge and skills Additionally, the age requirement for supporters of the FOQ ARC crediting necessary for a pilot to perform obtaining an ATP certificate to serve as system included A4A, CAA, American effectively in the air carrier PIC is not being altered in § 61.153. Eagle Airlines, Inc., ExpressJet, environment. However, by granting the Pilots must continue to be at least 23 Aerosim, FedEx, Cape Air, AAL, John FAA discretion to reduce the required years old to act as PIC in operations that O’Brien Consulting, MTSU, Spartan flight hours based on specific academic require an ATP certificate or to serve as College, and numerous individual training, the Act acknowledged that SIC in flag or supplemental operations commenters. flight time is not necessarily the only requiring three or more pilots. The FAA The National Training Aircraft component to developing a safe and agrees with many of the commenters Symposium (NTAS), which consisted of qualified pilot. The FAA concurs and that the existing total time requirements 80 industry members from academia, air has determined structured academic for an ATP certificate are appropriate to carriers, and flight training providers, training integrated with flight training act as PIC. recommended a crediting system very programs can provide more safety The following sections address similar to the FOQ ARC crediting benefit than simply meeting the 1,500 specific comments about alternative system with the only difference in the hour flight time requirement alone. crediting systems, the eligibility of amount of credit allowed for flight Accordingly, the FAA will permit a military pilots and graduates of four- instruction. Supporters of the NTAS pilot to obtain an ATP certificate with year aviation degree programs as system included JetBlue, WMU, Purdue restricted privileges and serve as an SIC proposed in the NPRM, and specific University, and FSC. in part 121 operations. The minimum recommendations from commenters The FAA has reconsidered the FOQ aeronautical experience requirements regarding expanding eligibility for the ARC crediting system and determined and age requirements of an R–ATP R–ATP certificate beyond those that implementation and oversight of certificate will greatly exceed the proposed in the NPRM. such a complex system, or a variation of commercial pilot certificate 3. FOQ ARC Recommendation it, would be too burdensome. Allowing requirements previously required to a large number of crediting options serve as SIC in part 121 operations. As The FOQ ARC recommended creates a much more complicated discussed in greater detail below, the crediting academic training as well as process for FAA examiners and academic coursework prerequisites for aeronautical experience. The ARC designees in determining and validating the R–ATP certificate together with the developed a complex system that not how much credit a pilot can get to be additional flight hour experience and only permitted flight-hour credit for a eligible for an R–ATP certificate. In the new training required for ATP variety of academic training including addition, the weighted flight experience certification will result in a pilot who is both two- and four-year aviation degrees concept gives a multiplier effect to better prepared to enter an air carrier but also allowed weighted credit for hours that were deemed more environment than meeting the 1,500 various flight experience. applicable to air carrier operations and hour requirement alone. Eleven commenters, including NAFI, therefore more valuable to a prospective The FAA emphasizes that pilots who Boeing Commercial Airplanes (Boeing), air carrier flightcrew member. While the meet these alternative hour NATA, RAA, JetBlue, WMU, Purdue, FAA finds value in the weighted flight requirements will be required to pass and FSC suggested that the FAA experience concept, the Act does not the same ATP knowledge test and implement a system of weighted flight permit giving flight hour credit to practical test as pilots who obtain an hour reductions based on pilot certain types of flight experience to ATP certificate at 1,500 hours. In experience. NAFI noted that the Pilot reduce the minimum required flight Source Study and the recommendations addition, in the final rule, the FAA is hours for the ATP certificate.18 retaining the limitations on the of the FAA’s FOQ ARC should be Considering phases I and III of the certificates of pilots who obtain an ATP referenced in any consideration of credit Pilot Source Study, the crediting system certificate with the reduced flight hours. options. Boeing stated that the FAA proposed by the ARC, and the These pilots will have the following should credit all manner of training that structured academic coursework a limitation placed on their certificates: would better prepare pilots for air graduate completes for an aviation ‘‘Restricted in accordance with 14 CFR carrier operations. Boeing noted that 61.167’’ and ‘‘Holder does not meet the this would include all college aviation 18 The FAA notes that Section 217 of the Act pilot-in-command aeronautical programs, approved courses from part directed the FAA to ensure that applicants for an experience requirements of ICAO.’’ 141 and part 142 certificate holders, and ATP certificate had received ‘‘flight training, Pilots who hold ATP certificates with all related experience and courses. academic training, or operational experience’’ that would prepare the pilot to function effectively in these limitations will not be permitted The RAA argued that the FAA should an air carrier environment. Several paragraphs later to act as PIC in any operation that adopt the recommendations of the FOQ in Section 217, Congress gave the Administrator requires an ATP certificate or serve as ARC. It noted the FOQ ARC discretion to reduce flight hours for the ATP SIC in flag or supplemental operations recommended an aeronautical certificate based on ‘‘specific academic training courses.’’ The FAA has determined that the failure that require three or more pilots. The experience credit system that to list operational experience in this provision of FAA will remove the restriction from incorporated many of the individual the Act does not permit the FAA to reduce flight the ATP certificate once the pilot recommendations identified by other hours based on operational experience.

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degree, the FAA has determined that a 55% of respondents stating that 750 military pilot will still be required to reduction in flight hours is appropriate, hours was adequate. complete the ATP certification training and we have retained credit for The FAA has determined that program in new § 61.156, pass the ATP academic training in the final rule. In permitting military pilots to obtain an knowledge test, and pass the ATP addition to decisions surrounding the R–ATP certificate with fewer than 1,500 practical test or air carrier evaluation crediting system proposed by the ARC, hours is appropriate due to the quality that results in the issuance of an ATP the FAA also engaged in extensive and structure of military training. To be certificate. In addition, prior to serving qualitative evaluation of aviation degree accepted into a pilot training program in in part 121 operations, military pilots programs and courses, which will be one of the branches of the military, a will be required to complete an air discussed in more detail later in this person must undergo a rigorous carrier’s initial training program and final rule. This evaluation, coupled with screening process including an pass a proficiency evaluation. the documentation that will be provided assessment of aviation aptitude. Accordingly, a military pilot will be by the aviation programs, will help to Depending on the branch of the required to demonstrate knowledge of ensure that crediting hours are only military, an applicant for pilot training civilian operations. granted for legitimate aviation program must hold an associate’s degree or a The FAA has modified § 61.39 to coursework. bachelor’s degree. Once accepted into a require military pilots applying for the pilot training program, a person is ATP practical test to present the 4. Military Pilots assigned full-time to aviation training. documents listed in § 61.160(a) to Commenters submitted 95 responses As an example, the United States Air substantiate eligibility for an R–ATP regarding the proposal to allow military Force Specialized Undergraduate Pilot certificate. These documents include an pilots to obtain an R–ATP certificate Training (SUPT) includes four to six official U.S. Armed Forces record that with 750 hours of flight time. Eighty- weeks of academic and preflight shows that the applicant graduated from eight commenters agreed a restricted training on aerospace physiology, a U.S. Armed Forces pilot training privileges ATP certificate is appropriate altitude chamber tests, aircraft systems, school and received a rating for military pilots. Several other aviation weather, mission planning, and qualification as a military pilot. individual commenters observed that navigation. After initial academic and Graduation from a training program the military operational environment is preflight training, the Air Force student designed to qualify a military pilot different than the air carrier pilot undergoes 22 weeks of primary solely for operation of unmanned environment, so reductions based on aircraft training before transitioning to a aircraft systems will not satisfy the military experience are not justified. track of advanced aircraft training that requirement in § 61.160(a). CAPA specifically stated there is no continues for another 24 to 28 weeks. Additionally, the FAA notes that empirical evidence that a graduate from During flight training, military pilots regulations do not currently permit the a military program has better experience continue their academic training time acquired while operating an or skill than other airman. through detailed briefings and unmanned aircraft system to be logged Four New York congressmen and debriefings of their flight training. An to meet aeronautical experience RACCA opposed a reduction in flight Air Force student pilot is committed to requirements for FAA certification. time for anyone except military pilots. a 12-hour duty day while at SUPT, and Although several commenters have These commenters acknowledged the his or her flight proficiency is suggested the FAA allow a further highly specialized disciplined screening continuously assessed. Additionally, reduction in flight hours for military and training procedures military pilots during the flight training phases, an Air pilots, the FAA has received no undergo. Force student pilot participates in flight compelling data to support such a Twenty-eight commenters, including training every day, either in a simulator reduction. In addition, the FAA notes Delta, CAA, and RAA, indicated a 750- or an aircraft. that, based on averages provided by the hour requirement for former military Similarly, a Navy pilot completes a military, an additional reduction would pilots is too high. Most commenters six-week indoctrination program which have limited impact on those that could stated 500 hours is more appropriate. includes classes in aerodynamics, air take advantage of this provision. Spartan College stated ‘‘the rigor and navigation, aviation physiology, and Specifically, the majority of military quality selection process for military engineering. The Navy pilot next pilots who complete their service pilots linked with highly structured completes primary training in obligations will have acquired the 1,500 training meets or exceeds the approximately 22 weeks. It includes hours required for an unrestricted ATP requirements of the NPRM’’ and added ground-based academics, FSTDs, and certificate. Army pilots who average that 500 hours is appropriate for flight training. The Navy pilot then approximately 800 hours when they military pilots who operate in a multi- continues to advanced flight training. complete their service obligations and crew environment. Based on the comprehensive and pilots who are honorably discharged An additional 17 commenters demanding nature of military pilot from the military prior to completing including ERAU, KSU, JetBlue, NAFI, training, the FAA is adopting the their service obligation would be most PABC, GAMA, FSC, CAE, NATA, DSU, proposed requirement to allow military likely to benefit from the R–ATP and a number of individuals agree pilots who have graduated from an certificate. military pilots should be eligible for a Armed Forces flight training program to restricted privileges ATP certificate but apply for the ATP practical test after 5. Graduates With a Bachelor’s Degree did not suggest how much experience is obtaining 750 hours of flight time. To in an Aviation Major appropriate. Three commenters, the extent that some commenters have One hundred and seventy-five including Aerosim, stated 750 hours is suggested a reduction is not appropriate commenters supported an R–ATP too low and suggested 1,000 hours due to operational differences in certificate for applicants with a instead. Aerosim conducted a survey of military operations, the FAA responds bachelor’s degree with an aviation over 300 of its part 141 flight training that the completion of military pilot major. Several academic institutions institutions that indicated that 71% of training and the accumulation of 750 including the Council for Higher the respondents support a reduction in flight hours does not automatically Education Accreditation (CHEA), the flight hours for military pilots, with result in an R–ATP certificate. Rather, a American Association of Community

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Colleges, UAA, Fox Valley Technical complete ground and flight training the FAA establish requirements for College of Aeronautics, WMU, Aims toward a commercial pilot certificate academies to qualify them. Other Community College, ERAU, Hesston and instrument rating. commenters suggested that the FAA College, Purdue, KSU, FSC, Based on the fact that the academic offer an R–ATP certificate to graduates Westminster College, UVU, SIU, OSU, coursework completed as part of an of a four-year collegiate flight program MTSU, DSU, Spartan College, Nova aviation major generally exceeds the with fewer total flight hours, generally Southeastern University, and Florida time a pilot might spend in ground in the range between 500 and 1,000 Institute of Technology were supportive school outside of that environment, the flight hours. of the flight experience reduction based FAA continues to support a reduction of on academics. In addition, several flight hours for graduates with an Ten commenters, including KSU, individual commenters stated that aviation major from a four-year SJSU, WMU, UVU, Aerosim, ALPA, graduates of an aviation degree program institution of higher education who American Flyers, and Nova should be eligible to obtain an R–ATP complete ground and flight training as Southeastern University believe the certificate because the quality of part of approved training courses at a proposed 1,000 hours of flight training received at such schools is part 141 pilot school that is associated experience is adequate. Approximately superior to that received under part 61. with the institution of higher education. 47 percent of NAFI’s members indicated CAPA commented that there is no Over the course of several years, these that 1,000 hours is too low but did not empirical evidence that a graduate of an graduates complete significant aviation specify how many of those responding aviation degree program has better coursework well above the hours of generally oppose an R–ATP certificate. experience or skill than an airman who ground training required for commercial The FAA has considered the 2010 and has not. CAPA also stated that, because pilot certification. In addition, a 2012 Pilot Source Studies, the FOQ ARC most pilots cannot afford the student’s knowledge and flight report, and the structured academic ‘‘extraordinarily high cost of specialized proficiency are continuously evaluated coursework in aviation a graduate aviation institutions,’’ the reduction in throughout the degree program. receives 19 flight hours for these graduates is unfair Notwithstanding the FAA’s continued and has determined that, because an applicant with financial support for a reduction in required based on the best currently available resources can ‘‘purchase’’ their flight hours for these applicants, the information, it is appropriate to retain qualifications without having to gain FAA has refined, clarified, and the minimum 1,000-hour aeronautical flying experience. Moore Air, Inc. stated expanded some elements of the R–ATP experience requirement for graduates of that permitting pilots from aviation certificate as it applies to graduates of four-year degree program with an bachelor’s degree programs affiliated degree programs with aviation majors in aviation major who obtain their with part 141 schools discriminates the final rule. These modifications are commercial pilot certificate and against pilots with fewer economic discussed in the following sections. instrument rating from an associated part 141 pilot school. Commenters have resources. John A. O’Brien Aviation a. Flight Hour Requirement Consulting, LLC, stated the restricted not provided compelling evidence to privileges ATP certificate should not be Notwithstanding general support for a support a further reduction in hours for limited to college graduates from ‘‘select reduction in hours for these pilots, graduates of these programs. Many universities.’’ AAL commented that the many commenters recommended commenters referenced the 2010 Pilot NPRM encourages pilots to attend a reducing the hours below the 1,000 Source Study (which indicated that the four-year aviation college or university hours proposed in the NPRM. most successful pilots in initial training, but fails to recognize that such paths are One hundred sixty-five commenters without any consideration of the stated that 1,000 hours is too high, available only to those willing and able manner in which they received their including OSU, Aviation Professional to afford such educational paths. AAL aviation training, were those pilots Development, LLC (APD), DSU, and the acknowledges that higher education and hired with 500–1,000 hours) to justify Pilot Career Initiative. AAL and quality training should be encouraged why they felt the FAA should reduce Westminster College stated 1,000 hours but quality training is also available in the hour requirement further.20 The places outside accredited four-year is much too high to provide an incentive for pilots to pursue a formal education. FAA notes that the third phase of the aviation colleges. Pilot Source Study, which was In support of a reduction based on Most commenters responded that a submitted to the docket, indicated that academic credit, Parks College (Parks) total flight time of 500 to 750 hours is stated that its aviation graduates more appropriate for graduates of a four- pilots with 1,001–1,500 total flight accomplish approximately 220 ‘‘hours year aviation degree program. Many hours had more completions in training of ground and classroom instruction commenters, including Delta, ERAU, than any other group, including the leading to a [commercial pilot and Rocky Mountain College cited the group with 500–1,000 total flight 21 certificate] with an instrument rating.’’ Pilot Source Study as evidence that the hours. Parks noted that, in addition to this FAA should allow pilots with fewer classroom training for pilot certification, than 1,000 hours to be employed by air 19 There is further discussion of the FAA’s review its students complete an additional 480 carriers. The American Aviation of academic curriculum later in this document. This review provided additional support to the agency’s hours (32 credit hours) of academic Institute (AAI) along with several other decision to retain the credit for graduates of coursework on topics related to aviation commenters suggested the rule be aviation degree programs. and air carrier operations. UND also simplified by establishing the 750-hour 21 A summary of the findings of the 2012 Pilot provided information demonstrating threshold for an R–ATP certificate to Source Study was submitted to the rulemaking docket. The FAA considered the results along with that graduates of its professional flight civilian candidates who have graduated additional factors during development of the final curriculum must complete 464 hours of from accredited programs including rule. A recent journal article discussing the results instruction in required aviation two- and four-year universities, of the 2012 Pilot Source Study concluded that coursework that includes courses on programs designed for university ‘‘flight hours are not a good predictor of performance.’’ The journal article can be found in human factors, flight physiology, graduates, and other structured the Journal of Aviation Technology and advanced aerodynamics, and aviation academies run by training organizations Engineering, Vol.II, Issue 2 (2013) at: http:// weather. These students must also and by airlines. AAI also recommended docs.lib.purdue.edu/jate/vol2/iss2/2/.

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b. Institutional Accreditation and are established for student performance The FAA is retaining the requirement ‘‘Aviation Degree Programs’’ and the type of degree programs are for institutional accreditation in this The FAA proposed in the NPRM to more clearly defined. An individual final rule because accreditation ensures permit a reduced flight hour commenter also suggested ‘‘aviation- that education provided by institutions requirement for applicants who hold a related degree’’ is too broad. The of higher education meet acceptable bachelor’s degree with an aviation major commenter suggested the FAA specify levels of quality. Accrediting agencies, obtained from a postsecondary the number of hours as well as the as defined by the Department of educational institution that satisfies the subject areas that should be taught. Education in 34 CFR 600.2, develop definition of ‘‘accredited’’ as established Barbary Coast Consulting expressed evaluation criteria and conduct peer by Department of Education in 34 CFR concern that the determination of what evaluations to assess whether those degree credits would qualify for a criteria are met. According to CHEA, 600.2. The Department of Education reduction in hours would fall to the accredited status is a signal to students maintains a database of accredited academic institution and recommended and the public that an institution meets postsecondary institutions and that the FAA should make this at least threshold standards for its programs available at the following Web determination based on how these faculty, curriculum, student services, site: http://ope.ed.gov/accreditation/. classes will actually enhance aviation and libraries. UAA fully supported the proposed safety. The FAA acknowledges the value of requirement that any degree-granting The Families of Continental Flight programmatic accreditation, but it is not institution qualifying its graduates for 3407 stated that, while there is value to the sole means of assuring the quality of reduced flight hours must be accredited aeronautical knowledge and training an aviation degree program for the by a nationally recognized accrediting provided by four-year accredited purpose of qualifying students for an R– agency as defined by the Department of institutions that offer aviation degrees, ATP certificate. Currently, AABI is the Education in 34 CFR 600.2. UAA such graduates should not ‘‘blindly be only organization that provides contended that this type of accreditation accorded flight hour credit without accreditation to aviation degree insures the validity of the institution carefully evaluating each course to programs. As noted by UAA, if program- granting the degree and provides the determine if it meets the law’s specific specific accreditation becomes a most inclusive form of accreditation criteria[.]’’ The Families of Continental requirement for the R–ATP certificate, possible by which to prepare pilots for Flight 3407 specifically noted that the the number of eligible institutions will the proposed R–ATP certificate. UAA law required that academic training be reduced to 29. added some of their member institutions courses ‘‘enhance safety more than The FAA agrees, however, with hold program-specific accreditation in requiring the pilot to fully comply with commenters who believe that the addition to institutional accreditation, the flight hours requirement.’’ P.L. 111– requirements of ‘‘aviation degree but the majority do not have program 216, sec. 217(d). The Families of programs’’ must be better defined. The accreditation at this time. UAA looked Continental Flight 3407 further stated FAA has reviewed aviation degree at current, national collegiate flight that the FAA should develop a curriculum requirements from over 100 training and indicated the number of procedure to carefully evaluate the colleges and universities and found that eligible institutions will decrease from coursework in each graduate’s academic graduates of four-year universities over 164 to 29 if program specific program and only give credit to courses receive bachelor’s degrees with as few accreditation becomes a requirement. that enhance aviation safety and not as 27 credit hours and as many as 85 UAA noted that two institutions that courses that focus on ‘‘tangential areas credit hours in aviation and aviation- currently hold program accreditation are of aviation.’’ They indicated that credit related courses. In addition, required phasing out their pilot training should be based on a course-by-course courses and electives within aviation programs. basis and not a blanket 500-hour degree programs vary significantly. KSU stated that the relationship reduction. Many aviation degree programs are not between the academic institution and NATA noted that the Act gave the focused primarily on preparing a the flight training provider signifies a FAA authority to allow for reduced student for a career as a professional strong commitment to quality pilot hours based on a safety assessment. It pilot but rather for careers in areas such education and fosters an environment of argued that the FAA failed to as air traffic control, aerospace professional pilot training. KSU added demonstrate in the NPRM that it had engineering, aircraft maintenance, or that Aviation Accreditation Board performed a comprehensive analysis. business aviation. If the requirements International (AABI) accreditation and AAI indicated that the FAA should set proposed in the NPRM were not refined, part 141 approval by the FAA provide specific program standards that can be graduates of those degree programs the needed quality assurances for the met at the undergraduate or graduate could be eligible for an R–ATP quality and integrity of flight training. levels at accredited schools and certificate without having completed Purdue added that the same credit universities. relevant coursework designed to should be given to graduates of AABI- Spartan College commented that the improve their knowledge and skills as a accredited flight programs regardless of education program must be well pilot. the part under which the school integrated with the university to make For this reason, the FAA has decided operates. APD agreed with the proposal sure that classroom and flight lab time that broad approval of aviation degree to provide an R–ATP certificate but match the learning objectives. Spartan programs based on accreditation alone indicated that those R–ATP certificates College recommended that all academic is not sufficient. Rather, the most should be available only for those and ground school courses be taught by critical element for determining whether students attending an AABI-accredited faculty and instructional staff employed a graduate should be eligible for an R– flight school. by the institution. Spartan College ATP certificate is the body of The FAA received several comments indicated, however, that flight training coursework completed prior to requesting the FAA further define could be taught either by an institution’s graduating with a degree in an aviation ‘‘aviation degree program.’’ The NTSB instructional staff or by one or more major. Establishing more specific supported an ATP certificate with qualified contractors through written program criteria for eligibility for an R– restricted privileges provided standards contract. ATP certificate will better ensure that

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academic training courses enhance required 60 credit hours because it aviation-related coursework designed to safety such that a reduction in flight introduces the student to basic weather prepare them for a career as a hours is consistent with the Act. theory that will affect flight decisions. professional pilot. Concurrently with The FAA has modified § 61.160 from As further explained in AC 61–139, their broader aviation coursework, that proposed in the NPRM to clarify the Institution of Higher Education’s students will complete the required academic requirements a student must Application for Authority to Certify its ground and flight training and pass the complete to be eligible for an R–ATP Graduates for an Airline Transport Pilot practical tests for a commercial pilot certificate. In the final rule, the FAA has Certificate with Reduced Aeronautical certificate and instrument rating. These established that a student must: Experience, the FAA believes that students are continuously evaluated • Earn a bachelor’s degree in an courses in subject areas like aircraft with academic testing and flight aviation major; performance and aerodynamics, aircraft evaluations over the course of several • Complete 60 semester credit hours systems, aviation human factors, air years. Based on these factors, a graduate in aviation and aviation-related traffic control and airspace, aviation law of a bachelor’s degree program who coursework designed to improve and and regulations, aviation weather, and completes the requirements set forth in enhance the knowledge and skills of a aviation safety represent courses that are § 61.160 is eligible for an R–ATP and person seeking a career as a professional designed to enhance and improve the may apply for the ATP practical test pilot; with 1,000 hours total time as a pilot. • knowledge and skills of a person Complete ground training for a seeking a career as a professional pilot. In setting the criterion for 60 semester commercial pilot certificate and an The FAA expects that, in addition to the credit hours in aviation and aviation- instrument rating under approved part ground and flight training required for related coursework, the FAA decided to 141 curricula at the institution of higher FAA certification, aviation students will allow partial recognition for applicants education; with bachelor’s degrees with aviation • have completed coursework in all of Complete flight training for majors who fall short of the 60 credit commercial pilot certificate and an these areas as part of their aviation degree. hour requirement. Applicants who have instrument rating under approved part completed at least 30 semester credit 141 curricula at the institution of higher Finally, an R–ATP certificate applicant must have a commercial pilot hours in aviation and aviation-related education or at a part 141 pilot school coursework designed to improve and associated with the institution of higher certificate with an airplane category and instrument rating earned from a part 141 enhance the knowledge and skills of a education; and person seeking a career as a professional • Obtain a commercial pilot pilot school that is part of the academic institution or associated with the pilot may apply for an R–ATP certificate certificate with airplane rating and an with 1,250 hours total time as a pilot. instrument rating upon completion of academic institution through a formal training agreement. Under § 61.160, a The applicant’s coursework must ground and flight training. include all of the ground and flight The FAA has established 60 semester graduate must have completed all training for a commercial pilot credit hours in aviation and aviation- ground training for the commercial pilot certificate and instrument rating. related coursework designed to improve certificate and instrument rating at the and enhance the knowledge and skills institution of higher education. c. Cross Country Time for the R–ATP of a person seeking a career as a Accordingly, the academic institution Certificate must, at a minimum, hold a part 141 professional pilot as the minimum To apply for an ATP certificate under pilot school certificate for ground requirement. In determining whether a § 61.159, a pilot must accumulate 1,500 training. This requirement will ensure course is designed to improve and hours total time as a pilot that must that the ground training for certification enhance the knowledge and skills of a include 500 hours of cross-country is integrated into the institution’s person seeking a career as a professional flight time. In the NPRM, the FAA broader academic curriculum. The flight pilot, the institution should consider the proposed to require military pilots who training for the commercial pilot objective and purpose of the course. For apply for an R–ATP certificate with 750 certificate and instrument rating may be instance, an introductory course on air hours total time as a pilot to have 250 completed either at the institution, if it traffic control could be designed to hours of cross-country flight time. The holds a part 141 pilot school certificate provide a foundation for both pilots and NPRM proposed requiring graduates for flight training, or at a part 141 pilot for students intending to pursue a career with aviation majors who apply for an school that is associated with the as an air traffic controller. On the other R–ATP certificate with 1,000 hours total undergraduate institution through a hand, an upper-level or advanced air time as a pilot to have 375 hours of formal training agreement. The FAA traffic control course is primarily cross-country flight time. The reduction notes it has revised § 141.26 to require intended to prepare a person to work as in the required cross-country flight time a pilot school that provides flight an air traffic controller with little was proportional to the reduction in training for an institution of higher additional benefit to a person seeking a total flight hours. career as a pilot. Although knowledge of education that holds a letter of UND’s John D. Odegard School of tower operations is instructive, an authorization under § 61.169 must have Aerospace Sciences submitted a upper-level air traffic control course is a formal training agreement with that research study that was conducted to not generally designed with the goal of institution of higher education. assess the impact of the proposed rule improving and enhancing the Under the standards established in on the supply of pilots who primarily knowledge and skills of a person the final rule, the FAA estimates that obtain their flight experience from flight seeking a career as a professional pilot. students who are eligible for an R–ATP instructing. UND’s study concentrated These credit hours may include certificate will complete over 600 on the nature of flight time acquired as 22 coursework outside the aviation instructional hours in aviation and a flight instructor as it relates to the 500 department so long as the course hours of cross-country flight time focuses on an aviation-related topic. For 22 The FAA estimated that, as part of a degree program, students will complete an average of 12– required to apply for the ATP certificate. example, credit hours obtained in a 15 credit hours of ground and flight training toward meteorology course outside the aviation FAA certificates and ratings. Students will broader aviation and aviation-related coursework department could count toward the complete an additional 45–48 credit hours of during 15-week semesters.

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The participants in the study included documentation, as appropriate, to the (graduates who have completed at least line flight instructors from 17 collegiate FAA that includes: 60 credit hours), or 1,250 hours aviation programs. Based on its • List of aviation majors offered by (graduates who have completed at least research, UND concluded that the the institution; 30 credit hours). A graduate will then be average flight instructor would have to • Type of degree offered; required to present the certifying • log 2,100 total flight hours before Institutional accreditation document, along with all other accumulating 500 hours of cross- information; documentation required in § 61.39, • Part 141 pilot school information; country flight time. UND recommended • when applying for the practical test for that the FAA amend the rule to require List of substantial changes to degree an R–ATP certificate. a minimum of 200 hours of cross- programs in past five years; • Course descriptions of aviation and 6. Recommendations for Expanding country flight experience to obtain an aviation-related courses that may be Eligibility for the R–ATP Certificate R–ATP certificate rather than the 375 used to satisfy the credit hours required hours proposed in the NPRM for A significant number of commenters, by § 61.160; and including air carriers, educational graduates of four-year aviation • Training agreements for flight institutions, training providers, programs. training provided by a part 141 pilot instructors, and aviation organizations The FAA has reviewed the school, if applicable. information provided by UND and The institution must identify on the suggested that a greater number of pilots determined that it is appropriate to form those academic courses that satisfy should be eligible for an ATP certificate reduce the cross-country flight time the requirements of § 61.160. with reduced flight hours. Specifically, required for all applicants for an R–ATP Specifically, the institution must commenters suggested that the FAA certificate to 200 hours. In reaching this demonstrate that a course is designed to make the R–ATP certificate available to decision, the FAA considered the past improve and enhance the skills and the following candidates: • Graduates of two-year aviation and current requirements of both the knowledge of a person seeking a career degree programs with commercial pilot commercial pilot and ATP certificates. as a professional pilot. These courses certificates and instrument ratings from Although 200 hours is below the will include the ground and flight an affiliated part 141 pilot school; requirements for an ATP certificate training courses required for FAA • Students who come to eligible under § 61.159, the FAA believes pilots certification as well as other coursework programs already holding commercial will accumulate a significant and within the aviation department, such as pilot certificates and instrument ratings; relevant amount of cross-country Aviation Law, Human Factors, or • experience as SICs in part 121 Students from non-eligible Advanced Aircraft Systems. Courses programs who transfer into and graduate operations before being eligible to outside the aviation department may obtain an unrestricted ATP certificate from eligible programs; also satisfy the requirements of § 61.160. • Pilots who are age 21 and have and upgrade to PIC. The 200 hours of For example, a physics course may 1,500 hours of flight time; cross-country experience represents a qualify as an aviation-related course • Graduates with bachelor’s degrees significant increase over the 50 hours of provided the course description clearly with aviation majors and obtain cross-country flight time required for indicates aircraft performance and commercial pilot certificates and the commercial pilot certificate—the aerodynamics are the primary focus of instrument ratings from a non-affiliated prior requirement to serve as SIC in part the course. The institution must part 141 pilot school; 121 operations. Pilots who hold an R– demonstrate that it offers sufficient • Graduates with bachelor’s degrees ATP certificate will be required to meet aviation and aviation-related courses with aviation majors and obtain the 500 hours of cross-country flight that a graduate could rely upon to meet commercial pilot certificates and time required in § 61.159 prior to having at least 30 semester credit hours. instrument ratings from an affiliated the limitation removed from their The application and FAA review part 61 flight training program; certificate. The FAA notes that the 200 process for institutions seeking a letter • Graduates with associate’s degrees hours of cross-country flight time is of authorization to certify students is with aviation majors and obtain consistent with the ICAO standard for further explained in AC 61–139. The AC commercial pilot certificates and an unrestricted ATP certificate. provides greater detail on the aviation instrument ratings from a non-affiliated d. The Role of the Institution of Higher and aviation-related coursework used to part 141 pilot school; Education in Certifying Its Students satisfy the semester credit hour • Graduates with associate’s degrees requirement. In addition, the AC with aviation majors who obtain Under new § 61.169, an institution of provides information related to the part commercial pilot certificates and higher education may apply for 141 pilot school requirements, instrument ratings from an affiliated authority to certify that its graduates including training agreements, and the part 61 flight training program; have met the academic eligibility institution’s responsibility to notify the • Pilots who have completed training requirements for an R–ATP certificate. FAA of any changes that will affect its programs at ‘‘Aviation Academies’’ (part The institution may not certify a student letter of authorization. Once the FAA 141 pilot school or part 142 training based solely on the degree received or has determined that an institution of center); the aviation major that has been higher education has met all the • Pilots who have completed ‘‘other’’ completed. Rather, it will be required to requirements, it will issue a letter of aviation courses (e.g. AJT, Upset evaluate each student’s coursework authorization granting the school Prevention and Recovery Training before certifying that a graduate has met authority to add a certifying statement (UPRT)); all of the academic eligibility to a student’s transcript or other • Certified Flight Instructors (CFI); requirements. document deemed acceptable by the and To obtain authority to certify students Administrator. The certifying statement • Graduates of colleges and for eligibility for the R–ATP certificate must denote whether the graduate is universities who do not have aviation under new § 61.160, an institution of eligible to apply for an R–ATP degrees higher education must submit an certificate based on the applicable A discussion of the options suggested application and supporting criteria in § 61.160 at 1,000 hours by commenters follows.

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a. Graduates With an Associate’s Degree to include two-year programs, which hours in aviation coursework than in an Aviation Major should be afforded academic credit as graduates of bachelor’s degree programs. In the NPRM, the FAA did not provided in the FOQ ARC report. For that reason, the FAA disagrees with The UAA added that two-year college propose any reduction in total flight giving the same credit to two-year and university aviation degree programs time for graduates of two-year aviation programs. Accordingly, the FAA has are a key part of the overall collegiate degree programs. Thirty six modified § 61.160 to permit graduates of aviation-related pilot supply. To commenters, including Fox Valley approved two-year degree programs validate the assertion, the UAA Technical College Aeronautics Advisory with aviation majors to apply for an R– conducted a telephone survey in April Committee (FVTC), Experimental ATP certificate with 1,250 total hours of 2012, which reached a total of 29 Aircraft Association (EAA), Aims flight time. community college aviation degree As set forth in § 61.160(c), graduates Community College, NAFI, Jet programs out of 40 identified as flight of two-year programs must complete a Transitions, American Association of training providers. Based on the data minimum of 30 semester credit hours in Community Colleges, Hesston College, obtained in the survey, the UAA aviation and aviation-related Spartan College, UAA, CAE, and estimates more than 2,000 aviation coursework designed to improve and ExpressJet, argued that graduates of students are currently enrolled in two- enhance the knowledge and skills of a pilot schools not associated with a four- year degree programs. For the 29 person seeking a career as a professional year aviation degree program should respondents, it was found that: ‘‘(1) pilot. The 30 credit hours may include also be eligible for reduced flight time 1,474 total students were enrolled in coursework outside of the aviation to be eligible for an R–ATP certificate. aviation flight-related degrees at these department so long as the course Most of the thirty six commenters stated institutions, or, on average, 51 students focuses on an aviation related topic. The that two-year college flight training per institution; (2) the student FAA assumes on average courses are programs should be eligible for an R– enrollment ranged from a low of 7 offered at three semester credit hours ATP certificate. students to a high of 292 students; and per course. The 30 credit hours Fox Valley Technical College and the (3) of the 29 institutions reporting, 18 therefore will include the ground and American Association of Community conducted flight training solely under flight training courses for a commercial Colleges contended that the proposed part 141, 6 operated under part 61, and pilot certificate and instrument rating rule is arbitrary and discriminatory and 5 used a combination of parts 61 and and other aviation and aviation-related that graduates of two-year colleges and 141.’’ courses. universities should be allowed to obtain UAA recommended changing the As with bachelor’s degree programs, an R–ATP certificate. proposed § 61.160 to eliminate the the graduate will need to acquire a Aims Community College added that differentiation between two- and four- commercial pilot certificate with an its students receive the same focused year schools and recommended a 750- airplane category and instrument rating aviation training discussed in the NPRM hour minimum for the R–ATP from a part 141 pilot school that is part and should be eligible for the same certificate. The EAA contended that the of the undergraduate institution. The credit that graduates of four-year degree FAA should form a working group to institution of higher education must programs receive. According to Aims, explore what modifications should be hold a part 141 pilot school certificate these students complete the same flight made to these two-year school and provide all ground training for the hour and academic instruction accreditation standards in order for their commercial pilot certificate and requirements as students at four-year programs and students to qualify for the instrument rating. This requirement will institutions, even though they do not revised ATP aeronautical experience ensure that the ground training is complete as many courses unrelated to requirements in § 61.160. integrated into the broader academic aviation. Aims indicated that students The AAI recommended that the FAA curriculum. The flight training may be who earn an Associate of Applied adopt a program-based standard and not completed either at the institution, if it Science degree complete 72 credit hours define acceptability solely by the length holds a part 141 pilot school certificate as part of its fixed-wing professional of the program. AAI commented that a for flight training, or at a part 141 pilot pilot program. They also stated the two- student at a four-year institution school that is associated with the year college and university system pursues coursework in non-aviation undergraduate institution through a nationwide has been providing well- fields, which is far less relevant than the training agreement. trained pilots for the airlines and other aviation coursework actually taken. aviation employers for decades. They Based on the FAA’s extensive review b. Transfer Students suggested that, with the high cost of of two-year and four-year aviation SIU believes students who move from flight training and college in general, degree programs, the FAA has a two-year aviation degree program to now is not the time to take away an determined that it is appropriate to an affiliated four-year aviation program efficient, effective, reasonably priced, permit graduates who obtain an and complete their bachelor’s degree educational opportunity from those who associate’s degree with an aviation and the required flight training under cannot afford the cost and time required major to apply for an R–ATP certificate part 141 should be eligible for a for a four-year degree program. with fewer than 1,500 total hours. The restricted privileges ATP certificate. CAE contended that quality two-year colleges, universities, and their KSU similarly states students who instruction and flight experience can be graduates who responded to the NPRM transfer to a four-year collegiate flight delivered in two-year programs have provided sufficient information to training degree program with an affiliated with part 141 pilot schools or support a reduction in the flight hour affiliated part 141 pilot school should part 142 training centers. Spartan requirement for an R–ATP certificate. have the same eligibility as a student College supported academic credit The FAA has found that these who solely attends a four-year collegiate based on a variety of educational tracks graduates receive degrees with a range flight training degree program with an including four-year and two-year of 24 to 56 credit hours in aviation and affiliated part 141 pilot school. KSU collegiate aviation degrees. UAA, aviation-related coursework. On noted, however, that the school ExpressJet, and several other average, however, graduates of associate receiving a transfer student must commenters argued that the FAA failed degree programs complete fewer credit evaluate the student’s performance and

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ensure that the school’s own the eligibility requirement of 23 years of establish a fair method whereby flight performance standard is met before age for an ATP certificate. The FAA has proficiency could be measured against graduation can occur. stated that the minimum age part 141 standards to allow part 61 The FAA acknowledges students requirement of 23 years ensures ‘‘a high students a reduction in flight hours. follow a number of different paths for maturity level for those pilots who are Another individual commenter pointed completing post-secondary education at permitted to operate as PIC in out that part 141 schools are given an a college or university. Some students operations requiring an ATP unfair advantage over part 61 schools. start at community colleges and transfer certificate.’’ Exemption No. 7472. UVU stated that graduates from four- to four-year degree programs while Commenters have failed to provide any year aviation programs with integrated other students transfer between different compelling evidence to support a flight training should qualify for an R– four-year institutions of higher change to the long-standing requirement ATP certificate regardless of whether education. The FAA does not want to that a pilot exercising the PIC privileges their training was conducted under part deter individuals from seeking of an ATP certificate be at least 23 years 61 or part 141. alternative paths to achieving an of age. Therefore, the FAA has not Numerous commenters stated that aviation degree and therefore has changed the age requirements for pilots AABI accredited institutions with part determined that students who transfer serving as PIC in part 121 air carrier 61 schools should be eligible for a into a two-year or four-year degree operations, SIC in part 121 flag or restricted privileges ATP certificate at program with an aviation major could supplemental operations requiring three 1,000 flight hours. Purdue believes any be eligible for an R–ATP certificate. or more pilots, or operations conducted AABI-accredited aviation program These graduates would be eligible for an under §§ 91.1053(a)(2)(i) and should be eligible for credit regardless R–ATP certificate provided they 135.243(a)(1). of whether the associated flight training complete the applicable requirements of Based on the comments, however, the is conducted under 14 CFR parts 61, § 61.160, including the semester credit FAA has determined that a pilot who 141, or 142. hours and ground and flight training. has reached the age of 21, has logged Several commenters, including DSU The FAA acknowledges that many of 1,500 hours total time as a pilot, and and CAE, believed pilots with an the larger four-year degree programs satisfies the remaining aeronautical aviation-related degree and part 141 with aviation majors have satellite experience requirements for an R–ATP flight training from a separate programs that are two-year programs. certificate should be permitted to apply organization should be eligible for a The satellite schools follow the same for an R–ATP certificate and serve as an restricted privileges ATP certificate. ground and flight training curriculum as SIC in part 121 operations. These pilots SIU, AAL, and Prairie Air Service, Inc. the parent school which makes for a will exceed the age requirement of 18 argued that the FAA should extend smooth transition from the two-year years old that is currently required to eligibility for the R–ATP certificate to program to the four-year program. The obtain a commercial pilot certificate any four-year college graduate, FAA believes those graduates should which, prior to the final rule, allowed a regardless of academic major or where also be eligible for an R–ATP certificate pilot to serve as SIC in part 121. flight training was obtained. provided the requirements of § 61.160 Additionally, these pilots will have Westminster College supported are met and documented through achieved the total flight time for an ATP academic credit as a substitute for flight official college transcripts and records. certificate obtained under § 61.159. The experience adding that credit should be Further guidance and clarification on FAA has determined that permitting extended to graduates of a part 141 pilot transfer credit is provided in AC 61– such pilots to serve as SICs is an school with any four-year college degree 139. increase in the level of safety under or associate’s degrees in aviation. Many commenters disagreed with c. Pilots With 1,500 Hours Who Are Not current regulations and is consistent with the public law’s focus on a higher allowing credit for an ATP certificate for Yet 23 Years Old level of flight experience for pilots training received from non-affiliated Three commenters stated pilots serving in part 121 air carrier part 141 pilot school. IATA stated that, should be able to obtain an R–ATP operations. if this proposition were to become a certificate at the age of 21 or less as long As with other applicants for an R– reality, it would require an as they meet the full aeronautical ATP certificate, these pilots will be unreasonable amount of FAA oversight experience requirements for the ATP required to complete 200 hours of cross- in determining the adequacy of each certificate, including the 1,500 hours of country flight time. The remaining 300 applicant’s training. ALPA’s support of total flight time. The commenters added hours of cross-country flight time can be flight hour reduction for the restricted that the existing age 23 requirement for completed as an SIC in part 121 ATP certificate for college or university the ATP certificate is arbitrary, operations. The minimum age of 21 for educated pilots is based on a discriminatory, and not based on an R–ATP certificate will allow those comprehensive flight training science. AOPA commented that the pilots currently serving as SICs in part curriculum integrated with the student’s FAA should allow any applicant to 121 operations to continue serving in education. Several of the individual obtain an ATP certificate at the age of their current role provided they meet commenters stated that graduates of an 21 and receive restricted privileges. the required aeronautical knowledge aviation degree program should be NATA supports no age requirement if and experience requirements and eligible to obtain an R–ATP certificate the ATP minimums are met, stating successfully accomplish an evaluation because the quality of training received those pilots should be eligible for a that results in ATP certification and an at such schools is superior to that restricted privileges ATP certificate. aircraft type rating. received under part 61. Many pilots who have not yet reached The FAA has considered all of the the age of 23 have met or exceeded the d. Other Degree Programs various methods for obtaining academic 1,500 hours of total time as a pilot Twenty-seven commenters stated that and flight experience proposed by required for an ATP certificate. The graduates from four-year universities commenters but decided that degree FAA has remained consistent through affiliated with part 61 schools should programs with non-aviation majors, denials of requests for exemption and also be eligible for an R–ATP certificate. flight training conducted under part 61, previous rulemaking efforts to maintain One commenter suggested that the FAA and non-integrated flight training

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should not be eligible for an ATP Paradigm Shift Solutions, Inc., Prairie NATA recommended that the FAA certificate with fewer than 1,500 hours. Air Service, Inc., SIU, MTSU, and expand the flight hour credit ‘‘to The FAA has permitted a reduction for Spartan College, encouraged the FAA to include a comprehensive framework graduates who receive bachelor’s permit pilots with other training similar to the recommendations of the degrees and associate’s degrees with experiences to qualify for an R–ATP FOQ ARC and any other science-based aviation majors and receive part 141 certificate. advanced training courses that provide ground and flight training for a AOPA and AAI contend that the FAA a benefit to safety.’’ NATA stated that, commercial pilot certificate and an defined ‘‘academic credit’’ too narrowly. if the FAA did not expand the proposal, instrument rating as part of a broader NAFI advised consideration of what the NPRM should be withdrawn in its aviation curriculum. would constitute ‘‘academic study’’ and entirety until such time as a more The FAA does not agree with those recommended that it not be limited only comprehensive framework could be commenters who believe that graduates to university or college training created. The AAI contended that credit with degrees unrelated to aviation programs. NAFI stated that it was should be applied to other structured should be eligible for an R–ATP possible that other institutions or academies run by training organizations certificate. These graduates have not training providers could develop highly or air carriers. completed coursework that prepares effective ‘‘academic study’’ training Twelve commenters, including John them for a career as a professional pilot programs. NAFI added that a A. O’Brien Aviation Consulting, LLC, and such an allowance would not be standardized criterion that could be the AAI, PABC, UAA, Sporty’s consistent with the Act. As discussed applied across various programs would Academy, and the IFL Group argued above, the FAA has emphasized the be necessary to allow such a condition that students attending flight schools importance of an aviation curriculum in to be successful and measurable. that are not associated with an permitting a reduction in flight hours. It PCI contended that the structured accrediting entity, also referred to as is the significance of aviation flight academies should qualify for a flight academies, should be eligible for coursework above and beyond what is reduction in hours because they have reduced time to qualify for a restricted required for pilot certification that is the strong academic and flight training ATP certificate. primary basis for permitting a reduction programs conducted through an A4A argued all part 141-trained pilots in flight hours. To underscore this fact, approved FAA curriculum. John A. should be eligible for a restricted ATP the FAA has established a minimum O’Brien Aviation Consulting, LLC because part 141 pilot schools are number of credit hours in aviation and indicated that aviation academies subject to the same standards, regardless aviation-related coursework designed to should be eligible since they provide of their affiliation with a four-year improve and enhance the knowledge interaction with experienced airline college. IFL Group similarly argued that and skills of a person seeking a career professionals and flight instruction in the FAA should extend credit to any as a professional pilot that these accordance with FAA regulations to commercial, instrument, multi-engine students must complete to be eligible for individuals seeking employment as a pilot who has graduated from a part 141 an R–ATP certificate. Although pilot school. Aerosim also argued completing a bachelor’s degree may pilot at an airline. The training is develop certain qualities in an specialized and regimented for an graduates from independent part 141 individual that may assist them in a individual with very little aviation schools that offer a structured training career as a professional pilot, those background to acquire the skills and program, with air carrier procedures, qualities are not directly relevant to knowledge to graduate from a program, policies, and standards, should be aviation and should not be the basis for in a short timeframe, with all of the eligible for academic credit. a reduction in flight hours. pilot certificates necessary to fly at an The FAA does not support a For those commenters who believe air carrier. AOPA is also supportive of reduction in flight hours for pilots who that the reduction should apply to credit for training completed at aviation complete training at an ‘‘aviation graduates irrespective of whether they ‘‘academies.’’ academy,’’ or for pilots who complete complete ground and flight training AOPA and two other commenters their ground and flight training at a part through a part 141 pilot school or under stated that the FAA should allow credit 141 pilot school. The reduction for part 61, or whether or not the flight for individual academic courses and not graduates who receive bachelor’s or training is integrated with the academic simply apply a blanket reduction at associate’s degrees with aviation majors coursework, the FAA disagrees. By graduation. Paradigm Shift Solutions was not based solely on the completion requiring the institution of higher and four additional commenters noted of ground and flight training for education to hold a part 141 certificate the FAA had not considered Advanced certification at a part 141 pilot school. to teach at least the ground training, the Jet Training for credit—a unanimous Rather, the reduction was based on the FAA ensures that the training for a recommendation from the FOQ ARC. content and substance of a broader commercial certificate and instrument Another commenter noted the FAA had academic curriculum completed rating is incorporated into the broader not considered pilots enrolled in FAA- concurrently with ground and flight academic aviation curriculum. In Industry Training Standards programs training for certification. The FAA notes addition, the FAA has oversight of the or those pilots who complete air carrier that the regulations already reflect a training conducted through part 141 training through an Advanced reduction in flight hours for a program approval. Those pilot schools Qualification Program. The Upset commercial pilot certificate completed must renew their certificates every 24 Prevention and Recovery Training at a part 141 pilot school or part 142 months and demonstrate the quality of Association (UPRTA) added that the training center. Pilots who complete a the training through an established FAA should issue restricted ATP commercial pilot certificate as part of an training standard. certificates with reduced flight hour approved part 141 or part 142 requirements to all ATP candidates, curriculum can apply for a commercial e. Other Approved Training and provided they have received academic pilot certificate with 190 total flight Specialized Courses and flight instruction in upset hours, as opposed to the 250 hours Forty-one commenters, including the prevention and recovery from qualified required for those pilots who train Pilot Career Initiative (PCI), AOPA, instructors. under part 61.

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The FAA acknowledges that flight individual commenter suggested that a F. Aircraft Type Rating for All Pilots academies generally provide focused restricted ATP should be available to Operating Under Part 121 (§ 121.436) training to prepare pilots for a active CFIs. In the NPRM, the FAA proposed professional pilot career; however, the The FAA recognizes that, while requiring all SICs in part 121 operations FAA does not agree that the academic completing the ground and flight hold an aircraft type rating for the curriculum is sufficient to meet the training for a CFI certificate is valuable, aircraft flown in revenue service by intent of the Act. Flight academies do it is not the predominant reason that a August 1, 2013. A total of 113 not spend an abundance of time in CFI is recognized for his or her commenters responded to this proposed aviation coursework, separate from the knowledge and skill. It is the time spent requirement. minimally required ground school, over in the training environment teaching a period of several years. These other pilots that reinforces a CFI’s skills 1. Aircraft Type Rating Requirement for academies lack the accredited and and abilities. Therefore, the FAA does Part 121 SICs structured academic environment that not agree with commenters who suggest Seventy-eight commenters, including the aviation colleges and universities that this time meets the intent of the A4A, AOPA, APA, CAA, CAPA, Cape provide. The courses taught by aviation academic crediting provision in the Air, Delta, ExpressJet, Parks College, academies are primarily focused on statute. The operational experience NADA/F, PABC, Aviation Professional flight training and obtaining certificates gained from teaching is what is Development, FSC, FedEx, IATA, NAFI, and ratings rapidly. Many programs valuable, not the academic coursework UAA, USAPA, and WMU, agreed with advertise a person can obtain their to obtain the certificate. As with the proposed aircraft type rating private pilot certificate, commercial specialized courses, the FAA requirement. ALPA, CAE, and FSI pilot certificate, instrument rating, and encourages pilots to seek additional support the proposed requirement certified flight instructor certificates in training that will enhance their skills because it would require a type rating 12 months or less. and abilities like CFI certificates; for part 121 SICs flying domestically; The FAA also does not support a however, CFI ground schools are thus harmonizing the U.S. with current reduction in flight hours for specialized designed to meet existing regulatory ICAO standards. Boeing supported the courses such as upset recovery training requirements and do not represent and advanced jet training. The FAA proposed aircraft type rating additional training courses that merit a requirement for part 121 SICs because it encourages pilots to seek additional reduction in flight time as permitted training that will enhance their skills encourages one level of safety for under the Act. In addition, allowing a operations involving aircraft that require and abilities; however, the FAA does large number of crediting options not have the resources to evaluate every type ratings. ERAU, Purdue, Rocky creates a much more complicated Mountain College, and SIU, agreed with possible course that could be the basis process for FAA examiners and for a reduction in flight hours. The FAA the proposed rule requiring SICs in part designees in determining and validating 121 air carrier operations to hold an also does not support a reduction in how much credit a pilot can get to be flight hours for those pilots who obtain aircraft type rating, provided the air eligible. FAA certificates through a FITS carrier is responsible for supplying the program or who complete air carrier 7. Summary of FAA Decision type rating to the SIC. An individual training through AQP. These programs commenter said that operators should The FAA is adopting the following provide the type rating to decrease costs are designed to meet existing regulatory alternative total flight hour requirements and do not represent for new hire pilots. Rocky Mountain requirements for an R–ATP certificate additional training courses that merit a College noted that pilot supply would with airplane category multiengine class reduction in flight time. In addition, diminish if the cost of the type rating is rating or an ATP certificate obtained allowing a large number of crediting transferred to the pilot. concurrently with an airplane type options creates an increasingly Twenty-two commenters, including rating: KSU and GAMA generally disagreed complicated process for FAA examiners • and designees in determining and 750 hours for a military pilot who with requiring SICs in part 121 air validating how much credit a pilot can has graduated from a flight training carrier operations to hold an aircraft program in the Armed Forces; type rating. Four commenters, including get to be eligible for an R–ATP • certificate. 1,000 hours for a graduate who AAL and the IFL Group, said that holds a bachelor’s degree with an requiring SICs in part 121 air carrier f. Certified Flight Instructors aviation major (60+ aviation semester operations to hold an aircraft type rating Many commenters indicated that the credits) from an institution of higher is not necessary and that current individuals who perform best in air education who also receives a regulations and air carrier training carrier initial training are those that commercial certificate and instrument programs are sufficient. Ameriflight have CFI certificates and were hired rating from an associated part 141 pilot stated experience, not certification, is with 500 to 1,000 hours. The school; the problem. Prairie Air Services commenters contended that the Pilot • 1,250 hours for a graduate who ‘‘doubted’’ that any accidents would Source Study in 2010 and 2012 holds a bachelor’s or an associate’s have been prevented if the SIC had a provided support with statistically degree with an aviation major (30+ type rating. Bemidji Aviation Services, significant results for the argument that aviation semester credits) from an Inc. indicated that SIC checks achieve CFIs perform better in part 121 training. institution of higher education who also the same goal. UPRTA supports upset The pilots that had CFI certificates had receives a commercial certificate and prevention and recovery training as an more training completions and required instrument rating from an associated alternative to obtaining a type rating. fewer extra training events in part 121 part 141 pilot school; and Aerosim and an individual commenter training. NTAS, AABI, Spartan College, • Pilots who have reached age 21, noted that a type rating has not and one individual commenter stated have logged 1,500 hours total time as a historically been an indicator that SICs that credit for CFI ratings and flight pilot, and satisfy the remaining are properly trained. instruction given should qualify for a aeronautical experience requirements The FAA agrees with the large reduction in flight hours. Another defined in § 61.160. number of commenters who said that

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requiring an aircraft type rating for all rating for the aircraft flown to be $11.6 already hold ATP certificates during SICs serving in part 121 operations million dollars. annual recurrent training. With the would improve safety in part 121 air AAI, A4A, Delta, FedEx, and UPS also publication of the final rule so close to carrier operations. In addition, this requested that the proposed compliance the proposed compliance date, it is requirement responds to the objectives deadline of August 1, 2013 be extended. likely that air carriers will have to of section 216 of the Act, which requires They specifically proposed a schedule additional training and testing the Administrator to determine the compliance deadline of 5 years or events for these SICs to obtain a type appropriate multiengine airplane flight during transition or upgrade training. rating by August 2013 unless the FAA experience for pilot flightcrew members. JetBlue proposed aligning the extends the compliance date. To the The historic division of compliance time frame with initial, extent commenters suggested aligning responsibilities between the PIC and SIC transition, or upgrade training. Some the type rating requirement and upgrade have changed. In today’s air carrier commenters indicated that, for current training, the FAA has determined that environment, both the PIC and SIC SICs, the compliance period for the type would result in an unnecessary delay share the role of pilot flying and pilot rating requirement should be five years given the assumptions in the initial monitoring. Therefore, the FAA has or be aligned with upgrade training. regulatory evaluation. The time period determined that requiring an SIC to UVU, SJSU, and four individual for upgrade to PIC is approximately 5 train to the same level of aircraft commenters discussed implementation years for regional carriers and 10 years handling proficiency as the PIC by of a grandfather clause for current for major air carriers. obtaining an aircraft type rating is students currently enrolled in college to To balance the cost and timing appropriate. The FAA assumes most become a pilot. concerns raised by commenters with the The FAA estimates that even if an air pilots will obtain an aircraft type rating benefits of requiring SICs to hold an carrier does not currently provide at the air carrier as part of initial aircraft type rating, the FAA has aircraft type ratings to its SICs, the training. The practical test for an SIC to decided to extend the compliance date impact of the proposed rule to its to January 1, 2016 for pilots who have obtain an aircraft type rating will training program would be low. been employed as part 121 SICs on or include the same tasks and maneuvers Currently, all SICs in part 121 before July 31, 2013. This change is as those required for a PIC receiving a operations receive extensive training reflected in the new § 121.436(c). The type rating. Because this practical test and a thorough evaluation at the end of extended compliance period will allow would be administered by an FAA the air carrier’s initial training program. air carriers to make the appropriate inspector or designee, the test would During the evaluation, SICs must modifications to their approved training serve as an additional level of oversight demonstrate that they can perform most programs and incorporate the type of the SICs aircraft handling skills and of the maneuvers and tasks that would rating requirement into their recurrent abilities. The FOQ ARC members be required for an aircraft type rating. training and transition training. In unanimously recommended that an SIC The FAA acknowledges that an SIC may addition, it will alleviate the burden hold a type rating in the aircraft to be need some additional hours of training placed on the aircrew program flown in part 121 air carrier operations. on tasks and maneuvers required for an designees and FAA employees who will 2. Compliance Time aircraft type rating that are not currently need to administer the certification required during the SIC evaluation. The event for the large number of SICs who JetBlue and AAL requested a FAA believes, however, that the may require aircraft type ratings. The grandfather clause for existing SICs to practical test for the aircraft type rating FAA notes that the extended enable additional compliance time and could be performed in the same compliance date will most benefit reduce the financial burden that would simulator session currently used for the current SICs who hold ATP certificates be incurred by requiring unplanned evaluation. The FAA acknowledges that, and already have relevant experience training and evaluation sessions. JetBlue unlike an evaluation, which is typically operating the aircraft they are flying. estimated it would cost $6 million to conducted by a check airman, the The FAA does not support a provide a type rating to its current 1,120 practical test for an aircraft type rating grandfather provision that would result SICs who do not hold a type rating for would have to be administered by an in differing SIC certification the aircraft they fly. This estimate is FAA inspector or FAA designee. requirements. Nor does it support based on the cost provided in the FAA’s As a result of the statutory deadline certification by air carrier employees initial regulatory evaluation, which requiring all part 121 SICs to hold ATP who are not designees of the estimated the incremental per-pilot cost certificates by August 2, 2013, most Administrator. There is no precedent for of a type rating for existing SICs at current part 121 SICs that hold only a an evaluation event that results in the $5,389. AAL is concerned about the commercial pilot certificate will likely issuance of an FAA certificate or rating additional cost burden of providing a receive an aircraft type rating during an being conducted by someone other than type rating to their 852 current SICs ATP certification event administered by a designee of the Administrator. The who do not have type ratings. AAL the air carrier prior to the deadline. commenters did not offer any added that the FAA should consider Many air carriers have already initiated persuasive arguments for why non-FAA allowing qualified simulator instructors a change to their approved training employees or designees should be or check airmen to validate flying skills programs to provide ATP certificates allowed to administer these evaluation for those pilots with at least 1,000 hours and type ratings to SICs who hold only events. in type during their next recurrent commercial pilot certificates. The FAA training cycle. Upon completion of the assumes the proposed compliance date 3. Aircraft Type Rating Requirement for evaluation event, AAL suggested having for the type rating will not be an issue SICs Serving in Operations Outside of a letter issued to the pilot to take to an because this population of SICs will Part 121 FAA office to obtain their ATP receive a type rating simultaneously Fifteen commenters stated that SICs certificate. Delta estimated the short- with an ATP certificate. serving in operations outside of 14 CFR term cost to provide the type rating to In the initial regulatory evaluation, part 121 should hold a type rating if the its more than 1,800 SICs who already the FAA assumed that air carriers would PIC is also required to hold a type rating have ATP certificates but not the type provide a type rating to their SICs who under the rule part. CAPA supported

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the idea of requiring SICs serving in part 121 operations. Additionally, the regulatory requirements for the ATP operations conducted under parts 91, Pilot Career Initiative, Cape Air, certificate, which is required to serve as 125, and 135 to hold a type rating ExpressJet Airlines, and Airlines for PIC in part 121 operations. Therefore, because flying tasks are based on the America noted that the Act only regulations minimized the chance that pilot flying and pilot monitoring addresses part 121 operations. For this two pilots with little or no air carrier designations, not on seat specific reason the type rating requirement experience could be paired together as maneuvers, as was once the case. FSI should be limited to part 121 a flightcrew. The Act’s requirement for commented that even under normal operations. part 121 SICs to hold ATP certificates operations there may be scenarios where NATA commented that an SIC type significantly changes the flightcrew the SIC does not have the knowledge rating requirement outside of part 121 is composition for those operators who and experience to successfully land the not relevant because the FAA did not hire pilots with the minimum flight aircraft. FSI and an individual propose such a requirement in the time requirements. By raising the commenter also noted that SICs should NPRM, nor did the FAA present certificate requirement of part 121 SICs, hold a type rating as a way of ensuring conclusive evidence of a need for the natural mentoring period may no they can safely fly the aircraft in the requiring a type rating for SIC serving in longer exist without additional event the PIC is incapacitated. IATA operations under parts 91, 125 or 135. regulation. The FAA notes that this stated in its comments that a type rating Parks College commented that there is a requirement will create time for gives SICs more insight into the clear potential safety benefit to requiring mentoring to occur for pilots new to the technical and operational characteristics SICs under parts 91, 125 and 135 to air carrier environment, which supports and specifics of the aircraft and possess a type rating; however, there is in part the objectives of Section 206 of generates more confidence, which can not enough data regarding the potential the Act. That statutory requirement will be translated into increased operational economic impacts of the proposal to be addressed in the Flight Crewmember safety. APA stated that all pilots should offer a cost-benefit based Mentoring Leadership, and Professional be required to accomplish the same recommendation. ERAU commented Development rulemaking project. training to the same standards. Delta that it is unnecessary because The intent of the proposed 1,000-hour commented that requiring SICs flying operations under other rule parts are not air carrier experience requirement in operations outside of part 121 to hold a similar. § 121.436 was to prevent two pilots in type rating issued in accordance with The FAA agrees with commenters that part 121 operations with little or no air the practical test standard would ensure the flight-related tasks are no longer carrier experience from being paired that all pilots serving as flightcrew based on seat position, but rather by the together as a flightcrew in line members and carrying passengers for pilot flying versus pilot monitoring operations. In addition, it would ensure hire meet the same standard. designations. Additionally, the FAA that pilots obtain at least one full year Forty-five commenters including agrees that type-specific training could of relevant air carrier operational Rocky Mountain College, IFL Group, increase the technical and operational experience before assuming the and Prairie Air Services, disagreed with knowledge level of SICs on specific authority and responsibility of a PIC in requiring SICs serving in operations aircraft. The Act was specific to operations conducted in part 121 outside of part 121 to hold an aircraft modifying the ATP certificate and part operations. As proposed, the 1,000 type rating. KSU, Purdue, FSC, and 121 operations. As such, the NPRM did hours in air carrier operations could be Aviation Professional Development, not propose that SICs under other a combination of time as PIC in LLC stated that the current rules for operating parts obtain an ATP certificate operations conducted under or aircraft type rating. Even though the parts 91, 125 and 135 are sufficient and § 91.1053(a)(2)(i), § 135.243(a)(1), or as FAA specifically solicited comments on there is no need for a type rating an SIC in part 121 operations.23 requirement. GAMA also commented requiring SICs serving outside of part that there are sufficient regulations in 121 to obtain a type rating, a specific 1. Air Carrier Experience Requirement place for parts 91, 125 and 135 requirement was not included in the Twenty-nine commenters, including operations and added there are no safety draft regulatory text in the NPRM. AAL, A4A, ALPA, CAA, CAPA, PABC, issues related to the SIC not having a Additionally, the FAA did not provide Pilot Career Initiative, The Families of type rating. Spartan College also stated any economic impact information in the Continental Flight 3407, USAPA, UVU, that current regulations are sufficient regulatory evaluation that was provided and WMU, stated the proposed 1,000 and that the training received by SICs is with the NPRM. While the FAA did hour requirement is appropriate. adequately preparing them for line receive comments that supported Over 40 commenters, including CAE operations. Bemidji Aviation Services extending the type rating requirement to and KSU, believe the proposed rule is Inc. commented that a type rating operations outside of part 121, a excessive with some proposing evaluation is no different than the majority of the commenters did not alternative hours of air carrier checkride that most airlines already support such a requirement. As a result experience. Delta specifically stated that make an SIC pass. Aerosim commented the FAA intends no action at this time. 750 hours is enough time for a pilot to that type-rating training has not G. Minimum of 1,000 Hours in Air complete initial training, meet operating historically been any indicator of a Carrier Operations To Serve as PIC in experience requirements, and acquire properly trained pilot. Aerosim stated Part 121 Operations (§ 121.436) approximately 18 months of flying that real scenario-based training experience. Additionally, over the 18- Prior to the issuance of this final rule, coupled with a structured training month period the pilot would be SICs in part 121 operations were only program would result in a more exposed to seasonal weather differences, required to hold a commercial pilot competent pilot. mechanical issues, passenger issues, certificate with an instrument rating, AAL, RAA, Pilot Career Initiative, and air traffic control issues. GAMA, which can be obtained in as few as 190 Cape Air, and PABC expressed concern Rocky Mountain College, FSC, Purdue, that a type rating requirement for SICs flight hours. If hired by a part 121 air serving in parts 91, 125, or 135 would carrier with these minimums, SICs 23 The FAA has included an exception from this restrict an important time building would acquire over 1,000 hours in air requirement for pilots who are serving as pilot in avenue for pilots aspiring to serve in carrier operations before meeting the command in part 121 operations on July 31, 2013.

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and Spartan College commented that the responsibility of a part 121 operation as therefore, that time should count. FSI proposed time was too long and that PIC. The FAA does not differentiate part said that multicrew time accrued by upgrade from SIC to PIC should be 121 flightcrew member certification and SICs in subpart K of part 91 and parts based on competency, not on the qualification requirements based upon 135 and 125 should count toward the number of flight hours. The UAA and whether they are conducting passenger 1,000 hours. ALPA commented that SIC SIU commented that the requirements or supplemental (cargo) operations. The time in part 135 and subpart K of part for a PIC should be established by the FAA acknowledges that this 91 should count if the time was air carrier and the air carrier’s POI. UAA requirement will increase the minimum acquired in a multiengine turboprop or and SUI also commented that pilots time required for a pilot prior to serving turbojet airplane. NATA commented who obtain an unrestricted ATP as PIC in part 121 operations. If a pilot that SIC time outside part 121 should certificate with 1,500 hours would need is entering part 121 service with no count because experience in multiple a minimum of 2,500 total flight hours to previous air carrier experience, it may operational scenarios is beneficial. upgrade to a part 121 PIC. SICs with an take more than one year for the pilot to Purdue said that SIC time should count R–ATP certificate would need a upgrade to PIC. The FAA estimated in as long as it was acquired while flying minimum of 1,750 (military pilots) to the initial regulatory evaluation for the in a multi-pilot crew under subpart K of 2,000 total flight hours (graduates of NPRM that flightcrew members serving part 91 or part 135. UPRTA said that SIC qualifying four-year aviation degree in part 121 operations fly on average time outside of part 121 should count programs) to upgrade to a part 121 PIC. 750 hours per year. However, the FAA only if the SIC has completed upset UAA and SIU are concerned that these notes that part 121 pilots are permitted prevention and recovery training. flight hours may exceed what is by regulations to fly up to 1,000 hours Aviation Professional Development necessary to train safe, competent PICs. per calendar year (§ 121.471). The FAA and FSC said that SIC time accrued Fifteen commenters contended the also notes that for most operators the outside of part 121 operations should requirement is unnecessary. 1,000-hour requirement will not be a not count because other operations are Ameriflight, Inc., Boeing, JetBlue, and factor given actual upgrade times for dissimilar. The PABC stated that SIC Kestrel commented that setting a flight SICs exceed the minimum time it would time accrued outside of part 121 time requirement for upgrade will not take to acquire 1,000 hours, and thus we operations should not count towards guarantee an increased level of believe there will be minimal costs and this requirement because the mentoring operational safety or competency. These benefits from this provision. and experience needed to become an commenters assert that minimum hour effective part 121 PIC cannot be requirements are not a guarantee that a 2. Part 135 and Part 91, Subpart K Time received outside of part 121 operations. desired experience has been gained and The FAA received over fifty USAPA does not support counting flight that flight time alone does not provide comments on whether to credit flight time in subpart K of part 91 or part 135 an opportunity to assess the pilot’s time earned in part 135 and subpart K operations towards the 1,000 hour ability to act as PIC. ExpressJet Airlines of part 91 towards the 1,000 hours of air requirement. stated that the current requirements for carrier experience requirement. The The FAA has decided that pilots a PIC in part 121 are sufficient because majority of commenters supported should not be permitted to count any air carrier PIC candidates complete a including the PIC flight time in these time as a required SIC in operations rigorous training program, which is operations as proposed in the NPRM as conducted outside of 14 CFR part 121. approved by the FAA. These pilots also part of the requirement. AAL, GAMA, These SICs are not exercising the receive continuous oversight through KSU, and RACCA stated this time is privileges of an ATP certificate and have recurrent training and checking events. similar to part 121 operations and not demonstrated leadership and ERAU noted the proposed requirement provides a useful base of experience. command abilities necessary to exercise is arbitrary, too long, and limits the air FedEx, ExpressJet, ALPA, IFL Group, operational control of a flight in carrier’s flexibility. and Purdue specifically commented that conditions most similar to operations RAA supported the requirement for other PIC time in part 135 operations conducted under part 121. The FAA has 1,000 hours of experience in air carrier should also count toward the 1,000-hour concluded that the time an SIC spends operations for part 121 passenger requirement. Conversely, five observing a PIC in part 121 operations service, but believes that requirement is commenters, including APA, CAPA, plays an important role in preparing the excessive for part 121 all-cargo and USAPA, stated operations under SIC for eventual upgrade to PIC. A PIC supplemental operations. RAA is part 135 and subpart K of part 91 and in part 121 air carrier operations is concerned that because supplemental should not count towards the proposed expected to possess leadership and carriers providing feeder service are 1,000-hour experience requirement. command abilities, including often limited to shorter flight legs, it In the NPRM the FAA also asked aeronautical decision making and the could take three or more years for a pilot commenters if SIC time outside of part sound judgment necessary to exercise to gain 1,000 hours as an SIC. RAA 121 should count towards the 1,000 operational control of the flight. The states that these operations pose no hour requirement to upgrade to PIC in FAA has determined that developing threat to the flying public and a more part 121. The majority of commenters these abilities is most effectively done suitable time requirement should be on this question offered that some SIC by performing the duties of an SIC in considered for part 121 supplemental time outside of part 121 operations part 121 air carrier operations while carriers. should count toward the requirement. under the supervision of an experienced The FAA has considered all of the Cape Air said that flight time as an SIC PIC. comments and determined that keeping in scheduled part 135 operations should The FAA has determined that the the 1,000-hour air carrier experience count. ExpressJet said that SIC time in ability to fly at the ATP certificate level requirement is appropriate for all subpart K of part 91 and part 135 and have demonstrated this proficiency operations under part 121. This operations should count. FedEx during evaluation is an important requirement will ensure that an SIC has commented that subpart K to part 91, regulatory differentiation. The FAA first experienced an entire year of relevant part 125, and part 135 operations can proposed that certain operations under air carrier operational experience before involve complex aircraft and experience part 135 should require an ATP assuming the authority and relevant to part 121 operations; certificate in 1977. In that NPRM, the

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FAA stated the requirement to hold an pilots operate in a unique system that is hours of air carrier operating ATP certificate to act as PIC in some different from a part 121 air carrier experience. part 135 operations was ‘‘[. . . ] based environment. The FAA has determined H. Miscellaneous Issues in part on operational complexity and that military pilots would benefit from the number of persons carried, would spending some time serving as a 1. Pilot Supply provide a level of safety more required crewmember in a civilian air In the NPRM the FAA sought comparable to that provided by Part carrier operation before upgrading to comment on the potential impact to 121.’’ For these same reasons the FAA PIC. This time would prepare them for pilot supply on part 121 and part 135 air has determined that flight time acquired operating in compliance with the carriers as well as part 141 pilot schools as a PIC in operations under regulations that govern civil aviation, and part 142 training centers as a result § 91.1053(a)(2)(i),and § 135.243(a)(1) the air carrier’s particular operating of the requirement for all SICs in part and flight time acquired as an SIC in specifications, and the airplane’s 121 to hold an ATP certificate. The FAA part 121 operations should count operations manual. received 267 comments regarding pilot towards the 1,000 hour air carrier 4. Other Time supply from airlines, industry/trade experience requirement. Operations groups, colleges and universities, pilot under § 91.1053(a)(2)(i) or FedEx, A4A, and FSI said that flight training centers, and pilots. § 135.243(a)(1) require an ATP time in part 125 should count toward certificate, are multicrew operations, the 1,000 hours of air carrier experience a. Part 121 Pilot Supply and generally use turbine aircraft and required to serve as PIC in part 121 operations. The FAA determined that More than 100 commenters therefore are the most applicable to part specifically stated the proposed ATP 121 operations. The FAA has flight time in part 125 should not count requirements for part 121 SICs would determined that, while other part 91 and because, although these operations hurt part 121 pilot supply. The part 135 operations may involve certain share certain characteristics with part University of Dubuque, SIU, and 58 elements that are relatable to part 121 121 operations, they are not sufficiently other commenters stated the ATP operations, the varied nature of similar to count toward the 1,000 hours certificate requirement for part 121 SICs operations does not make credit toward of air carrier experience. Part 125 does would significantly affect air carriers’ the 1,000 hour requirement appropriate. not involve common carriage, a pilot is ability to hire new pilots, particularly As such, the proposed requirement that only required to have a commercial regional air carriers. the 1,000 hours in air carrier operations pilot certificate, and the operating rules Only a handful of commenters may be a combination of time as PIC in in part 125 differ significantly from the provided specific information to operations conducted under operating rules in part 121. § 91.1053(a)(2)(i) or § 135.243(a)(1) or as FedEx, AA, A4A, and FSI commented support the assertion that part 121 pilot SIC in part 121 operations remains that flight time in international air supply will diminish. Among these unchanged from the NPRM. carrier operations should count toward commenters was the UAA. Their the 1,000 hours required to serve as PIC comments included data that suggests 3. Military Time in part 121 operations. The FAA there is a diminishing supply of pilots Delta, A4A, AAL, and FedEx concluded that, although foreign air in general at a time when forecasts commented that flight time in military carrier operations are similar to U.S. air suggest a consistent and growing global operations should count toward the carrier operations, there are significant demand for pilots. UAA stated in their 1,000-hour air carrier experience differences related to the environment comments: requirement. UPS specifically asked under which foreign air carrier • Overall, U.S. airline domestic whether military flight time counted operations are conducted, including revenue passenger enplanements are towards the 1,000-hour air carrier possible cultural differences. Most expected to grow an average of 2.2 operating experience requirement. FSI importantly, pilots serving for foreign percent per year from 2011 to 2032 and indicated that multicrew flight time in air carriers do not operate under U.S. international revenue passenger the military should count. An regulations and may not have enplanements by U.S. carriers are individual commenter stated that experience in the U.S. national airspace expected to grow 4.2 percent per year military pilots who fly transport system. The FAA concluded that from 2011 to 2032. category aircraft as PIC should be able requiring these pilots to serve first as an • Currently, Boeing forecasts a global to credit up to 500 hours of their SIC in part 121 operations before need for 460,000 pilots through the year transport category military flight time. upgrading to PIC is appropriate. 2030, with 97,350 of those needed for The commenter stated that this would CAE commented that the FAA should North America. This demand is based still require them to fly 500 hours for an consider a minimum time in aircraft upon projected fleet growth and pilot air carrier before being eligible to act as type if a pilot does not have sufficient retirements. PIC for a part 121 operation. flight time in subpart K of part 91, part • Pilots who turned 60 in the years The FAA recognizes that many pilots 135, or part 121 to meet the 2007 to 2012 will be forced to retire in the course of their military careers requirement. While time in type is beginning in 2012. UAA estimated that, will obtain significant multicrew valuable, the proposed requirement is beginning in 2018 or 2019, as many as experience as PICs of transport category directed at gaining relevant experience 2,000 part 121 pilots will be forced to aircraft and therefore has added in complex air carrier operational retire each year due to the Age 65 rule. paragraph (c) to new § 121.436 to allow environments rather than in aircraft • FAA statistics demonstrate the 500 hours of military flight time accrued handling. The FAA has determined that number of new student pilot certificates as PIC of a multiengine turbine- the proposed requirement for SICs to issued has declined from 2007 to 2010 powered, fixed-wing airplane in an obtain a type rating will provide by more than 12,000. The number of operation requiring more than one pilot additional experience and proficiency new commercial pilot certificates issued to be credited to the 1,000-hour in aircraft-specific handling and also declined significantly from 2007 requirement. While there is value in this knowledge. Therefore, the FAA has through 2010. experience, the FAA does agree with decided not to allow credit for time in • A study conducted by the some of the commenters that these the type of aircraft towards the 1,000 University of North Dakota indicates

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only slightly more than half the flight have on part 135 operators, 141 pilot operate approved Level 4⁄5 FSTD instructors surveyed who initially schools, and 142 training centers. The devices. planned on an airline career still have RAA commented that students will be NADA/F commented that the 1,500 that long-term goal. less attracted to part 141 schools that are flight hours and ATP requirement • The Pilot Source Study (2010) not associated with a four-year should benefit part 141 training centers indicates a decrease in military pilots university and college accredited and should have no impact on part 135 moving to air carriers. As the U.S. aviation degree programs because those carriers as they already require an ATP Armed Forces continue contraction, students could not take advantage of the and 1,500 hours. fewer military pilots are needed. R–ATP hour requirements. Cape Air commented that it is likely ALPA stated in their comments that SJSU commented that part 141 pilot that many part 135 pilots with ATP there will be no impact on the pilot schools and 142 training centers may certificates will be recruited by the supply based on this rule because there see a decline in new student enrollment larger part 121 carriers who would then are thousands of qualified pilots because some students already struggle not have to incur the costs of the ATP currently on furlough. They also noted to afford training costs and will not be CTP. This natural career progression that the availability of pilots is a willing to spend the extra money essentially places the majority of the function of the health of the air carrier needed to meet the new requirements of burden of acquiring ATP certificates to industry. a part 121 SIC position. On the other smaller airlines, with limited resources. CAPA stated the business practices hand, ALPA commented that it expects c. FAA Response and models of many of our nation’s enrollment at accredited colleges and carriers have reduced the career universities with part 141 pilot training The FAA does not dispute the factual expectations of entry-level pilots to a programs to increase. It also anticipates numbers of decreased pilot starts and standard that will not allow a pilot to the rule ‘‘could result in the creation of the decreased number of commercial support a family. This new economic training partnerships between those and flight instructor certificates issued reality is what is driving many qualified accredited colleges and universities and over the past 10 years. However, the pilots out of the job market. CAPA training academies (e.g., CAE and FAA also cannot change the stated there will not be a pilot shortage FlightSafety International) that possess requirement under the Act that all pilots but a shortage of pilots willing to work part 141/142 certificates to utilize the in part 121 operations have an ATP for low wages. certified flight training simulators that certificate by August 2013. The FAA has Several commenters, including RAA, these flight training academies may decided to take advantage of the ExpressJet, JetBlue, Ameriflight, have.’’ relieving option within the Act to offer Paradigm Shift Solutions, Inc., and DSU commented that it already has a an ATP certificate with restricted GAMA stated this rule will exacerbate high attrition rate because the flight privileges, which would permit some the pilot shortage caused by the Age 65 training component of its program pilots to obtain the ATP certificate with rule. Ameriflight added that no pilots doubles the cost of the aviation degree less than 1,500 hours. While pilot will be available for operators of small compared to other degrees offered by supply was not the reason the FAA aircraft as a result of talent drain to the university despite the fact that it considered such an option, the FAA has larger operators. makes no money on the flight training. determined it would be a cost-relieving The AAI contended that within five It is concerned the rule would increase measure and would address some of the years the proposed rule will result in a the attrition rate further. pilot supply concerns. severe flight shortage to small CAE commented that part 141 Despite the reduced pool of eligible communities. It also contends that the operators might retain their instructors pilots (i.e. pilots with the total flight rule will threaten feeder routes and hub longer but may also suffer from reduced hours for an ATP certificate), the current operations. customer throughput as the new rule level of safety will be maintained IATA contended that the proposed virtually eliminates their options to because pilots must continue to meet rule will be felt first in regional carriers provide training at any level of certification and qualification standards but will eventually affect legacy carriers reduction below the 1,500 hours. before serving as a pilot in part 121 as well. ExpressJet, Delta, Parks College, Parks College commented that part operations. As under current and two other commenters state that the 135 operators and part 91 subpart K regulations, any pilot who fails to rule sacrifices quality pilot candidates operators may face negative impacts in demonstrate satisfactory performance by focusing on flight time instead of the two ways. First, if the supply of pilots for the ATP certificate or successfully quality of training. American Eagle qualified for part 121 operations complete all of the requirements within Airlines, Inc., states that the rule will diminishes significantly, causing entry the air carrier training program will not put U.S. air carriers at a disadvantage wages to increase, there may be a shift serve in part 121 operations. We do not with foreign carriers. of employees from part 91 and part 135 see safety compromised because of a Cape Air, UPS, FSC, CAA, ERAU, operations to part 121 operations. reduced eligible pilot pool. A4A, CAE, Human Capital Management Secondly, the supply of pilots that gain The FAA acknowledges it is possible and Performance, LLC, Aviation their initial crew experience in part 121 that as a result of the reduced pool of Professional Development, LLC, DSU, operations as SIC, then move to part 135 eligible pilots, some carriers with less Spartan College, LeTourneau operations or part 91 subpart K as PIC competitive compensation packages University, and three other commenters may decrease. It also anticipates that the may experience a higher failure rate due predict that the arbitrary hour proposed ATP CTP would increase to an inability to attract the best requirements of the proposed ATP training volume at part 142 training candidates, which in turn is a cost to certificate with restricted privileges will centers, as they currently operate the that carrier. Determining the actual cost discourage students from seeking air majority of Level ‘‘C’’ and ‘‘D’’ is very difficult to identify due to lack carrier careers. simulators. Additionally, training of available data and long term hiring volume at part 142 certified training data is difficult to forecast. The FAA b. Part 135, 141, and 142 Pilot Supply facilities would significantly increase, notes, however, the candidates who The FAA also received comments on as only a limited number of part 141 have traditionally performed the best in the impact the proposed rule would and collegiate programs currently initial training, as identified by the ARC

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and the pilot source study, are those the FAA’s finding that the (annualized) take place just prior to initial pilot candidates that will be eligible for a cost of the rule is less than 0.5% of the training so there will be no incremental restricted privileges ATP certificate. operating revenues of all small firms travel costs. However, we now include affected by the rule and request that this travel costs for pilots undergoing ATP 2. Benefits and Cost finding be reevaluated taking into certification training at part 142 training Ameriflight questioned why the FAA account RACCA members and other centers. We agree that we calculated the cost of the proposed rule similarly-placed part 135 carriers. underestimated training pay in the post-statute (meaning without the costs In conducting the economic analysis, NPRM and have increased our estimate associated with the self-executing ATP the FAA did not disregard part 135 on- for the final rule. certificate requirement), but claimed a demand operations as evidenced by the In reference to our estimate of the cost $23 million dollar benefit 24 from the accident analysis conducted by AVP. of the 1,500-hour requirement, the IFL ATP certificate requirement. Ameriflight For part 135 operators, the FAA Group disputed the assertion that a new recommended the FAA not be allowed determined that this rule would have pilot can easily fly 750 hours in a year to take a benefit from any proposed rule had no economic impact on those outside of part 121 operations. The IFL it is not accounting for in its costs. operators. Operating revenue data is not group noted that kind of flight time has The FAA’s Office of Accident available for most part 135 operators as historically been obtained working for Investigation and Prevention (AVP) most are privately held. However, the an air carrier, which the pilot will no conducted an accident analysis three part 135 operators for which we longer be able to do. The commenter accidents of those accidents where the do have operating revenue, as measured added, although flight instructing is SIC had less than 1,500 hours and found by number of PICs (4 to 45 PICs), another way to build time, as a result of no relationship with the ATP certificate encompass almost the entire size range the declining student pilot starts, the requirement. AVP found the probable of part 135 operators (1 to 55 PICs). The ability for pilots to earn that much time cause and contributing factors for those finding that there would be an annually is not realistic. Upon review, accidents to be other issues that are insignificant economic impact therefore the FAA has reduced its assumption to addressed by the ATP CTP and the applies to RACCA members and other 500 hours of flight time annually. aircraft type rating requirement. similarly-placed part 135 carriers. With respect to the cost of the ATP Therefore, the FAA did not attribute any In commenting on the costs of the CTP, NATA asserted the costs are borne benefit to the ATP certificate ATP CTP, AOPA indicated the FAA did by the individual, not an air carrier. requirement. However, as reflected in not calculate the time required of air ‘‘Should the FAA reject NATA’s the final regulatory evaluation, if one carriers to ‘‘navigate the cumbersome comment that costs of the ATP CTP were to attribute all of the benefits schedules of part 142 training centers or should be computed based upon impact claimed for those accidents to the ATP airline in-house training centers’’ to to the regulated individual pilot, NATA certificate requirement (meaning there schedule simulator training and asserts that the FAA still must modify was no other attributable cause for the estimated the cost to be a minimum of its estimates to reflect the higher accident other than the fact that the SIC two hours per ATP applicant. AOPA training costs faced by Part 135 and 91 did not have an ATP certificate and also stated the ATP CTP costs did not subpart K operators’’ due to smaller 1,500 hours), it would total $23 million account for travel expenses because the class sizes and the need to contract with (NPRM). FAA assumed the ATP CTP training training providers. Ameriflight and RACCA believe that would take place immediately prior to The FAA believes that most pilots the cost of the final rule will exceed initial training for the air carrier, but will receive the ATP CTP through $141 million for the airline industry and ‘‘the FAA does not address pilots employment—either at large air carriers, should therefore precipitate a review seeking ATP certification outside of the with their own training facilities and under the Unfunded Mandates Reform air carrier environment.’’ AOPA also simulators, or at part 142 training Act of 1995. The $141 million dollar questioned the training pay assumption, centers through training agreements. figure that triggers the Unfunded stating that ‘‘It seems highly unlikely a The inefficiencies of small size can be Mandates assessment relates to costs pilot earns only $43 a day—$2 per day greatly mitigated by contracting out, imposed in any one year on the private less than their daily per diem—while and, in fact, many small operators sector, which is not the case for this training. . . .’’ already use contract training to meet rule. The total costs attributable to the The FAA estimates the social cost of existing training requirements. rule over a 20-year period are just the ATP CTP by estimating the impact Moreover, the ATP CTP, as a general $312.7 million and the highest cost in on the low-cost providers of the program, is not specific to any type any year is under $20 million (2032). training—part 121 air carriers and part aircraft, nor to any rule part (121, 135, Consequently, the Unfunded Mandates 142 training centers. To also include the 91K). Therefore, we believe that Reform Act is not implicated by this pecuniary impact on training schools competitive part 142 training centers final rule. would be double counting. The FAA will deliver generic ATP CTP training to Ameriflight and RACCA objected to does not agree with costing two hours individuals, as well as air carriers, at the finding of no economic impact on per applicant to schedule training. costs no higher than our conservative part 135 operators. RACCA questioned Given the inventory availability of estimate. ‘‘the thoroughness and validity of the FSTDs discussed previously, the FAA economic impact analyses’’ and believes the impact to training 3. Alternative Licensing Structure suggested ‘‘one reason for the FAA’s department administrators will be In the NPRM the FAA posed two inaccuracy is their complete disregard minimal. With respect to travel costs, questions which focused on an of Part 135 on-demand flying.’’ the FAA has modified its assumption alternative pilot licensing structure for Ameriflight and RACCA also object to and believes that 50% of pilots will be part 121 pilots. The FAA asked if it trained directly by air carriers and 50% should consider an alternative licensing 24 In the NPRM initial regulatory evaluation, the will be trained by part 142 training structure for pilots who desire only to FAA estimated that the total benefit for accidents involving SICs with fewer than 1,500 hours of flight centers. We believe it is highly fly for a part 121 air carrier (e.g. time was $23 million. The final rule regulatory reasonable to assume that ATP multicrew pilot license). The FAA also evaluation estimates it to be $16 million. certification training by air carriers will asked if it were to adopt a licensing

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structure for a multicrew pilot license that have limited knowledge and propose an alternate licensing structure (MPL), what would be the appropriate experience thus reducing safety. for pilots seeking employment with a amount and type of ground and flight The Families of Continental Flight part 121 air carrier. Delta, ALPA, and training. 3407, NADA/F, GAMA, USAPA, and CAE also recommended the FAA form With respect to the question of Bemidji Aviation Services, Inc., an MPL ARC to develop whether the FAA should consider an disagreed with an alternative licensing recommendations for the adoption of alternative licensing structure for structure for pilots who desire only to MPL program. prospective part 121 pilots, a total of 79 fly for a part 121 air carrier. Families of The FAA is appreciative of the commenters including IATA, JetBlue, Continental Flight 3407 suggested an comments received regarding an NAFI, Boeing, PABC, FedEx, A4A, CAE, ATP should be the minimum for SICs. alternative certification avenue for part RAA, Delta, NADA/F, USAPA, ERAU, NADA/F stated they are opposed to 121 air carrier pilots. Whereas the FAA Spartan College, and UAA provided altering the ATP requirements and recognizes the potential benefits of such input. Just over half of the commenters noted the option of multicrew license is a certification structure, it is also were supportive of the FAA considering not part of the legislation. USAPA stated cognizant of the potential risks such a an alternative method to certificate part the FAA should keep the current ATP dramatic departure from traditional 121 air carrier pilots. NTAS supplied standard. Bemidji Aviation Services, certification and experience the results of their industry polling; Inc., stated pilots need to have more requirements could present. The FAA their responders reflected similar experience than an MPL. FSI noted their also agrees with commenters on the results. Sixty-two percent of their ATP courses already include limited data points available for a responders were in favor of the FAA appropriate CRM training. American comprehensive evaluation of existing considering an MPL-like structure. Flyers and NOVA Southeastern MPL programs abroad. Although the FAA’s harmonization with ICAO was University stated the FAA should not FAA cannot commit to a timetable for the most selected reasoning for support accept a lower standard of skill. the organization of an ARC, the FAA according to the NTAS poll. With respect to the question of what believes such an industry group could would be the appropriate amount and Some commenters including IATA properly research, study, and provide type of ground and flight training for an and Boeing, noted the benefits of an detailed recommendations to the FAA MPL-like certification structure, 35 alternative licensing structure for pilots for additional consideration. commenters provided specific who desire only to fly for a part 121 air recommendations on the ground and 4. Accident Effectiveness Ratings carrier. IATA noted results show pilots flight training for an MPL-like structure. In the NPRM the FAA sought training in a multicrew environment Seventeen commenters recommended comment on the effectiveness ratings for exhibit proficiency and safety. Boeing looking to existing ICAO standards or the specific accidents identified in stated the graduates of these programs rules in place in other countries. Appendix 4 of the Initial Regulatory are highly competent in the knowledge ExpressJet recommended the FAA Evaluation. Appendix 4 contained the and skills required for air carrier should review the existing MPL list of part 121 and part 135 accidents operations. An individual commenter structure as outlined in Annex 1 to the that may have been prevented as a result stated training for such a license International Convention on Civil of this rulemaking. The accident specifically develops the core Aviation and consider the desired analysis was conducted by the FAA’s competencies necessary to operate as a outcomes and harmonizing with ICAO Office of Accident Investigation and part 121 SIC. Another individual before determining the amounts and Prevention (AVP) in the Assessment of commenter noted MPL is one of the types of training. the Effectiveness of Public Law 111–216 most rigorous structured pilot training JetBlue supported an alternative in Reducing Accident Risk posted to the programs. licensing structure and stated ground docket. Only six commenters addressed CAE stated its top recommendation is and flight training should be determined the effectiveness ratings of the accident for the FAA to adopt a U.S. MPL. by a comprehensive task analysis and analysis. Another individual commenter noted qualification standard, derived from an Ameriflight and an individual the MPL would allow applicant pilots to Instructional Systems Design (ISD) commenter quoted AVP’s assessment save time and money in reaching their process, and in alignment with the that it found little relationship between goal. Aerosim stated the MPL has been requirements of ICAO. Similarly, CAE the 1,500 hour requirement and airplane proven to be effective training outside states MPL candidates meet the accidents, and therefore found little the United States and should be requirements of a pilot operating in benefit for that requirement. Only seven considered in the United States. LETU multicrew transport category aircraft in of the 31 accidents used for the 14 CFR noted many other countries are using all environments developed through an Part 121 benefit analysis had SICs with the ICAO MPL to address pilot shortage. ISD approach. It is not determined by less than 1,500 hours. The individual The RAA stated there is more than hours, but by meeting objectives of the commenter also stated that it appears enough experience in alternate pilot required competencies through that since the 1,500 hour requirement is training and licensing approaches theoretical and flight training, as mandated by statute, the FAA found it elsewhere in the world to support FAA specified by the ICAO Procedures for unnecessary to examine the 1,500 hour consideration of such an approach. Air Navigation Services (PANS) requirement as a tool for improving Several commenters including ERAU Training Document. Consistent with the safety. Aerosim disagreed with the disagreed with an alternative licensing concepts of Advanced Qualification accident analysis because none of the structure for pilots who desire only to Program (AQP), MPL is a continuous accidents reviewed were caused by low fly for a part 121 air carrier and noted improvement training process validated time SIC. UPS commented that it was the lack of information regarding MPL by empirical data. unaware of any evidence to suggest the programs. ERAU noted not enough FedEx, AAL, and A4A each stated the accidents cited by the FAA as the performance data exists on pilots from FAA should consider MPL requirements benchmark for both benefit and MPL programs. CAPA stated an MPL- in accordance with ICAO standards or prevention would have been avoided if like structure would replace fully as recommended from an ARC. JetBlue the proposals in this NPRM had been in qualified and type rated pilots with ones recommended an ARC be convened to place.

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A4A states that the FAA should the final rule, which is included in the ATP certificate is a prerequisite to pilot ‘‘exclude the 24 part 121 accidents that docket for this rulemaking. employment for it, however, market include SICs with more than 1,500 forces and future pilot supply ‘‘will 5. Considerations for Offering the ATP hours as not relevant to this ultimately determine our and other part CTP rulemaking.’’ A4A questioned the 121 major airlines’ decision to offer the effectiveness ratios on several specific In the NPRM, the FAA sought course.’’ accidents 25 because the NTSB comment on what factors parts 121, 135, The FAA appreciates the commenters determined that the probable causes of 141, and 142 certificate holders would input on what the considerations will be the accidents were failures by the PIC principally consider in determining for offering the ATP CTP and took the not the SIC. A4A based its conclusion whether to offer the ATP CTP. The FAA identified concerns into consideration on the fact that this final rule ‘‘mandates received 39 comments to this question. in developing this final rule. Of the comments received, a majority additional experience for a SIC’’ and, 6. Administrative Law Issues therefore, any accident based primarily of the commenters including on an NTSB finding that the PIC was Ameriflight, CAE, SIU, and ERAU, This final rule will be effective primarily responsible for the accident indicated having a Level C or higher immediately upon publication in the should be excluded. FFS would be a consideration. UND Federal Register. Section 553(d)(3) of The FAA did consider the 1,500 hour commented that it does not have a Level the Administrative Procedure Act requirement for SICs as a regulatory C or D FFS. The cost to acquire, house, provides that publication of a rule shall baseline, since it is required by the Act, operate, and maintain the device would be made not less than 30 days before its when reviewing the accidents. However, be prohibitive. UND was quoted $8 effective date, except ‘‘for good cause both the proposed rule and final rule million dollars to purchase a Level C found and published with the rule.’’ 5 would have affected the eligibility of FFS. This means UND would have to U.S.C. 553(d)(3). Consistent with section both the PIC and the SIC involved in the charge $1,000 per hour to operate the 553(d)(3) and for reasons discussed accidents cited in AVP’s analysis. The simulator. This cost does not include below, the FAA finds good cause exists eligibility of flight crews is based on the the cost to build a building to house the to publish this final rule with an ATP certificate requirement for SICs and FSTD or the cost to hire staff to operate immediate effective date. the 1,000 hours of air carrier experience the equipment. The UAA commented As noted earlier, independent of any for the PIC. In all 3 accidents that that the proposed requirement for a rulemaking action by the FAA, all received ‘‘high’’ effectiveness scores Level C FFS severely limits the number flightcrew members in part 121 (meaning there is a 75% reduction in of 141 certificate holders who could operations must hold an ATP certificate the likelihood of the accident under the provide the training. UAA stated that by August 2, 2013. Under this final rule, proposed rule), crew performance none of its member colleges or certain pilots will be able to obtain an essentially explained the accidents and universities own Level C FFSs. UAA ATP certificate with fewer than 1,500 the rule would have affected the stated the proposal would thrust more hours based on specific academic eligibility of both pilots, as neither the training on part 121 operators and the training courses. The FAA has PIC nor the SIC met the proposed large part 141 pilot schools and 142 established a process by which minimum experience for their training centers. institutions of higher education may respective positions under the proposed Another consideration by many of the apply for authority to certify graduates and final rule. AVP concluded that more commenters was whether the certificate for an R–ATP certificate. Without an experience and seasoning would have holder had instructors that met the immediate effective date, the FAA affected the outcome of these accidents. proposed requirement of two years of cannot begin to issue this authority, AVP also acknowledged in its experience in airline operations. Boeing, which will delay issuance of R–ATP analysis that, as a matter of analytical SIU, and UAA commented that the certificates. Such a delay could result in principle, no accident received an requirement for ATP CTP instructors to hardship for those pilots currently effectiveness score higher than 0.9 based have two years of experience under serving in part 121 air carrier operations on the assumption that the FAA can § 91.1053(a)(2)(i), or § 135.243(a)(1), or who would otherwise qualify for an R– never be certain that any intervention in any part 121 operation does not ATP certificate. To minimize would eliminate all risk in a particular assure proficiency in instructing. Boeing disruptions to part 121 operations and scenario. The accident analysis further commented that the instructor reduce the impact on pilots currently considered the entire proposal, not just requirement is overly burdensome on serving in part 121 with commercial the requirement for part 121 SICs to part 141 and 142 certificate holders as pilot certificates, the FAA finds good hold an ATP certificate. AVP found the these organizations have no ability to cause exists for this rule to take effect rulemaking to be effective at least to qualify instructors that did not already immediately upon publication in the some degree against 31 accidents meet the requirement. Federal Register. analyzed, and in most cases the Additional comments focused on effectiveness scores were ‘‘low’’ or which certificate holders might need to 7. Miscellaneous Amendments ‘‘low-to-moderate.’’ provide the ATP CTP. American The FAA proposed several As a result of the comments and the Airlines commented that aviation miscellaneous amendments to parts 61 changes incorporated into the final rule, colleges will be incentivized to offer the and 142. These amendments— AVP re-evaluated the part 121 and part course; however costs to the certificate maintained in the final rule—are non- 135 accidents and made some holder would be a significant factor in substantive technical amendments adjustments. The full review of the determining whether to develop and intended to define terms, remove accident analysis is available as part of offer such a course. JetBlue speculates obsolete provisions, and make minor the Final Regulatory Impact Analysis for the ATP CTP requirement would conforming changes to existing necessitate part 135, regional part 121 regulations. In addition, the FAA has 25 A4A specifically questioned the effectiveness carriers, and parts 141 and 142 made a slight modification to § 61.71(c). ratios in Great Lakes Aviation accident (6/20/2007), certificate holders to offer the ATP CTP This change makes clear that a person the Air Tahoma accident (8/13/2004), the Mesa Airlines accident (10/16/2001), and the Avjet immediately to help alleviate pilot may be considered to meet the accident (3/29/2001). supply concerns. JetBlue added that an aeronautical experience, aeronautical

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knowledge, and areas of operation for inflation with base year of 1995). requirement (by means of the R–ATP requirements of part 61 under the terms This portion of the preamble certificate) and also by its provision of a Bilateral Aviation Safety Agreement summarizes the FAA’s analysis of the allowing pilots with a minimum age of (BASA) and associated Implementation economic impacts of this final rule. We 21 to be eligible for the R–ATP Procedures for Licensing (IPL). As suggest readers seeking greater detail certificate. Our estimate of these cost previously written, the provision could read the full regulatory evaluation, a savings are $2.3 billion with a present have given the impression that a person copy of which we have placed in the value savings of $0.8 billion. who holds a foreign pilot license and is docket for this rulemaking. The final rule requires that all SICs applying for a U.S. pilot certificate on In conducting these analyses, FAA serving in part 121 operations hold a the basis of a BASA is automatically has determined this final rule has type rating in the airplane flown and considered to have met the benefits that justify its costs, satisfies a requires that an ATP CTP be completed requirements of part 61. In fact, a Congressional requirement to improve by all applicants for an ATP certificate foreign pilot is only considered to have aviation safety, and is a ‘‘significant with an airplane category multiengine met those requirements specifically regulatory action’’ as defined in section class rating (or an ATP certificate identified in the BASA and IPL. 3(f) of Executive Order 12866 because it obtained concurrently with an airplane IV. Regulatory Notices and Analyses raises novel policy issues contemplated type rating). The costs of the final rule under that executive order. The rule is training and aircraft type rating A. Regulatory Evaluation also ‘‘significant’’ as defined in DOT’s requirements total $312.7 million Changes to Federal regulations must Regulatory Policies and Procedures. The ($138.7 million in present value). The undergo several economic analyses. final rule, if adopted, will not have a expected benefits from the new training First, Executive Order 12866 and significant economic impact on a requirements are $576.8 million with a Executive Order 13563 direct that each substantial number of small entities, present value of $251.7 million. Federal agency shall propose or adopt a will not create unnecessary obstacles to For part 121 operators the final rule regulation only upon a reasoned international trade, and will not impose is cost-beneficial as present value determination that the benefits of the an unfunded mandate on state, local, or benefits, at $127.5 million, exceed intended regulation justify its costs. tribal governments, or on the private present value costs, at $124.6 million. Second, the Regulatory Flexibility Act sector. For part 135 operators present value of 1980 (Pub. L. 96–354) requires Total Benefits and Costs of This Rule benefits, at $124.2 million, exceed agencies to analyze the economic present value costs, at $9.8 million. In the Act, Congress mandated that all impact of regulatory changes on small Although the FAA does not have a part 121 pilots serving as second in entities. Third, the Trade Agreements quantitative estimate of benefits for part command (SICs) have an airline Act (Pub. L. 96–39) prohibits agencies 91, subpart K, operators, we believe that transport pilot (ATP) certificate with at from setting standards that create the ATP CTP will sufficiently enhance least 1,500 flight hours. This statutory unnecessary obstacles to the foreign safety for part 91, subpart K, operators requirement is self-executing, it will commerce of the United States. In to make the rule cost-beneficial for these developing U.S. standards, this Trade take effect whether or not the FAA operators as well. Because of the Act requires agencies to consider issues a regulation. We estimate the similarity of their operations, we believe international standards and, where costs of the ATP certificate requirement that part 91 subpart K operators are appropriate, that they be the basis of to be $6.4 billion ($2.2 billion in present subject to similar risks as part 135 U.S. standards. Fourth, the Unfunded value), almost all of which stems from operators. The lack of identifiable rule- Mandates Reform Act of 1995 (Pub. L. the 1,500-hour flight time requirement. related accidents reflects the 104–4) requires agencies to prepare a The statute allows the FAA significantly smaller scope of part 91 written assessment of the costs, benefits, Administrator to specify academic subpart K operations compared to part and other effects of proposed or final training as an offset to the 1,500-hour 135 operations and a possible under- rules that include a Federal mandate flight time requirement provided the recording of part 91 subpart K accidents. likely to result in the expenditure by training enhances safety. This rule Additional discussion can be found in State, local, or tribal governments, in the provides cost savings benefits from its the full regulatory evaluation. aggregate, or by the private sector, of provision of such academic training $100 million or more annually (adjusted credits toward the 1,500-hour Statute and Rule Costs and Benefits

TABLE 5A—STATUTE COSTS AND BENEFITS

Total cost PV cost Statute costs ($ mil) ($ mil)

ATP Certificate Requirement—Knowledge & Practical Tests ...... $29.9 $31.1 ATP Certificate Requirement—Eligibility Restrictions ...... 6,344.5 2,181.9

Part 121 ATP Certificate Requirement ...... 6,374.4 2,213.0

Statute Benefits ...... No Identifiable Accident Benefits.

TABLE 5B—FINAL RULE COSTS

Total cost PV cost Final rule costs ($ mil) ($ mil)

Part 121 Operators ...... $280.4 $124.6 Part 135 Operators ...... 22.4 9.8

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TABLE 5B—FINAL RULE COSTS—Continued

Total cost PV cost Final rule costs ($ mil) ($ mil)

Part 91, Subpart K, Operators ...... 9.8 4.3

Total Training/Type Rating Costs ...... 312.7 138.7

TABLE 5C—FINAL RULE SAFETY BENEFITS

Total benefits PV benefits Final rule safety benefits ($ mil) ($ mil)

Part 121 Safety Benefits ...... $292.5 $127.5 Part 135 Safety Benefits ...... 284.3 124.2

All Safety Benefits ...... 576.8 251.7

TABLE 5D—COST SAVINGS BENEFITS OF FINAL RULE

Total cost savings PV cost savings Final rule cost savings ($ mil) ($ mil)

Military Academic Training Credit (750 hrs) ...... $547.1 $188.2 4-Year Degree Academic Training Credit (500 hrs) ...... 972.0 333.0 2-Year Degree Academic Training Credit (250 hrs) ...... 490.1 165.8 Pilots with 1,500 Hrs Flight Time Eligible for Restricted ATP Certificate at Age 21 ...... 300.1 102.8

Cost Savings from Rule Relief ...... 2,309.3 789.8 Notes: 1. Part 121 PV cost of $124.6 million includes $123.1 million in ATP CTP costs and $1.5 million in type rating costs. 2. Details may not add up to totals due to rounding.

Who is potentially affected by this rule? growth factor of 1.0107.26 29, ‘‘Active Pilots by Type of Pilots working for or seeking Memorandum: Guidance on Treatment Certificate’’, Air Transport, Avg Annual of the Economic Value of a Statistical employment by air carriers operating Growth, 2009–2030. Life in Departmental Analyses [February • Cost of ATP CTP and cost of type under part 121 will be affected. It could 2013]. United States Office of the rating: Estimated from 2010 FAA also impact pilots working for or Secretary of Transportation (OST). industry survey and FAA Flight seeking employment by operators in • Number of rule-related accidents Standards Service. parts 135 and 91, subpart K. Certificate and associated number of fatalities, • Percentage of part 121 SICs without holders approved under parts 121, 135, number of minor & serious injuries, and an ATP certificate (regional = 85 141, or 142 will be affected if they aircraft damage: FAA, Office of percent; major/cargo = 15 percent): choose to offer the ATP CTP. Accident Investigation and Prevention Estimated from 2010 FAA industry Institutions of higher education that (AVP). survey. seek the authority to certify their • Market value of aircraft and • Percentage of part 121 SICs without graduates have met the requirements for restoration costs: APO update to 2008 of a type rating (regional = 90 percent; a restricted privileges ATP certificate data in Economic Values for FAA major/cargo = 30 percent): Estimated may also be affected. Investment and Regulatory Decisions, A from 2010 FAA industry survey. Assumptions: Guide, Section 5, Office of Aviation • • Typical number of years for We use a 20-year period of analysis Policy and Plans, U.S. Federal Aviation upgrade from SIC to PIC (Major airlines: in order to more fully account for costs Administration, Wash., DC, Dec. 31, 10 years, Regional airlines: 5 years): that will accumulate over time as new 2004. The 2008 data is updated from Estimated from 2010 FAA industry pilots replace retiring pilots unaffected 2008 to 2010 by the GDP implicit price survey. by the rule. All monetary values are deflator. • Typical number of years after which • expressed in 2010 dollars. In calculating Number of part 121 PICs and SICs PIC will move from regional airline to present values, we discount back to the by airline, part 135 ATP pilots, and part major airline (2 years): Estimated from end of 2010/beginning of 2011. 91, subpart K, fractional ownership 2010 FAA industry survey. • All monetary values are expressed program PICs: FAA, Flight Standards • Pilot salary data by airline (2008): in 2010 dollars. Present value discount Service, National Vital Information www.airlinepilotcentral.com. rate is 7 percent (Office of Management Subsystem (NVIS) database (Nov. 22, • Early and medical part 121 pilot & Budget, Circular A–4, ‘‘Guidelines 2010; Dec. 10, 2010). • retirement rate (0.5%): Email from Kit and Discount Rates for Benefit-Cost Pilot growth rate (0.6%): U.S. DOT, Darby, President, KitDarby.com Analysis of Federal Programs,’’ October FAA, Aviation Policy & Plans. FAA Aviation Consulting, LLC, Peachtree 29, 1992, p. 8, www.whitehouse.gov/ Aerospace Forecast: 2010–2030. Table City, GA, 12/18/2010. omb/circulars/index.html). • Part 121 pilot retirement rate • Value of statistical life (VSL) begins 26 Due to a decline in real income in 2011 and 2012, the growth factors for these years are 0.98246 (3.6%): Email from Kit Darby, President, at $8.86 million in 2010, and increases and 0.99702, respectively. Email from OST, March KitDarby.com Aviation Consulting, LLC, to $10.7 million in 2032 by an annual 7, 2013. Peachtree City, GA, 12/20/2010.

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• Part 135 and part 91, subpart K, The ATP CTP is designed to address billion, with a present value of $0.8 retirement rate (3.0%): We used this rate the gap in knowledge identified by the billion. The costs of the final rule in the FOQ Initial Regulatory Evaluation FOQ ARC between a commercial pilot training requirements for ATP certificate (p. 17) and received no comments. and the knowledge a pilot should have applicants and the aircraft type rating • Flight experience of military pilots when entering an air carrier requirement total $312.7 million ($138.7 leaving the service: FAA Flight environment. The basic concepts million in present value). Of these costs Standards Service. addressed by these requirements are part 121 operators are estimated to incur • Hiring minimums by airline & applicable to pilots operating in part $280.4 million ($124.6 million in airline group and percentage of pilots 135 and part 91, subpart K operations as present value). hired with military training: Kit Darby, well as pilots in part 121 operations. Cost Benefit Summary President, KitDarby.com Aviation The ATP CTP has a comprehensive Consulting, LLC, Peachtree City, GA. topic list to address these deficiencies The purpose of this final rule is to • Number of baccalaureates with that are the underlying causes of many meet pilot certification and qualification aviation-related degrees: Aviation airplane accidents: requirements imposed by Congress in Accreditation Board International • Aerodynamics Sections 216 and 217 of the Act. (AABI), Gary W. Kiteley, Executive Æ Stall recognition/recovery Congress mandated the ATP certificate Director, 3410 Skyway Drive, Auburn, Æ Upset prevention/recovery AL. Æ requirement—the most expensive High altitude operations requirement of this final rule, $6.4 Æ Energy management Benefits of This Rule Æ billion ($2.2 billion in present value), Operating in a multicrew although Congress allowed the FAA to The benefits of this final rule are that environment it provides some mitigation of the cost • provide academic training credits (by Air Carrier Operations means of the R–ATP) which result in of the Airline Safety and Federal Æ Physiology/Fitness for duty cost savings of $2.0 billion ($0.7 billion Aviation Extension Act of 2010 mandate Æ Communications in present value) that partially offset the and will provide accident prevention Æ Ground operations safety benefits from the rule’s training Æ Aircraft systems and performance requirement. The final rule also program in response to Congressional • Crew Resource Management partially offsets the requirement by direction. We estimate the cost to be • Knowledge-based decision-making reducing the R–ATP minimum age $6.4 billion ($2.2 billion in present • Leadership and Professional requirement for pilots with 1,500 hours value) to be the Congressionally- development to age 21. This relief provides an mandated self-executing requirement • Manual Aircraft Handling Skills additional cost savings of $0.3 billion that all part 121 SICs have an ATP • Pilot Monitoring Responsibilities ($0.1 billion in present value). Lastly, certificate with at least 1,500 flight Æ Communication the costs of the final rule training hours. The FAA found no quantifiable Æ Risk management requirements for ATP certificate relationship between the 1,500-hour Æ Decision making applicants and the aircraft type rating requirement and airplane accidents Æ Threat and error management requirement total $312.7 million ($138.7 because all part 121 PICs have an ATP The FAA determined that 58 million in present value) with expected certificate and 1,500 flight hours, and, accidents were partially attributable to benefits of $576.8 million ($251.7 in most accident cases, the SICs had pilot qualification issues, over the 2001– million in present value). 1,500 flight hours. Very importantly, 2010 period of accident analysis. We B. Regulatory Flexibility Determination because the 1,500-hour requirement will estimated the value of preventing these become law regardless of FAA action, 58 accidents in the future to be worth 1. Introduction and Purpose of This the costs for this requirement do not $838.6 million. After taking into Analysis require an FAA benefit justification for account probability that pilot such costs. Congress allowed, and the certification and qualification training The Regulatory Flexibility Act of 1980 final rule provides, cost-savings benefits would prevent these accidents, we (Pub. L. 96–354) (RFA) establishes ‘‘as a from the rule’s provision for academic derived part 121 safety benefits of about principle of regulatory issuance that training credits (including credit for $292.5 million, with present value agencies shall endeavor, consistent with military training) toward the 1,500-hour $127.5 million, and part 135 safety the objectives of the rule and of requirement. The final rule also benefits of about $284.3 million, with applicable statutes, to fit regulatory and provides cost savings by reducing the present value $124.2 million. informational requirements to the scale minimum age requirement for pilots of the businesses, organizations, and Costs of This Rule with 1,500 flight hours to 21 years. The governmental jurisdictions subject to cost savings that result from these Without this final rule, the Act’s regulation. To achieve this principle, provisions are $2.3 billion, with a mandate would cost $6.4 billion ($2.2 agencies are required to solicit and present value of $0.8 billion. billion in present value). Because the consider flexible regulatory proposals Primarily because of the training mandate of the SIC 1,500-hour and to explain the rationale for their requirements of this rule, the FAA requirement will become law regardless actions to assure that such proposals are expects that the rule will reduce the of FAA action, the costs for this given serious consideration.’’ The RFA number of future accidents. The requirement are not a cost of this rule. covers a wide-range of small entities, quantified benefits from this rule are The final rule provides cost savings by including small businesses, not-for- based upon the value of preventing reducing the minimum total hours for profit organizations, and small future accidents. The methodology an ATP certificate for military pilots and governmental jurisdictions. begins by identifying previous accidents graduates of bachelor’s and associate’s Agencies must perform a review to that this rule could have prevented, or degree programs with aviation majors, determine whether a rule will have a mitigated. We then estimate the and by reducing the minimum age significant economic impact on a probability that such accidents would requirement for pilots with 1,500 flight substantial number of small entities. If be prevented in the future were the rule hours to 21 years. The cost savings that the agency determines that it will, the in place. result from these provisions are $2.3 agency must prepare a regulatory

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flexibility analysis as described in the 2. Objectives of This Rule the impact is on individual pilots RFA. The purpose of this final rule is to pursuing ATP certification.’’ NATA also However, if an agency determines that meet pilot certification and qualification stated that the FAA failed to account for a rule is not expected to have a requirements imposed by Congress in dramatically higher training costs for significant economic impact on a Sections 216 and 217 of the Airline part 135 and 91 subpart K operators substantial number of small entities, Safety and Federal Aviation Extension compared to part 121 operators owing to section 605(b) of the RFA provides that Act of 2010 (Pub. L. 111–216). The far smaller class sizes, often one or two the head of the agency may so certify provisions of this Act were the result of pilots at a time, and their inability to use in-house training personnel to the and a regulatory flexibility analysis is the fatal accident of Colgan Air Flight same extent as a large airline. This lack not required. The certification must 3407 that occurred in Buffalo, New of ability to use efficiencies the way include a statement providing the York, on February 12, 2009. In addition large airlines do would lead to factual basis for this determination, and to specific mandated requirements, the the reasoning should be clear. significantly higher costs. Act requires the FAA to address certain The FAA believes that most pilots As required by Section 603(a) of the issues in pilot qualification and RFA, we prepared and published an will receive the ATP CTP through certification. This rule addresses those employment—either at air carriers, with initial regulatory flexibility analysis issues, most importantly with training (IRFA) as part of the NPRM for this rule their own training facilities and requirements to qualify pilots for the simulators, or at part 142 training (77 FR 12374, February 29, 2012). As a ATP certificate mandated by the Act. result of that analysis we determined centers through training agreements, as this rule would not have a significant 3A. Summary of the Significant Issues these are the organizations that have the impact on a substantial number of small Raised by the Public Comments in FFSs required for the ATP CTP. The entities for the following reason: The Response to the IRFA, a Summary of the inefficiencies of small size can be annualized cost 27 of the rule is less than Assessment of the Agency of Such greatly mitigated by contracting out this 2% of operating revenues for all small Issues, and a Statement of Any Changes training, and, in fact, many of the smallest operators already use contract firms that would be affected by the rule. Made to the Proposed Rule Resulting training to meet existing training Section 604 of the RFA also requires From Such Comments requirements. Moreover, the ATP CTP, an agency to publish a final regulatory The FAA received more than 200 as a general program, is not specific to flexibility analysis (FRFA) in the comments on the requirement that all any type aircraft, nor to any rule part Federal Register when issuing a final pilots, including SICs, hold an ATP (121, 135, 91K). Therefore, we believe rule. Section 604(a) requires that each certificate (requiring 1,500 flight hours), that competitive part 142 training FRFA contain: many in opposition to the requirement. centers will deliver generic ATP CTP (1) A succinct statement of the need These comments were made in response training to individuals, as well as air for, and objectives of, the rule; to the proposed rule, not the IRFA per carriers, at costs no higher than our (2) a summary of the significant issues se. Several commenters also objected to conservative estimate. raised by the public comments in our finding in the Initial Regulatory response to the IRFA, a summary of Flexibility Analysis that there was no 3.B. A Description of the Steps the agency’s assessment of such issues, and significant impact on a substantial Agency Has Taken To Minimize a a statement of any changes made to the number of small entities. These Significant Economic Impact on Small proposed rule resulting from such objections appear to stem from the Entities and * * * Why Other comments; commenters’ belief that the cost we Significant Alternatives to the Rule That (3) a description of and an estimate of attribute to the statute is a cost of the Affect Small Entities Were Rejected the number of small entities for which rule. But the requirement for all pilots The FAA has no discretion with the final rule will apply; in part 121 operations to hold an ATP respect to the Congressionally-mandated (4) a description of the projected certificate is Congressionally-mandated requirement that all part 121 pilots hold reporting, recordkeeping and other and self-executing, so the significant an ATP certificate. Although not compliance requirements of the rule, costs associated with this requirement specific to small entities, the FAA has including an estimate of the classes of are attributable to the statute, not the mitigated the cost of the 1,500 flight small entities which will be subject to rule. hour requirement for an ATP certificate the requirement and the type of The statute allows the FAA to grant by allowing credits towards total flight professional skills necessary for academic training credits, effectively time based on academic training preparation of the report or record; and reducing the costs of the 1,500-hour courses. These credits are provided by (5) a description of the steps the requirement. As a result of the means of a new R–ATP certificate. The agency has taken to minimize the comments on the ATP certificate final rule also reduces the minimum age significant economic impact on small requirement and the R–ATP certificate, requirement for the R–ATP certificate to entities consistent with the stated in the final rule the FAA will broaden age 21. The regulatory evaluation objectives of applicable statues, the scope of academic credits to include estimates this relief provided in the including a statement of the factual, pilots with a two-year degree with an final rule will reduce the cost of the policy, and legal reasons for selecting aviation major. The FAA will also Congressionally-mandated ATP the alternative adopted in the final rule permit a pilot with 1,500 hours of flight certificate requirement by $2.3 billion 28 and why each one of the other time to obtain an R–ATP certificate at (present value cost: $0.8 billion). significant alternatives to the rule the age of 21. Several commenters believe removing considered by the agency which affect With regard to the costs associated the ability for pilots to receive training the impact on small entities was with the ATP certification training for the multiengine airplane ATP rejected. program, NATA stated that ‘‘Since no requirement exists or is proposed that 28 The FAA has also modified the compliance date for the ATP CTP and the type rating 27 Annualized cost is the annual cash flow of an require air carriers to provide the ATP requirements to provide additional time to all pilots annuity that yields the same present value as the CTP, we believe the FAA must perform and operators to accommodate the new total present value cost. its analysis of this proposal assuming requirements.

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certificate under part 61 will hurt local include training in an FSTD. The employed as a pilot by a part 121 fixed-base operators (FBOs) and CFIs. requirements specifically relating to certificate holder by July 31, 2013. These commenters believe that allowing training at high altitude, in adverse Although not specific to small entities, FBOs and CFIs to provide the ATP CTP weather, and in difficult operational this will reduce the impact on small would reduce the cost of the training conditions cannot be safely or entities. In any case, type rating costs for and the negative impact on part 61 effectively accomplished in aircraft. For new-hire pilots are minimal given the instructors and part 61 flight schools. that reason, the ATP CTP can be statutory requirement for an ATP The FAA notes that prior to this final provided only by certificate holders certificate. rule there were no training requirements who can sponsor an FSTD. for the multiengine airplane ATP The FAA does not believe that there 4. Description of the Small Entities to certificate so pilots who sought the is an alternative to the ATP CTP Which the Final Rule Will Apply and an certificate on their own did not seek requirement that could be applied to Estimate of Their Number training with an instructor except when small entities. The Act identified several they were ready to take their practical critical areas that must be part of the The final rule would affect firms in test. Because most ATP certificates are training required to apply for an ATP part 121, part 135, and part 91, subpart currently accomplished through certificate to prepare pilots to operate in K, operations in the following North evaluation events conducted by an air carrier environment. To allow American Industry Classification employers under other rule parts (i.e., smaller operators who conduct System (NAICS) industries, for all four parts 121 or 135) rather than through operations that require pilots to hold an of which the Small Business part 61 instruction, the FAA does not ATP certificate to meet a reduced Administration (SBA) size standard is believe that there will be a significant training standard would not be 1,500 employees.29 The SBA size impact on part 61 instructors and part responsive to the Act and would create standard as defined in 13 CFR 121.201, 61 flight schools by excluding those two different standards for pilots who is the largest size that a business groups from providing the ATP CTP. are exercising the privileges of an ATP (including its subsidiaries and affiliates) As for the new requirement for pilots certificate. may be to remain classified as a small to complete the ATP CTP, the FAA has To the extent that small businesses business by the SBA. As the size determined that the safest and most were concerned about the costs standard is identical at 1,500 employees effective way to ensure that applicants associated with the type rating, as noted for all four air transportation industries, for an ATP certificate have met the earlier, the FAA has adjusted the we do not attempt to classify affected requirements of section 217 of the Act compliance date from August 2, 2013, to firms by particular air transportation is to establish specific requirements that January 1, 2016, for those pilots who are industry.

TABLE 6—SBA SIZE STANDARD FOR NAICS AIR TRANSPORTATION INDUSTRIES

NAICS code 2002 U.S. NAICS title SBA Size standard

481111 ...... Scheduled Passenger Air Transportation ...... 1,500 employees. 481112 ...... Scheduled Freight Air Transportation ...... 1,500 employees. 481211 ...... Nonscheduled Chartered Passenger Air Transportation ...... 1,500 employees. 481212 ...... Nonscheduled Chartered Freight Air Transportation ...... 1,500 employees.

The FAA database (2010) has 92 the basis of employment data available encompass almost the entire size range operators classified as part 121 air from the FAA database. We had no of part 135 operators. carriers. Using Department of corresponding employment data for part Transportation 2009 employment 5. Description of the Projected 135 operators. The largest part 135 Reporting, Recordkeeping and Other data,30 we identified 32 of these part operator, however, had just 55 PICs, so 121 operators as large and an identical Compliance Requirements of the Final we infer that all 1,106 part 135 operators Rule number as small. Using other are small. Table 7 below lists our employment data, we identified eight identified small entities operating under Reporting and Recordkeeping more part 121 operators as large, seven part 121, part 135, and part 91 subpart Requirements as subsidiaries of a group with more K operators along with data to assess the than 1,500 employees and one known to The final rule levies requirements that impact of the final rule on them, as be large (UPS). We identified one more must be met by certificate holders who part 121 operator as small, as a discussed below. We list all 52 small wish to offer or provide the ATP CTP. subsidiary of a group with less than part 121 operators and all nine small While requiring the gathering and 1,500 employees. We inferred 19 more part 91 subpart K operators, but, owing maintaining of information and, in operators to be small on the basis of to their large numbers, only the three certain cases, the reporting of some of pilot numbers.31 So in all, we identified part 135 operators for which we have that information to the FAA, these 40 of the 92 part 121 operators as large operating revenue data. Revenue data is sections require no additional burdens and 52 as small. Therefore, there are a not available for most part 135 operators on the certificate holders beyond what substantial number of small entities as most are privately held. However, the is required by the current rule or that operating as part 121 air carriers. three part 135 operators for which we which is currently borne by certificate We also identified five of the nine do have operating revenue, as measured holders in regular practice. Exceptions part 91, subpart K, operators as small on by number of PICs (4 to 45 PICs), to this are the following:

29 U.S. Small Business Administration. Table of 30 www.bts.gov/programs/airline_information/ pilots for any part 121 operator identified as small. Small Business Size Standards Matched to North number_of_employees/. The largest operator that we inferred to be small American Industry Classification System Codes, 31 The largest small part 121 operator has 1,446 had 231 pilots. July 21, 2006. Web site: www.SBA.gov. employees and 391 pilots, the largest number of

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a. One-time development and c. One-time application to the FAA by d. One-time cost per student to the submission of an ATP CTP to the FAA an institution of higher education institution of higher education for an for approval. seeking the authority to certify its academic advisor to review graduate b. One-time record keeping costs for graduates of a degree program with an transcripts to determine eligibility for an pilot training pertaining to completion aviation major for an R–ATP certificate. R–ATP certificate. of the ATP CTP. TABLE 7—ECONOMIC IMPACT OF THE FINAL RULE ON SMALL PART 121, PART 135, AND PART 91 SUBPART K OPERATORS

Pilots (parts Cost as Operating Operating Operator name Air carrier Primary Pilot Total 121, 135, Ann. cost % of revenue revenue category operations numbers 2009 emp or 91K) ($1000s) operating ($1000) source (percent) revenue

ABX AIR INC ...... Cargo ...... Part 121 ..... 313 1435 0.54 46 0.00 1,173,146 DOT. AEKO KULA INC (Aloha Air Cargo) ...... Cargo ...... Part 121 ..... 22 315 0.04 3 0.00 280,309 DOT. AERO MICRONESIA INC ...... Cargo ...... Part 121 ..... 12 AIR TRANSPORT INTERNATIONAL LLC ...... Cargo ...... Part 121 ..... 113 396 0.20 17 0.01 273,016 DOT. AMERIJET INTERNATIONAL INC ...... Cargo ...... Part 121 ..... 56 540 0.10 8 0.01 138,372 DOT. AMERISTAR AIR CARGO INC ...... Cargo ...... Part 121 ..... 17 0.03 3 0.04 6,942 DOT. ARROW AIR INC ...... Cargo ...... Part 121 ..... 50 613 0.09 7 0.00 206,805 DOT. ASTAR AIR CARGO INC ...... Cargo ...... Part 121 ..... 85 631 0.15 13 0.00 347,018 DOT. AVIATION SERVICES LTD ...... Cargo ...... Part 121 ..... 18 CAPITAL CARGO INTERNATIONAL AIR- Cargo ...... Part 121 ..... 100 223 0.17 15 0.03 53,209 DOT. LINES INC. CENTURION AIR CARGO INC ...... Cargo ...... Part 121 ..... 47 567 0.08 7 0.00 164,905 DOT. CORPORATE AIR ...... Cargo ...... Part 121 ..... 75 EVERGREEN INTERNATIONAL AIRLINES Cargo ...... Part 121 ..... 132 442 0.23 19 0.00 518,843 DOT. INC. FALCON AIR EXPRESS INC ...... Cargo ...... Part 121 ..... 25 0.04 4 0.03 11,665 DOT. FLORIDA WEST INTERNATIONAL AIR- Cargo ...... Part 121 ..... 32 51 0.06 5 0.00 113,736 DOT. WAYS INC. GULF AND CARIBBEAN CARGO INC ...... Cargo ...... Part 121 ..... 42 63 0.07 6 0.02 25,270 DOT. KALITTA AIR LLC ...... Cargo ...... Part 121 ..... 231 860 0.40 34 0.01 666,161 DOT. KALITTA CHARTERS II LLC ...... Cargo ...... Part 121 ..... 23 0.04 3 0.02 14,048 DOT. LYNDEN AIR CARGO L L C ...... Cargo ...... Part 121 ..... 49 175 0.08 7 0.01 88,289 DOT. MERIDIAN ASSOCIATES ...... Cargo ...... Part 121 ..... 8 MIAMI AIR INTERNATIONAL INC ...... Cargo ...... Part 121 ..... 80 409 0.14 12 0.01 151,868 DOT. MOUNTAIN AIR CARGO INC ...... Cargo ...... Part 121 ..... 126 NATIONAL AIR CARGO GROUP INC ...... Cargo ...... Part 121 ..... 23 500 0.04 3 0.02 20,882 DOT. NORTHERN AIR CARGO INC ...... Cargo ...... Part 121 ..... 24 197 0.04 4 0.01 47,197 DOT. OMNI AIR INTERNATIONAL INC ...... Cargo ...... Part 121 ..... 255 1032 0.44 38 0.01 438,327 DOT. PRESCOTT SUPPORT CO ...... Cargo ...... Part 121 ..... 13 0.02 2 0.02 8,614 DOT. RHOADES AVIATION INC ...... Cargo ...... Part 121 ..... 4 SIERRA PACIFIC AIRLINES INC ...... Cargo ...... Part 121 ..... 10 0.02 1 0.01 11,199 DOT. SKY KING INC ...... Cargo ...... Part 121 ..... 32 0.06 5 0.03 16,583 DOT. SKY LEASE I INC (Tradewinds Airlines) ...... Cargo ...... Part 121 ..... 49 47 0.08 7 0.01 63,683 DOT. SOUTHERN AIR INC ...... Cargo ...... Part 121 ..... 186 589 0.32 27 0.02 170,478 DOT. SWIFT AIR L L C ...... Cargo ...... Part 121 ..... 29 0.05 4 0.05 8,643 DOT. TATONDUK OUTFITTERS LTD ...... Cargo ...... Part 121 ..... 47 288 0.08 7 0.02 40,371 DOT. USA JET AIRLINES INC ...... Cargo ...... Part 121 ..... 70 244 0.12 10 0.01 128,053 DOT. DYNAMIC AIRWAYS LLC ...... Charter ...... Part 121 ..... 8 AERODYNAMICS INC ...... Charter PAX Part 121 ..... 14 211 0.02 2 0.00 53,595 DOT. RYAN INTERNATIONAL AIRLINES INC ...... Charter PAX Part 121 ..... 151 540 0.26 22 0.02 142,069 DOT. TEM ENTERPRISES INC (Xtra Airways) ...... Charter PAX Part 121 ..... 40 120 VISION AIRLINES INC ...... Charter PAX Part 121 ..... 116 131 0.20 17 0.03 62,366 DOT. WORLD AIRWAYS INC ...... Charter PAX Part 121 ..... 391 1446 0.68 58 0.01 653,144 DOT. BRENDAN AIRWAYS LLC (USA 3000 Air- Mainline ...... Part 121 ..... 54 390 0.09 8 0.00 227,850 DOT. lines). MN AIRLINES LLC (Sun Country Airlines) ..... Mainline ...... Part 121 ..... 143 642 0.25 21 0.01 224,232 DOT. VIRGIN AMERICA INC ...... Mainline ...... Part 121 ..... 330 1421 0.57 49 0.01 326,023 DOT. CHAMPLAIN ENTERPRISES INC Regional ..... Part 121 ..... 150 300 (CommutAir). EMPIRE AIRLINES INC ...... Regional ..... Part 121 ..... 111 250 ERA AVIATION INC (In Frontier Alaska Regional ..... Part 121 ..... 57 Group). GREAT LAKES AVIATION LTD ...... Regional ..... Part 121 ..... 231 1.12 128 0.13 100,033 10–K. GULFSTREAM INTERNATIONAL AIRLINES Regional ..... Part 121 ..... 156 INC. HAWAII ISLAND AIR INC ...... Regional ..... Part 121 ..... 38 0.18 21 0.08 24,907 DOT. HYANNIS AIR SERVICE INC ...... Regional ..... Part 121 ..... 212 850 PENINSULA AIRWAYS INC ...... Regional ..... Part 121 ..... 119 SEABORNE VIRGIN ISLAND INC ...... Regional ..... Part 121 ..... 21 0.10 12 1.73 670 CLEAR. USA JET AIRLINES INC ...... Part 135 ..... 45 0.62 6 0.02 27,380 DOT. AVIATION CONCEPTS ...... Part 135 ..... 10 0.14 1 0.05 2,568 DOT. VICTORY AIR TRANSPORT INC...... Part 135 ..... 4 0.05 0 0.02 2,745 DOT. AIRSPRINT US ...... Part 91K ..... 5 27 0.16 1 AVANTAIR ...... Part 91K ..... 136 340 4.25 17 0.01 149,001 CLEAR. CORPORATE EAGLE MGT SVCS ...... Part 91K ..... 13 33 0.41 2 0.01 11,419 CLEAR. EXECUTIVE FLT SVCS ...... Part 91K ..... 60 100 1.87 7 0.00 2,024,000 CLEAR. PLANE SENSE ...... Part 91K ..... 61 160 1.90 7 0.01 94,000 CLEAR.

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Other Compliance Requirements knowledge required for an air carrier multiengine class rating. As noted in the This final rule will require the SIC) and will address the current lack of regulatory evaluation and preamble, following: a training requirement for ATP multiengine hours are typically 1. An ATP certificate for all pilots certification. These competencies acquired while engaged in other operating in part 121. This requirement include crew coordination, checklist/ commercial aviation activities such as briefing items, low energy states/stalls, flight instruction or part 135 operations codifies the Congressionally-mandated and adverse weather conditions, on the way to obtaining the ATP 1,500 hours flight time required for an including icing, thunderstorms, and certificate. Moreover, minimums for ATP certificate, but will allow an R– crosswinds with gusts. The course multiengine time vary among airlines ATP certificate to be held by (a) military topics will be incorporated into the ATP from 50 hours to as much as 1,500 pilots with 750 hours of flight knowledge test. In addition to applying hours.34 experience and (b) graduates of four- to all pilots in part 121 operations, this The FAA also estimates as minimal year or two-year degree programs with requirement will apply to PICs in part the costs of the requirement that a part aviation majors who obtain their 135 operations that require an ATP 121 SIC have 1,000 hours of air carrier commercial pilot certificate with certificate, and PICs in part 91, subpart operating experience before upgrade instrument rating from an affiliated part K, Fractional Ownership Operations, from SIC to PIC. According to a 2010 141 pilot school. To be eligible for an R– which require the PIC to hold an ATP FAA survey of industry, the average ATP, graduates of a four-year program certificate. number of years to upgrade is about five will be required to have 1,000 hours of 4. An aircraft type rating for all SICs years for regional airlines and more than flight experience, while graduates of a serving in part 121 operations. The FOQ ten years for major airlines. Even two-year program will be required to ARC made the same recommendation without air carrier operating experience have 1,250 hours of flight experience. and this requirement responds to the in part 135 or part 91, subpart K a. The R–ATP certificate will allow a objectives of section 216 of the Act, operations, at an average number of 750 pilot to serve in part 121 air carrier which requires the Administrator to flight hours a year, an SIC will operations as an SIC only. With an R– determine the appropriate multiengine accumulate the required hours in less ATP certificate, however, part 121 SICs airplane flight experience for pilot than one and a half years. need only hold a second class medical flightcrew members. Currently only Compliance Cost by Part 121 Operators certificate, not the first class medical PICs in part 121 operations, and SICs in certificate that is the requirement for flag or supplemental operations Table 5 shows the cost of the final PICs. requiring three or more pilots, are rule for the part 121 operators. Costs of b. The minimum age for an R–ATP required to hold an aircraft type rating. the ATP CTP are allocated between the certificate will be reduced to 21 years.32 The FAA has determined that requiring regional airlines and the major/cargo The current age requirement for an ATP aircraft type ratings for all pilots in part airlines by the percentage of pilots certificate will remain at 23 years. 121 operations will improve safety by employed by the two airlines (Nov. 2010 2. A minimum of 50 hours of further exposing pilots to an advanced part 121 pilots, 78,258: Regionals— multiengine flight experience. This multiengine aircraft and a multicrew 20,565 [26.3%], Major/cargo airlines— requirement will apply not just to pilots environment. Also the provision for an 57,693 [73.7%]). serving in part 121 operations, but to all airplane type rating requires a pilot who As explained in the regulatory pilots who apply for an ATP certificate serves as SIC to be tested to the same evaluation, the FAA expects that the with an airplane category multiengine standard as the PIC and to demonstrate compliance cost of the ATP CTP for part class rating.33 This will include PICs in proficiency in difficult operational 121 air carriers will fall heavily, if not part 135 operations that require an ATP conditions, including adverse weather exclusively, on the regional airlines. So certificate, and PICs in part 91, subpart and high altitude operations. in assessing the economic impact on K, Fractional Ownership Programs, 5. A minimum of 1,000 hours in air small regional airlines, we assume the which require the PIC to hold an ATP carrier operations to serve as PIC in part entire ATP CTP costs fall on regional certificate. 121 operations. Under the final rule, airlines. But in order to assess the 3. An ATP Certification Training SICs must accumulate 1,000 flight hours economic impact on small cargo Program for applicants for an ATP in air carrier operations before becoming airlines, we assume the impact is certificate with an airplane category eligible for upgrade to PIC. Without the proportional to the number of pilots. We multiengine class rating or an ATP 1,000-hour requirement, SICs with an do the same with the type rating costs, certificate obtained concurrently with unrestricted ATP certificate would be although the magnitudes are small an aircraft type rating. This is a eligible to upgrade to PIC as soon as compared to the ATP CTP costs. foundational course that will include they attain 1,500 flight hours, regardless Economic Impact on Small Entities academic study as well as flight training of their experience. The 1,000-hour in FSTDs to meet the Act’s requirements requirement will ensure that a pilot will In order to assess the economic that pilots have the necessary training have at least one full year of relevant impact of this final rule on small firms, and experience discussed previously to operational experience before upgrading we allocate annualized costs to small function effectively in an air carrier to PIC. The final rule allows a pilot to firms based on the number of affected environment. The course will provide count PIC time in part 135 operations pilots and measure the economic impact training necessary to overcome the that require an ATP and in part 91, on small firms by each firms’ knowledge gap (between the subpart K, operations, as well as SIC annualized costs as a percentage of their commercial pilot certificate and the time in part 121 operations. Pilots with average 5-year, 2005–2009 operating experience as PICs in military transport revenues.35 While the economic burden 32 This is a change from the NPRM that will allow operations will be allowed to count up pilots of age 21 or 22, with 1,500 hours flight time, to 500 hours of such experience as well. 34 Kit Darby, President, www.KitDarby.com, to obtain the R–ATP certificate. The FAA estimates that cost will be Aviation Consulting, LLC, Peachtree City, GA. 33 The rule applies to the airplane class, so 35 Operating Revenue—www.transtat.bts.gov, Air applicants for an ATP certificate with single-engine minimal for the requirement of 50 hours Carrier Financial Reports (Form 41 Financial Data), class rating will be required to have 50 hours of of multiengine time for the ATP Schedules P1.1 & P1.2. We average for as many of single-engine time. certificate with an airplane category the five years of data as is available. Operating

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of this rule will have a disproportionate multiplied by the total annualized cost, Uruguay Round Agreements Act (Pub. impact on small entities, the compliance $11.51 million for part 121 operators, L. 103–465), prohibits Federal agencies cost will not result in a significant $0.897 million for part 135 operators, from establishing standards or engaging economic cost on small entities. This and $0.394 million for part 91, subpart in related activities that create analysis measures the economic impact K operators. These annualized costs are unnecessary obstacles to the foreign on small entities in a two-step process. based on the present value training costs commerce of the United States. All of the compliance costs are training (and type rating costs for part 121 Pursuant to these Acts, the costs for new pilots (plus type rating operators) calculated in the regulatory establishment of standards is not costs for part 121 operators). Again, the evaluation. considered an unnecessary obstacle to Congressional mandate that all pilots While Table 7 provides economic the foreign commerce of the United have an ATP certificate is self-enacting impact estimates for many operators, a States, so long as the standard has a and not an FAA requirement. Thus the generic estimate more simply makes the legitimate domestic objective, such the 1,500 hour requirement costs are not point that the compliance costs of this protection of safety, and does not included in these compliance costs. rule do not create a significant economic operate in a manner that excludes While the FAA believes the annual impact per operator. In general, the imports that meet this objective. The estimates of new pilots are reasonably annual number of new pilots per statute also requires consideration of accurate for the part 121, part 135, or operator is substantially less than 10 international standards and, where part 91 subpart K industry, we do not percent of the operator’s total pilots. For appropriate, that they be the basis for know the turnover per operator. The this case, an operator with a 100 pilots U.S. standards. The FAA has assessed annual new pilot hires per operator are will have no more than 10 new pilots the potential effect of this final rule and estimated as a percentage of total per year. With training costs of $3,300 determined that it would have only a industry pilots (part 121, part 135, or per pilot the annual training cost is less domestic impact and therefore would par 91 subpart K) multiplied by the than $33,000. As long as the operator not create unnecessary obstacles to the system-wide number of new pilots. The receives operating revenue greater than foreign commerce of the United States. $2 million these costs will be less than estimated new pilot hires for each D. Unfunded Mandates Assessment operator are then multiplied by the 2 percent of annual operating revenue. annualized training cost to obtain the The FAA does not believe costs less Title II of the Unfunded Mandates total annualized cost per operator. than 2 percent of annual operating Reform Act of 1995 (Pub. L. 104–4) The annual training cost is simply the revenue to have a significant economic requires each Federal agency to prepare per-pilot training cost multiplied by the impact. As Table 7 shows the a written statement assessing the effects annual number of newly hired pilots. percentage of annual compliance cost is of any Federal mandate in a proposed or The annualized training cost is less than nearly always less than 0.05 percent and final agency rule that may result in an $3,300 per pilot. This per-pilot training never over 2 percent of annual operating expenditure of $100 million or more cost estimate is $3,242 for a part 121 revenue. (adjusted annually for inflation with the operator and $3,178 for a part 135 The rule will have a disproportionate base year 1995) in any one year by State, operator and also for a part 91 subpart impact on small entities. Given the local, and tribal governments, in the K operator. The higher cost for part 121 Congressional mandate that all pilots aggregate, or by the private sector; such operators is due to the additional type have an ATP certificate and that this a mandate is deemed to be a ‘‘significant rating cost. As a point of reference, the mandate disproportionally affects small regulatory action.’’ The FAA currently average cost per pilot over the 20-year entities, the FAA considered, but had uses an inflation-adjusted value of estimation period of the rule is limited alternatives with which to $143.1 million. Excluding the approximately $4,000 (based on total provide more relief to small operators. Congressionally driven costs, the cost, not present value). Clearly the per- In considering the economic impact of compliance costs of this rule never pilot training cost is not a significant this rule, the FAA created the R–ATP exceed $100 million in any one year. economic impact. certificate based on education credits, This final rule does not contain such an The number of new pilots per year and for pilots with 1,500 flight hours, a unfunded mandate; therefore, the equals the number of retired pilots plus minimum age of 21, instead of age 23. requirements of Title II of the Act do not the additional pilots above the previous This rule imposes only training costs on apply. new pilots and small type rating costs year (net growth). On average the annual E. Paperwork Reduction Act number of new pilots is 3,531 for part on part 121 pilots. The compliance 121; 282 for part 135; and 124 for part period for the type rating requirement Title: Pilot Certification and 91, subpart K. The estimated number of for those pilots serving in part 121 by Qualification Requirements for Air new pilots per operator equals the July 31, 2013, has been extended in the Carrier Operations. operator’s current percentage of final rule. As both the per-pilot training This proposal contains the following industry pilots (part 121, part 135, or costs are modest and the annual number new information collection part 91 subpart K) 36 multiplied by the of new pilots is small, the compliance requirements. As required by the total number of new pilots. Table 7 lists cost relative to annual operating Paperwork Reduction Act of 1995 (44 that percentage for many small entities. revenue is always less than 2 percent U.S.C. 3507(d)), the FAA has submitted To calculate the cost per operator, that and almost always less than 0.05 the information requirements associated percentage per operator is then percent. Therefore, as the FAA with this proposal to the Office of Administrator, I certify that this final Management and Budget for its review. The Office of Management and Budget revenue for Great Lakes Aviation is from its SEC rule will not have a significant 10–K filing. Operating revenues for part 91 subpart economic impact on a substantial approved these new information K air carriers is from the CLEAR database and is for number of small entities. collection requirements associated with 2011. this final rule and assigned OMB 36 For part 121 operations since regional airlines C. International Trade Impact Control Number 2120–0755. and major/cargo airlines are analyzed separately, Assessment operator pilot percentages are calculated with Summary: The paperwork burden is respect to the total number of pilots in the relevant The Trade Agreements Act of 1979 comprised of two areas. First, this final group. (Pub. L. 96–39), as amended by the rule amends the requirements for

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obtaining an airline transport pilot adequately trained on the knowledge Salary of an aviation safety inspector (ATP) certificate by requiring pilot and skills they need to function in a = $61.50 applicants for an ATP certificate with an multicrew environment in a variety of First-Year Cost (2014) airplane category multiengine class operating conditions. The requirement Cost: 20 × 44 × $61.50 = $54,120 rating or an ATP certificate obtained to submit the ATP Certification Training Time: 20 × 44 = 880 hours concurrently with an airplane type Program curriculum to the FAA for Subsequent Years: Per-Year Costs rating to complete a new ATP approval will provide greater oversight Cost: 1 × 44 × $61.50 = $2,706 Certification Training Program. Any part of the training programs and ensure Time: 1 × 44 = 44 hours 142 training center, part 141 pilot consistency of both course and Total Over 20 Years (2013–2032) school, or air carrier wishing to offer the instructional quality among the training Cost: $54,120 + (18 × $2,706) = new training program would be required centers, pilot schools, and air carriers. $102,828 to submit the curriculum to the FAA for Part 121, 135, 141, or 142 certificate Time: 880 + (18 × 44) = 1,672 hours approval. holders that wish to offer or provide the Average per Year In addition, the final rule provides a ATP Certification Training Program are Cost: $102,828/20 = $5,141 method for an institution of higher required to develop and submit a course Time: 1,672/20 = 83.6 hours education to seek the authority to certify for approval by the FAA. For those that FAA Approval Letter Costs its graduates of a degree program with provide this training, additional pilot an aviation major to apply for a training record keeping would also be Initial number of certificate holders restricted privileges ATP certificate. The required. requesting ATP CTP approval = 20 final rule will require the institution to Time needed to issue the approval hold a part 141 pilot school certificate Industry ATP CTP Development Costs letter = 0.5 hours from the FAA to provide pilot training Initial number of certificate holders Salary of clerk/secretary = $24.67 within the degree program(s) listed in offering the ATP CTP = 20 First-Year Cost (2014) their letter of authorization. The Cost: 20 × 0.5 × $24.67 = $246.70 Time needed to develop the ATP CTP × institution of higher education seeking = 120 hours Time: 20 0.5 = 10 hours this authority will be required to submit Subsequent Years: Per-Year Costs Salary of a ground instructor = $32.55 × × an application on a new form that was 37 Cost: 1 0.5 $24.67 = $12.34 First-Year Cost (2014) × developed for this purpose. Cost: 20 × 120 × $32.55 = $78,120 Time: 1 0.5 = 0.5 hours Public Comments: With regard to the Time: 20 × 120 = 2,400 hours Total Over 20 Years (2013–2032) FAA’s paperwork estimates, NAFI was Cost: $246.70 + (18 × $12.34) = $469 Subsequent Years: Per-Year Costs × the only commenter. Their comment Cost: 1 × 120 × $32.55 = $3,906 Time: 10 + (18 0.5) = 19 hours stated—without providing specific Time: 1 × 120 = 120 hours Average per Year details—that ‘‘the accuracy of the Total Costs Over 20 Years (2013–2032) Cost: $469/20 = $23 agency’s estimate of the burden is Cost: $78,120 + (18 × $3,906) = Time: 19/20 = 0.95 hours significantly lacking in areas of $148,428 The information collection for the consideration that have been included, Time: 2,400 + (18 × 120) = 4,560 hours authority to certify graduates of a degree representative estimates of costs, and Average per Year program in an aviation major will the effects that will result from the Cost: $148,428/20 = $7,421 ensure pilots who seek eligibility for a proposed changes.’’ NAFI added that it Time: 4,560/20 = 228 hours restricted privileges ATP certificate was unaware of any data that has been based on academic training at an developed that accurately allows for Industry Record Keeping Costs institution of higher education have the proper costing of these effects and Initial number of ATP certificate option to complete aviation coursework recommended ‘‘that this data be sought applicants = 3,731 designed to improve and enhance the prior to any long term changes in order Time needed for record keeping per knowledge and skills of a person to more accurately study and make pilot = 0.1 hours seeking a career as a professional pilot. decisions regarding proposed changes.’’ Salary of a ground instructor = $32.55 Institutions of higher education who Without additional detail from the First-Year Cost (2014) seek the authority to certify its graduates commenter, the FAA is uncertain how Cost: 3,731 × 0.1 × $32.55 = $12,145 of a degree program with an aviation to respond to NAFI’s concerns regarding Time: 3,731 × 0.1 = 373 hours major to apply for a restricted privileges the accuracy of its estimates. The FAA Subsequent Years Costs (assume 0.6% ATP certificate are required to submit believes that the estimates in the NPRM annual growth rate) the necessary information about the accurately reflected the paperwork Cost: $231,501 degree program(s), including aviation burden of the proposal. Time: 7,112 hours and aviation-related coursework, in Notwithstanding, the FAA has Total Costs Over 20 Years (2013–2032) order to obtain the authority to certify reevaluated the paperwork burden of Cost: $12,145 + $231,501 = $243,646 a graduate has met the restricted the final rule and has made some Time: 373 + 7,112 = 7,485 hours privileges ATP certificate requirements adjustments to the ATP CTP paperwork Average per Year established in this final rule. costs. In addition, the FAA has added Cost: $243,646/20 = $12,182 Institution of Higher Education additional paperwork costs for Time: 7,485/20 = 374 hours institutions of higher education who Application Costs seek the authority to certify its graduates FAA ATP CTP Review Costs Initial number of institutions of of a degree program with an aviation Initial number of certificate holders higher education applying for the major to apply for a restricted privileges requesting ATP CTP approval = 20 authority to certify graduates = 150 ATP certificate by requiring them to Time needed to review the ATP CTP Time needed to complete the submit an application. for initial and final approval = 44 application = 8 hours Use of: The information collection for hours College professor hourly wage = the ATP Certification Training Program $53.33 will ensure pilots seeking employment 37 For 2013 there are no Paperwork Reduction Act First-Year Cost (2013) in an air carrier environment are costs for the ATP CTP. All costs begin in 2014. Cost: 150 × 8 × $53.33 = $63,966

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Time: 150 × 8 = 1,200 hours unrestricted ATP certificates. This pilot VI. How To Obtain Additional Subsequent Years: Per-Year Costs in command restriction will be reflected Information Cost: 1 × 8 × $53.33 = $427 on the pilot’s certificate. The experience A. Rulemaking Documents Time: 1 × 8 = 8 hours and qualifications of the pilots who Total Over 20 Years (2013–2032) hold restricted privileges ATP An electronic copy of a rulemaking × Cost: $63,966 + (19 $427) = $72,109 certificates will exceed the ICAO document may be obtained by using the × Time: 1,200 + (19 8) = 1,352 hours standards for second-in-command. Internet— Average per Year 1. Search the Federal eRulemaking Cost: $72,109/20 = $3,605 The FAA also notes certain long- Portal (http://www.regulations.gov); Time: 1,352/20 = 68 hours standing U.S. differences on file with 2. Visit the FAA’s Regulations and certain ICAO Medical Assessment Policies Web page at http:// Review of Transcripts Costs standards continue to apply under this www.faa.gov/regulations_policies/ or Initial number of graduates = 648 action. Although this rule permits SICs 3. Access the Government Printing Time needed to review a graduate’s in part 121 to hold only a second-class Office’s Web page at http:// transcript = 0.5 hours medical certificate, those SICs who www.gpoaccess.gov/fr/index.html. Academic advisor hourly wage = serve in international operations will Copies may also be obtained by $53.33 need to obtain an FAA first-class sending a request (identified by notice, First-Year Cost (2013) medical certificate to compensate for the amendment, or docket number of this Cost: 648 × 0.5 × $53.33 = $17,279 electrocardiography difference between rulemaking) to the Federal Aviation Time: 648 × 0.5 = 324 hours a first class medical certificate and a Administration, Office of Rulemaking, Subsequent Years Costs (assume 0.6% second class medical certificate. As ARM–1, 800 Independence Avenue annual growth rate) such, U.S. pilots who fly internationally SW., Washington, DC 20591, or by Cost: $348,696 must continue to comply with this calling (202) 267–9680. Time: 6,538 hours international aviation standard. B. Comments Submitted to the Docket Total Over 20 Years (2013–2032) Cost: $17,279 + $348,696 = $365,973 G. Environmental Analysis Comments received may be viewed by Time: 324 + 6,538 = 6,862 hours going to http://www.regulations.gov and Average per-Year FAA Order 1050.1E identifies FAA following the online instructions to Cost: $365,973/20 = $18,299 actions that are categorically excluded search the docket number for this Time: 6,862/20 = 343 hours from preparation of an environmental action. Anyone is able to search the assessment or environmental impact electronic form of all comments FAA Review of Application Costs statement under the National received into any of the FAA’s dockets Initial number of applications to Environmental Policy Act in the by the name of the individual review = 150 absence of extraordinary circumstances. submitting the comment (or signing the Time needed to review the The FAA has determined this comment, if submitted on behalf of an application = 6 hours rulemaking action qualifies for the association, business, labor union, etc.). Salary of an aviation safety inspector categorical exclusion identified in C. Small Business Regulatory = $61.50 paragraph 308(c) and involves no Enforcement Fairness Act First-Year Cost (2013) extraordinary circumstances. Cost: 150 × 6 × $61.50 = $55,350 The Small Business Regulatory Time: 150 × 6 = 900 hours V. Executive Order Determinations Enforcement Fairness Act (SBREFA) of 1996 requires FAA to comply with Subsequent Years: Per-Year Costs A. Executive Order 13132, Federalism Cost: 1 × 6 × $61.50 = $369 small entity requests for information or Time: 1 × 6 = 6 hours The FAA has analyzed this final rule advice about compliance with statutes Total Over 20 Years (2013–2032) under the principles and criteria of and regulations within its jurisdiction. Cost: $55,350 + (19 × $369) = $62,361 Executive Order 13132, Federalism. The A small entity with questions regarding Time: 900 + (19 × 6) = 1,014 hours agency determined that this action will this document, may contact its local Average per Year not have a substantial direct effect on FAA official, or the person listed under Cost: $62,361/20 = $3,118 the States, or the relationship between the FOR FURTHER INFORMATION CONTACT Time: 1,014/20 = 51 hours the Federal Government and the States, heading at the beginning of the preamble. To find out more about F. International Compatibility or on the distribution of power and SBREFA on the Internet, visit http:// responsibilities among the various _ In keeping with U.S. obligations levels of government, and, therefore, www.faa.gov/regulations policies/ under the Convention on International _ does not have Federalism implications. rulemaking/sbre act/. Civil Aviation, it is FAA policy to conform to International Civil Aviation B. Executive Order 13211, Regulations List of Subjects Organization (ICAO) Standards and that Significantly Affect Energy Supply, 14 CFR Part 61 Recommended Practices to the Distribution, or Use Aircraft, Airmen, Aviation safety. maximum extent practicable. The FAA has reviewed the corresponding ICAO The FAA analyzed this final rule 14 CFR Part 121 under Executive Order 13211, Actions Standards and Recommended Practices Air carriers, Aircraft, Airmen, Concerning Regulations that and has identified the following Aviation safety. differences. Significantly Affect Energy Supply, The FAA notes that, although pilots Distribution, or Use (May 18, 2001). The 14 CFR Part 135 will be able to obtain a restricted agency has determined that it is not a Air taxis, Aircraft, Airmen, Aviation privileges ATP certificate in fewer than ‘‘significant energy action’’ under the safety. the ICAO standard of 1,500 hours, those executive order and it is not likely to pilots will not have the pilot in have a significant adverse effect on the 14 CFR Part 141 command privileges of pilots who hold supply, distribution, or use of energy. Airmen, Educational facilities.

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14 CFR Part 142 (except for a rotorcraft category rating), navigation systems to navigate to the Airmen, Educational facilities. for a private pilot certificate (except for landing point. a powered parachute category rating), a (vi) For the purpose of meeting the The Amendment commercial pilot certificate, or an aeronautical experience requirements In consideration of the foregoing, the instrument rating, or for the purpose of for an airline transport pilot certificate Federal Aviation Administration exercising recreational pilot privileges (except with a rotorcraft category amends Chapter I of Title 14, Code of (except in a rotorcraft) under § 61.101 rating), time acquired during a flight— Federal Regulations, as follows: (c), time acquired during a flight— (A) Conducted in an appropriate (A) Conducted in an appropriate aircraft; PART 61—CERTIFICATION: PILOTS, aircraft; (B) That is at least a straight-line FLIGHT INSTRUCTORS, AND GROUND (B) That includes a point of landing distance of more than 50 nautical miles INSTRUCTORS that was at least a straight-line distance from the original point of departure; and of more than 50 nautical miles from the (C) That involves the use of dead ■ 1. The authority citation for part 61 is original point of departure; and reckoning, pilotage, electronic revised to read as follows: (C) That involves the use of dead navigation aids, radio aids, or other reckoning, pilotage, electronic navigation systems. Authority: 49 U.S.C. 106(f), 106(g), 40113, (vii) For a military pilot who qualifies 44701–44703, 44707, 44709–44711, 45102– navigation aids, radio aids, or other for a commercial pilot certificate (except 45103, 45301–45302. navigation systems to navigate to the with a rotorcraft category rating) under landing point. ■ 2. Amend § 61.1 as follows: § 61.73 of this part, time acquired ■ (iii) For the purpose of meeting the A. Remove paragraph designations during a flight— (b)(1) through (b)(19); aeronautical experience requirements (A) Conducted in an appropriate ■ B. Add new definitions of Accredited, for a sport pilot certificate (except for aircraft; Institution of higher education, and powered parachute privileges), time (B) That is at least a straight-line Nationally recognized accrediting acquired during a flight conducted in an distance of more than 50 nautical miles agency to paragraph (b) in alphabetical appropriate aircraft that— from the original point of departure; and order; (A) Includes a point of landing at least (C) That involves the use of dead ■ C. Revise paragraph (iii) of the a straight line distance of more than 25 reckoning, pilotage, electronic definition of Authorized instructor in nautical miles from the original point of navigation aids, radio aids, or other paragraph (b); departure; and navigation systems. ■ D. Revise the definition of Cross (B) Involves, as applicable, the use of * * * * * country time; and dead reckoning; pilotage; electronic Institution of higher education has the ■ E. Remove definitions of Flight navigation aids; radio aids; or other same meaning as defined by the simulator and Flight training device. navigation systems to navigate to the Department of Education in 34 CFR The additions and revisions read as landing point. 600.4. follows: (iv) For the purpose of meeting the * * * * * aeronautical experience requirements Nationally recognized accrediting § 61.1 Applicability and definitions. for a sport pilot certificate with powered agency has the same meaning as defined * * * * * parachute privileges or a private pilot by the Department of Education in 34 (b) * * * certificate with a powered parachute CFR 600.2. Accredited has the same meaning as category rating, time acquired during a defined by the Department of Education flight conducted in an appropriate * * * * * in 34 CFR 600.2. aircraft that— ■ 3. Amend § 61.23 as follows: * * * * * (A) Includes a point of landing at least ■ A. Revise paragraphs (a)(1) and (a)(2); Authorized instructor means— a straight line distance of more than 15 ■ B. Revise paragraphs (d)(1)(i) and (ii) * * * * * nautical miles from the original point of and (d)(2)(i). (iii) A person authorized by the departure; and The additions and revisions read as Administrator to provide ground (B) Involves, as applicable, the use of follows: training or flight training under part 61, dead reckoning; pilotage; electronic § 61.23 Medical certificates: Requirement 121, 135, or 142 of this chapter when navigation aids; radio aids; or other and duration. conducting ground training or flight navigation systems to navigate to the (a) * * * training in accordance with that landing point. (1) Must hold a first-class medical authority. (v) For the purpose of meeting the certificate: Cross-country time means— aeronautical experience requirements (i) When exercising the pilot-in- (i) Except as provided in paragraphs for any pilot certificate with a rotorcraft command privileges of an airline (ii) through (vi) of this definition, time category rating or an instrument- transport pilot certificate; acquired during flight— helicopter rating, or for the purpose of (ii) When exercising the second-in- (A) Conducted by a person who holds exercising recreational pilot privileges, command privileges of an airline a pilot certificate; in a rotorcraft, under § 61.101(c), time transport pilot certificate in a flag or (B) Conducted in an aircraft; acquired during a flight— supplemental operation in part 121 of (C) That includes a landing at a point (A) Conducted in an appropriate this chapter that requires three or more other than the point of departure; and aircraft; pilots; or (D) That involves the use of dead (B) That includes a point of landing (iii) When serving as a required pilot reckoning, pilotage, electronic that was at least a straight-line distance flightcrew member in an operation navigation aids, radio aids, or other of more than 25 nautical miles from the conducted under part 121 of this navigation systems to navigate to the original point of departure; and chapter if the pilot has reached his or landing point. (C) That involves the use of dead her 60th birthday. (ii) For the purpose of meeting the reckoning, pilotage, electronic (2) Must hold at least a second class aeronautical experience requirements navigation aids, radio aids, or other medical certificate when exercising:

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(i) Second-in-command privileges of (ii) Privileges of a commercial pilot (d) Duration of a medical certificate. an airline transport pilot certificate in certificate; or Use the following table to determine part 121 of this chapter (other than * * * * * duration for each class of medical operations specified in paragraph certificate: (a)(1)(ii) of this section); or

And on the date of ex- amination for your And you are conducting an operation requir- Then your medical certificate expires, for that If you hold most recent medical ing operation, at the end of the last day of the certificate you were

(1) A first-class medical (i) Under age 40 ...... an airline transport pilot certificate for pilot-in- 12th month after the month of the date of ex- certificate. command privileges, or for second-in-com- amination shown on the medical certificate. mand privileges in a flag or supplemental operation in part 121 requiring three or more pilots. (ii) Age 40 or older ..... an airline transport pilot certificate for pilot-in- 6th month after the month of the date of ex- command privileges, for second-in-com- amination shown on the medical certificate. mand privileges in a flag or supplemental operation in part 121 requiring three or more pilots, or for a pilot flightcrew member in part 121 operations who has reached his or her 60th birthday..

******* (2) A second-class (i) Any age ...... an airline transport pilot certificate for second- 12th month after the month of the date of ex- medical certificate. in-command privileges (other than the op- amination shown on the medical certificate. erations specified in paragraph (d)(1) of this section), a commercial pilot certificate, or an air traffic control tower operator cer- tificate.

*******

■ 4. Amend § 61.35 by removing the ■ 5. Amend § 61.39 to revise paragraphs (5) Meet the prescribed age word ‘‘and’’ at the end of paragraph (a) and (b); redesignate paragraphs (c) requirement of this part for the issuance (a)(1), redesignating paragraph (a)(2) as through (e) as paragraphs (e) through (g); of the certificate or rating sought; paragraph (a)(3), adding a new and add paragraphs (c) and (d) to read (6) Have an endorsement, if required paragraph (a)(2), and revising as follows: by this part, in the applicant’s logbook redesignated paragraph (a)(3)(iii) to read or training record that has been signed as follows: § 61.39 Prerequisites for practical tests. by an authorized instructor who (a) Except as provided in paragraphs certifies that the applicant— § 61.35 Knowledge test: Prerequisites and (b), (c), and (e) of this section, to be (i) Has received and logged training passing grades. eligible for a practical test for a time within 2 calendar months (a) * * * certificate or rating issued under this preceding the month of application in (2) After July 31, 2014, for the part, an applicant must: preparation for the practical test; knowledge test for an airline transport (1) Pass the required knowledge test: (ii) Is prepared for the required pilot certificate with an airplane (i) Within the 24-calendar-month practical test; and category multiengine class rating, a period preceding the month the (iii) Has demonstrated satisfactory graduation certificate for the airline applicant completes the practical test, if knowledge of the subject areas in which transport pilot certification training a knowledge test is required; or the applicant was deficient on the program specified in § 61.156; and (ii) Within the 60-calendar month airman knowledge test; and (3) * * * period preceding the month the (7) Have a completed and signed (iii) Date of birth, which shows: applicant completes the practical for application form. (A) For issuance of certificates other those applicants who pass the (b) An applicant for an airline than the ATP certificate with an knowledge test after completing the transport pilot certificate with an airplane category multiengine class airline transport pilot certification airplane category multiengine class rating, the applicant meets or will meet training program in § 61.156; rating or an airline transport pilot the age requirements of this part for the (2) Present the knowledge test report certificate with an airplane type rating certificate sought before the expiration at the time of application for the may take the practical test with an date of the airman knowledge test practical test, if a knowledge test is expired knowledge test only if the report; and required; applicant passed the knowledge test (B) For issuance of an ATP certificate (3) Have satisfactorily accomplished after July 31, 2014, and is employed: with an airplane category multiengine the required training and obtained the (1) As a flightcrew member by a part class rating obtained under the aeronautical experience prescribed by 119 certificate holder conducting aeronautical experience requirements of this part for the certificate or rating operations under parts 125 or 135 of this § 61.159 or § 61.160, the applicant is at sought; chapter at the time of the practical test least 18 years of age at the time of the (4) Hold at least a third-class medical and has satisfactorily accomplished that knowledge test; certificate, if a medical certificate is operator’s approved pilot-in-command * * * * * required; training or checking program; or

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(2) As a flightcrew member by a part phrase ‘‘part 121,’’ from paragraph (e) and areas of operation requirements of 119 certificate holder conducting introductory text to read as follows: this part. operations under part 121 of this ■ § 61.55 Second-in-command 9. Amend § 61.153 as follows: chapter at the time of the practical test ■ qualifications. A. Revise paragraph (a); and has satisfactorily accomplished that ■ B. Redesignate paragraphs (e) through operator’s approved initial training (a) * * * (h) as paragraphs (f) through (i); and program; or (3) At least a pilot type rating for the ■ C. Add a new paragraph (e). (3) By the U.S. Armed Forces as a aircraft being flown unless the flight The addition and revisions read as flight crewmember in U.S. military air will be conducted as domestic flight follows: transport operations at the time of the operations within the United States practical test and has completed the airspace. § 61.153 Eligibility requirements: General. pilot in command aircraft qualification * * * * * * * * * * training program that is appropriate to ■ 7. Amend § 61.57 by revising (a) Meet the following age the pilot certificate and rating sought. paragraph (e)(2) to read as follows: requirements: (c) An applicant for an airline (1) For an airline transport pilot transport pilot certificate with a rating § 61.57 Recent flight experience: Pilot in certificate obtained under the other than those ratings set forth in command. aeronautical experience requirements of paragraph (b) of this section may take * * * * * §§ 61.159, 61.161, or 61.163, be at least the practical test for that certificate or (e) * * * 23 years of age; or rating with an expired knowledge test (2) This section does not apply to a (2) For an airline transport pilot report, provided that the applicant is pilot in command who is employed by certificate obtained under the employed: an air carrier certificated under part 121 aeronautical experience requirements of (1) As a flightcrew member by a part or 135 and is engaged in a flight § 61.160, be at least 21 years of age. 119 certificate holder conducting operation under part 91, 121, or 135 for * * * * * operations under parts 125 or 135 of this that air carrier if the pilot is in (e) After July 31, 2014, for an airline chapter at the time of the practical test compliance with §§ 121.435 or 121.436, transport pilot certificate with an and has satisfactorily accomplished that as applicable, and § 121.439, or airplane category multiengine class operator’s approved pilot-in-command §§ 135.243 and 135.247 of this chapter, rating or an airline transport pilot training or checking program; or as appropriate. certificate obtained concurrently with (2) By the U.S. Armed Forces as a * * * * * an airplane type rating, receive a flight crewmember in U.S. military air ■ 8. Amend § 61.71 by revising graduation certificate from an transport operations at the time of the paragraphs (b) and (c) to read as follows; authorized training provider certifying practical test and has completed the completion of the airline transport pilot pilot in command aircraft qualification § 61.71 Graduates of an approved training certification training program specified training program that is appropriate to program other than under this part: Special in § 61.156 before applying for the the pilot certificate and rating sought. rules. knowledge test required by paragraph (d) In addition to the requirements in * * * * * (g) of this section; paragraph (a) of this section, to be (b) A person may apply for an airline * * * * * eligible for a practical test for an airline transport pilot certificate, type rating, or ■ transport pilot certificate with an 10. Amend § 61.155 as follows: both under this part, and will be ■ A. Remove the word ‘‘and’’ after the airplane category multiengine class considered to have met the applicable rating or airline transport pilot semicolon in paragraph (c)(12); requirements under § 61.157, except for ■ B. Remove the period from the end of certificate obtained concurrently with the airline transport pilot certification an airplane type rating, an applicant paragraph (c)(13) and add the phrase ‘‘; training program required by § 61.156, and’’ in its place; and must: for that certificate and rating, if that ■ (1) If the applicant passed the C. Add paragraphs (c)(14) and (d). person has: The additions read as follows: knowledge test after July 31, 2014, (1) Satisfactorily accomplished an present the graduation certificate for the approved training program and a § 61.155 Aeronautical knowledge. airline transport pilot certification proficiency check for that airplane type * * * * * training program in § 61.156, at the time that includes all the tasks and (c) * * * of application for the practical test; maneuvers required to serve as pilot in (14) After July 31, 2014, for airplane (2) If applying for the practical test command in accordance with the category multiengine class rating or under the aeronautical experience requirements of subparts N and O of airplane type rating, the content of the requirements of § 61.160(a), the part 121 of this chapter; and airline transport pilot certification applicant must present the documents (2) Applied for an airline transport training program in § 61.156. required by that section to substantiate pilot certificate, type rating, or both (d) An applicant who successfully eligibility; and within the 60-day period from the date completes the knowledge test for an (3) If applying for the practical test the person satisfactorily accomplished airline transport pilot certificate prior to under the aeronautical experience the requirements of paragraph (b)(1) for August 1, 2014, must successfully requirements of § 61.160(b), (c), or (d), that airplane type. complete the practical test within 24 the applicant must present an official (c) A person who holds a foreign pilot months from the month in which the transcript and certifying document from license and is applying for an equivalent knowledge test was successfully an institution of higher education that U.S. pilot certificate on the basis of a completed. An applicant who passes the holds a letter of authorization from the Bilateral Aviation Safety Agreement and knowledge test prior to August 1, 2014, Administrator under § 61.169. associated Implementation Procedures but fails to successfully complete the * * * * * for Licensing may be considered to have practical test within 24 months must ■ 6. Amend § 61.55 by revising met the applicable aeronautical complete the airline transport pilot paragraph (a)(3) and by removing the experience, aeronautical knowledge, certification training program specified

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in § 61.156 and retake the knowledge (iii) Adverse weather conditions, device or aviation training device may test prior to applying for the practical including icing, thunderstorms, and not be used to satisfy this requirement. test. crosswinds with gusts. * * * * * ■ 11. Add § 61.156 to read as follows: (2) The remaining FSTD training may (5) Not more than 100 hours of the be completed in a Level 4 or higher total aeronautical experience § 61.156 Training requirements: Airplane flight simulation training device. The requirements of paragraph (a) of this category—multiengine class rating or training must include the following section may be obtained in a full flight airplane type rating concurrently with areas: simulator or flight training device that airline transport pilot certificate. (i) Navigation including flight represents an airplane, provided the After July 31, 2014, a person who management systems; and aeronautical experience was applies for the knowledge test for an (ii) Automation including autoflight. accomplished as part of an approved airline transport pilot certificate with an (c) Deviation authority. The training course in parts 121, 135, 141, or airplane category multiengine class Administrator may issue deviation 142 of this chapter. rating must present a graduation authority from the weight requirement * * * * * certificate from an authorized training in paragraph (b)(1) of this section upon ■ 14. Add § 61.160 to read as follows: provider under part 121, 135, 141, or a determination that the objectives of 142 of this chapter certifying the the training can be met in an alternative § 61.160 Aeronautical experience— applicant has completed the following device. airplane category restricted privileges. training in a course approved by the ■ 12. Amend § 61.157 by revising (a) Except for a person who has been Administrator. paragraph (c) to read as follows: removed from flying status for lack of (a) Academic training. The applicant proficiency or because of a disciplinary for the knowledge test must receive at § 61.157 Flight proficiency. action involving aircraft operations, a least 30 hours of classroom instruction * * * * * U.S. military pilot or former U.S. that includes the following: (c) Exceptions. A person who applies military pilot may apply for an airline (1) At least 8 hours of instruction on for an aircraft type rating to be added to transport pilot certificate with an aerodynamics including high altitude an airline transport pilot certificate or airplane category multiengine class operations; an aircraft type rating concurrently with rating or an airline transport pilot (2) At least 2 hours of instruction on an airline transport pilot certificate, and certificate concurrently with an airplane meteorology, including adverse weather who is an employee of a certificate type rating with a minimum of 750 phenomena and weather detection holder operating under part 121 or part hours of total time as a pilot if the pilot systems; and 135 of this chapter, does not need to presents: (3) At least 14 hours of instruction on comply with the requirements of (1) An official Form DD–214 air carrier operations, including the paragraph (b) of this section if the (Certificate of Release or Discharge from following areas: applicant presents a training record that Active Duty) indicating that the person (i) Physiology; shows completion of that certificate was honorably discharged from the U.S. (ii) Communications; holder’s approved training program for Armed Forces or an official U.S. Armed (iii) Checklist philosophy; the aircraft type rating. Forces record that shows the pilot is (iv) Operational control; * * * * * currently serving in the U.S. Armed (v) Minimum equipment list/ ■ 13. Amend § 61.159 as follows: Forces; and (2) An official U.S. Armed Forces configuration deviation list; ■ A. Redesignate paragraphs (a)(3) record that shows the person graduated (vi) Ground operations; through (a)(5) as paragraphs (a)(4) from a U.S. Armed Forces (vii) Turbine engines; through (a)(6); undergraduate pilot training school and (viii) Transport category aircraft ■ B. Add a new paragraph (a)(3); ■ C. Remove the phrase ‘‘paragraph received a rating qualification as a performance; military pilot. (ix) Automation, navigation, and (a)(3)(ii)’’ from newly redesignated paragraph (a)(4)(i) and add the phrase (b) A person may apply for an airline flight path warning systems. transport pilot certificate with an (4) At least 6 hours of instruction on ‘‘paragraph (a)(4)(ii)’’ in its place; ■ D. Remove the phrase ‘‘paragraph airplane category multiengine class leadership, professional development, rating or an airline transport pilot crew resource management, and safety (a)(3)’’ from newly redesignated paragraph (a)(4)(ii) and add the phrase certificate concurrently with an airplane culture. type rating with a minimum of 1,000 (b) FSTD training. The applicant for ‘‘paragraph (a)(4)’’ in its place; and ■ E. Revise newly redesignated hours of total time as a pilot if the the knowledge test must receive at least paragraph (a)(5). person: 10 hours of training in a flight The addition and revision read as (1) Holds a Bachelor’s degree with an simulation training device qualified follows aviation major from an institution of under part 60 of this chapter that higher education, as defined in § 61.1, represents a multiengine turbine § 61.159 Aeronautical experience: Airplane that has been issued a letter of airplane. The training must include the category rating. authorization by the Administrator following: (a) * * * under § 61.169; (1) At least 6 hours of training in a (3) 50 hours of flight time in the class (2) Completes 60 semester credit Level C or higher full flight simulator of aircraft for which the rating is sought. hours of aviation and aviation-related qualified under part 60 of this chapter A maximum of 25 hours of training in coursework that has been recognized by that represents a multiengine turbine a full flight simulator representing a the Administrator as coursework airplane with a maximum takeoff weight multiengine airplane may be credited designed to improve and enhance the of 40,000 pounds or greater. The toward the flight time requirement of knowledge and skills of a person training must include the following this paragraph if the training was seeking a career as a professional pilot; areas: accomplished as part of an approved (3) Holds a commercial pilot (i) Low energy states/stalls; training course in parts 121, 135, 141, or certificate with an airplane category and (ii) Upset recovery techniques; and 142 of this chapter. A flight training instrument rating if:

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(i) The required ground training was multiengine class rating or an airline ■ G. Add new paragraph (f); completed as part of an approved part transport pilot certificate concurrently ■ H. Remove the phrase ‘‘paragraphs (a) 141 curriculum at the institution of with an airplane type rating with a through (e)’’ from newly redesignated higher education; and minimum of 1,250 hours of total time as paragraph (g) introductory text and add (ii) The required flight training was a pilot. the phrase ‘‘paragraphs (a) through (f)’’ completed as part of an approved part (e) A person who applies for an in its place; and 141 curriculum at the institution of airline transport pilot certificate under ■ I. Remove the phrase ‘‘paragraph higher education or at a part 141 pilot the total flight times listed in paragraphs (f)(1)’’ from newly redesignated school that has a training agreement (a), (b), and (c) of this section must paragraph (g)(3) and add the phrase under § 141.26 of this chapter with the otherwise meet the aeronautical ‘‘paragraph (g)(1)’’ in its place. institution of higher education; and experience requirements of § 61.159, The revisions and additions read as (4) Presents official transcripts or except that the person may apply for an follows: other documentation acceptable to the airline transport pilot certificate with Administrator from the institution of 200 hours of cross-country flight time. § 61.165 Additional aircraft class category higher education certifying that the (f) A person who has 1,500 hours total and ratings. graduate has satisfied the requirements time as a pilot, 200 hours of cross- * * * * * in paragraphs (b)(1) through (3) of this country flight time, and otherwise meets (c) * * * section. the aeronautical experience (2) After July 31, 2014, successfully (c) A person may apply for an airline requirements of § 61.159 may apply for complete the airline transport pilot transport pilot certificate with an an airline transport pilot certificate certification training program specified airplane category multiengine class under this section. in § 61.156; rating or an airline transport pilot (g) An airline transport pilot (3) Pass a knowledge test for an certificate concurrently with an airplane certificate obtained under this section is airplane category multiengine class type rating with a minimum of 1,250 subject to the pilot in command rating or type rating on the aeronautical hours of total time as a pilot if the limitations set forth in § 61.167(b) and knowledge areas of § 61.155(c); person: must contain the following limitation, * * * * * (1) Holds an Associate’s degree with ‘‘Restricted in accordance with 14 CFR an aviation major from an institution of 61.167.’’ The pilot is entitled to an (5) Meet the aeronautical experience higher education, as defined in § 61.1, airline transport pilot certificate without requirements of § 61.159 or § 61.160; that has been issued a letter of the limitation specified in this and authorization by the Administrator paragraph when the applicant presents * * * * * under § 61.169; satisfactory evidence of having met the (e) Additional class rating within the (2) Completes at least 30 semester aeronautical experience requirements of same aircraft category. Except as credit hours of aviation and aviation- § 61.159 and the age requirement of provided in paragraph (f) of this section, related coursework that has been § 61.153(a)(1). a person applying for an airline recognized by the Administrator as (h) An applicant who meets the transport pilot certificate with an coursework designed to improve and aeronautical experience requirements of additional class rating who holds an enhance the knowledge and skills of a paragraphs (a), (b), (c), and (d) of this airline transport certificate in the same person seeking a career as a professional section is issued an airline transport aircraft category must— pilot; pilot certificate with the limitation, (1) Meet the eligibility requirements (3) Holds a commercial pilot ‘‘Holder does not meet the pilot in of § 61.153, except paragraph (g) of that certificate with an airplane category and command aeronautical experience section; instrument rating if: (i) The required ground training was requirements of ICAO,’’ as prescribed * * * * * completed as part of an approved part under Article 39 of the Convention on (f) Adding a multiengine class rating 141 curriculum at the institution of International Civil Aviation if the or airplane type rating to an airline higher education; and applicant does not meet the ICAO transport pilot certificate with a single (ii) The required flight training was requirements contained in Annex 1 engine class rating. A person applying completed as part of an approved part ‘‘Personnel Licensing’’ to the to add a multiengine class rating or 141 curriculum at the institution of Convention on International Civil airplane type rating to an airline higher education or at a part 141 pilot Aviation. An applicant is entitled to an transport pilot certificate with an school that has a written training airline transport pilot certificate without airplane category single engine class agreement under § 141.26 of this chapter the ICAO limitation specified under this rating must— with the institution of higher education; paragraph when the applicant presents (1) Meet the eligibility requirements and satisfactory evidence of having met the of § 61.153; (4) Presents official transcripts or ICAO requirements and otherwise meets (2) Pass a required knowledge test on other documentation acceptable to the the aeronautical experience the aeronautical knowledge areas of Administrator from the institution of requirements of § 61.159. § 61.155(c), as applicable to multiengine higher education certifying that the ■ 15. Amend § 61.165 as follows: airplanes; ■ graduate has satisfied the requirements A. Redesignate paragraphs (c)(2) (3) Comply with the requirements in in paragraphs (c)(1) through (3) of this through (c)(5) as paragraphs (c)(3) § 61.157(b), if applicable; section. through (c)(6); (4) Meet the applicable aeronautical ■ (d) A graduate of an institution of C. Add new paragraph (c)(2); experience requirements of § 61.159; ■ higher education who completes fewer D. Revise newly redesignated and than 60 semester credit hours but at paragraphs (c)(3) and (c)(5); (5) Pass a practical test on the areas least 30 credit hours and otherwise ■ E. Revise paragraph (e) introductory of operation of § 61.157(e)(2). satisfies the requirements of paragraph text and paragraph (e)(1); (b) may apply for airline transport pilot ■ F. Redesignate paragraph (f) as * * * * * certificate with an airplane category paragraph (g); ■ 16. Revise § 61.167 to read as follows:

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§ 61.167 Airline transport pilot privileges § 61.169 Letters of authorization for (1) Holds an airline transport pilot and limitations. institutions of higher education. certificate with an airplane category (a) Privileges. (1) A person who holds (a) An institution of higher education multiengine class rating; an airline transport pilot certificate is that is accredited, as defined in § 61.1, (2) Has at least 2 years of experience entitled to the same privileges as a may apply for a letter of authorization as a pilot in command in operations person who holds a commercial pilot for the purpose of certifying its conducted under § 91.1053(a)(2)(i) or certificate with an instrument rating. graduates for an airline transport pilot § 135.243(a)(1) of this chapter, or as a (2) A person who holds an airline certificate under the academic and pilot in command or second in transport pilot certificate and has met aeronautical experience requirements in command in any operation conducted the aeronautical experience § 61.160. The application must be in a under this part; requirements of § 61.159 and the age form and manner acceptable to the (3) Except for the holder of a flight requirements of § 61.153(a)(1) of this Administrator. instructor certificate, receives initial part may instruct— (b) An institution of higher education training on the following topics: (i) Other pilots in air transportation must comply with the provisions of the (i) The fundamental principles of the service in aircraft of the category, class, letter of authorization and may not learning process; and type, as applicable, for which the certify a graduate unless it determines (ii) Elements of effective teaching, airline transport pilot is rated and that the graduate has satisfied the instruction methods, and techniques; (iii) Instructor duties, privileges, endorse the logbook or other training requirements of § 61.160, as appropriate. record of the person to whom training responsibilities, and limitations; (c) The Administrator may rescind or (iv) Training policies and procedures; has been given; amend a letter of authorization if the and (ii) In flight simulators, and flight Administrator determines that the (v) Evaluation. training devices representing the aircraft institution of higher education is not (4) If providing training in a flight referenced in paragraph (b)(1) of this complying or is unable to comply with simulation training device, hold an section, when instructing under the the provisions of the letter of aircraft type rating for the aircraft provisions of this section and endorse authorization. represented by the flight simulation the logbook or other training record of training device utilized in the training PART 121—OPERATING the person to whom training has been program and have received training REQUIREMENTS: DOMESTIC, FLAG, given; within the preceding 12 months from AND SUPPLEMENTAL OPERATIONS (iii) Only as provided in this section, the certificate holder on: except that an airline transport pilot (i) Proper operation of flight simulator who also holds a flight instructor ■ 18. The authority citation for part 121 is revised to read as follows: and flight training device controls and certificate can exercise the instructor systems; privileges under subpart H of this part Authority: 49 U.S.C. 106(f), 106(g), 40113, (ii) Proper operation of environmental for which he or she is rated; and 40119, 41706, 44101, 44701–44702, 44705, and fault panels; (iv) In an aircraft, only if the aircraft 44709–44711, 44713, 44716–44717, 44722, (iii) Data and motion limitations of has functioning dual controls, when 46105.2. simulation; instructing under the provisions of this ■ 19. Amend § 121.409 by revising (iv) Minimum equipment section. paragraph (b) introductory text to read requirements for each curriculum; and (3) Excluding briefings and as follows: (v) The maneuvers that will be debriefings, an airline transport pilot demonstrated in the flight simulation may not instruct in aircraft, flight § 121.409 Training courses using airplane training device. simulators, and flight training devices simulators and other training devices. (c) A certificate holder may not issue under this section— * * * * * a graduation certificate to a student (i) For more than 8 hours in any 24- (b) Except for the airline transport unless that student has completed all consecutive-hour period; or pilot certification training program the curriculum requirements of the (ii) For more than 36 hours in any 7- approved to satisfy the requirements of course. consecutive-day period. § 61.156 of this chapter, a course of (d) A certificate holder must conduct (4) An airline transport pilot may not training in an airplane simulator may be evaluations to ensure that training instruct in Category II or Category III included for use as provided in techniques, procedures, and standards operations unless he or she has been § 121.441 if that course— are acceptable to the Administrator. trained and successfully tested under * * * * * ■ 21. Revise § 121.419 to read as Category II or Category III operations, as follows: ■ 20. Add § 121.410 to read as follows: applicable. § 121.419 Pilots and flight engineers: (b) Limitations. A person who holds § 121.410 Airline transport pilot Initial, transition, and upgrade ground an airline transport pilot certificate and certification training program. training. has not satisfied the age requirement of (a) A certificate holder may obtain (a) Except as provided in paragraph § 61.153(a)(1) and the aeronautical approval to establish and implement a (b) of this section, initial, transition, and experience requirements of § 61.159 training program to satisfy the upgrade ground training for pilots and may not: requirements of § 61.156 of this chapter. flight engineers must include (1) Act as pilot in command in The training program must be separate instruction in at least the following as operations conducted under part 121, from the air carrier training program applicable to their assigned duties: § 91.1053(a)(2)(i), or § 135.243(a)(1) of required by this part. (1) General subjects— this chapter, or (b) No certificate holder may use a (i) The certificate holder’s dispatch or (2) Serve as second in command in person nor may any person serve as an flight release procedures; flag or supplemental operations in part instructor in a training program (ii) Principles and methods for 121 of this chapter requiring three or approved to meet the requirements of determining weight and balance, and more pilots. § 61.156 of this chapter unless the runway limitations for takeoff and ■ 17. Add § 61.169 to read as follows: instructor: landing;

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(iii) Enough meteorology to insure a (v) Normal and emergency ■ 23. Add § 121.436 to read as follows: practical knowledge of weather communication procedures; and phenomena, including the principles of (vi) Approved crew resource § 121.436 Pilot Qualification: Certificates and experience requirements. frontal systems, icing, fog, management training. thunderstorms, and high altitude (2) The training required by paragraph (a) No certificate holder may use nor weather situations; (a)(2) of this section for the airplane may any pilot act as pilot in command (iv) Air traffic control systems, type. of an aircraft (or as second in command procedures, and phraseology; (c) Initial ground training for pilots of an aircraft in a flag or supplemental (v) Navigation and the use of and flight engineers must consist of at operation that requires three or more navigation aids, including instrument least the following programmed hours of pilots) unless the pilot: approach procedures; instruction in the required subjects (1) Holds an airline transport pilot (vi) Normal and emergency specified in paragraph (a) of this section certificate not subject to the limitations communication procedures; and in § 121.415(a) unless reduced in § 61.167 of this chapter; (vii) Visual cues prior to and during under § 121.405: (2) Holds an appropriate aircraft type descent below DA/DH or MDA; (1) Group I airplanes— rating for the aircraft being flown; and (viii) Approved crew resource (i) Reciprocating powered, 64 hours; (3) If serving as pilot in command, has management initial training; and and 1,000 hours as second in command in (ix) Other instructions as necessary to (ii) Turbopropeller powered, 80 operations under this part, pilot in ensure competence. hours. command in operations under (2) For each airplane type— (2) Group II airplanes, 120 hours. § 91.1053(a)(2)(i) of this chapter, pilot in (i) A general description; (d) Initial ground training for pilots command in operations under (ii) Performance characteristics; who have completed the airline § 135.243(a)(1) of this chapter, or any (iii) Engines and propellers; transport pilot certification training combination thereof. For those pilots (iv) Major components; program in § 61.156 must consist of at who are employed as pilot in command (v) Major airplane systems (e.g., flight least the following programmed hours of in part 121 operations on July 31, 2013, controls, electrical, hydraulic); other instruction in the required subjects compliance with the requirements of systems as appropriate; principles of specified in paragraph (b) of this section this paragraph (a)(3) is not required. normal, abnormal, and emergency and in § 121.415(a) unless reduced (b) No certificate holder may use nor operations; appropriate procedures and under § 121.405: may any pilot act as second in limitations; (1) Group I airplanes— command unless the pilot holds an (vi) Procedures for— (i) Reciprocating powered, 54 hours; airline transport pilot certificate and an (A) Recognizing and avoiding severe and appropriate aircraft type rating for the weather situations; (ii) Turbopropeller powered, 70 aircraft being flown. A second-in- (B) Escaping from severe weather hours. command type rating obtained under situations, in case of inadvertent (2) Group II airplanes, 110 hours. § 61.55 does not satisfy the requirements encounters, including low-altitude ■ 22. Add § 121.435 to read as follows: of this section. windshear, and (c) For the purpose of satisfying the (C) Operating in or near § 121.435 Pilot qualification: Certificate flight hour requirement in paragraph thunderstorms (including best and experience requirements. (a)(3) of this section, a pilot may credit penetrating altitudes), turbulent air (a) No pilot may act as pilot in 500 hours of military flight time (including clear air turbulence), icing, command of an aircraft (or as second in obtained as pilot in command of a hail, and other potentially hazardous command of an aircraft in a flag or multiengine turbine-powered, fixed- meteorological conditions; supplemental operation that requires wing airplane in an operation requiring (vii) Operating limitations; three or more pilots) unless he holds an more than one pilot. (viii) Fuel consumption and cruise airline transport pilot certificate and an (d) Compliance with the requirements control; appropriate type rating for that aircraft. of this section is required by August 1, (ix) Flight planning; (b) No certificate holder may use nor 2013. However, for those pilots who are (x) Each normal and emergency may any pilot act as a pilot in a capacity employed as second in command in part procedure; and other than those specified in paragraph 121 operations on July 31, 2013, (xi) The approved Airplane Flight (a) of this section unless the pilot holds compliance with the type rating Manual. at least a commercial pilot certificate requirement in paragraph (b) of this (b) Initial ground training for pilots with appropriate category and class section is not required until January 1, who have completed the airline ratings for the aircraft concerned, and an 2016. transport pilot certification training instrument rating. Notwithstanding the program in § 61.156 must include requirements of § 61.63(b) and (c) of this § 121.437 [Removed] instruction in at least the following as chapter, a pilot who is currently ■ 24. Remove § 121.437. applicable to their assigned duties: employed by a certificate holder and ■ 25. Amend § 121.543(b)(3)(i) to read (1) Ground training specific to the meets applicable training requirements as follows: certificate holder’s— of subpart N of this part, and the (i) Dispatch or flight release proficiency check requirements of § 121.543 Flight crewmembers at controls. procedures; § 121.441, may be issued the * * * * * (ii) Method for determining weight appropriate category and class ratings (b) * * * and balance and runway limitations for by presenting proof of compliance with (3) * * * takeoff and landing; those requirements to a Flight Standards (i) In the case of the assigned pilot in (iii) Meteorology hazards applicable District Office. command during the en route cruise to the certificate holder’s areas of (c) The requirements of this section portion of the flight, by a pilot who operation; will expire on July 31, 2013. After that holds an airline transport pilot (iv) Approved departure, arrival, and date, the requirements of § 121.436 certificate not subject to the limitations approach procedures; apply. in § 61.167 of this chapter and an

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appropriate type rating, is currently (ii) Elements of effective teaching, training, testing, and checking for pilot qualified as pilot in command or second instruction methods, and techniques; schools certificated under this part and in command, and is qualified as pilot in (iii) Instructor duties, privileges, is considered to meet the requirements command of that aircraft during the en responsibilities, and limitations; of this part, provided— route cruise portion of the flight. A (iv) Training policies and procedures; (1) There is a training agreement second in command qualified to act as and between the certificated training center a pilot in command en route need not (v) Evaluation. and the pilot school; have completed the following pilot in (4) If providing training in a flight (2) The training, testing, and checking command requirements: The 6-month simulation training device, holds an provided by the certificated training recurrent flight training required by aircraft type rating for the aircraft center is approved and conducted under § 121.433(c)(1)(iii); the operating represented by the flight simulation part 142; experience required by § 121.434; the training device utilized in the training (3) The pilot school certificated under takeoffs and landings required by program and have received training and this part obtains the Administrator’s § 121.439; the line check required by evaluation within the preceding 12 approval for a training course outline § 121.440; and the 6-month proficiency months from the certificate holder on: that includes the training, testing, and (i) Proper operation of flight simulator check or simulator training required by checking to be conducted under this and flight training device controls and § 121.441(a)(1); and part and the training, testing, and systems; * * * * * checking to be conducted under part (ii) Proper operation of environmental 142; and Appendix H to Part 121 [Amended] and fault panels; (4) Upon completion of the training, ■ 26. Amend Appendix H to Part 121 by (iii) Data and motion limitations of simulation; testing, and checking conducted under removing the reference ‘‘§ 61.153(g)’’ part 142, a copy of each student’s from the last paragraph of the appendix (iv) Minimum equipment requirements for each curriculum; and training record is forwarded to the part and adding the reference ‘‘§ 61.153(h)’’ 141 school and becomes part of the in its place. (v) The maneuvers that will be demonstrated in the flight simulation student’s permanent training record. PART 135—OPERATING training device. (b) A pilot school that provides flight REQUIREMENTS: COMMUTER AND (c) A certificate holder may not issue training for an institution of higher ON DEMAND OPERATIONS AND a graduation certificate to a student education that holds a letter of RULES GOVERNING PERSON unless that student has completed all authorization under § 61.169 of this ONBOARD SUCH AIRCRAFT the curriculum requirements of the chapter must have a training agreement course. with that institution of higher ■ 27. The authority citation for part 135 (d) A certificate holder must conduct education. evaluations to ensure that training is revised to read as follows: ■ techniques, procedures, and standards 33. Amend § 141.33 by adding Authority: 49 U.S.C. 106(f), 106(g), 41706, paragraph (a)(4) to read as follows: 40113, 44701–44702, 44705, 44709, 44711– are acceptable to the Administrator. 44713, 44715–44717, 44722, 45101–45105. ■ 29. Amend § 135.341 by adding a § 141.33 Personnel. sentence to the end of paragraph (a) to ■ 28. Add § 135.336 to read as follows: (a) * * * read as follows: (4) In addition to meeting the § 135.336 Airline transport pilot requirements of paragraph (a)(3) of this certification training program. § 135.341 Pilot and flight attendant crewmember training programs. section, each instructor used for the (a) A certificate holder may obtain (a) * * * This deviation authority airline transport pilot certification approval to establish and implement a does not extend to the training provided training program in § 61.156 of this training program to satisfy the under paragraph (c) of this section. chapter must: requirements of § 61.156 of this chapter. * * * * * (i) Hold an airline transport pilot The training program must be separate certificate with an airplane category from the air carrier training program PART 141—PILOT SCHOOLS multiengine class rating; required by this part. (ii) Have at least 2 years of experience (b) No certificate holder may use a ■ 30. The authority citation for part 141 as a pilot in command in operations person nor may any person serve as an is revised to read as follows: conducted under § 91.1053(a)(2)(i) or instructor in a training program Authority: 49 U.S.C. 106(f), 106(g), 40113, § 135.243(a)(1) of this chapter, or as a approved to meet the requirements of pilot in command or second in § 61.156 of this chapter unless the 44701–44703, 44707, 44709, 44711, 45102– 45103, 45301–45302. command in any operation conducted instructor: under part 121 of this chapter; and (1) Holds an airline transport pilot ■ 31. Amend § 141.11 by adding (iii) If providing training in a flight certificate with an airplane category paragraph (b)(2)(viii) to read as follows: multiengine class rating; simulation training device, have (2) Has at least 2 years of experience § 141.11 Pilot school ratings. received training and evaluation within as a pilot in command in operations * * * * * the preceding 12 months from the conducted under § 91.1053(a)(2)(i) of (b) * * * certificate holder on— this chapter, § 135.243(a)(1) of this part, (2) * * * (A) Proper operation of flight or as a pilot in command or second in (viii) Airline transport pilot simulator and flight training device command in any operation conducted certification training program. controls and systems; under part 121 of this chapter; * * * * * (B) Proper operation of environmental (3) Except for the holder of a flight ■ 32. Revise § 141.26 to read as follows: and fault panels, instructor certificate, receives initial (C) Data and motion limitations of training on the following topics: § 141.26 Training agreements. simulation; (i) The fundamental principles of the (a) A training center certificated under (D) Minimum equipment learning process; part 142 of this chapter may provide the requirements for each curriculum; and

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(E) The maneuvers that will be (b) * * * pilot in command or second in demonstrated in the flight simulation (2) Approved under subpart Y of part command in any operation conducted training device. 121 of this chapter, Advanced under part 121 of this chapter; * * * * * Qualification Programs, for the (c) Except for the holder of a flight ■ 34. Amend Appendix K to Part 141 as authorization holder’s own employees; instructor certificate, receives initial follows: * * * * * training on the following topics: ■ A. Revise paragraph 4.(b) and 4.(c). ■ 37. Amend § 142.3 by revising (1) The fundamental principles of the ■ B. Add paragraph 13. paragraph (3) of the definition of Course learning process; Appendix K to Part 141—Special and the definition of Flight training (2) Elements of effective teaching, Preparation Courses equipment to read as follows: instruction methods, and techniques; (3) Instructor duties, privileges, § 142.3 Definitions. * * * * * responsibilities, and limitations; 4. * * * * * * * * (4) Training policies and procedures; (b) Except for the airline transport pilot Course means— and certification program in paragraph 13 of this * * * * * (5) Evaluation. appendix, training in a flight simulator that (3) A curriculum, or curriculum (d) If providing training in a flight meets the requirements of § 141.41(a) of this segment, as defined in subpart Y of part part, may be credited for a maximum of 10 simulation training device— percent of the total flight training hour 121 of this chapter. (1) Holds an aircraft type rating for the requirements of the approved course, or of * * * * * aircraft represented by the flight this section, whichever is less. Flight training equipment means full simulation training device utilized in (c) Except for the airline transport pilot flight simulators, as defined in § 1.1 of the training program and have received certification program in paragraph 13 of this this chapter, flight training devices, as training and evaluation within the appendix, training in a flight training device defined in § 1.1 of this chapter, and that meets the requirements of § 141.41(b) of preceding 12 months from the certificate this part, may be credited for a maximum of aircraft. holder on the maneuvers that will be 5 percent of the total flight training hour * * * * * demonstrated in the flight simulation requirements of the approved course, or of ■ 38. Amend § 142.49 by revising training device; and this section, whichever is less. paragraph (c)(3)(iv) to read as follows: (2) Satisfies the requirements of * * * * * § 142.53(a)(4). 13. Airline transport pilot certification § 142.49 Training center instructor and (e) A certificate holder may not issue training program. An approved airline evaluator privileges and limitations. a graduation certificate to a student transport pilot certification training program * * * * * must include the academic and FSTD unless that student has completed all (c) * * * the curriculum requirements of the training set forth in § 61.156 of this chapter. (3) * * * The FAA will not approve a course with course. fewer hours than those prescribed in § 61.156 (iv) If instructing or evaluating in an (f) A certificate holder must conduct of this chapter. aircraft in flight while serving as a evaluations to ensure that training required crewmember, holds at least a techniques, procedures, and standards PART 142—TRAINING CENTERS valid second class medical certificate; are acceptable to the Administrator. and ■ 35. The authority citation for part 142 * * * * * § 142.55 [Amended] is revised to read as follows: ■ 39. Add § 142.54 to read as follows: ■ 40. Amend § 142.55 as follows: Authority: 49 U.S.C. 106(f), 106(g), 40113, ■ 40119, 44101, 44701–44703, 44705, 44707, § 142.54 Airline transport pilot certification A. In paragraph (a)(2), remove the 44709–44711, 45102–45103, 45301–45302. training program. phrase ‘‘part 187’’ and add in its place the phrase ‘‘part 183’’; and No certificate holder may use a person ■ 36. Amend § 142.1 by revising ■ B. In paragraph (d), remove the phrase nor may any person serve as an paragraphs (a) and (b)(2) to read as ‘‘SFAR 58’’ and add in its place the instructor in a training program follows: phrase ‘‘subpart Y of part 121 of this approved to meet the requirements of chapter’’. § 142.1 Applicability. § 61.156 of this chapter unless the (a) This subpart prescribes the instructor: Issued in Washington, DC, under the requirements governing the certification (a) Holds an airline transport pilot authority provided by 49 U.S.C. 106(f), and operation of training centers. Except certificate with an airplane category 44701(a), and Secs. 216–217, Public Law as provided in paragraph (b) of this multiengine class rating; 111–216, 124 Stat. 2348 on July 10, 2013. section, this part provides an alternative (b) Has at least 2 years of experience Michael P. Huerta, means to accomplish training required as a pilot in command in operations Administrator. by parts 61, 63, 65, 91, 121, 125, 135, conducted under § 91.1053(a)(2)(i) or [FR Doc. 2013–16849 Filed 7–10–13; 4:15 pm] or 137 of this chapter. § 135.243(a)(1) of this chapter, or as a BILLING CODE 4910–13–P

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Part IV

Department of Health and Human Services

Food and Drug Administration 21 CFR Parts 1 and 16 Administrative Detention of Drugs Intended for Human or Animal Use; Draft Guidance for Industry on Circumstances That Constitute Delaying, Denying, Limiting, or Refusing a Drug Inspection; Availability; Proposed Rule and Notice

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DEPARTMENT OF HEALTH AND comments received may be posted Costs and Benefits HUMAN SERVICES without change to http:// The primary public health benefits www.regulations.gov, including any from adoption of the proposed rule Food and Drug Administration personal information provided. For would be the value of the illnesses or additional information on submitting deaths prevented because the Agency 21 CFR Parts 1 and 16 comments, see the ‘‘Comments’’ heading administratively detained a drug it has [Docket No. FDA–2013–N–0365] of the SUPPLEMENTARY INFORMATION reason to believe is adulterated or section of this document. misbranded; this benefit occurs only if Administrative Detention of Drugs Docket: For access to the docket to the drug would not have been prevented Intended for Human or Animal Use read background documents or from entering the market using one of comments received, go to http:// the Agency’s other enforcement tools. AGENCY: Food and Drug Administration, www.regulations.gov and insert the HHS. The estimated primary costs to FDA docket number(s), found in brackets in include marking or labeling the ACTION: Proposed rule. the heading of this document, into the detained product and costs associated ‘‘Search’’ box and follow the prompts SUMMARY: The Food and Drug with appeals of detention orders. The and/or go to the Division of Dockets Administration (FDA) is proposing a Agency estimates the net annual social Management, 5630 Fishers Lane, Rm. regulation to implement administrative costs to be between $0 and $591,480. 1061, Rockville, MD 20852. detention authority with respect to FOR FURTHER INFORMATION CONTACT: I. Background drugs intended for human or animal use as authorized by amendments made to Charlotte Hinkle, Office of Regulatory On July 9, 2012, President Obama the Federal Food, Drug, and Cosmetic Affairs, Food and Drug Administration, signed the Food and Drug Act (the FD&C Act) by the Food and 10903 New Hampshire Ave., Bldg. 32, Administration Safety and Innovation Drug Administration Safety and Rm. 4345, Silver Spring, MD 20993– Act (FDASIA, Pub. L. 112–144) into law. Innovation Act (FDASIA). Once the 0002, 301–796–5300, FDASIA Title VII of FDASIA provides FDA with applicable regulation is finalized, FDA’s [email protected]. important new authorities to help it administrative detention authority with SUPPLEMENTARY INFORMATION: better protect the integrity of the drug respect to drugs will allow FDA to better Executive Summary supply chain. One of those new protect the integrity of the drug supply authorities is section 709, which chain. Specifically, FDA will be able to Purpose of the Regulatory Action amends section 304(g) of the FD&C Act administratively detain drugs FDA’s administrative detention (21 U.S.C. 334(g)) to provide FDA with encountered during an inspection that authority with respect to drugs intended administrative detention authority with an officer or employee conducting an for human or animal use will allow FDA respect to drugs. Section 304(g) of the inspection has reason to believe are to better protect the integrity of the drug FD&C Act, as amended by FDASIA, adulterated or misbranded. This supply chain. Specifically, provides FDA the same authority to authority is intended to protect the administrative detention is intended to detain drugs that section 304(g) already public by preventing distribution or protect the public by preventing provides FDA with respect to devices subsequent use of drugs encountered distribution or subsequent use of drugs and tobacco products. Once during inspections that are believed to encountered during inspections that implementing regulations with respect be adulterated or misbranded, until FDA may be adulterated or misbranded, until to drugs are finalized, the amendments has had time to consider what action it FDA has had time to consider what to section 304(g) of the FD&C Act will should take concerning the drugs, and action it should take concerning the take effect, allowing FDA to to initiate legal action, if appropriate. drugs, and to initiate legal action, if administratively detain drugs that an DATES: Submit either electronic or appropriate. FDA already has the officer or employee conducting an written comments on the proposed rule authority to administratively detain inspection under section 704 of the by September 13, 2013. devices, tobacco, and foods that FDA FD&C Act has reason to believe are adulterated or misbranded. ADDRESSES: You may submit comments, has reason to believe are adulterated or FDA’s administrative detention identified by Docket No. FDA–2013–N– misbranded. authority with respect to drugs will 0365, by any of the following methods. FDA is issuing this proposed rule under section 304(g) of the FD&C Act, allow FDA to drive safety and quality Electronic Submissions as amended by section 709 of FDASIA, through the drug supply chain. Use of Submit electronic comments in the and section 701 of the FD&C Act (21 this authority is intended to protect the following way: U.S.C. 334(g) and 371). Section 304(g) public by preventing distribution or • Federal eRulemaking Portal: http:// also authorizes FDA to administratively subsequent use of drugs encountered www.regulations.gov. Follow the detain devices and tobacco products. during inspections that may be instructions for submitting comments. adulterated or misbranded, until FDA Summary of the Major Provisions has had time to consider what action it Written Submissions This notice contains a proposed rule should take concerning the drugs, and Submit written submissions in the regarding the administrative detention to initiate legal action, if appropriate. following ways: of drugs. FDA proposes to amend parts Section 709 of FDASIA requires the • Mail/Hand delivery/Courier (for 1 and 16 (21 CFR parts 1 and 16) to Secretary to ‘‘consult with stakeholders, paper or CD–ROM submissions): create an implementing rule for this including manufacturers of drugs’’ Division of Dockets Management (HFA– authority. The proposed changes set before issuing implementing 305), Food and Drug Administration, forth the procedures for detention of regulations. Section 709 of FDASIA also 5630 Fishers Lane, Rm. 1061, Rockville, drugs believed to be adulterated or requires FDA to issue a notice of MD 20852. misbranded and amend the scope of proposed rulemaking that includes the Instructions: All submissions received FDA’s part 16 regulatory hearing proposed regulation and provides a must include the Agency name and procedures to include the period of at least 60 days for comments Docket No. FDA–2013–N–0365. All administrative detention of drugs. on the proposed regulation. Finally,

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section 709 of FDASIA states that FDA B. Proposed Revisions to Part 16 If a rule has a significant economic must ‘‘publish the final regulation not The proposed amendment to part 16 impact on a substantial number of small less than 30 days before the regulation’s is a technical change. This change businesses, the Regulatory Flexibility effective date’’ and states that FDA must amends a statement in § 16.1 so that the Act requires Agencies to analyze issue regulations no later than 2 years scope of part 16 regulatory hearing regulatory alternatives that would after enactment of FDASIA. procedures will also include minimize any significant impact of a On April 9, 2013, FDA published a administrative detention authority with rule on small entities. FDA has document in the Federal Register that respect to drugs. determined that this proposed rule opened a 30-day public docket to solicit would not have a significant economic input from all relevant stakeholders III. Effective Date impact on a substantial number of small regarding FDA’s issuance of regulations FDA intends that the effective date of entities. for the administrative detention of drugs the new requirements will be 30 days Section 202(a) of the Unfunded (78 FR 21085). The docket was intended after publication of a final rule in the Mandates Reform Act of 1995 requires to ensure that stakeholders had an Federal Register. Section 709 of that Agencies prepare a written opportunity to provide comments before FDASIA states that FDA’s new authority statement, which includes an FDA issued proposed regulations on under section 304(g) of the FD&C Act assessment of anticipated costs and administrative detention with respect to shall not take effect until FDA issues a benefits, before proposing ‘‘any rule that drugs and to ensure that such final regulation, and section 709 includes any Federal mandate that may information submitted to FDA was requires FDA to ‘‘publish the final result in the expenditure by State, local, available to all interested persons in a regulation not less than 30 days before and tribal governments, in the aggregate, timely fashion. the regulation’s effective date.’’ Finally, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) The 30-day public docket closed on section 709 of FDASIA requires that no in any one year.’’ The current threshold May 9, 2013. FDA received one later than 2 years after enactment of after adjustment for inflation is $141 responsive, non-substantive comment. FDASIA, regulations to implement million, using the most current (2012) The Agency did not consider administrative detention authority with Implicit Price Deflator for the Gross nonresponsive comments in developing respect to drugs must be issued. Domestic Product. FDA does not expect this proposed rule. FDA notes that this Therefore, FDA intends to issue the this proposed rule to result in any 1- announcement regarding the proposed final rule for administrative detention year expenditure that would meet or rule also solicits input from all relevant authority with respect to drugs by July exceed this amount. stakeholders before FDA issues final 9, 2014, with an effective date for the The primary public health benefits regulations to implement its final rule no later than August 8, 2014. from adoption of the proposed rule administrative detention authority with IV. Legal Authority would be the value of the illnesses or respect to drugs. FDA modeled the deaths prevented because the Agency proposed regulations for the FDA is issuing this proposed rule administratively detained a drug it has administrative detention of drugs on the under sections 304(g) and 701 of the reason to believe is adulterated or existing regulations covering FD&C Act and section 709 of FDASIA. misbranded; this benefit occurs only if administrative detention of devices (see Section 709 of FDASIA provides FDA the drug would not have been prevented 21 CFR 800.55). FDA did so because of authority to issue regulations regarding from entering the market using one of identical statutory authority underlying administrative detention authority with the Agency’s other enforcement tools. the regulations (21 U.S.C. 334(g)). respect to drugs. Section 304(g) of the FD&C Act includes FDA’s There may also be benefits from II. Proposed Changes to Current administrative detention authority with deterrence if administrative detention Regulations respect to drugs. The proposed rule is increases the likelihood misbranded or adulterated products will not be A. Proposed Revisions to Part 1 necessary for efficient enforcement of the FD&C Act. marketed in the future. FDA proposes to amend part 1 (21 The estimated primary costs to FDA CFR part 1) to create an implementing V. Analysis of Impacts (Summary of the include marking or labeling the regulation for the administrative Initial Regulatory Impact Analysis) detained product and costs associated detention of drugs. The proposed FDA has examined the impacts of the with appeals of the detention orders. amendment to part 1 consists of one proposed rule under Executive Order However, other costs, such as loss in section, § 1.501, under a new subpart, 12866, Executive Order 13563, the market value of a detained drug, may be which is titled ‘‘Subpart L— Regulatory Flexibility Act (5 U.S.C. incurred if FDA revokes the detention Administrative Detention of Drugs 601–612), and the Unfunded Mandates order on appeal. Given the history of Intended for Human or Animal Use.’’ Reform Act of 1995 (Pub. L. 104–4). administrative detention use with Proposed § 1.501 sets forth the Executive Orders 12866 and 13563 medical devices and foods, the procedures for the administrative direct Agencies to assess all costs and likelihood is low of FDA issuing a detention of drugs encountered during benefits of available regulatory detention order that is later revoked on an inspection that are believed to be alternatives and, when regulation is appeal. adulterated or misbranded. The new necessary, to select regulatory We estimate the annual costs using a regulation is closely modeled on the approaches that maximize net benefits range of 0 to 20 administrative current regulation for the administrative (including potential economic, detentions performed each year. The detention of devices (21 CFR 800.55). environmental, public health and safety, Agency estimates the net annual social There are minor differences from the and other advantages; distributive costs to be between $0 and $591,480. device regulation, including updates to impacts; and equity). The Agency The present discounted value over 20 statutory references to refer to drugs believes that this proposed rule would years would be in the range of $0 to instead of devices and changes to not be an economically significant $8,799,729 at a 3 percent discount rate language to conform to current Federal regulatory action as defined by and in the range of $0 to $6,266,148 at Register requirements. Executive Order 12866. a 7 percent discount rate.

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FDA has examined the economic of Dockets Management between 9 a.m. believe that a drug, as defined in section implications of the final rule as required and 4 p.m., Monday through Friday, and 201(g) of the Federal Food, Drug, and by the Regulatory Flexibility Act. If a will be posted to the docket at http:// Cosmetic Act, is adulterated or rule will have a significant economic www.regulations.gov. misbranded. impact on a substantial number of small (c) Detention period. The detention is List of Subjects entities, the Regulatory Flexibility Act to be for a reasonable period that may requires agencies to analyze regulatory 21 CFR Part 1 not exceed 20 calendar days after the options that would lessen the economic Cosmetics, Drugs, Exports, Food detention order is issued, unless the effect of the rule on small entities. We labeling, Imports, Labeling, Reporting FDA District Director in whose district find that this proposed rule would not and recordkeeping requirements. the drugs are located determines that a have a significant economic impact on greater period is required to seize the a substantial number of small entities. 21 CFR Part 16 drugs, to institute injunction This analysis, together with other Administrative practice and proceedings, or to evaluate the need for relevant sections of this document, procedure. legal action, in which case the District serves as the Initial Regulatory Therefore, under the Federal Food, Director may authorize detention for 10 Flexibility Analysis, as required under Drug, and Cosmetic Act and the Public additional calendar days. The additional the Regulatory Flexibility Act. Health Service Act, and under authority 10-calendar-day detention period may be ordered at the time the detention VI. Paperwork Reduction Act of 1995 delegated to the Commissioner of Food and Drugs, it is proposed that 21 CFR order is issued or at any time thereafter. FDA concludes that the requirements parts 1 and 16 be amended as follows: The entire detention period may not proposed in this proposed rule are not exceed 30 calendar days, except when subject to review by the Office of PART 1—GENERAL ENFORCEMENT the detention period is extended under Management and Budget because they REGULATIONS paragraph (g)(6) of this section. An do not constitute a ‘‘collection of authorized FDA representative may, in information’’ under the Paperwork ■ 1. The authority citation for 21 CFR accordance with paragraph (j) of this Reduction Act of 1995 (44 U.S.C. part 1 is revised to read as follows: section, terminate a detention before the 3518(c)(1)(B)(ii)). Authority: 15 U.S.C. 1333, 1453, 1454, expiration of the detention period. VII. Federalism 1455, 4402; 19 U.S.C. 1490, 1491; 21 U.S.C. (d) Issuance of detention order. (1) 321, 331, 332, 333, 334, 335a, 343, 350c, The detention order must be issued in FDA has analyzed this proposed rule 350d, 352, 355, 360b, 360ccc, 360ccc–1, writing, in the form of a detention in accordance with the principles set 360ccc–2, 362, 371, 374, 381, 382, 387, 387a, 387c, 393; 42 U.S.C. 216, 241, 243, 262, 264. notice, signed by the authorized FDA forth in Executive Order 13132. FDA representative who has reason to believe has determined that the proposed rule, ■ 2. Add subpart L, consisting of that the drugs are adulterated or if finalized, would not contain policies § 1.501, to read as follows: misbranded, and issued to the owner, that would have substantial direct operator, or agent in charge of the place Subpart L—Administrative Detention effects on the States, on the relationship where the drugs are located. If the of Drugs Intended for Human or between the National Government and owner or the user of the drugs is Animal Use the States, or on the distribution of different from the owner, operator, or power and responsibilities among the § 1.501 Administrative detention of drugs. agent in charge of the place where the various levels of government. drugs are detained, a copy of the Accordingly, the Agency tentatively (a) General. This section sets forth the procedures for detention of drugs detention order must be provided to the concludes that the proposed rule does owner or user of the drugs if the owner’s not contain policies that have believed to be adulterated or misbranded. Administrative detention is or user’s identity can be readily federalism implications as defined in determined. the Executive order and, consequently, intended to protect the public by (2) If detention of drugs in a vehicle a federalism summary impact statement preventing distribution or use of drugs or other carrier is ordered, a copy of the is not required. encountered during inspections that may be adulterated or misbranded, until detention order must be provided to the VIII. Environmental Impact the Food and Drug Administration shipper of record and the owner of the The Agency has determined under 21 (FDA) has had time to consider what vehicle or other carrier, if their CFR 25.30(h) that this action is of a type action it should take concerning the identities can be readily determined. that does not individually or drugs, and to initiate legal action, if (3) The detention order must include cumulatively have a significant effect on appropriate. Drugs that FDA orders the following information: the human environment. Therefore, detained may not be used, moved, (i) A statement that the drugs neither an environmental assessment altered, or tampered with in any manner identified in the order are detained for nor an environmental impact statement by any person during the detention the period shown; is required. period, except as authorized under (ii) A brief, general statement of the paragraph (h) of this section, until FDA reasons for the detention; IX. Comments terminates the detention order under (iii) The location of the drugs; Interested persons may submit either paragraph (j) of this section, or the (iv) A statement that these drugs are electronic comments regarding this detention period expires, whichever not to be used, moved, altered, or document to http://www.regulations.gov occurs first. tampered with in any manner during or written comments to the Division of (b) Criteria for ordering detention. that period, except as permitted under Dockets Management (see ADDRESSES). It Administrative detention of drugs may paragraph (h) of this section, without is only necessary to send one set of be ordered in accordance with this the written permission of an authorized comments. Identify comments with the section when an authorized FDA FDA representative; docket number found in brackets in the representative, during an inspection (v) Identification of the detained heading of this document. Received under section 704 of the Federal Food, drugs; comments may be seen in the Division Drug, and Cosmetic Act, has reason to (vi) The detention order number;

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(vii) The date and hour of the held at a later date, which must not be the decision even if the 5-working-day detention order; later than 20 calendar days after receipt period for making the decision extends (viii) The period of the detention; of a detention order. beyond the otherwise applicable 20- (ix) The text of section 304(g) of the (2) The appellant of a detention order calendar-day or 30-calendar-day Federal Food, Drug, and Cosmetic Act must state the ownership or proprietary detention period. and paragraphs (g)(1) and (g)(2) of this interest the appellant has in the (7) If the appellant appeals the section; detained drugs. If the detained drugs are detention order but does not request a (x) A statement that any informal located at a place other than an regulatory hearing, the presiding officer hearing on an appeal of a detention establishment owned or operated by the must render a decision on the appeal order must be conducted as a regulatory appellant, the appellant must include affirming or revoking the detention hearing under part 16 of this chapter, documents showing that the appellant within 5 working days after the filing of with certain exceptions described in would have legitimate authority to the appeal. paragraph (g)(3) of this section; and claim the drugs if seized. (8) If the presiding officer affirms a (xi) The location and telephone (3) Any informal hearing on an appeal detention order, the drugs continue to number of the FDA district office and of a detention order must be conducted be detained until FDA terminates the the name of the FDA District Director. as a regulatory hearing under regulation detention under paragraph (j) of this (e) Approval of detention order. A in accordance with part 16 of this section or the detention period expires, detention order, before issuance, must chapter, except that: whichever occurs first. be approved by the FDA District (i) The detention order under (9) If the presiding officer revokes a Director in whose district the drugs are paragraph (d) of this section, rather than detention order, FDA must terminate located. If prior written approval is not the notice under § 16.22(a) of this the detention under paragraph (j) of this feasible, prior oral approval must be chapter, provides notice of opportunity section. obtained and confirmed by written for a hearing under this section and is (h)(1) Movement of detained drugs. memorandum within FDA as soon as part of the administrative record of the Except as provided in this paragraph, no possible. regulatory hearing under § 16.80(a) of person may move detained drugs within (f) Labeling or marking a detained this chapter; or from the place where they have been drug. An FDA representative issuing a (ii) A request for a hearing under this ordered detained until FDA terminates detention order under paragraph (d) of section should be addressed to the FDA the detention under paragraph (j) of this this section must label or mark the District Director; section or the detention period expires, drugs with official FDA tags that (iii) The last sentence of § 16.24(e) of whichever occurs first. include the following information: this chapter, stating that a hearing may (2) If detained drugs are not in final (1) A statement that the drugs are not be required to be held at a time less form for shipment, the manufacturer detained by the U.S. Government in than 2 working days after receipt of the may move them within the accordance with section 304(g) of the request for a hearing, does not apply to establishment where they are detained Federal Food, Drug, and Cosmetic Act a hearing under this section; to complete the work needed to put (21 U.S.C. 334(g)). (iv) Paragraph (g)(4) of this section, them in final form. As soon as the drugs (2) A statement that the drugs must rather than § 16.42(a) of this chapter, are moved for this purpose, the not be used, moved, altered, or describes the FDA employees, i.e., individual responsible for their tampered with in any manner for the regional food and drug directors, who movement must orally notify the FDA period shown, without the written preside at hearings under this section. representative who issued the detention permission of an authorized FDA (4) The presiding officer of a order, or another responsible district representative, except as authorized in regulatory hearing on an appeal of a office official, of the movement of the paragraph (h) of this section. detention order, who also must decide drugs. As soon as the drugs are put in (3) A statement that the violation of a the appeal, must be a regional food and final form, they must be segregated from detention order or the removal or drug director (i.e., a director of an FDA other drugs, and the individual alteration of the tag is punishable by regional office listed in part 5, subpart responsible for their movement must fine or imprisonment or both (section M of this chapter) who is permitted by orally notify the FDA representative 303 of the Federal Food, Drug, and § 16.42(a) of this chapter to preside over who issued the detention order, or Cosmetic Act, 21 U.S.C. 333). the hearing. another responsible district office (4) The detention order number, the (5) If the appellant requests a official, of their new location. The drugs date and hour of the detention order, the regulatory hearing and requests that the put in final form must not be moved detention period, and the name of the hearing be held within 5 working days further without FDA approval. FDA representative who issued the after the appeal is filed, the presiding (3) The FDA representative who detention order. officer must, within 5 working days, issued the detention order, or another (g) Appeal of a detention order. (1) A hold the hearing and render a decision responsible district office official, may person who would be entitled to claim affirming or revoking the detention. approve, in writing, the movement of the drugs, if seized, may appeal a (6) If the appellant requests a detained drugs for any of the following detention order. Any appeal must be regulatory hearing and requests that the purposes: submitted in writing to the FDA District hearing be held at a date later than (i) To prevent interference with an Director in whose district the drugs are within 5 working days after the appeal establishment’s operations or harm to located within 5 working days of receipt is filed, but not later than 20 calendar the drugs; of a detention order. If the appeal days after receipt of a detention order, (ii) To destroy the drugs; includes a request for an informal the presiding officer must hold the (iii) To bring the drugs into hearing, as defined in section 201(x) of hearing at a date agreed upon by FDA compliance; the Federal Food, Drug, and Cosmetic and the appellant. The presiding officer (iv) For any other purpose that the Act (21 U.S.C. 321(x)), the appellant must decide whether to affirm or revoke FDA representative who issued the must request either that a hearing be the detention within 5 working days detention order, or other responsible held within 5 working days after the after the conclusion of the hearing. The district office official, believes is appeal is filed or that the hearing be detention period extends to the date of appropriate in the case.

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(4) If an FDA representative approves authorize in writing the removal of, the will advise all persons required under the movement of detained drugs under required labels or tags. this paragraph to keep records paragraph (h)(3) of this section, the (k) Recordkeeping requirements. (1) concerning that detention whether detained drugs must remain segregated After issuance of a detention order further recordkeeping is required for the from other drugs and the person under paragraph (d) of this section, the remainder of the 2-year, or shorter, responsible for their movement must owner, operator, or agent in charge of period. FDA ordinarily will not require immediately orally notify the official any factory, warehouse, other further recordkeeping if the Agency who approved the movement of the establishment, or consulting laboratory determines that the drugs are not drugs, or another responsible FDA where detained drugs are manufactured, adulterated or misbranded or that district office official, of the new processed, packed, or held, must have, recordkeeping is not necessary to location of the detained drugs. or establish, and maintain adequate protect the public health, unless the (5) Unless otherwise permitted by the records relating to how the detained records are required under other FDA representative who is notified of, drugs may have become adulterated or regulations in this chapter (e.g., the or who approves, the movement of misbranded, records on any distribution good manufacturing practice regulation drugs under this paragraph, the required of the drugs before and after the in part 211 of this chapter). tags must accompany the drugs during detention period, records on the and after movement and must remain correlation of any in-process detained PART 16—REGULATORY HEARING with the drugs until FDA terminates the drugs that are put in final form under BEFORE THE FOOD AND DRUG detention or the detention period paragraph (h) of this section to the ADMINISTRATION expires, whichever occurs first. completed drugs, records of any changes (i) Actions involving adulterated or in, or processing of, the drugs permitted ■ 3. The authority citation for 21 CFR misbranded drugs. If FDA determines under the detention order, and records part 16 is revised to read as follows: that the detained drugs, including any of any other movement under paragraph Authority: 15 U.S.C. 1451–1461; 21 U.S.C. that have been put in final form, are (h) of this section. Records required 141–149, 321–394, 467F, 679, 821, 1034; 42 adulterated or misbranded, or both, it under this paragraph must be provided U.S.C. 201–262, 263b, 364. may initiate legal action against the to the FDA on request for review and ■ 4. Revise the first sentence of § 16.1 drugs or the responsible individuals, or copying. Any FDA request for access to paragraph (b)(1) to read as follows: both, or request that the drugs be records required under this paragraph destroyed or otherwise brought into must be made at a reasonable time, must § 16.1 Scope. compliance with the Federal Food, state the reason or purpose for the * * * * * Drug, and Cosmetic Act under FDA’s request, and must identify to the fullest (b) * * * supervision. extent practicable the information or (1) Statutory provisions: (j) Detention termination. If FDA type of information sought in the Section 304(g) of the act relating to decides to terminate a detention or records to which access is requested. the administrative detention of devices when the detention period expires, (2) Records required under this and drugs (see §§ 800.55(g) and 1.501(g) whichever occurs first, an FDA paragraph must be maintained for a of this chapter). * * * representative authorized to terminate a maximum period of 2 years after the detention will issue a detention issuance of the detention order or for Dated: July 10, 2013. termination notice releasing the drugs to such other shorter period as FDA Leslie Kux, any person who received the original directs. When FDA terminates the Assistant Commissioner for Policy. detention order or that person’s detention or when the detention period [FR Doc. 2013–16843 Filed 7–12–13; 8:45 am] representative and will remove, or expires, whichever occurs first, FDA BILLING CODE 4160–01–P

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DEPARTMENT OF HEALTH AND Office of Regulatory Affairs, Food and inspection, or refusing to permit entry HUMAN SERVICES Drug Administration, 12420 Parklawn or inspection for the purposes of section Dr., Rm. 4138, Rockville, MD 20857. 501(j) of the FD&C Act. Food and Drug Administration Send one self-addressed adhesive label This draft guidance is being issued [Docket No. FDA–2013–D–0710] to assist that office in processing your consistent with FDA’s good guidance requests. See the SUPPLEMENTARY practices regulation (21 CFR 10.115). Draft Guidance for Industry on INFORMATION section for electronic The draft guidance, when finalized, will Circumstances That Constitute access to the draft guidance document. represent the Agency’s current thinking Delaying, Denying, Limiting, or Submit electronic comments on the on ‘‘Circumstances That Constitute Refusing a Drug Inspection; draft guidance to http:// Delaying, Denying, Limiting, or Availability www.regulations.gov. Submit written Refusing a Drug Inspection.’’ It does not comments to the Division of Dockets create or confer any rights for or on any AGENCY: Food and Drug Administration, Management (HFA–305), Food and Drug person and does not operate to bind HHS. Administration, 5630 Fishers Lane, Rm. FDA or the public. An alternative ACTION: Notice. 1061, Rockville, MD 20852. approach may be used if such approach FOR FURTHER INFORMATION CONTACT: satisfies the requirements of the SUMMARY: The Food and Drug Emily M. Leongini, Office of Policy and applicable statutes and regulations. Administration (FDA) is announcing the Risk Management, Office of Regulatory availability of a draft guidance for Affairs, Food and Drug Administration, II. Comments industry entitled ‘‘Circumstances that 10903 New Hampshire Ave., Bldg. 32, Constitute Delaying, Denying, Limiting, Interested persons may submit either Rm. 4339, Silver Spring, MD 20903, electronic comments regarding this or Refusing a Drug Inspection.’’ The 301–796–5300. Food and Drug Administration Safety document to http://www.regulations.gov SUPPLEMENTARY INFORMATION: and Innovation Act (FDASIA) added a or written comments to the Division of new provision to the Food, Drug, and I. Background Dockets Management (see ADDRESSES). It is only necessary to send one set of Cosmetic Act (FD&C Act) concerning FDA is announcing the availability of inspections that would make a drug comments. Identify comments with the a draft guidance for industry entitled docket number found in brackets in the adulterated. This guidance defines, by ‘‘Circumstances That Constitute way of example, the circumstances that heading of this document. Received Delaying, Denying, Limiting, or comments may be seen in the Division FDA would consider to constitute Refusing a Drug Inspection.’’ On July 9, delaying, denying, or limiting of Dockets Management between 9 a.m. 2012, FDASIA (Pub. L. 112–144) was and 4 p.m., Monday through Friday, and inspection, or refusing to permit entry signed into law. Section 707 of FDASIA or inspection for the purposes of making will be posted to the docket at http:// adds 501(j) to the FD&C Act (21 U.S.C. www.regulations.gov. a drug adulterated. 351(j) to make a drug adulterated that DATES: Although you can comment on ‘‘has been manufactured, processed, III. Electronic Access any guidance at any time (see 21 CFR packed, or held in any factory, Persons with access to the Internet 10.115(g)(5)), to ensure that the Agency warehouse, or establishment and the may obtain the document at either considers your comment on this draft owner, operator, or agent of such http://www.fda.gov/Regulatory guidance before it begins work on the factory, warehouse, or establishment Information/Guidances/ucm122044.htm final version of the guidance, submit delays, denies, or limits an inspection, or http://www.regulations.gov. either electronic or written comments or refuses to permit entry or on the draft guidance by September 13, inspection.’’ As required by section 707, Dated: July 9, 2013. 2013. FDA is issuing this guidance to define Leslie Kux, ADDRESSES: Submit written requests for the types of action, inaction, and Assistant Commissioner for Policy. single copies of the draft guidance to the circumstances that FDA considers to [FR Doc. 2013–16841 Filed 7–12–13; 8:45 am] Office of Policy and Risk Management, constitute delaying, denying, or limiting BILLING CODE 4160–01–P

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Reader Aids Federal Register Vol. 78, No. 135 Monday, July 15, 2013

CUSTOMER SERVICE AND INFORMATION CFR PARTS AFFECTED DURING JULY

Federal Register/Code of Federal Regulations At the end of each month the Office of the Federal Register General Information, indexes and other finding 202–741–6000 publishes separately a List of CFR Sections Affected (LSA), which aids lists parts and sections affected by documents published since Laws 741–6000 the revision date of each title. Presidential Documents 3 CFR 1024...... 39902 741–6000 1026...... 39902 Executive orders and proclamations Proclamations: The United States Government Manual 741–6000 8997...... 39949 14 CFR Other Services Executive Orders: 25...... 41684 Electronic and on-line services (voice) 741–6020 13646...... 39539 39 ...... 39567, 39571, 39574, Privacy Act Compilation 741–6064 13648...... 40621 40954, 40956, 41274, 41277, Public Laws Update Service (numbers, dates, etc.) 741–6043 Administrative Orders: 41280, 41283, 41285, 41286, TTY for the deaf-and-hard-of-hearing 741–6086 Memorandums: 41836 Memorandum of June 61...... 42324 ELECTRONIC RESEARCH 25, 2013 ...... 39535 71 ...... 40381, 40382, 41289, 5 CFR 41290, 41685, 41686, 41837, World Wide Web 41838, 41839 1201...... 39543 73...... 39964, 40958 Full text of the daily Federal Register, CFR and other publications 1209...... 39543 91...... 39576, 39968 is located at: www.fdsys.gov. 7 CFR 97...... 40383, 40385 Federal Register information and research tools, including Public 120...... 41999 Inspection List, indexes, and links to GPO Access are located at: 2...... 40935 121...... 39968, 42324 www.ofr.gov. 210...... 39163, 40625 125...... 39968 220...... 40625 135...... 42324 E-mail 245...... 40625 141...... 42324 FEDREGTOC-L (Federal Register Table of Contents LISTSERV) is 253...... 39548 142...... 42324 272...... 40625 an open e-mail service that provides subscribers with a digital Proposed Rules: 319...... 41259 form of the Federal Register Table of Contents. The digital form 39 ...... 39190, 39193, 39633, 357...... 40940 of the Federal Register Table of Contents includes HTML and 40045, 40047, 40050, 40053, 925...... 39548 PDF links to the full text of each document. 40055, 40057, 40060, 40063, 1205...... 39551 40065, 40069, 40072, 40074, To join or leave, go to http://listserv.access.gpo.gov and select 1206...... 39564 40640, 40642, 41005, 41877, Online mailing list archives, FEDREGTOC-L, Join or leave the list Proposed Rules: (or change settings); then follow the instructions. 41882, 41886, 41888 210...... 41857 71 ...... 40076, 40078, 41333, PENS (Public Law Electronic Notification Service) is an e-mail 225...... 41857 41335, 41336, 41337, 41890 service that notifies subscribers of recently enacted laws. 319...... 41866 To subscribe, go to http://listserv.gsa.gov/archives/publaws-l.html 340...... 41866 15 CFR and select Join or leave the list (or change settings); then follow 1205...... 39632 740...... 40892 the instructions. 10 CFR 742...... 40892 748...... 41291 FEDREGTOC-L and PENS are mailing lists only. We cannot 140...... 41830 770...... 40892 respond to specific inquiries. 170...... 39162 772...... 40892 171...... 39162 Reference questions. Send questions and comments about the 774...... 39971, 40892 430...... 41265 Federal Register system to: [email protected] 902...... 39583 433...... 40945 The Federal Register staff cannot interpret specific documents or Proposed Rules: Proposed Rules: regulations. 997...... 39638 26...... 39190 Reminders. Effective January 1, 2009, the Reminders, including 32...... 41720 16 CFR Rules Going Into Effect and Comments Due Next Week, no longer 429...... 41610, 41867 appear in the Reader Aids section of the Federal Register. This 430 ...... 40403, 41610, 41868, 803...... 41293 information can be found online at http://www.regulations.gov. 41873 1500...... 41298 CFR Checklist. Effective January 1, 2009, the CFR Checklist no 431...... 41333 Proposed Rules: longer appears in the Federal Register. This information can be Ch. II ...... 42026 11 CFR found online at http://bookstore.gpo.gov/. 310...... 41200 104...... 40625 18 CFR FEDERAL REGISTER PAGES AND DATE, JULY 12 CFR Proposed Rules: 39163–39542...... 1 701...... 40953 40...... 41339 39543–39956...... 2 741...... 40953 39957–40380...... 3 911...... 39957 19 CFR 40381–40624...... 5 1073...... 41677 12...... 40388, 40627 40625–40934...... 8 1091...... 40352 111...... 41299 40935–41258...... 9 1214...... 39957 163...... 40627 41259–41676...... 10 1215...... 39959 178...... 40627 41677–41834...... 11 1703...... 39959 41835–41998...... 12 Proposed Rules: 21 CFR 41999–42388...... 15 1002...... 39902 21...... 39184

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175...... 41840 3...... 39163 37 CFR Proposed Rules: 1100...... 40664 520...... 42006 6...... 39163 Proposed Rules: 558...... 42006 13...... 39163 201...... 39200 Proposed Rules: 72...... 39163 47 CFR 1...... 42382 80...... 39163 39 CFR 1...... 41314 16...... 42382 83...... 39163 111...... 41305 25...... 41314 890...... 39649 100 ...... 39588, 40391, 41299, Proposed Rules: 51...... 39617 41300 111...... 41721 53...... 39617 22 CFR 101...... 39163 54...... 40968 120...... 40922 103...... 39163 40 CFR 63...... 39617 121...... 40922 104...... 39163 50...... 40000 64...... 38617, 40582 123...... 40630, 40922 105...... 39163, 41304 52 ...... 40011, 40013, 40966, 73...... 40402 124...... 40922 106...... 39163 40968, 41307, 41311, 41698, 79...... 39619 125...... 40922 110...... 39163 41846, 41850, 41851, 42018 Proposed Rules: 502...... 39584 114...... 39163 60...... 40635 2 ...... 39200, 39232, 41343 115...... 39163 5...... 39232 23 CFR 61...... 40635 116...... 39163 62...... 40015 22...... 41343 1200...... 39587 117 ...... 39163, 39591, 40393, 63...... 40635 43...... 39232 1205...... 39587 40632, 40960, 41843, 42010, 80...... 41703 51...... 39233 1206...... 39587 42011 81...... 41698 53...... 39233 1250...... 39587 118...... 39163 180 ...... 40017, 40020, 40027 64 ...... 39233, 40407, 42034 133...... 39163 1251...... 39587 Proposed Rules: 73...... 41014, 42036 136...... 39163 1252...... 39587 Ch. I ...... 41768 79...... 39691, 40421 138...... 39163 1313...... 39587 49...... 41012, 41731 90...... 41771 148...... 39163 1335...... 39587 52 ...... 39650, 39651, 39654, 149...... 39163 1345...... 39587 40086, 40087, 40654, 40655, 48 CFR 150...... 39163 1350...... 39587 41342, 41735, 41752, 41901 151...... 39163 5...... 41331 60...... 40663 24 CFR 161...... 39163 15...... 41331 61...... 40663 164...... 39163 204...... 40043 Proposed Rules: 62...... 40087 165 ...... 39163, 39592, 39594, 209...... 40043 207...... 41339 63...... 40663 39595, 39597, 39598, 39599, 216...... 40043 81 ...... 39654, 40655, 41735, 26 CFR 39601, 39604, 39606, 39608, 225...... 40043, 41331 41752 39610, 39992, 39995, 39997, 229...... 40043 1...... 39973, 39984 423...... 41907 247...... 40043 54...... 39870 39998, 40000, 40394, 40396, 602...... 39973, 39984 40399, 40632, 40635, 40961, 41 CFR Proposed Rules: 41300, 41687, 41689, 41691, 9904...... 40665 Proposed Rules: Proposed Rules: 41694, 41844, 41846, 42012, 1...... 39644 413...... 40836 42016 49 CFR 414...... 40836 27 CFR 177...... 40963 Ch. I ...... 41853 Proposed Rules: Proposed Rules: 42 CFR 395...... 41716, 41852 9...... 40644, 41891 100...... 40079 121...... 40033 Proposed Rules: 165 ...... 40081, 40651, 41009, 431...... 42160 541...... 41016 28 CFR 41898, 42027 435...... 42160 90...... 40959 207...... 42030 436...... 42160 50 CFR 334...... 39198 438...... 42160 17 ...... 39628, 39836, 40970 29 CFR 440...... 42160 216...... 40997, 41228 2510...... 39870 34 CFR 447...... 42160 622...... 39188, 40043 2590...... 39870 Ch. II ...... 41694 457...... 42160 635...... 40318, 42021 4022...... 42009 690...... 39613 Proposed Rules: 679 ...... 39631, 40638, 41332, 41718, 42022, 42023, 42024 Proposed Rules: Proposed Rules: 88...... 39670 2520...... 42027 Ch. II ...... 40084 431...... 40272, 41013 Proposed Rules: 17 ...... 39698, 40669, 40673, 30 CFR 45 CFR 41022, 41550 36 CFR 49...... 39532 5b...... 39184, 39186 50...... 39273 1280...... 41305 147...... 39870 600...... 40687 33 CFR Proposed Rules: 155...... 39494, 42160 622...... 39700 1...... 39163 1196...... 39649 156 ...... 39494, 39870, 42160 697...... 41772

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